29 Jun 2021
Old-age dependency ratio
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
The Intergenerational Report is published every 5 years and forecasts an outlook for the Australian economy and the Federal Government’s budget over the next 40 years.
Bottom line, the Australian economy is projected to grow at a slower pace over the next 40 years due to slower population growth.
This has implications for the old-age dependency ratio which is the ratio of working-age people to those over 65.
For every person aged over 65 in 1981-82 there were 6.6 working-age people, today we are at 4.0 and by 2060-61 it is forecast to fall to 2.7 working-age people for every person aged over 65.
Click for Chart 2.17
So where does the Federal Government get the money to pay for healthcare, the Age Pension and end-of-life support?
Tax revenue, across the board as a share of GDP is forecast to rise steeply over the next two decades.
Click for Chart 8.1
For a full copy of the just released 2021 Intergenerational Report please click the following link.
Click to read.
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