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Mar 24, 2015

Intergenerational report overlooks the valuable contributions of older people

In the first article in a two-part series on the health implications of the Federal Government’s


In the first article in a two-part series on the health implications of the Federal Government’s much-critiqued Intergenerational Report, Associate Professor Briony Dow from the National Ageing Research Institute says it overlooks the significant contributions that older people are making to society, especially as carers.

Briony Dow writes:

Australia is looking to its older people and women to solve the economic problems forecast in the latest IGR.

Treasurer Hockey states that, “to drive higher levels of prosperity through economic growth, we must increase productivity and participation … to achieve these goals we need to encourage those currently not in the workforce, especially older Australians and women, to enter, re-enter and stay in work, where they choose to do so (IGR, 2015)”.

An earlier report by the Centre for Excellence in Population Ageing Research (CEPAR) also suggested that GDP could be improved by 2.4% by 2050 if all non-participating people over the age of 55 who wanted to work could do so. They argued that this would considerably reduce the 2.75% fiscal gap that Treasury estimates will come from the ageing population (Chomik & Piggott, 2012). Furthermore, expenditure would decrease by approximately 0.5% of GDP, due to reduced pension and health costs (Chomik & Piggott, 2012).

The problem with looking to older people and women to fill the gap is that it fails to take into account the significant productive activities that these groups are already engaged in, especially care activities. Care that occurs within families or friendship networks, where no money is exchanged is not considered productive. Despite the savings to the public purse (estimated at $40 billion a year in 2010), our measure of GDP specifically excludes services that are provided within families free of charge, including care of older people and people with disability.

If the older people and women currently providing care to spouses, parents and grandchildren moved into the paid workforce, who would take their place?

The intergenerational report talks about the ageing population and the impact that this will have on demand for formal care provision, especially residential care, but it largely ignores the fact that 80% of care for frail older people is provided by family members.

Seventy percent of people living with dementia live in the community with their families. Only 7% of older people live in residential aged care facilities. And who are the carers?  Women make up 71% of all primary carers, and 58% of all primary carers are over 65 years old (Carers Victoria, 2015).

Approximately 1 in 5 people over 65 are carers, and the likelihood of being a carer increases with age, to 1 in 4 people over 75 years of age.  Older spouses represent a substantial proportion (43%) of primary carers of older people. A number of older people also continue to provide care for adult children with a disability. And in almost 23,000 families, children are being raised solely by grandparents.

Surely all this activity should be considered in our formal measures of productivity. Even in the narrowest definition of productivity, workforce participation, older adults caring for their grandchildren enable younger adults’ participation. A recent COTA NSW report found that between 10 and 20 percent of people over 65 were providing child care for their grandchildren and the average amount of care was 12.7 hours per week, saving over $90 million a year in NSW alone.

I wonder what the increase in GDP would be if you included care production? Unlike many other productive activities, such as manufacturing weapons of war, logging of old-growth forests and brown coal production, caring is environmentally harmless and builds human connection and growth, rather than destruction.

Another problem with the participation solution is that it ignores the discrimination faced by many older people when they try to enter the workforce and the difficulty that family carers have in re-entering the workforce when their care responsibilities allow.

There is clear evidence that older people experience age discrimination within Australian workplaces. For example, the majority of the age discrimination complaints received by the AHRC in 2008–09 were related to employment, and most of these complaints were made by individuals over the age of 45 years (Australian Human Rights Commission, 2010).

Mr Hockey talks of not only entry but re-entry into the workforce. This is a key issue for family carers. If you take time out of the workforce to care for a disabled child or an older person, it can be very difficult to re-enter. You have missed skill development opportunities, staff development, and work experience.

So although it is a great idea to promote workforce participation amongst older people and women who want to work, we need to explore the reasons they are not working now. They are not just sitting idle. Barriers to workforce participation, whether they be existing non-work commitments, age discrimination or gaps in experience due to other responsibilities, need to be removed.

We also need to acknowledge and value the productive activities that older people and women are currently engaged in and work out how these will be managed if a substantial proportion of our current care-force shifts into the paid workforce.

• Associate Professor Briony Dow, Director of Health Promotion at NARI.



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4 thoughts on “Intergenerational report overlooks the valuable contributions of older people

  1. Norman Hanscombe

    Ian, you shouldn’t comment on this issue for much the same reason that most of us don’t comment on life styles in the regions around Andromeda.

  2. Ian McDonald

    Briony has pointed out a major shortcoming of the intergenerational report – it’s neglect of unpaid work by carers. This and many other types of non-market activity contribute to human well-being and so should not be regarded as ‘unproductive’. It is the case that human well-being is properly regarded as the objective on which economics as a discipline is based and so unpaid work should be included as productive activity. Unfortunately, in the IGR the focus is on a narrower objective than human well-being, the objective being to not increase the tax share. It is as though 23.9, the percent of Commonwealth tax receipts in GDP, is a sacred number. If human well-being had been the focus of the IGR then it would be surely be found that the optimal response to a demographic shift to a higher proportion of old people would be to raise the tax share to finance support for the larger number of people needing support and that the unpaid contribution of carers is productive.

  3. Scott

    “Despite the savings to the public purse (estimated at $40 billion a year in 2010), our measure of GDP specifically excludes services that are provided within families free of charge, including care of older people and people with disability.”

    That’s not really true. The GDP captures the use of carers by the increased purchases that are made via the extra income of non-carers in the family unit.

    i.e If a grandparent performs a day of free child care, it means that the parents of said child are able to work an extra day (or not pay for an extra day in child care), thus enriching the household. This is then reflected in the GDP though an increase in the household final consumption expenditure (if the excess money is spent) or an increase in investment spending (if the excess cash is going to savings/investment which is then spent by business)

  4. Norman Hanscombe

    Even the merely semi-economically literate understand previous generations haven’t paid sufficient tax to cover welfare benefits we’ve received. At 79 years of age I’ve watched the cargo cult type mentality which overcomes so many ordinary voters and Party members on this issue; but by 2015 I’d have expected any media which takes itself seriously would know better.
    I guess I’m a super-optimist?

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