The conversation around older Australians has long been associated with costs and dependence. It’s time to shift the conversation. The economic muscle of the ‘silver economy’ can be accessed with new policy approaches that lift the workforce participation of 55-64 year olds. This will in turn support our nation’s regional economic performance. Ageing is happening rapidly in our regions. In certain places, more than 20 per cent of the population is already over the age of 55. Most discussions around ageing paint older Australians as a homogenous block, and overwhelmingly focus on the expected increases in costs to healthcare services and the remaining workforcei . Yet these are often issues related to the very oldest Australians. While there is no doubt that an ageing population brings certain challenges, more and more Australians expect to live and work longer than previous generations. For regional economies, keeping their older workforce active and engaged can bring substantial local benefits. With the right strategies, regions can lift participation rates and boost spending power in local economies, even with an older age profile. Achieving this requires policies that can respond to regional differences. Focusing on those aged from 55-64 years old, the Regional Australia Institute’s (RAI) analysis demonstrates considerable differences in local participation rates across the country. Regions like Hume in Victoria and Murray in New South Wales outperform the national average, while others like the Far South Coast of New South Wales fall well below. This variation also extends to the share of people working in full time or part time roles. In Geelong for example, for every 55-64 year old person employed part time, there are 1.5 employed full time. In Byron Bay the reverse is true, with part time workers outnumbering those in full time employment. For many regions, lower participation rates among 55-64 year olds are a result of structurally low participation across all ages. Similarly, high incidences of part time employment can reflect a local economy that simply has a high proportion of part time jobs. But in a number of regions, 55-64 year olds make up a disproportionate share of workers not in the labour force. The resulting economic opportunity lost, can be substantial. For many people, lifetime earning capacity peaks over 50 creating some serious economic muscle in older age groups’ spending power. In Lismore, those aged between 55-64 years old make up 14 per cent of the total population but almost 20 per cent in income earned. Increasing the participation rate amongst older workers with this earning potential can deliver significant gains. For example, on the Central Coast of New South Wales, a 3 per cent increase in 55-64 year olds in the participation rate could increase total local consumption power by $33 million per annum. A similar increase in Victoria’s Hume and Loddon Mallee regions could deliver $80 million per annum. Enabling greater workforce participation among older Australians will take a mix of policies that aim to empower older workers to stay in their jobs for longer, as well as making it easier for those out of work to take advantage of new opportunities. To create better outcomes, the Organisation for Economic Co-operation and Development (OECD) recommends a policy package that improves the employability of older workers, addresses barriers on the side of employers, and strengthens financial incentives to remain in the workforce. The recently announced Career Transition Assistance Program trial, and Restart wage subsidy are examples of these kinds of approaches.
Ahead of wider reforms responding to Australia’s ageing population as a whole, regions should be given flexibility to trial a range of new policy options to better engage people in the 55-64 year old age group in the economy. This will target early action to where the challenge is greatest and build the evidence required to support the implementation of new national policy approaches. Regions have much to gain by lifting the workforce participation rate of their older population. As an important step towards developing new solutions, this discussion paper helps define how our ageing workforce is impacting different regions and the potential payoffs for regions able to take advantage of an underutilised section of the labour force.