All You Need to Know About The Impact of Ageing Population on Australia’s Economy
The current population of Australia is almost 25.75 million. Statistics taken from the government indicate that in Australia a child is born every 103 seconds. This means that by the time you are done reading this article, approximately 8-10 Aussie kids would have been born!
How to Read Population Statistics
When it comes to analysing population, it must be kept in mind that population trends do not change in a couple of years, it takes two or more decades for the effect of population change to materialise. For instance if the government decides to reduce the ageing population by encouraging Australians to have more children, then within a few years the rate of child births will go up. That won’t be any issue but the correction in the ageing population will come at least two to three decades later, when the children who are born today reach working age. This government policy to encourage people to have more children will then have to continue not only for a few years but for over a decade, to make sure that four to five decades later, the median population of Australia is young enough to take the burden of the economy in future.
This is why policy making to control or manage the population is always done on a long term basis. Once you understand the population trend for the future, it becomes easy to plan for the economic policies and resource allocation.
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The Current Trend of Australian Population
From what has been discussed above, it can be seen that Australia has an ageing population. The current median population is between 36 and 40 and the rate of population growth is around 1.5%. Add to this the increased longevity and decreased fertility. All of these factors indicate that the population of Australia is ageing and there is nothing that can be done to address this issue in the short term.
There is another issue when it comes to population. While the age of the population in general is increasing, there has also been an increase in the rate of population growth. In 2002, it was predicted that the population of Australia would be 28 million by 2047 but the current level of population in 2021 is over 25 million and fresh estimates suggest that Australia will reach 28 million mark before 2030.
If we delve deeper into the details of population then we can see that the median age in the capital cities is around 36 years whereas the median age for the rest of Australia is around 41 years. This shows that at the moment the population of Australia is balanced between the 36-40 year age bracket. This is a slightly higher age bracket because if we look at the long term projection, then this means that over the next four to five decades Australia is going to have an ageing population.
People aged 20-49 years of age comprise up to almost 45% of the population in the capitals whereas for the rest of Australia this figure is 36%. Once again this shows that the capitals have a relatively younger median population as compared to the rest of Australia. In both the capitals and other regions, there is a higher number of women in the older age groups.
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Impact on the Economy
From what has been stated above, it can be concluded that once we understand the trend of population, economic planning becomes easy. At this point Australia has got two trends in its population.
- Firstly Australia has an ageing population which means that in the next two to four decades, there is going to be a large number of the elderly.
- Australia has got increasing population growth which is because of three factors
- Increase in longevity
- More people settling in Australia
Any future economic policy will have to keep these two factors in mind.
Ageing population means that there is going to be more stress on the care homes. Thus the government will have to set up more care homes and allocate the relevant level of medical expenditures for the ageing population.
Pediatrics are also going to be in demand. Although the fertility and new child birth rate are not very high in Australia but the rate has increased in the last two decades. This increase in rate means that there is now an increased demand for pediatrics.
This also means that in future, there is going to be increased demand for housing. We already know that the regional capitals and commercial hubs are having a severe shortage of real estate, which is why city centres such as Sydney, Melbourne and Brisbane have a housing market that resembles the housing market of London.
The government is focusing on the housing sector and there is a policy to invest in construction over the next decade, this move is not only expected to cover some of the housing sector demand but also intended to invigorate the economy and eliminate some of the negative impact created by the pandemic.
It can be concluded that Australia has both an ageing population and an increasing rate of population growth. At the start of the millennium the population growth rate in Australia was very low but the last two decades have seen a rise in this growth rate which is a combination of net birth rate and net immigration rate. This however means that as the population grows at an increased rate, there is going to be pressure on the government to allocate resources efficiently.
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