Early in that decade the first-born of the children who made up the postwar baby boom began to challenge their parents with slogans like “Never trust anyone over thirty.” Those parents — retrospectively labelled “the greatest generation” for having endured the 1930s depression and the second world war — had come to regard their kids as lazy and spoilt.

As the children born in the 1940s became thirtysomethings and the youth revolts of the 1960s faded away, the generation gap was mostly forgotten. Its revival in the 1990s came in a quite different context. By then, the lazy equation of “boomer” and “young person” was clearly obsolete.

The members of the post-boom cohort, who became known as generation X, were seeking to make their way in the world but found their way blocked by the much larger generation above them, who occupied all the desirable cultural niches and weren’t planning to move on any time soon. Mark Davis’s Ganglands: Cultural Elites and the New Generationalism was one of the earliest expressions of this frustration.

Davis’s work was well received in Australia. But the terms of the debate were set in the United States by William Strauss and Neil Howe in their bestselling book, Generations. As well as making the now-standard claims about the characteristics of the boomers, Strauss and Howe theorised that major events caused generations to cycle through four different types: idealist, reactive, civic and adaptive.

Strauss and Howe’s model was initially accepted uncritically. This mode of classification was a boon to marketers and lazy journalists, functioning largely as a more respectable form of astrology. Rather than engaging in tedious discussions of economic and foreign policy, for example, presidential campaigns could be discussed in terms of the generations to which the contenders belonged.

Pushback came soon enough, not least from me. (Disclosure: the fact that my cohort, generation Jones, 1954–63, isn’t recognised in standard generational classification predisposes me to dislike the entire generational punditry genre.) In a piece written in 2000, I made a number of not entirely original observations:

• Claims about generations are often restatements of longstanding clichés about the laziness and irresponsibility of the young or the rigidity and hypocrisy of the old. Demographers distinguish these “age effects” (as well as “time effects,” the influences that affect all age groups) from the “cohort effects” specific to those growing up during a depression, for example, or a long postwar boom.

• Differences associated with race, class and gender are mostly more significant than those associated with birth cohort. Donald Trump might share a birthday with a Black woman paid the minimum wage to clean one of his hotels, but that doesn’t mean they have any significant experiences in common.

• The boomer generation is particularly problematic because the demographic event after which it is named doesn’t match the cultural events with which it is associated. At one end, many of the leading figures in boomer culture were actually born during the war years — in other words, before the boom. At the other end, those born after 1954 were too young to experience either the full employment of the postwar economic boom or defining cultural events like the Woodstock rock festival or the fights over conscription and the Vietnam war. Barack Obama (born 1961) is classed as a boomer, but his political awareness was shaped by the presidency of Ronald Reagan (whom he saw as a role model) rather than that of Lyndon Johnson or Richard Nixon.

• More generally, the typical gap of fifteen to twenty years between their oldest and youngest members means that generations are too big for any real commonality of experience.

As criticisms of this kind multiplied, generational analysts lost credibility, though very slowly. It was only in May this year that the Pew Research Center, widely seen as an authoritative source of survey findings, conceded most of the points made above and announced that its audiences “should not expect to see a lot of new research coming out of Pew Research Center that uses the generational lens.”

Nevertheless, the generational bandwagon rolls on. A new arrival is Jean Twenge’s book Generations, whose title recycles Strauss and Howe’s though she rejects a good deal of their analysis. Twenge adopts a narrative format to apply the generational frame to Americans born in the last one hundred years, beginning with the silent generation (born 1925–45) and ending with polars, her own term for children born since 2013.

Twenge avoids some of the pitfalls discussed above. Most importantly, she pays attention to the distinction between age effects, time effects and cohort effects. She compares the experience of different generations at the same age, and tries to take account of long-run trends like the rise of computers. She uses long-running data sets such as the Panel Study on Income Dynamics to assure consistent comparisons of different cohorts at the same age.

This approach yields some interesting insights. For example, the silent generation married and had children earlier than any previous or subsequent generation, and had more children per family. One interesting implication of early childbearing is that most of the later boomers were the children of parents from the immediately preceding generation, the silents, unlike the more common gap of two generations between parents and children.

Another, not particularly startling, observation is that boomers have been bigger consumers of alcohol and recreational drugs than any other cohort. That phenomenon has continued from the upsurge in youthful drug use in the 1960s to the present day. Younger generations like the millennials and gen Z are more abstemious, perhaps as a result of a lifetime of exposure to messaging about the dangers of substance (ab)use.

More fundamentally, Twenge makes the point that technological change has different impacts on different age cohorts. One claimed effect is increased individualism, though this ignores how the once widely held admiration for “rugged individualism” is now rarely heard in the United States.

Twenge is on stronger ground when she discusses the slower life trajectory created by two things: the need for young people to spend more time in education in a technologically complex society, and the longer life spans enabled by improvements in health. These changes inevitably alter the timing of the processes that define generations: leaving the parental home and forming new households, entering and leaving employment, old age and death. While they don’t really follow generational boundaries, they provide a useful narrative device.

Twenge concedes a related point. “It’s also true that generations are sometimes too broad: those born ten years apart but within the same generation have experienced a different culture,” she writes. “Still, too many micro-generations would be confusing and would make it harder to discern broad generational trends.”

Familiar analytical problems remain. Like nearly all generational analysts, Twenge consistently downplays the importance of class. This passage is truly striking:

The charming novel Nine Ladies, by Heather Moll, imagines the aristocratic Mr Darcy from Jane Austen’s Pride and Prejudice time-travelling from 1812, when race, gender, and class were destiny, to 2012. He’s of course amazed by smartphones, airplanes, and restaurants, but the advice the born-in-1987 version of Elizabeth Bennet gives him the most often is, “Remember, treat everyone equally.” Equality is one of the unifying themes of cultural change over the last one hundred years, making it one of the unifying themes of generational change.

This claim would have been unremarkable if it had been made in the 1950s, when America was a proudly middle-class society. But the rise in inequality and the decline in social mobility have been central to the disasters that have befallen the US polity in the last few decades, culminating in the emergence of Trumpism.

Turning more specifically to generational analysis, there is the problem that the demographic baby boom from 1946 to the early 1960s does not match cultural and economic history, which shows a sharp break at the end of the postwar economic boom in the early 1970s. Economically and culturally, as I pointed out back in 2000, the Vietnam generation has a lot more in common with the “baby busters” (the last of the silents, born during and just before the second world war) than with baby boomers:

[M]ost of the cultural icons of the Vietnam generation were actually born before 1945. Obvious examples are the Beatles and Rolling Stones, not to mention James Dean, Marilyn Monroe and Elvis Presley. Throughout the 1960s, rock music was made by the children of the baby bust, who were in the fortunate position of having the largest audience in history. Other members of the baby bust cohort took the chance to establish themselves as the social and political voice of youth, a position which they then sought to maintain well into middle age.

Twenge implicitly concedes most of this, noting that the last of the silents were anything but silent.

A more coherent generational analysis could be achieved by having the boomer generation born between the late 1930s and the mid 1950s, too young to have real memories of depression and war but young enough to come of age during the seemingly endless prosperity of the postwar boom.

Then, following the suggestion of cultural commentator Jonathan Pontell, the rest of the (demographic) baby boom could be assigned to my cohort, generation Jones. The most appealing etymology for generation Jones is the slang term “jonesing,” referring to withdrawal after a drug-induced high. As summarised by Wikipedia: “Jonesers inherited an optimistic outlook as children in the 1960s, but were then confronted with a different reality as they entered the workforce during… a long period of mass unemployment.”

On this division, the remaining boomers would be a shrinking minority in their seventies and eighties, soon to pass from the scene altogether. And without the boomers, the journalistic generation game would cease to be of much interest.

Even in the toned-down version offered by Twenge and the Pew Research Center, generational analysis misleads more than it enlightens. For serious scholarly work, five-year birth cohorts, categorised by race, gender and class background, are much more useful. For entertainment purposes, astrology is just as good and less divisive. •

Generations: The Real Differences between Gen Z, Millennials, Gen X, Boomers, and Silents — and What They Mean for America’s Future
By Jean M. Twenge | Atria Books | $32.50 |  560 pages

The post Can generational analysis be saved? appeared first on Inside Story.

There is, however, one prediction that can be made, with almost perfect safety. For the foreseeable future, Australia’s political class will continue to worry about declining birth rates and “population ageing.”

Worries of this kind have been around since the late nineteenth century, when families first began exercising some control over the number of children they had. The panic over declining fertility was briefly interrupted by an unexpected baby boom after 1945, which coincided with an economic boom. But concerns about ageing resumed with increasing force from the 1980s, when the fact that baby boomers would one day retire started to enter budget calculations just as the prospects of continued strong growth were fading. Worse, unlike previous generations, the boomers showed a propensity to live well beyond the official pension age.

This resurgence in concern has coincided almost exactly with my own working life, and I have spent a fair bit of that time trying to debunk it. My attempts began before the first Intergenerational Report in 2002, and have continued, with very limited success, right up to last month’s release of the latest.

Criticising alarmism about fertility and ageing is something of a family tradition. In 1988, my mother Pat, a demographer, produced No Rising Generation: Women & Fertility in Late Nineteenth Century Australia, a study of the first panic about declining fertility. The title, a quotation from a typically gloomy pro-natal advocate, would work perfectly well as a summary of views being stated today.

Alarm is expressed most commonly in terms of the “old-age dependency ratio”: the ratio of people aged sixty-five and over, assumed to be dependent, and those between fifteen and sixty-four, who must therefore work to support them.

The ages built into the ratio reflected the economic realities of 1909 (at least for men), when the age pension was first introduced. Most men left school and entered the workforce at fifteen, possibly after a brief apprenticeship. Young and strong, they reached their peak earning power in their twenties. If they made it to the pension age of sixty-five they were worn out and, in many cases, incapable of working any longer. At that point, they could expect to live another ten years or so.

Women, meanwhile, were expected to leave paid employment when they married, as nearly all of them did. They then undertook the work of caring for children — an activity ignored by the dependency ratio and left out of calculations of national income. Reflecting their limited employment opportunities, women could (if single or widowed) receive the age pension at sixty.

Apart from some fluctuations, these patterns didn’t change much for the next fifty years or so. The birth rate fell sharply during the Great Depression but rebounded in the baby boom. Women entered the workforce in large numbers during the second world war but were pushed out again to make room for returned servicemen. And although reductions in premature deaths (especially infant mortality) produced a big increase in average life expectancy, prospective longevity barely changed for sixty-five-year-olds between 1900 and 1960.

After 1960, though, things changed radically at both ends of the age distribution. Leaving school at fifteen ceased to be a sensible (or even a feasible) option. By the late twentieth century nearly all young people finished high school and most went on to post-school education and training. Dependence on parents, and on publicly provided or subsidised education, continued to around twenty years of age.

At the other end of the age distribution, the number of healthy years someone could expect to live after sixty-five increased steadily. The abolition of official retirement ages meant people could choose to work until they were seventy or even older. Yet the trend of the late twentieth century — exacerbated when the 1990s recession consigned many older workers to apparent unemployability — was towards earlier retirement.

It was in this context that Coalition treasurer Peter Costello launched the first Intergenerational Report. Its predictions (or projections) were less important than the rhetorical purpose: to spread the message that reductions in public spending, and particularly in welfare payments, were urgently needed if unacceptable increases in taxation were to be avoided.

These claims were repeated in successive reports, reaching the height of absurdity under treasurer Joe Hockey, who warned that the 2015 report would make us “fall off our chairs” and raised the prospect of newborn Australians living to 150. (He forgot to mention that these future Methuselahs would not even reach pension age until the last decades of the twenty-first century.)

The alarmist tone of the Intergenerational Reports was based on the idea that old people will represent an unsustainable burden on both the health system and the retirement income system. But most of the policy changes necessary to fix retirement incomes were well under way by the time the first report came out.

First, income and assets tests for the age pension, largely abolished in the 1970s, had been reintroduced in the 1980s. Then, beginning in the early 1990s, defined benefit superannuation schemes were replaced by accumulation schemes that put the burden on workers to plan the retirement investments on which they would live.

The final step, beginning in the late 1990s, was a gradual increase in the age of eligibility for retirement incomes of all kinds. The pension age for women was increased to sixty-five. Further changes in 2009 began the process of increasing the pension age to sixty-seven, which has just been completed.

Ironically, the most important backward steps in this process were taken by Costello himself. His tax concessions for superannuation, of particular benefit to self-managed superannuation funds, have proved both unsustainable and politically hard to undo. It has taken fifteen years of effort by governments of both parties to wind them back. The absurdly generous franking credits system, against which Labor campaigned in 2019, now looks untouchable.

The resolution of the retirement income problem was finally acknowledged, with some justifiable partisan spin, in the 2023 report. As treasurer Jim Chalmers observed, “Our population is ageing but our spending on the age pension will fall — that’s the intergenerational genius of super. Super is delivering on its promise — providing a better retirement for more Australians and a better outcome for the budget over the next forty years.”

Despite this, the 2023 report sticks with the outdated dependency ratio, noting that the term “refers to the number of people aged sixty-five and over for every 100 people of traditional working age (fifteen to sixty-four).” The only concession to twenty-first-century reality is the word “traditional,” hinting that a document supposedly designed to prepare for the future is still using the mental categories of the past.

But if we use a more realistic age distribution, and take account of the fact that both young and old people are dependent, the apparent crisis vanishes. There are currently about two people aged under twenty or over seventy for every three people in between. This ratio will barely change between now and 2063.

And what about the old bugbear of health spending? Ever since the first Intergenerational Report, critics of the conventional wisdom have pointed out that the growth in health expenditure has been driven mainly by the new and better treatments that lead to longer and healthier lives. This is the reverse of the alarmist claim that an increase in longevity (the cause of which is left unstated) means longer periods of late-life illness and greater demand for medical services.

New medical technologies are part of the process of structural change inherent in modernity. In the first half of the twentieth century, manufacturing displaced agriculture as the central focus of economic activity, only to be displaced in its turn by services. Now change is occurring within the service sector, with information technology and artificial intelligence replacing some services and enhancing the importance of others.

Much of the growth in the service sector comes from human services like health and education, which governments are best placed to provide or at least fund. This will indeed require an increase in the share of national income going to government, and therefore an increase in tax rates. Rather than calling for alarm, the Intergenerational Report ought to be raising awareness of the need for these structural changes.

Like its predecessors, the latest Intergenerational Report will almost certainly fail to create the hoped-for sense of alarm among voters. But in two crucial respects it ought to be generating some alarm in the political class that produced it.

First, the report spells out the need for more tax revenue. Yet the major parties have a bipartisan commitment to cutting taxes for those with the greatest ability to pay. The stage three tax cuts, designed by Scott Morrison first as treasurer and then as prime minister, will put a hole in tax revenue that will take decades to fill. And Labor’s 2019 election defeat led it to abandon most proposals to close tax loopholes.

Our government ought to be even more alarmed about global heating. For the first time, this year’s Intergenerational Report at least attempts to estimate some of the monetary costs of the disaster towards which we are accelerating. But the government that commissioned it is doing little to improve the situation, and a great deal to make it worse.

Every day, it seems, we read of a new coalmine being approved or a new gas project receiving massive subsidies. And every day the results are evident around the world in catastrophic fires, devastating floods and the accelerating destruction of natural habitats.

We are, indeed, driving younger generations of Australians towards a poorer future. But this poverty won’t be caused by higher tax rates or the costs of aged care. Rather, our poisoned bequest will be the unliveable planet that is already in plain view. •

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In retrospect, what were we thinking? Did we really believe private companies would put serving the public above profit? That companies wouldn’t take advantage of light-touch regulation? That their insistence on commercial confidentiality wasn’t designed to protect their operations from scrutiny?

Which leads to another question: is our whole approach to social services systemically flawed?

Mark Considine, a professor of political science at Melbourne University with decades of experience in examining social programs, thinks so. His recent book The Careless State brings together what we tend to see as separate problems — problems that add up to an indictment of the privatisation and deregulation of Australian social policy — and provides some pointers to how we could do better.

Social services reform became an extension of the enthusiasm for financial deregulation, free markets and privatisation that swept the world during the 1980s and was taken up by the Hawke and Keating governments in Australia. Why not try market-based reforms in new areas, even though they were outside the traditional market economy? Lumbering, inefficient bureaucracies and the community service model went out of fashion; competition, choice and entrepreneurial flair were all the rage.

Efficient markets are driven by price competition, but in the new social service markets prices were set by a single purchaser of the services, which was the government. But governments lost touch with how services were provided and often found themselves reduced to mopping up and repairing when things went awry.

Not-for-profit providers shrank, unable to compete with the often ruthless cost-cutting and understaffing of their profit-making rivals. Clients, particularly the vulnerable, often fell prey to lack of information or misleading information. The absence of real alternatives made choice illusory.

Another result was that the quality of services deteriorated. “If money can be made by providing a terrible service, that is what a market will allow,” writes Considine. Serious fraud and rorting of the rules, costing billions of dollars, were evident in all the market-driven services he examined.

So what now? The timing may just be right for a serious reassessment. A change of government in Canberra and the searing experience of robodebt might provide the impetus for change.

One of those who commented on a draft of Considine’s book was Glyn Davis, who was vice-chancellor of Melbourne University. Davis has since been appointed by Anthony Albanese to head the Department of the Prime Minister and Cabinet, and wants to pursue the issues Considine identified.

Not surprisingly, The Careless State has struck a chord with non-government providers and charities, though not so much with for-profit enterprises. It also has attracted international attention: Considine has been invited as the keynote speaker at the annual Social Outcomes conference in Oxford next month.

Considine says that Britain saw a similar shift to market-based services, starting with the Blair government. But it was never as gung-ho in its approach and is already well on the way to a reconsideration. He recalls a British bureaucrat remarking that his counterparts in Canberra “were always more Catholic than the Pope.” Denmark, Israel and the Netherlands have already moved away from a free-wheeling market approach towards a more mixed model of public coordination and governance.

Australian politicians are starting to take notice as well. As chair of the select parliamentary committee on employment services, Victorian federal Labor MP Julian Hill kept the attention of his audience of employment providers with a provocative speech last October. “Over two decades of evidence raises legitimate questions about the impact of marketisation,” he said, “and there are a growing number of informed sceptics deeply concerned that competition and choice has failed and will continue to fail the most vulnerable consumers.”

The Albanese government made some changes to employment services last year. Among them was that those jobseekers considered the easiest to return to work are no longer assigned to employment agencies, for whom they were easy earners, but are instead referred to a digital service. The existing system remains for two-thirds of unemployed people, however, including an estimated 500,000 who have been on benefits for more than a year — a figure that has barely changed despite a substantial fall in overall unemployment.

The government’s changes prompted Hill to ask his audience: “Will you respond to the greater flexibility in the system and upfront investment by investing in people? Or will we see more ‘creaming and parking,’ as has plagued the privatised system for twenty years, underinvesting in those who need the most help?” Hill was referring to the fact that more money could be made by “creaming” — moving the easiest clients quickly into jobs — while “parking” those with greater needs but fewer prospects of employment.

Those hoping Hill’s views may be tempered by Liberals on the committee could be disappointed. Russell Broadbent, a Victorian Liberal MP with a long record of hewing an independent path, is the committee’s deputy chair. He praises Hill’s bipartisan approach, is impressed with the critique developed by Considine (who has given evidence to the inquiry), and is concerned the present system plays into the hands of those who argue that “everyone who hasn’t got a job is a slacker. That is just not true — most have multiple barriers to entry into the workforce.”

Broadbent also makes broader criticisms of the market-based social services. “How come private aged-care providers drive exceptionally beautiful cars? It’s not because they’re living on the breadline: it’s because they have taken their million dollars out and say to the managers ‘there’s the money that’s left — make it work.’” He hastens to add that not everyone deserves to be tarred with the same brush.

When Paul Keating’s government shook up employment services in 1995 it went further than most developed nations. The Commonwealth Employment Service was retained but forced to compete with private job agencies. The unemployed would be able to shop around for the best service, and quality would be assured by competition between providers.

As the rhetoric of the time put it, the government would be steering, not rowing. It would set the policies but not run the services. The shift fitted nicely with another fashion — the drive for smaller government.

Capturing the mood of the moment, Keating favourably compared the new market with the previous public “monolith.” But Considine quotes another reason Keating gave for the reform: “One of the things you have always got to do when you think about social reform in Australia is to make it Tory-proof… you have got to hermetically seal them so they can’t get their nasty little right-wing fingernails under them and tear them away.” In short, Labor adopted a policy it thought the Liberals could only agree with.

That’s not quite how it worked out. The Howard government did retain the changes but reshaped them in its own, harsher image. It increased the proportion of employment services transferred from the CES to private providers from 30 per cent to 50 per cent and whittled it away further in subsequent years. Then it closed the government body down completely, leaving the whole field to non-government providers.

It also removed the “mutual” in the mutual obligation policy introduced by the Keating reforms, cutting spending on the training programs that the government had provided for long-term unemployed and introducing Work for the Dole as a condition for retaining benefits. This pandered to the populist notion mentioned by Broadbent — the unemployed as “slackers” or “bludgers” (see also robodebt). Although it has been shown to do almost nothing to help people find real jobs, Work for the Dole has been retained by the Albanese government.

Against a background of rapidly increasing demand for social services, the same arguments for choice and competition influenced new policies in aged care, childcare, vocational training and later the NDIS. In the first two decades of this century, aged care spending rose from 2.8 per cent to 3.5 per cent of the total federal budget. For childcare the increase was from 0.77 per cent to 1.53 per cent; for employment services, including income support and job assistance, from 3.3 per cent to 4.5 per cent.

In the name of “contestability,” for-profit firms were allowed to offer their services alongside not-for-profit companies and community organisations. “A church agency with a history of 100 years of philanthropic work to the unemployed would be considered no better and no worse than an entrepreneur seeking to make a profit from the same social services market,” writes Considine.

Even the most respected charities were sucked into the vortex of ruthless competition. In 2005, the Salvation Army in Victoria was forced to repay more than $9 million for fraudulently upgrading unemployed clients to a “highly disadvantaged” classification so that they attracted much higher fees. Staggeringly, a 2012 audit found that only 42 per cent of job-finding fees charged by providers were genuine.

Private providers also sprang up like mushrooms when vocational education and training was progressively deregulated and privatised, starting under the Hawke government in the 1980s and eventually enfeebling the states’ TAFE systems. The reforms culminated in what Considine describes as “the most spectacular frauds yet seen in any social program… With extraordinary profits to be made, the system was deluged with providers targeting the most disadvantaged customers with courses that had little value and sign-up incentives that made it appear they were getting their program for free.”

Students had choices but insufficient information to make them meaningful, particularly if they were international students. In theory, they could switch to other providers if they were unhappy about the quality of the training they were receiving. In practice, enrolment and course fees created effective barriers. The education and training provided by some firms were so poor that childcare firms refused to employ their graduates.

Childcare itself has also performed poorly. Government subsidies for the rapidly expanding sector often feed almost directly into higher fees and bigger profits. A 2021 study found that an Australian couple on average wages spent 16 per cent of their income on childcare, compared with 3 per cent in South Korea, 4 per cent in Sweden and 5 per cent in Iceland.

“In effect childcare providers lift fees according to what the consumers will bear, with politicians then pressured to reduce some of the cost this generates for families,” Considine writes. He adds that childcare has also become a real estate business, with a bias towards the suburbs with the best prospects for capital gains.

The shortcomings in another market-driven sector, aged care, were tragically thrust into the spotlight during Covid, particularly in Victoria. The aged care royal commission’s scathing report labelled the neglect of clients, including physical and sexual abuse by staff, a “disgrace” that “should be a source of national shame.” Cutting costs on meals, typically described in promotional material as “home cooked”, meant many in care were malnourished.

The pandemic also highlighted how the best-quality care was being provided in government-run homes, where there were far fewer deaths. Eighteen reviews of aged care over twenty-four years led Considine to the conclusion that governance of the sector was “catastrophically weak.”

Substantial increases in funding disguise the fact that the system has not kept up with the increased demands of an ageing population. Considine estimates a 40 per cent reduction in spending per client over twenty-five years, coinciding with the steady shift from a community service to a market model.

Regulation has increased but is often ineffective. Large-scale gaming of the system is evident, with the proportion of nursing home residents classified as needing complex health care — which attracts higher funding — increasing from 12.7 per cent to 53 per cent over the decade to 2019.

Inspections of facilities do occur, but always with plenty of notice. “You knew at least a week ahead,” says one executive quoted in the book. Remarkably, the industry has prevailed in its strong objections to unannounced inspections. The Australian Aged Care Quality and Safety Agency is compromised by operating inside the health department, which makes the policy decisions in aged care.

For providers, the incentives are perverse: rather than rewarding them for higher standards, the system encourages them to cut costs to generate higher demand and bigger profits. Staff are underpaid and undertrained, which also means they lack the authority to advocate on behalf of clients.

Considine believes the aged care royal commission has not gone anywhere near far enough in its recommendations. “There’s a lot of regulation raining down from above but not much internal self-management and learning,” he says. “We haven’t actually laid out the basis of a transparent care strategy. I think there is still a very high likelihood, even with more trained personnel, that the management of some of these residential places could be behaving in a really unsatisfactory fashion.”

The National Disability Insurance Scheme, the largest reform in social policy since Medicare, is admirable in its charter to give everyone with a serious disability the right and the means to obtain the assistance they choose and need. What sets it apart from the other social programs Considine examined is the role of two intermediaries — local area and support coordinators — who help clients draw up a plan and implement it, making for more effective choice.

But the NDIS still incorporates some of the same problems Considine identified in the other programs. It relies on a market for services, with the aim of using competition between providers to achieve greater efficiency. But the services offered have not always been adequate in terms of quality and availability.

The NDIS example raises another weakness in market-based social programs — what Considine calls the “black box.” Instead of the government prescribing how services are delivered, it allows providers to offer services according to their own “secret recipe,” in the interests of innovation, competition and efficiency.

Considine gives the example of a provider who suggests weekly appointments when monthly appointments are adequate; clients then ask for higher funding to cover this. The government’s National Disability Insurance Agency, or NDIA, may see costs going up but be unable to act effectively against over-servicing because it doesn’t know enough about the services provided or has limited ability to act.

The Quality and Safeguards Commission is supposed to be the NDIS cop but it is seldom on the beat. In 2020, when it reported on the death of a person whose carer was charged with manslaughter, it had received more than 8000 complaints over two years but banned only one provider.

Considine identifies other inequities in the NDIS, with better-off or more articulate people or their families able to argue for better care plans. And the government’s arm’s-length approach creates the ever-present danger of fraud, as it has done in other choice-based social systems.

Last year, the NDIA reported that eighteen people had been charged since 2020 over alleged fraud against the NDIS totalling up to $14 million. At the same time, the head of the Australian Criminal Intelligence Commission, Michael Phelan, estimated that as much as a fifth of the $30 billion annual spending on the NDIS had been misappropriated. His agency had uncovered fake NDIS clients, systematically inflated invoices, payments for services never provided, and a network of professionals helping criminals exploit the scheme.

The picture Considine paints is not unremittingly bleak. Workplace health and safety has moved in the opposite direction, from a private insurance market approach to something closer to a public–private partnership, with greater government — in this case state government — involvement and control. The cost of the schemes Considine examined in New South Wales and Victoria rose and fell at different times but were ultimately brought under control alongside improvements in health and safety.

Employers are still able to choose their insurers, but uniform standards were set and operators are required to be more transparent, encouraging a “learn from the best” culture, as opposed to the black box approach. And workplace inspections occur without prior notice.

One other area Considine identifies as an outlier is maternal and child health, which is still a public service delivered by state governments and local councils at centres staffed by specialist nurses. The service is available to everyone; to the degree choice is provided, it involves public rather than private providers. The service has a high reputation, says Considine, and offers few opportunities for fraud or “creaming.”

While the Albanese government seems prepared to listen to critics of the present system, and while at least some people believe it is open to persuasion, its risk-averse approach to change raises questions about its willingness to embrace wholesale reform.

Some signs are less than encouraging. The government’s draft national care and support economy strategy talks, among other things, about “functioning markets, sustainable funding and… productivity gains.” In its response, the Australian Council of Social Service urges the government to look at better options, including alternatives to markets, given the “litany of systemic failures and inadequacies with markets in social services.” Anglicare argues that the government should take back the control and operation of employment services.

Considine believes the markets-and-choices model has been exhausted. The pendulum needs to swing back towards empowering the clients and staff of the services — “from choice to voice,” as he puts it.

A culture of improvement and innovation must come from within. Vulnerable people in particular should have access to specialists who advocate for their needs. The black boxes within which providers guard their business models have to be replaced with more transparency. Governments need to take responsibility for services as well as setting the standards.

Is that enough? “I don’t have the view that nationalising these services is necessary,” says Considine. “In most of these social services, where the government has been working with community organisations, it works well. There are some private organisations in childcare and aged care and parts of the NDIS who are credible.

“I don’t have a problem with a mixed economy. I have a problem with running a social service as if is a market. You need to run it as a public service because that is what it is.” •

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In key fields — childcare, aged care, employment services and the NDIS — what we have is not a quality system of care but a disordered ecology of self-directed providers and distant regulators. Governments write complex contracts and rain down new rules when things go wrong, but they haven’t improved the systems themselves. We pay a high price for poor quality and often fraud-ridden services.

Royal commissions, parliamentary reviews, Productivity Commission reports and dozens of independent studies show the same pattern. Successive federal governments have dealt with rising demand for social services by encouraging private companies to form a quasi-market and then encouraging citizens to search for services that suit them.

The new vocabulary of social service reform became the offer of greater choice, with the power that might create for each individual to get what they want and for services to thus become highly responsive. The engine driving this imagined process was the failed idea that unhappy customers will simply exit a bad service and thus “signal” to producers that they must lift their game.

The problem with this “choice” model is twofold.

First, new service markets don’t suddenly spring into life across the social spectrum, waiting for customers to stroll in and make their selections. They are completely different from products: they can’t be produced in advance or shipped in the post or compared on a supermarket shelf. They are created at the same moment they are consumed. They require personal delivery and careful connection to the communities they seek to serve.

Second, these services are extremely difficult to regulate from a distance. We only know how good a service is when we experience it or when we observe, up close, someone else experiencing it.

What current services offer is a “buyer beware” warning and a distant form of regulation that catches the occasional rogue but misses the day-to-day defects across the system. That’s the reason the aged care royal commission found that the majority of people in our old folks’ homes were malnourished. That’s the reason thousands of people were duped by vocational education providers signing them up to ghost courses.

The “choice” idea turns out to be a stalking horse for something else altogether. It enables governments to withdraw from social services. Top public servants now like to say they are “steering, not rowing,” which has come to mean that they lack knowledge of how services are actually produced and experienced. The choice revolution has become a means of risk shifting.

Of course, choice itself is no bad thing. Everyone likes to have a choice when it comes to the important things they have to do. But that raises critical questions. What kinds of options can clients choose? And do they want to be left to figure all that out themselves? When US researchers asked a sample of the general American population if they want to choose their own cancer treatments, a strong majority answered yes. But when they asked people who actually had cancer, only a small number said yes. What they wanted was access to quality medical advice and a chance to be fully involved in decisions. That’s not choice, that’s voice.

The services in Australia’s service “markets” are a wide mix of the great and the ghastly — which is exactly what we would predict. Not all private providers are rogues, but it is also true that they all put shareholder value first; that’s the whole point of the market model. And once fraud becomes a regular event, heavier regulation and reputational damage become common.

This system produces a low-average model with some core characteristics. The owners of the services seek to increase their margins by de-professionalising the service and stocking it instead with poorly paid and untrained staff. Because they all do it and because they are all paid the same rate by the government, they face no market risk if they run a service that conforms to a poor minimum standard. Only the truly dreadful get noticed by the regulators.

Where a star-rating system is used to show consumers how the different providers are doing, the low-average system means that the best service only has to be slightly better than its terrible comparators in order to score points.

With weak oversight of the service itself, providers are tempted to put their best effort into marketing their service to would-be clients. If you browse the websites of aged care homes you will see that most offer “home-cooked meals” and a “place like home.” But no one knows exactly what that means until they move into a centre, which may be too late. Childcare centres promise educational activity, but there is no way to know if that ever happens or for how long in the average day.

Service providers also work very hard to get the maximum subsidy they can from the government. Many seek to reclassify their clients as more needy than they really are, or delay helping them solve smaller problems so the bigger issues will generate greater subsidies. Charges meanwhile rise faster than the average in the broader community because users receive government money to cushion the blow. These dynamics help explain one of the great paradoxes of these service markets: they can become more expensive at the same time as they deliver worse services.

These tragic conditions are well known inside each of the sectors. Sadly, the better operators get tarred with the same brush as the worst. “It is a matter of luck whether our most vulnerable and forgotten citizens end up in one of these shitholes or living a good life” is how one market player described rogue operators in the disability sector.

In that contrast is the clue to the way out of this terrible mess. Instead of a chaotic world of high-risk choices, we need to redesign these services with high, transparent standards of care built in. And we need those receiving the services and those supporting them to have a strong voice in their development and delivery. Throwing more money at the problem won’t make a jot of difference until a more systemic approach kicks in.

The good news is that many of the changes needed aren’t expensive, and some will actually save money. Services need to be better grounded in communities, which will require a more imaginative social investment strategy than has been evident to date. And shared expertise will need to play a bigger role within these services so we can promote the best solutions and share the best methods.

Each of these services has its own dynamics and will require specific reform. But common problems also need to be tackled. The first and most dramatic challenge is to make services more transparent by defining the core activities and standards of all service providers and building in the peer reviewing and evidence sharing that make real-time improvements possible. An agreed model of delivery must combine the best interests of clients with an efficient and responsive approach to current users and future demand.

With transparent models of service will come a greater capacity to share useful adaptations and innovations and use resources creatively. Regulation will also be cheaper and less time-wasting. A common service model would also give employees access to training to increase their skills and to participate in sector-wide benchmarking and self-improvement.

A second area for structural change involves the necessary shift from choice to voice. By all means, let’s keep systems that involve multiple agencies. Nothing is improved by going back to a single bureaucratic supply model — if ever such a thing existed. But let’s move past the myth that these systems will improve because consumers can simply move to the better option and thus drive out poor performers. Multiple suppliers are useful when they offer specialisation and community-specific capability, not when they seek to out-compete some carbon-copy agency down the street.

What really drives improvement is a stronger voice for clients and their families. More mechanisms are needed to help these “experts of experience” make a positive contribution to agencies’ performances. For example, public funds should come with the requirement that the agency has a client board that is consulted about all the key issues.

The third area where change would generate significant benefit is in infrastructure. By over-relying on private markets for core social services we have drifted away from public assets and weakened our planning capacity. Public payments for individual users include contributions to service infrastructure, but these assets reside in private hands and can’t therefore be used for maximum benefit. New models for private–public partnership are needed to build services for the future.

Local governments often provide the planning approval for such facilities but cannot manage them over their lifespan. As a result, aged care, childcare and training facilities are often built to optimise real estate value rather than to develop joined-up services such as joint childcare and aged care facilities.

Finally, we need to re-establish the role of public service providers within the broader mix of agencies. The public service can’t improve a service it doesn’t understand using staff who have no frontline capability. Public service delivery should always drive for high standards, test new methods and activate the “flanking services” — including counselling, rehabilitation and housing assistance — needed to make complex services work. And a “provider of last resort” should always be ready to move to places where market players won’t accept risks associated with long-term investments in clients.

There’s an alternative, of course: we can keep doing what we have been doing for twenty years and watch the most vulnerable in our community get ripped off and done down. It’s not a great choice. •

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To Sims, and many others around Australia, that’s how crucial the new tax debate is. It’s no longer just about whether Labor waves through Scott Morrison’s stage three tax cuts, amends them or abandons them. There is a much wider question, with much greater consequences for our country.

Governments can never satisfy us all. But from hospitals to defence, from childcare to aged care, from schools to fixing potholes, government services are falling way short of what Australians need and expect from their country. That shortfall helped Labor get into government. Now Labor’s there, what is it going to do about it?

Labor came to office as the flagbearer of many Australians’ hopes for a government that would end the chronic underfunding of education, health and welfare, not to mention the miserly $47.74 a day we give the unemployed to live on.

Some of those areas have now reached the point where things fall apart. GPs, tired of being cast as the poor cousins to specialists, are deserting country towns and suburban practices, and young doctors are not replacing them. Aged care homes and childcare centres are perpetually short-staffed because low pay and high workloads create constant turnover. Across the board, Australia is short of skilled workers because apprentice wages are so low that only half of them stay on to complete their training.

We could all add more examples. To me the most important is that Australia now finds itself in the most dangerous environment since the second world war, yet the Coalition kept defence spending to just 2 per cent of GDP (lower than in the 1960s when we faced no real threat) and settled on submarines that will be delivered between 2038 and 2050.

Faced with all these needs, Labor nonetheless went to the election with a platform of relatively modest, tightly targeted new spending, promising no new taxes and a big tax cut primarily for those in least need.

You can understand why. It wanted to be elected, so it played safe. And in 2025 it wants to be re-elected, so it doesn’t want to risk breaking any promises now. At least, not yet.

You see what Rod Sims meant? All those spending goals require more money, much more money. In the short term, the only way governments can get more money is by raising taxes, to reallocate spending from private purposes to public ones. What do we want Australia to be?

The looming budget is the government’s first test — and the timing is not good.

The fallout from Russia’s invasion of Ukraine (amid other factors) has lifted global food prices almost 50 per cent above pre-Covid levels, blown global energy prices to several times pre-Covid levels, provided cover for businesses everywhere to sneak their prices up — and could throw some big economies into recession.

The International Monetary Fund this week estimated that after decades of low price growth, global inflation has jumped to 8.75 per cent. Even with central banks slamming the brakes on hard (which the IMF applauds), it predicts global prices will rise 6.5 per cent next year before returning to something like normal in 2024.

Contrary to some commentary, the IMF is not forecasting a global recession; its half-yearly World Economic Outlook is towards the optimistic end of the spectrum. It predicts the global economy to grow by a relatively low 2.7 per cent next year, dragged down by global supply disruptions, a permanent slowing of China’s growth rate (to 4.4 per cent) and the fallout from the war in Ukraine.

It expects the United States to keep growing, albeit slowly (1 per cent); other forecasters expect much worse. The IMF envisages some big developing economies like India (6.1 per cent) and Indonesia (5.0) more or less hurdling the upheaval, while Brazil, Russia and Turkey now seem to be doing better (or in Russia’s case, less badly) than was forecast six months ago.

If there is a recession, it would be in the advanced economies — whose growth collectively is expected to slump to 1.1 per cent — and centred in Europe. Germany, Italy and Sweden are forecast to experience mild recessions: no upsurge in unemployment, just a year without growth.

On the IMF’s forecast, Australia will also be hit. It expects our growth to fall to 1.9 per cent next year and 1.8 per cent in 2024, and to stay low thereafter. Unemployment would gradually edge back towards 5 per cent, per capita growth would total just 4 per cent over five years. Governing Australia would not be fun.

These are only forecasts. But clearly the budget outlook is far worse than the one Josh Frydenberg unveiled in his budget in March. And even that projected a string of hefty deficits as far as the eye can see. At a time of record mineral prices and low unemployment, there is no good reason why Australia should have run up new debt of $32 billion in 2021–22.

A cardinal rule of budgeting is that, by and large, you pay for what you spend. If you don’t, you are leaving the bill for the new generation to pay. There are exceptions: you run deficits in bad times and cover them by running surpluses in good times. Infrastructure spending largely benefits the next generation, so it is fair to borrow to build. But at federal and state level — especially in Victoria and the ACT — governments have simply lacked the courage to make us pay for what they spend.

This combination of a grim global outlook, a grim state of the budget and a government still new to the job does make it likely Labor’s first budget will be, as treasurer Jim Chalmers keeps saying, responsible.

I assume he means that Labor will give priority to reducing the budget deficit. And that in working out the numbers, Treasury will err on the side of caution in guessing future energy prices, and hence company tax revenue. And that any new taxes and spending will implement the commitments Labor made in the campaign, and little else. And, of course, that Labor will go after the Coalition programs it has identified as rorts.

All that buys time. But circumstances are conspiring to force Labor to confront Rod Sims’s question: what does it want Australia to be? To deliver First World services, you need a First World revenue base. And for Australia, that means higher taxes.

Let’s take the long-term issue first. Australia is a low-tax country. At the government’s recent jobs summit, economist Ross Garnaut cited OECD figures showing that total federal, state and local government tax revenue as a share of GDP was 5.7 percentage points lower than the developed country average. That’s a shortfall of almost $140 billion a year.

The IMF’s data for total revenue reports a similar gap: governments in Australia raise 5 percentage points of GDP less revenue than the median advanced economy. In 2019 federal, state and local governments raised 34.6 per cent of GDP, well below 40.7 per cent in Canada (the country we most resemble), 46.5 per cent in Germany, and an average of 50.6 per cent in Scandinavia.

In part, that’s because retirement income in Australia is semi-privatised through superannuation, whereas retirees in almost all other Western countries, even the United States, rely on government-run retirement benefits funded by a separate social security tax on income. (The reason Australia appears to rely so much on income tax is that we have only one income tax. Most other Western countries have two, under separate names.)

But the OECD’s data show Australia also has the highest private spending on education of any OECD country, and the third-highest “voluntary” private spending on healthcare. Unemployment benefits are among the very lowest in the Western world.

Once, Labor ministers might have rebelled against this two-stream system in which the best services are reserved for those who can pay the fees demanded in the private sector. Now, as we saw when the Gillard government squibbed on the Gonski report’s school funding reforms, preference to private schools is one British tradition Labor still loyally supports.

In theory, Labor could use more desirable ways to meet the cost of bringing Australia’s services to the standards we expect. It could reduce spending on lesser priorities and reallocate the savings. Or it could take on the politically difficult economic reforms needed to speed up Australia’s sluggish rate of productivity growth.

In reality, speakers at the revenue summit agreed, the gap between today’s service levels and those we expect in aged care, the health system and so on is too vast to be filled by cutting services in other areas. Sims called it “self-evident” that savings from those cuts, while they could and should be made, are not on the scale needed to get us where we want to be.

For ten years until recently, Sims chaired the Australian Competition and Consumer Commission. The experience has made him sceptical of the potential for dramatically improving our productivity and hence growing a bigger economy. Rapid productivity growth, he said, requires increased competition — and the reality is that business is reducing competition, not increasing it.

“Our political debate always favours low taxation,” he said. “We have to point out that what comes with that is low expenditure. And we have to keep asking the question: is that what we want? If you want to spend extra money, you have to raise extra revenue. There’s just no avoiding that.”

He went on: “If you are against higher taxation, then you are against higher government expenditure… Many do not realise that in opposing taxation they are opposing extra spending on health, education and much else. I think we need higher taxation. I think it’s unavoidable.”

Why? Sims and other speakers at the summit gave several reasons:

1. Australians need better services

Annie Butler of the Nurses Federation cited the findings of the aged care royal commission: neglect and substandard care are widespread and systemic in aged care because the industry is underfunded by $10 billion a year. “Ridiculously low” wages lead to high staff turnover and hence shortages.

ACTU secretary Sally McManus argued that a lot of the crises Australia is experiencing in health and other services result from years of “chronic underfunding.” Economists predict that 30 per cent of all jobs created in the next decade will be in caring for others, but unless those jobs are better paid, workers will not stay in them. Our priorities have to change.

2. The transition to a low-carbon economy

The big economic reform facing Labor is going to be an expensive one: valuable in the long term but costly upfront. Business and government will need to invest tens of billions of dollars in building the solar and wind farms that will generate the power, the batteries that will store that power, and the transmission lines that will bring it from the inland to the cities. And if our coal stations are to close down by 2035, this money needs to be spent in the next decade or so to guarantee that we will still be able to turn on the lights.

The task is made even bigger and more crucial by the need to transition cars from oil to electricity and households and businesses from gas to electricity. Tim Washington, chair of the Electric Vehicle Council, told the summit that electric vehicles comprise, at best, 3 per cent of Australian car sales, compared with 15 per cent in other Western countries. With a global shortage of EVs likely to persist, he urged business and government to manufacture them here, using Australian designs, software, metals and lithium to create an entire value chain. He’s not likely to get that.

Fortunately, there is an ideal solution. Unfortunately, only the Greens, teal independents and economists support it. It is a carbon tax.

Sims confessed he found it baffling that so many Australians want action on climate change but instantly condemn the idea of a tax on carbon. Governments are going deeper into deficit to subsidise solar panels and electric vehicles, whereas the carbon tax would give the whole economy an incentive to decarbonise while raising taxes to fund the investments required.

“No such transition can be painless,” he said. “We need to decide whether we are serious about climate change. If we are, then it can be funded by a tax that will have the benefit of directly changing behaviour while insulating low income earners [through compensation].”

3. Get out of deficit and start paying down debt

Australia has less government debt than most Western countries, but only because the Hawke, Keating and Howard governments made fiscal responsibility a priority from 1985 until 2005. In both 2009 and 2021, as a resilient Australia emerged from the global financial crisis and Covid lockdowns respectively, our governments kept piling on stimulus as if money were no object. And the pollies’ fear of tax rises — much of it due to the vicious hostility of the Murdoch press towards anyone, especially anyone from Labor, brave enough to impose them — has kept us in deficit ever since.

Federal government revenue in this century peaked at 25.6 per cent in 2005–06, when it was 24.1 per cent of GDP. Since then spending has swollen to 26.8 per cent of GDP. Yet, far from keeping pace, revenue has fallen — because governments are frightened of raising taxes.

As ANU economist Ben Phillips put it, “We have plans for increased expenditure, but not for increased revenue. All we’ve got to increase revenue is bracket creep: it’s sneaky, but it works.”

(Bracket creep is the additional tax you pay when inflation pushes more of your nominal income into a higher tax bracket. The stage 3 tax cuts are often defended as simply handing back that extra tax. But only the high income earners will get their bracket creep back, and they get back more than they lost.)

Phillips estimates that Australia faces a revenue gap of $25 billion to $50 billion a year for the next decade. The summit heard lots of suggestions on how to close that gap: one that Labor has flagged for this budget, and others that we should be debating and putting to a new tax review.

Sims alone proposed five:

• Crack down on multinationals avoiding tax by non-commercial transfer pricing, including paying ridiculously high interest rates or “marketing fees” to a head office in a tax haven.

• Ensure Australians benefit when our mineral and energy resources are extracted. Norway takes almost 80 per cent of the revenue from its oil and gas fields, yet Australia allows companies to take those resources for virtually nothing. The petroleum resource rent tax, which is meant to do the job, desperately needs big repairs — and an extension to cover coal and iron ore.

• Introduce an excess profits tax, as the European Union has done recently. Australian Bureau of Statistics figures show that in the Coalition’s nine years in office, mining output rose by $195 billion but wages in the industry by just $5 billion. Net profits by the mining industry grew by $190 billion, yet taxes on mining shrank by $0.1 billion. If there is ever a time for a tax on excess profits, it is in Australia now.

• A carbon tax. (See above.)

• At state level: a comprehensive land tax covering all private property except farmland, to replace stamp duty on conveyancing. Economists generally see land tax as a most efficient tax. Sims called it a progressive tax, “based on assets that cannot be moved,” that produces a steady revenue flow.

• Road-user charges will be inevitable as electric vehicles replace petrol-driven cars. Their advantage is that they can be fine-tuned for vehicle type (trucks pay for the damage they do to roads) and time of day (peak-hour pricing).

Other speakers added at least another five:

• Prune tax breaks for superannuation.

• Prune or phase out negative gearing of property investments.

• Scrap fossil fuel subsidies, including the mining industry’s exemption from fuel excise.

• End concessional tax rates for family trusts.

• Increase the Medicare levy to pay for extra spending on aged care.

Sims emphasised that the reforms would need to be sold as a package, with compensation where appropriate, as the Hawke government did when it reformed tax in 1985. That package was preceded by a tax review by Treasury and a tax summit where a wide range of groups put their case.

Albanese has pledged no new taxes in this term apart from the ones Labor took to the election (primarily a crackdown on tax avoidance by multinationals — no votes lost by tackling that). But independent MPs Allegra Spender (Wentworth, NSW) and Zoe Daniel (Goldstein, Victoria) both urged a new tax review “with everything on the table” — with Spender adding “including the GST” and a hopeful plea: “We need to have grown-up conversations about tax.”

Well, good luck with that. I suspect most tax economists would agree that the GST rate should be raised, or its field widened, or both. New Zealand lifted its GST rate to 15 per cent back in 2010 without suffering any visible social collapse, and its GST is far more comprehensive than ours. That’s the main reason its government can spend more than ours.

The left needs to stop demonising the GST and think of tax reform as a package. You can introduce or increase or widen a GST fairly so long as you design the right package — as we saw in 1999 after the Australian Democrats stopped the Liberals using the GST to shift more of the tax burden onto lower and middle income earners.

But so long as we are unable to see any bipartisanship on tax, the GST will remain a no-go area. And bipartisanship is probably off the agenda as long as Peter Dutton is Liberal leader.

Where does that leave the stage 3 tax cuts? It looks like this movie has ended now, with treasurer Jim Chalmers apparently losing the fight despite his skilful attempts to persuade colleagues to revise, reduce or even scrap the cuts — which would be in line with his theme of protecting the budget in increasingly dangerous times and giving support only to those who really need it.

But good movies these days have a sequel, and these tax cuts won’t take effect until mid 2024. Given his impressive debut in the role, Chalmers has time to perfect it when he plans his next budget. He knows the case for either abolishing the cuts or reducing and retargeting them is very strong.

Stage 3 contains three elements:

• abolish the 37 per cent marginal tax rate on income earned between $120,000 and $180,000

• raise the threshold for the 45 per cent top rate from $180,000 to $200,000

• reduce the standard 32.5 per cent rate to 30 per cent — which would then be a flat tax rate for all income from $45,000 to $200,000.

Modelling by the Parliamentary Budget Office and by Ben Phillips found the first and the third are the expensive items. And the consensus at the summit seemed to be that if there is compromise, we should keep the third while scrapping the first.

A few points are important to note.

First, these tax cuts were proposed by treasurer Scott Morrison way back in 2018, six years before they would take effect. Since then, we have had a global Covid pandemic and the global inflation breakout. Committing to tax cuts six years before they took effect had no economic rationale. What drove it was politics. Morrison assumed the budget in 2024 could afford it. He was wrong.

Second, the cuts follow stage 1 (in 2018), directed to lower-middle income earners, and stage 2 (in 2020), focused on upper-middle incomes. Stage 1 was small, and has since been abolished by the Coalition itself. Stage 2 was bigger: it cut taxes for people earning less than $90,000 by $10 a year, and taxes for people earning over $120,000 by $1890 a year. The idea that high earners have been kept waiting while others have had tax cuts is quite untrue.

Stage 3 is seriously big money. The Parliamentary Budget Office last year estimated their cost at $18 billion in year one (2024–25), then more than doubling to $37 billion by year nine (2032–33). Treasury is now revisiting those numbers — and the cost will almost certainly be even higher now.

But even on the PBO’s 2021 estimate, that would reduce total government revenue by 3.5 per cent initially, and by more than 4 per cent by the start of the 2030s. That is a huge cut in revenue at a time when the budget is unable to cope with Australia’s existing spending needs, let alone the new ones coming over the horizon from the ageing of our population, China’s attempt to assert hegemony over the region, the excesses of the NDIS, and so on. We need tax rises, not tax cuts.

Third, the PBO estimates that 78 per cent of those billions of dollars would go to the richest 20 per cent of Australians. That’s largely because they pay 68 per cent of all income tax — but that in turn is because they get such a high share of the nation’s income. They would rank low on a list of those in need.

That said, it seems fair to say that the threshold of $180,000 for Australia’s top tax is too low. If Chalmers and his colleagues want to compromise, one option they might consider is to reduce the 37 per cent rate to 35 per cent with the same thresholds as now — but add a new 40 per cent rate for income from $180,000 to $200,000, and a timetable to raise that threshold to $250,000. Over time, that would save the budget a lot of money, without taking everything from those who would gain from the plan Labor promised them. •

The post Time to talk about tax appeared first on Inside Story.

I’m not sure how many people in Perth picked up the clue in that refrain, but those who did would have known that something distinctively Dutch was brewing. That phrase is the call sign of Buurtzorg (spoiler: in Dutch buurt means neighbourhood and zorg means care), a nurse-led organisation that has revolutionised home care in the Netherlands.

Buurtzorg intrigues policymakers around the world looking for better ways to enable elderly people (and others with care needs) to live independently with less formal care. What’s not to like about a model that KPMG found “halves costs, improves quality and makes happier caregivers,” as Forbes magazine enthused?

Admirers of the Buurtzorg model are not confined to healthcare, either. La philosophie Buurtzorg, as the French call it, has become something of a standard-bearer for a nascent movement rallying to put human values back at the core of government.

Neighbourhood Care — which is indeed Buurtzorg’s partner in Australia — launched under the radar, in difficult times. At first glance, it appears to be just another service provider competing for dollars under the National Disability Insurance Scheme. And, who knows, that may yet prove to be so. There’s plenty of noise in that crowded space, and good reason to suspect the fine intentions of new entrants. “A lot of people come into the sector with lovely values and mission statements, but they are there for an opportunity, to commodify care,” says Wollongong University health services researcher Anita Westera, who points to the rapid growth of digital care platforms like Mable and Kynd as the logical extension of transforming aged care and disability into a marketplace predicated on consumer choice.

Chief executive Arnold Stroobach tells me Neighbourhood Care employs twenty-six people. It has three teams operating in Western Australia — two in metropolitan Perth and another in Northam, an hour east of Perth — and a small presence in Ipswich, in Queensland. These self-managed teams are the central unit of the Buurtzorg model; in the Netherlands, where it is the biggest community care provider, Buurtzorg’s decentralised network has 1000 of them.

A Buurtzorg team consists of ten to twelve trained nurses. Once a team grows bigger than twelve, it splits into two (an idea pinched from an unconventional Dutch tech entrepreneur, the late Eckart Wintzen). Each nursing team works in a buurt of up to 10,000 inhabitants and typically divides the care of fifty to sixty frail elderly people between its members. Referrals come from hospitals, doctors or families.

The nurses organise everything themselves, taking charge of the complete process of caring for their patients and running their own small enterprise. They are connected to each other and the other teams in the decentralised network by an internet-based platform called Buurtzorgweb. There’s no middle management to refer problems up to. If a team has internal conflict, Buurtzorg offers the assistance of “coaches” — there’s one per forty teams — who are trained in team dynamics. If a team can’t solve its problems, it closes.

Neighbourhood Care bears only a sketchy resemblance to this model at the moment. Apart from working in disability rather than aged care, only one team is operating at full capacity, the one in Northam, and its employees are not nurses but therapists and trained support workers. The challenge for the organisation is to comply with the requirement of the NDIS — where every client has a plan with prescribed goals and line items — while trusting the operation to the team.

“You can’t copy and paste the Dutch model,” says Stroobach. “You have to find a way to adapt to local conditions.” The team dynamic is different in a non-medical sector, he says, but they haven’t changed the principles of Buurtzorg a lot. And they’ve just passed their first NDIS audit. The next step is to register for the federal government’s My Aged Care scheme.

Australia’s sprawling suburbs and isolated regional towns are a very different kind of buurt from those in the Netherlands’ densely populated lowlands. But Buurtzorg’s big idea is small teams not small areas, Stroobach says. “It’s human-scaled.” It has been a slow business finding the right people for the teams, frontline workers who know what’s expected of them and can wear the responsibility of self-management. The Dutch love it, but it’s not a familiar concept in Australia, where our default position is the traditional hierarchy.

Stroobach finds the analogy with a sporting team works well though. “In sport, feedback can be brutal, but it’s acceptable. In the workplace here it’s almost a miracle to have feedback.” And some clients aren’t comfortable with the Buurtzorg model — they don’t believe the support worker can make his or her own decisions. It’s a tricky dynamic, he says, and “you can kill it off if you’re not careful.”

When I speak with Buurtzorg’s founder, nurse turned social entrepreneur Jos de Blok, he seems happy enough with what’s happening in Australia so far. “In my opinion, they are doing very well,” he says. It’s quite an effort in the first few years, he adds. The thing is to break even: “If it is stable, you can easily grow.” He thinks it will take five years for Buurtzorg to “get somewhere” in Australia.

That’s an interesting time frame, given the speed and magnitude of Buurtzorg’s growth in the Netherlands. From a standing start in the winter of 2006, Buurtzorg attracted enormous interest, both from nurses who deserted its competitors to join Buurtzorg teams, and from the ministry of health, which actively promoted the development of the model.

Within a decade, Buurtzorg was employing more than half the country’s community nurses, and the government had adjusted the payment system to make room for its flat-rate billing. By 2015, two independent audits (by KPMG and EY) had assessed the model’s impact on some of the most chronic problems facing Dutch healthcare — dissatisfied patients, overstretched and disillusioned staff, and a constant pressure on budgets. Those reports were immensely helpful, de Blok says. “When you are able to show that our model is 40 per cent cheaper for society, you get political acceleration.”

Buurtzorg employs more than 14,000 people in the Netherlands. It is mostly engaged in nursing frail elderly people in their homes, but it also has teams working in mental health, family and child services, and domestic help, and there is discussion in the Netherlands and elsewhere about whether and how the Buurtzorg principles can be applied to education, policing and other social services. De Blok doesn’t argue with that. “For me, it is not really a business model, it is a way to look at society,” he says.

De Blok is driving while we talk, heading to The Hague for a meeting with the Dutch health minister. It’s a Monday morning, but traffic is light. He’ll be on time, which is a good thing because Hugo de Jonge is “not particularly a friend,” he says. Previous ministers of health have been helpful, but de Jonge has been critical of Buurtzorg. Plus, he has a “top-down way of doing things.” You can see where this is going. Top-down would press all de Blok’s buttons.

But he’s not necessarily meeting his minister as a supplicant. The Buurtzorg model is one of the Netherlands’ more famous exports these days — perhaps not up there with edam or windmill biscuits, but active in twenty-five countries. Moreover, a lot of Buurtzorg’s competitors have adopted its model. De Blok estimates up to 70 per cent of healthcare organisations in the Netherlands have switched to self-managed teams. “My ambition in Holland was to change the healthcare system,” he says. “We succeeded quite well.”

Reducing complexity: Buurtzorg’s founder, Jos de Blok. Linelle Deunk/Lumen

He has no need to blow his own trumpet when so many others are ready to do it for him. Frederic Laloux devoted a section of his influential management book Reinventing Organizations to Buurtzorg’s model; the Royal Society of Arts awarded de Blok its Albert Medal in 2014 (other recipients have included Francis Crick and Tim Berners-Lee). The young Dutch historian who famously disrupted the 2019 Davos meeting, Rutger Bregman, is a fan. The list goes on. De Blok and his organisation are a global phenomenon.

The minister would know that. He would also know that everything has its season. Has Buurtzorg already fulfilled the potential that Dutch management professor Sharda Nandram suggested it had “to permanently change the landscape of the healthcare sector” or is it only just hitting its stride? It’s hard to know. There are still a lot of blanks in the picture.

Buurtzorg is de Blok’s brainchild and he is a gifted communicator, in an understated Dutch way. If you watch him giving a TED talk, it isn’t difficult to appreciate why his ideas have such a wide reach, not just in Europe but in places where Dutch ideas have historically had little purchase, like China, India and Japan.

He makes eliminating overpaid managers, luxurious offices and layers of bureaucracy — and giving teams of nurses the authority and responsibility for providing care to housebound older people with chronic disease and disabilities — sound incredibly obvious.

De Blok is no innocent. It’s not that he doesn’t see the problems that healthcare systems all over the world have — who doesn’t? — but rather that he makes a virtue of reducing complexity.

“What I see in a lot of countries is that systems are increasingly complicated and frustrations are becoming worse and worse,” he told University of Cambridge business professor Jaideep Prabhu, whose new book about government tells the Buurtzorg story in detail. “I want to show that it’s easy to change.”

But that’s the question, isn’t it? How easy?

It’s worth spending a little time looking more closely at how Buurtzorg developed in the Netherlands before exploring why full take-up of the model has not quite happened yet — even in Britain, where enthusiasm for Buurtzorg is high, as former Buurtzorg staffer Paul Jansen wrote recently, but many promising teams have been absorbed back into their organisations. Jansen was chief operating officer at Buurtzorg Britain and Ireland between 2018 and 2020.

Much of the intense international curiosity and speculation about Buurtzorg centres on the question of its adaptability. Can its successes be replicated in countries with similar healthcare problems, or is it something that only the Dutch, with their famous openness to new ideas (like reinstating old water courses to avert extreme flooding, and demanding farmers cull their cow herds to reduce ammonia pollution), can pull off?

So, a short detour is needed to put Buurtzorg’s origins into context. In the early 1990s, in response to rising costs and an ageing population, Dutch politicians threw away the old public service playbook and put their faith in the three Ms of markets, managers and metrics. Even if you’re not a student of government — who would know this trend as New Public Management — you’ll recognise the ideological shift. It changed the way public services throughout the world were delivered, and nowhere more so than in Australia, where NPM retains an iron grip across government.

De Blok was working in a village with a few colleagues as a community nurse when the political winds changed. He told the journal People and Strategy that being a community nurse under the traditional, pre-NPM model of healthcare gave him everything he wanted. “I had the freedom to decide how to take care of patients. I had very good colleagues. There was no management structure, we didn’t have strategic plans, and we didn’t have planning tools. We just did what was needed. It was effective.”

And then came a directive from the top that small district nursing teams should be merged to form larger organisations run by professional managers. This would bring economies of scale, with competition driving down costs and driving up the quality of care.

That was the theory. What actually happened was that the focus of healthcare moved from caring for patients to delivering products — products like nursing, nursing extra, personal care, personal care special, guidance, guidance extra, and so on. As products proliferated, more managers were hired to control the process.

Nurses, on the other hand, were authorised only to deliver certain products in an agreed time frame and lost the personal bond they’d had with patients. Sometimes up to thirty different healthcare professionals visited an elderly person at home in a month to administer different tasks or interventions, yet there was no oversight of an individual’s health and wellbeing.

(Melbourne public health researcher Sarah Russell has made similar observations about My Aged Care, where the most common complaint about providers is the high turnover of unqualified, inexperienced and untrained support workers, strangers being sent to the homes of older people who have to “just trust they will be treated with respect and kindness.”)

Care organisations became like factories, systems replaced relationships, and the perception of what was good care and what were good solutions changed — but to what end? Patients were confused and unhappy. Nurse sick leave rates soared. And, instead of driving down costs and improving the quality of care, the reforms had the opposite effect.

De Blok spent a decade trying to work within the new system. He retrained as a manager, did a master’s degree in innovation and eventually became a managing director. But by 2004 he understood that if he wanted to recover what had been lost — the sacrosanct relationship between patient and nurse — he’d have to start his own organisation, designed and run by nurses. It would deliver only one service, which was helping people in the quality of their daily life.

The idea, de Blok has said, was to “have people around these problems who feel connected to them and can make the choices they think are the best choices… The support systems should be logical and simplified but you should not underestimate the complexity of what’s going on.”

To understand that complexity better, listen to him talking to Richard Atherton on the Being Human podcast about the kinds of decisions nurses make when they’re caring for patients in the last phase of their life. “In our society, we try to make everything explicit, we try to put it into protocol and regulations and so on, but most of the work of nurses is in the heads of people, based on years of doing things and understanding patterns. You need the environment, you need the autonomy, and the space to do these things based on your practical wisdom and intuition.”

Feeling connected: a Buurtzorg team meeting in the German city of Münster. Buurtzorg Germany

De Blok spent eighteen months designing Buurtzorg with his wife Gonnie Kronenberg and other nursing friends. He had figured out most of it, but it wasn’t until he got talking to a former colleague and IT expert, Ard Leferink, that the model came together. Leferink showed him how to scale up his idea. He would design an internet-based platform (which became Buurtzorgweb) that could be built quickly and cheaply to support nurses in their work, freeing up their time to focus on care.

Nursing teams manage their frontline workload on their iPads (the platform also allows Buurtzorg to monitor how each team is doing), and other administration is picked up by the back office operation run by Kronenberg. It’s lean: forty-five people deal with contracts, billing hours to health insurers, and supporting nurses when they have difficult cases. Overheads are low, at 8 per cent. In Australia, administration fees in the home care system average almost a third of package costs.

In its first full year of operation, 2007, Buurtzorg began with one team of ten nurses in Almelo and ended the year with twelve teams in different places and a turnover of €1 million. De Blok wasn’t surprised. He knew that if it worked then everyone would want it. It was good for nurses, good for patients, and — as would be proven within a few years — good for the system. But they did get lucky.

In the summer of 2007, the then minister of health, who’d seen de Blok on television, asked if she could join a team of Buurtzorg nurses on her bicycle. She liked what she saw and invited Buurtzorg to visit the ministry of health, and from there came an initiative that led to Buurtzorg being asked to develop a national policy based on its model. “She was wanting to find ways to change [the system] herself,” he remembers. “So she said, ‘Let’s do this together.’” Not everyone was convinced, though. There was some pushback from other care organisations and from insurers, which withheld funds, but eventually they came on board.

That’s the conundrum: people around the world like what they see in Buurtzorg, and want what it offers, but on their terms. People in top government roles can have big issues with trust and relinquishing control. “There is a lack of trust in devolving power and funding to communities that know their people best,” says Travers McLeod, chief executive of the Centre for Policy Development in Melbourne, which has invested a lot of thought and energy on the ground in community-led programs.

Trust-based organisations like Buurtzorg are difficult beasts to understand if your view is that people are fundamentally selfish. That was the starting point of NPM — that people need tangible incentives to serve the public good, which means their performance has to be measured so managers know who deserves punishment or reward. And people who ask for help must be assessed to see if they really need help, or are just trying to grab more than their share.

We’ve all grown used to thinking this way, so it’s hard work persuading policymakers that other motivations can bring out the best in people.

“Working within a system that is not open to these kinds of things is one of the most difficult parts,” de Blok tells me. “I’ve been talking for ten years with the NHS [Britain’s National Health Service]. It is so complicated in that system to create space and an environment where you can experiment and show an impact. It fits completely with the NHS first principles, and the nurses understand it, but the system is so complicated.”

Even the Danes, whose culture is highly compatible with the Dutch, are struggling to keep their first concrete experiment with two Buurtzorg-style home care teams on track. The social enterprise running the pilot filed for bankruptcy on 31 August, a week before a midterm evaluation was published by VIVE, the Danish Center for Social Science Research. The project’s director put the financial failure down to the hybrid nature of the project — citizens loved it, he said, and growth was steady at 15 per cent a month, but “systems could not keep up and we got too much resistance.” The VIVE review was ambivalent. “Buurtzorg challenges the Danish way of organising elderly care,” it reported, “and therefore there are also divided opinions about the model’s relevance and applicability in a Danish context.”

De Blok tells me he was in Denmark the previous week, and that “they want to adopt all the ideas of Buurtzorg.” He would be there again the following week for more conferences. And this is how it seems to go. A lot of conferences but remarkably little evidence yet for how the idea plays out in practice anywhere but in the Netherlands.

That said, there are sizeable Buurtzorg organisations in France, Sweden and Germany, and the European Union has invested €8 million in Transforming Integrated Care in the Community, a four-year research project guided by the principles of Buurtzorg. There are also several Buurtzorg partners in Asia, including in China, India, South Korea and Japan.

Buurtzorg Asia took some time to bed down, according to its boss Stephan Dyckerhoff. In Japan, for example, the first nurse team left after a few months, “overwhelmed by the situation of having to manage themselves,” Dyckerhoff wrote in a guest blog post for Agile Australia. “We now work using a ‘step by step’ approach, encouraging nurses to take more responsibility over time but having a lead nurse and/or general manager in place at the beginning.”

BMJ Open reported something similar in a 2018 study of an English neighbourhood nursing team using an adapted Buurtzorg model. The nurses loved it, the patients loved it, but it messed with the system. “Challenges were reported… in relation to the recognition and support of the concept of self-managing teams within a large bureaucratic healthcare organisation.”

Of course they were: the whole point of Buurtzorg, with its motto of “humanity over bureaucracy,” is to sideline bureaucracy, and that is never going to be popular with management.

There is one glaring absence from Buurtzorg International’s line-up — the United States. A home care organisation modelled on Buurtzorg began in 2014 in Stillwater, Minnesota, with financial support and guidance from the Dutch. It had four nurse employees and cared for its first few home care clients on a private-pay basis, but the team had to deal with multiple payers, each with its own rules and procedures. That made it difficult for nurses to follow the approach of their Dutch counterparts, who do their own billing and therefore make the savings in administration costs that underpin the Dutch organisation. Buurtzorg pulled out of the United States in 2017. De Blok says Americans keep calling him, attracted by Buurtzorg’s growth, but they miss the point. “It is designed on trust… not to make as much profit as possible.”

But he’s not suggesting everyone Buurtzorg partners with must be a not-for-profit. In fact, Neighbourhood Care is owned by Future Proof Australia, a management services firm run by Stroobach, who has a background in medical informatics, and his partner Brett Parker, an accountant. It needs to make a profit to survive, but Stroobach volunteers that the NDIS is very generously funded — and in aged care there’s a huge demand for home care services.

In 2017–18, almost a million Australians accessed home care services (versus 200,000 people living permanently in residential aged care), and part of the federal government’s response to the aged care royal commission was additional funding to deal with the 100,000-strong waiting list for home care packages. What the royal commission failed to do, according to Wollongong University’s Anita Westera and her colleague Kathy Eagar, was to “make recommendations to end excessive price gouging, particularly in home care, and to regulate excessive profit.”

This is not to suggest that Buurtzorg is looking to make money from vulnerable older Australians, but simply to note that the model — rather like the Montessori education model — is open to adaptation and interpretation, both within aged care and more broadly. All over the world, people are trying to rewire power structures. People like New York–based digital activist Jeremy Heimans, for example, who is better known in Australia as the founder of Get Up! He frequently uses Buurtzorg to describe what the future of work looks like. “What Buurtzorg gets right is it puts human beings front and centre,” he wrote in a piece published by LinkedIn.

A lot of people know intuitively that NPM isn’t working — that “you can’t successfully micromanage delivery of complex services from the centre,” as one former senior public servant put it to me — but don’t necessarily have the language to express what an alternative would look like.

Thea Snow, who runs the Melbourne office of the London-based Centre for Public Impact, has met some of these people in webinars she’s run throughout 2020–21 in conjunction with the Australia and New Zealand School of Government. Thousands of public servants have signed up to explore themes like humble leadership, power sharing, systemic thinking and meaningful measurement. They’re not only from  the social services, but also from areas like defence, fisheries, agriculture and planning.

For Snow — as for others — Buurtzorg represents “something bigger, a movement. It is about a new belief in what the role of government is, what frontline works are, how citizens interact with government… It is not mainstream, but I feel energised and positive about the ways this conversation is attracting people who are extremely passionate about reimagining government.”

As for Arnold Stroobach, he’s walking the talk over in the west. “We have similar conditions in Australia as there were in 2006 when Jos de Blok started Buurtzorg… What I hope is that just like in the Netherlands, it becomes a dominant model in healthcare with everyone working in the Buurtzorg way.” •

The publication of this article was supported by a grant from the Judith Neilson Institute for Journalism and Ideas.

The post Coffee first, then care appeared first on Inside Story.

This is not to say that dementia is new to the cinema. Among the films dealing with the condition and its effects over the past couple of decades have been Iris (2001), which recorded the writer Iris Murdoch’s decline; Away from Her (2006), the Canadian-set drama of relationships tangled by the advance of dementia; and Still Alice (2014), a touching study of a linguistics professor’s experience of early-onset Alzheimer’s. Perhaps to ensure healthy box office returns for a problematic subject, each had A-level stars: respectively Judi Dench, Julie Christie and Julianne Moore.

The makers of the latest films all took the same precaution — if that is the apt word. I mentioned that these films are challenging, and it may well have been the acting challenge that attracted such notable performers. But the makers of The Father, Supernova and June Again have adopted notably different narrative procedures in their dramatisation of the condition’s progress and its influence on the lives of those who have to deal with the protagonist’s painful symptoms.

First, the award-winning British/French co-production, The Father, the first feature for director Florian Zeller, who is also co-author. His screenplay, adapted from his own stage play, moves with remarkable fluidity in a film that eschews linear narrative. The viewer is not always any more certain of location than is the film’s protagonist, the eighty-odd-year-old Anthony (Anthony Hopkins). The essential location of the film’s drama is really his mind, which varies wildly in its grip on reality.

Though the film is adapted from a stage play and most of the action is confined to an apartment, with a brief sortie into a hospital, Zeller’s direction ensures that it is never “stagey.” Along with the direction, the cinematography and the editing create a wholly persuasive fluidity between the here and the there, the real and the imagined.

The film opens on a shot of Anne (Olivia Colman) rushing in to visit her father (Hopkins), who greets her with “What are you doing here?” She’s anxious and he’s fractious, and the film quickly develops a powerful sense of the tension between father and daughter. She’s devoted to him and concerned about his welfare, but with marital difficulties of her own to deal with she’s planning to go to Paris with a new partner. Anthony’s most recent carer (awful word!) has left, claiming he’d unjustly called her “a little bitch,” a charge he denies, insisting that she stole his watch, which of course she didn’t.

Anne tries patiently to deal with his vagaries, including his repeated objection to France because “they don’t speak English there,” and his anxious query, “What’s to become of me?” He knows just enough to realise that, if Anne goes to Paris, he will be on his own. The film offers a wonderful sense of Anthony’s utter confusion and does so without resort to melodrama or sentimentality.

Viewers may also be confused (whose flat are we now in?), but we are encouraged, indeed required to enter the father’s mind, as the film creates his real world and the other he imagines he is in from time to time. This uncertainty does not detract from viewers’ involvement in the action from moment to moment — this moment, for example, eliciting sympathy for Anne in her attempts to help her father, that moment requiring empathy with a mind losing its grip.

Supernova is also essentially concerned with the relationship between a dementia sufferer and the person responsible for his wellbeing. Here, it is a study of two elderly men — one losing control over himself, and the other, his long-time partner, having his patience sorely tested by often-irrational demands but never losing the affection that has governed their decades together.

Unlike The Father, in which the narrative enacts the eponym’s disordered state of mind, Supernova, written and directed by Harry Macqueen, opts for more linear storytelling. It records the journey round northern England of these two men: Sam (Colin Firth) is a pianist whose next performance the film is leading up to; his partner Tusker (Stanley Tucci) is a novelist trying to write his last book in the knowledge that he is unlikely to finish it.

Tusker’s dementia is the more moving because he has moments of lucidity. Sam, for the most part bearing patiently with his partner’s fluctuating state of mind, has organised their campervan trip as a sort of last journey, but the film is never sentimental about this. In fact, Sam can sometimes be irritated with Tusker’s messing about and forgetting things.

Supernova may sound like a road movie, but in this journey the glorious northern England scenery, in veteran Dick Pope’s luminous cinematography, is more an observer than something to observe. The relationship between the men may be changing, but these hills and valleys are oblivious.

And whereas in most road movies the protagonists have idiosyncratic encounters along the way, the encounter here is limited to a party at Sam’s sister’s house. She and Tusker have arranged it as a surprise gesture, partly as thanks for Sam’s longstanding love and care. Tusker has prepared a speech for the occasion but finds he’s not up to reading it and asks Sam to do it for him; the fact that much of it is about Sam gives it a special poignancy.

As director, Macqueen never loses sight of the experience at the heart of the film. As screenwriter, he was wise to conceive of the film as essentially a two-hander, with the one lively stopover accentuating the quiet restraint of the rest. And of course he has the benefit of possibly career-best performances from Firth and Tucci, who constitute a wholly credible pair. As co-stars, they achieve a sense of interconnectedness not often equalled in film.

Like the other two recent films, the Sydney-set June Again has a strong central performance. This is the feature debut of its director, New Zealander J.J. Winlove, who is also, like the directors of The Father and Supernova, the author of the screenplay. I’m not sure what this dual role means, but perhaps it suggests a serious commitment to exploring these disrupted lives.

In the role of June, now in a “home” for those similarly afflicted, is Noni Hazlehurst. While perhaps not an international name on a par with the stars of the other two films, she is one of the surviving stalwarts of the Australian cinema revival of the 1970s and over four decades has never faltered on screens large and small. In June Again she has one of her most challenging roles, and though the film occasionally strains credibility, she never does.

The film opens and closes on a large close-up of June, which perhaps suggests a clearer, more formal structure than is borne out by the rest of the film. We see her wandering the corridors, trying to open doors, and a sympathetic doctor explaining her condition; but she is somewhat improbably able to exit the institution and take a taxi to what she thinks is her own house, where she steals some clothes. From then on her memory comes and goes: she finds that her son Devon (Stephen Curry) and daughter Ginny (Claudia Karvan) have fallen out; she discovers she’s no longer part of the firm she once managed; she leaps into a car and drives off to the country, where she weeps at the pain of memory.

And so on: the film develops a straggling narrative, but unlike The Father doesn’t use it to persuasive effect. In fact the story is overcrowded with events, some of which tell us about the family but shift the focus from June’s decline. There are touches of wit in the screenplay (as when two sullen grandchildren are dispossessed of their iPads), and Curry and Karvan offer astute support.

June Again is not unenjoyable but it lacks the powerful dramatic fluidity of The Father and the persuasive interaction of the two men in the more straightforward Supernova. But it is good to see, in all three, so serious a matter being given such careful attention. •

The post Holding on appeared first on Inside Story.

Some of the worries are prompted by old-fashioned, not to say primitive, concerns about birthrates as an indicator of “national vitality.” But they mainly reflect a twentieth-century view of the economy that is deeply embedded in our ways of thinking and economic measurement, even though it is now almost completely obsolete.

Underlying this view is the notion that “a surplus of young people” is needed to “drive economies and help pay for the old,” as the New York Times put it in its report on the 2020 figures. But this model of the economy only emerged in the twentieth century, and it looks likely to end in the twenty-first.

For most of human history, old people were expected to work as long as they could, just as children were put to work as soon as they were able. The very young and the very old depended on their families to support them.

That changed radically with the emergence of the welfare state at the end of the nineteenth century. Children were excluded from the workforce and required to attend school until the official leaving age, typically around fourteen. Governments paid for schools but generally required parents to support their children in other ways, as they’d done in the past.

At the other end of life, the new system of age pensions meant that old people (most commonly those over sixty-five) became entitled to public support, sometimes subject to a means test. Pensions were paid out of taxes or contributions to social security schemes.

Either way, the cost was borne by the “working-age” population, generally defined as fifteen to sixty-four. With a high birthrate, the age distribution of the population was shaped like a pyramid, with a large working-age population at the bottom supporting a small group of retirees at the top.

Underlying the pyramid was the idea that physical work predominated. Young, strong and needing only on-the-job training, workers would leave school at fourteen and immediately start contributing to the economy. By sixty-five, they would be worn out and ready for retirement. The more young people the better.

To see what’s happened to that assumption, we need only look at the US data on employment by age. At the turn of the twenty-first century, the pyramid concept looked reasonable enough. Around 60 per cent of young people aged sixteen to twenty-four were employed, compared with barely 30 per cent of those aged fifty-five and over.

By 2019, though, before the pandemic, the gap had largely closed. Just over 50 per cent of people aged sixteen to twenty-four were employed, compared with 39 per cent of those over fifty-five. While many of the jobs held by young people are now part-time and low-waged, older workers are typically earning just below the peak they reached at around age fifty. The figures suggest that average earnings per person are already higher among the old than among the young.

The modern economy is quite different from the one assumed by the conventional population pyramid. To become a productive member of the community, young people need academic or vocational post-school education, and that requires large-scale spending by government or parents, or through loan schemes like HECS. Even as the proportion of young people in the population has declined, developed countries like Australia and the United States have been able to maintain or even increase the proportion of national income allocated to education.

A return to high birthrates over the next few years would create the need for a large increase in education spending. The pay-off in terms of a more productive workforce would not be fully realised until the second half of this century, when the expanded age cohort entered the prime-age workforce in their late twenties and early thirties.

At the other end of the age distribution, official retirement ages have been abolished, and the eligibility age for the pension has been pushed to sixty-seven, with further increases in prospect. For a significant group of manual workers, physical exhaustion still makes retirement a relief. The undervaluing of older workers persists, pushing many into retirement whether they want it or not. But working past sixty-five is an increasingly attractive economic option for a large group of white-collar workers.

A realistic model of the future workforce is one in which productive workers are mostly aged between twenty-five and seventy. Given that life expectancy will never be much above ninety-five, the typical person will spend about half their life in the working-age population and the other half evenly divided between education and retirement.

In other words, despite the concerns expressed since the 2020 population figures were released, the age distribution associated with a lower birthrate is unlikely to cause major problems in how people in countries like Australia are supported during the years they spend out of the workforce.

Meanwhile, a lower birthrate is having an unambiguously beneficial impact on the size of the world’s population. The world is already overcrowded, and the growing population is straining the capacity of the planet. Even with falling birthrates, the world’s population is certain to rise between now and 2050.

By 2100, the total figure might return to the current level of eight billion, or perhaps a little fewer. The idea that we should push people to have more children in order to lift this number, rather than make marginal adjustments to the economic institutions we have inherited from the twentieth century, is simply nonsensical. •

The post The end of the population pyramid appeared first on Inside Story.

Paid for by industry superannuation funds, this recent TV ad is designed to pressure the government to deliver on its promise to lift the compulsory super rate from 9.5 per cent to 12 per cent in increments of 0.5 per cent, starting in July and finishing in 2025.

The ad’s promise of extra money for nothing sounds great. Except, of course, it doesn’t work that way. Four pieces of research over the past decade — the review of taxation by former treasury head Ken Henry, a Grattan Institute study, work by the Reserve Bank and, most recently, the Retirement Income Review headed by former treasury official Michael Callaghan — have all come to the same conclusion: increases in compulsory superannuation come predominantly from wages.

Arguments to the contrary, including by Labor and the super industry, are unconvincing. Sure, wages growth has been very slow anyway, but that doesn’t mean it wouldn’t be slower still if employers have to increase the superannuation rate further.

Yes, the ad’s description of a 12 per cent rate being guaranteed is correct — so long as you believe politicians keep their promises. This particular pre-election promise by the Morrison government falls into the category of making-promises-we-don’t-believe-in-but-are-necessary-to-help-us-win-the-election. Whether Morrison keeps the promise depends on how much pressure is applied through public opinion, including that influenced by advertising campaigns, versus the wishes of those in the government who have always opposed compulsory super.

And if the future is even more super, as the ad argues, then the future is also even greater inequality — something the Labor Party is supposed to be against. More super is fine if that’s what people want to do with their money, but it’s a bad idea if a large chunk of it comes from taxpayers boosting the retirement incomes of people often better off than themselves.

When treasurer Josh Frydenberg released the final report of the Retirement Income Review in November, he highlighted a few of its findings, including that “the age pension reduces income inequality among retirees, as low-income retirees receive the largest age pension payments.” That’s true, but he left out the rest of the report’s conclusion: “While the age pension helps offset inequities in retirement outcomes, the design of superannuation tax concessions increases inequality.”

That design applies a flat rate of 15 per cent tax on contributions and earnings, meaning the higher your income, the more you save in tax by not paying normal income tax rates of up to 47 per cent.

In June 2018, more than 11,000 people had more than $5 million each in their super accounts. The review calculated that a super balance of $5 million attracts around $70,000 a year in tax concessions on earnings. A $10 million balance attracts more than $165,000. By contrast, the full age pension, with supplements, is worth $24,552 a year for an individual or $37,014 for a couple.

To those who argue that people who pay more tax should be entitled to higher concessions, the review points out that higher-income earners receive not only bigger concessions in dollar terms but also “more superannuation tax concessions than lower-income earners as a percentage of superannuation contributions.” (My emphasis.)

The Henry report calculated that 37 per cent of superannuation tax concessions went to the top 5 per cent of taxpayers. The latest report says the total cost of the concessions on both contributions and earnings grew by almost 40 per cent to $42 billion in the four years to 2019. Unchanged, it projects their value to increase from 4.6 per cent to 5 per cent of GDP over the next forty years, while spending on the age pension will fall from 2.5 per cent to 2.3 per cent. In short, inequality will increase.

Politicians on both sides of the fence used to worry about such unfairness. “A major deficiency of the current system is that tax benefits for superannuation are overwhelmingly biased in favour of high-income earners,” treasurer Peter Costello said in his first budget speech in 1996. And he did something about it by imposing a tax surcharge on superannuation contributions for high-income earners. But a few years later, in 2003, he responded to complaints about administrative complexity by starting to phase out the surcharge. It disappeared altogether in 2005.

Costello’s complete conversion to the interests of the super industry and greater inequality came in 2006, when he introduced tax-free super for all retirees as well as allowing people to tip up to $1 million into their funds before applying generous caps on their annual contributions.

When Wayne Swan’s turn as treasurer came in 2007, he started in the same place as Costello nine years earlier. He spelled out the regressive impact of super concessions on an income tax system that was supposed to be progressive. While those on incomes above $180,000 received a 31.5 percentage point reduction in their marginal tax rate, someone on $35,000 received just 1.5 percentage points.

The situation was even worse for those whose incomes were below the tax-free threshold, who were still taxed 15 per cent on their compulsory super contributions. In other words, they were being penalised for being required to put money into superannuation. Swan fixed that with a rebate, as well as halving the caps for super contributions attracting the tax concession. But he baulked at further reform to tackle inequity, including the Henry report’s recommendation for a uniform 15 per cent tax deduction on contributions for most people.

Apart from their gaining little or nothing in tax subsidies, the superannuation system is a raw deal for many low- and middle-income earners for another reason: as their super income increases, their pension payments fall because of means testing, with the result that they are little or no better off for having been compelled to put aside 9.5 per cent of their salary.

Governments have tinkered further to tackle some of the worst excesses. Costello’s surcharge has been resurrected, with people with incomes above $250,000 now paying 30 per cent tax on contributions. Superannuation balances above $1.6 million (around 1 per cent of retirees) also attract extra tax.

But the basic inequity of the system remains. And it has increasingly been ignored in the debate, despite the best efforts of organisations such as the Australian Council of Social Service, which has a long track record of well-researched campaigning for a fairer system.

The system’s inequity also raises questions about its sustainability. When Josh Frydenberg released the Callaghan report he highlighted its finding that the costs of the overall system were “broadly sustainable.” But he didn’t mention why the report uses the word “broadly.” While higher superannuation balances should reduce the cost of the age pension slightly over the next forty years, the cost of the super tax concessions are projected to grow and exceed the cost of the pension by about 2050. “The increase in the SG [super guarantee] rate to 12 per cent will increase the fiscal cost of the system over the long term,” the report adds.

While the report doesn’t make specific recommendations — something for which the politicians will be grateful — it does make some pointed observations. One of them stresses the unfairness and unsustainability of tax-free super in retirement:

There are areas where superannuation tax concessions are not a cost-effective way to help people achieve adequate retirement incomes. In particular, the cost of the earnings tax exemption in retirement will grow faster than the growth in the economy as the system matures and provides the greatest boost to retirement incomes of higher-income earners.

The report observes that “extending earnings tax to the retirement phase could also simplify the system by enabling people to have a single superannuation account for life and would improve the sustainability of the system.”

It also points out that the present structure discriminates against women, who retire with smaller super balances, on average, and less of a taxpayer subsidy.

Successive reports, including Henry’s, the Grattan Institute’s and Callaghan’s, have found that increasing the super guarantee is not necessary to give people adequate retirement incomes. The benchmark typically applied for maintaining living standards in retirement is 65 to 70 per cent of previous income. This is based on people facing lower costs in retirement, often having paid off their home and raised and educated their children, and no longer needing to save for retirement.

The latest review found that, assuming what it called an efficient drawdown of savings, this benchmark was reached or exceeded for all income levels at the present compulsory super rate of 9.5 per cent. Even given the “inefficient” way many people spend their super — by withdrawing at only the minimum required rates of 4 per cent or 5 per cent, for example — the inquiry found that most retirees’ income was 60 per cent or more of that while working.

Particularly in the earlier years, that means retirees often aren’t running down their savings and feel that they can cover unexpected expenses and, in particular, leave an inheritance. While that is their choice, it doesn’t mean that it should be encouraged by government policy. “Superannuation is intended to fund living standards of retirees, not to accumulate wealth to pass to future generations,” is how the report puts it. And because inheritances are not distributed equally, it adds, they increase inequity in the next generation.

Many developed countries have some form of inheritance or wealth tax. Australia has none. To the contrary, we have a form of reverse wealth tax, with taxpayers subsidising inheritances via the super system. The bigger the amount, the bigger the subsidy.

The super guarantee should not be increased without first making the tax concessions fairer. Otherwise, higher-income earners will receive even bigger taxpayer subsidies — largely paid for by the taxes of lower-income earners, many of whom benefit little from the system but are compelled to put money aside that could be better used to meet their present-day needs. •

The post If the future is more super, then the future is greater inequality appeared first on Inside Story.

At the other end of the video link, sitting at a single long table in Canberra, are the three most senior Commonwealth officials entrusted with oversight of Australia’s aged care sector: commissioner Janet Anderson, who heads the aged care regulator; Professor Brendan Murphy, secretary of the health department; and Michael Lye, the department’s deputy secretary for ageing and aged care.

Rozen is grilling the panel about evidence presented to the commission earlier that morning suggesting that the federal government failed to plan adequately for Covid-19 outbreaks in aged care. The commission has been examining two documents: the health sector’s emergency response plan — a fifty-six-page document outlining the overall health sector response that only mentions aged care twenty-one times and includes no specific action points or plans for the sector — and the guidelines for individual aged care facilities issued by Communicable Diseases Network Australia, a government body, which the government has repeatedly cited as evidence it had a national plan for aged care.

In excoriating testimony a few hours earlier, gerontologist Professor Joseph Ibrahim had described the CDNA guidelines as a “tick sheet” designed for “some poor bugger sitting in an aged care home, a middle manager,” rather than a national plan. The guidelines themselves repeatedly stress their advisory and non-comprehensive nature, stating that while they “provide guidance on good practice,” they are “not a substitute for advice from other relevant sources,” and that “readers should not rely solely on information contained within this guideline.” They place the onus on planning for Covid-19 squarely on providers, noting that “the primary responsibility of managing Covid-19 outbreaks lies with the [aged care facility], in their responsibility for resident care and infection control.”

Rozen is zeroing in on the fact that the first two versions of the guidelines — released 13 March and 31 April respectively — did not include any federal government role in dealing with outbreaks in aged care. It took a full four months before any Commonwealth responsibilities were added into a third version, on 14 July.

Nonetheless, the two health department witnesses are adamant that a national plan for aged care existed all along, with no lack of clarity about the federal government’s role. Murphy insists that the CDNA guidelines are a “foundational and comprehensive plan.” In his sworn statement, Lye claims that he doesn’t consider there was any “lack of clarity about the roles and responsibilities of approved providers and state and federal government authorities during the response to the Covid-19 pandemic.”

Rozen presses Lye on why the federal government’s responsibilities were not included in the first two iterations of the CDNA guidelines.

Lye demurs.

Rozen presses him again: “I’ll ask you to accept from me that there is no reference at all to the Australian government’s role in relation to aged care in either of the first versions of this document or the second. Does that surprise you?”

Then comes a jaw-dropping moment: Murphy cups his hand over his mouth and whispers the phrase “Australian government document” to Lye.

Lye picks up Murphy’s hint. “Look, it’s our document, counsel, so it’s an Australian government document that deals with aged care,” he tells Rozen. “So it’s possible that in first version that was implicit and then it has been made explicit.”

Embarrassingly for Murphy, the microphone has picked up his whisper.

“Did Professor Murphy just whisper to you the answer he suggest you give, Mr Lye?” Rozen asks.

There’s an excruciating beat of silence.

“I just — I just said it was an Australian government document, which — which it is,” Murphy replies defiantly.

It’s tempting to zero in on the shock value of this moment, and linger there. After all, it’s not every day that a secretary of the department of health is caught coaching a witness at a royal commission. But more astonishing than Murphy’s whispered intervention is the substance of what he was suggesting.

Murphy’s claim was that the federal government’s CDNA guidelines didn’t need to state the government’s role or responsibilities in managing Covid-19 outbreaks in aged care — because the federal government itself produced the document.

For aged care providers, this is a bit like reaching into your seat pocket for the emergency instructions on a plunging aeroplane and finding a card that advises you to come up with your own exit strategy, with no information on what the plane’s crew will do — then being told the crew’s role is implied because the airline printed the card.

The emerging picture of the federal government’s failure to prepare Australia’s residential aged care facilities for Covid outbreaks is so damning, the omissions and errors so comprehensive, that it will likely take years for its full scope to come into view.

What do we know so far? The foundational failure was the fact that the government entirely neglected to take account of the existing shortcomings of the aged care system in considering what response would be required. The existing operating environment in Australian aged care — in which the baseline standard of care is already deficient, and the workforce lacks the skills and the numbers to cope with the needs of the elderly within the system — is not mentioned in either the CDNA guidelines or the overall health sector emergency response plan.

Nor does either document refer to the issues that prompted the royal commission in the first place: chronic understaffing, skills shortages, ineffectual regulation, endemic neglect and basic failures of care, overreliance on chemical and physical restraints, sexual and physical abuse, malnutrition, dehydration, preventable injuries and premature deaths.

The royal commission also heard that the federal government did not consider the specific challenges of infection control in an aged care setting, including the high degree of physical contact and the home-like environment, nor the operational differences between aged care facilities and hospitals, nor the fact that personal care workers — the majority of the aged care workforce, who can have as little as a six-week certificate qualification, or in some cases no qualifications at all — lack the basic awareness of infection control that is taken for granted elsewhere in the health sector. In short, the government did not consider any of the sector’s widely known failings when considering what measures or support it might need during an unprecedented pandemic.

The government also failed to ensure a standardised approach to infection control. It had no mechanism to make high-level infection control expertise available to providers from the outset of an outbreak: at Newmarch House, for instance, where the outbreak claimed nineteen lives, such an expert was only on site after two weeks. The government’s online training in the use of personal protective equipment was voluntary, and as of early June only one-fifth of the workforce had completed it. Face masks were not made compulsory for aged care workers until 13 July, long after scores of residents had died at both Dorothy Henderson Lodge and Newmarch House, and after residents had begun to die of Covid-19 in Victorian aged care facilities.

The government also provided incomplete or incorrect advice to providers, notifying aged care facilities as late as August that they needed to plan only for a loss of up to 30 per cent of their workforce in the case of an outbreak — in spite of Dorothy Henderson Lodge having lost almost its entire workforce within the first forty-eight hours of its outbreak back in the first week of March, and despite overwhelming international evidence that aged care workforces were being decimated in the case of major outbreaks.

Nor had the government established clear channels of communication and responsibility, leading to buck-passing and critical delays in information sharing between various levels of government and the regulator. One result was a four-day delay before the regulator notified the health department of the outbreak at St Basil’s Home for the Aged, which has now claimed forty-four lives, or more than a third of its residents.

Many of the meagre measures the government had put into place were not properly or fully implemented. Unbelievably, as of 21 August the government had spent only half of the $43 million it had allocated for its surge workforce, in spite of widespread reports of residents being left soiled, unfed and without other basic care in affected homes across Victoria. And while it distributed $92 million to aged care providers in a “one worker, one site” scheme to stop staff working at more than one facility and mitigate the spread between facilities, the government admitted it had no way of enforcing the directive or tracking whether it was working.

The federal government also actively resisted simple measures that would improve providers’ capacity to plan for and combat the spread. Despite repeated pleas from providers and peak bodies, the federal government refused to release heat maps of facilities with outbreaks — even confidentially to providers — until September, citing the need both to protect providers from reputational damage and to shield them from intrusive media scrutiny. This decision significantly hampered providers’ ability to control whether casual workers from facilities with known outbreaks were rostered on in their facilities.

Nor, in spite of scores of facilities having experienced uncontrolled spread of Covid-19, has the government created a consistent national protocol for hospital transfers of infected residents to ensure the safety of those who are not infected.

Perhaps even more concerning is the degree of defeatism on display in testimony by government officials: at the Senate select committee on Covid-19, Brendan Murphy framed aged care cases and deaths as a fait accompli, saying that “I don’t think it’s possible in any part of the world to make a facility protected from Covid, no matter how well staff do.” In the same hearing, aged care minister Richard Colbeck declared that “no country has been able to avoid outbreaks in residential aged care which we’re seeing in Australia. Where there’s been widespread community transmission, the reality is that we will continue to see outbreaks in all parts of our community, but we see, tragically, the results that occur in residential aged care.”

As well as indicating a fatalistic acceptance of aged care deaths, these assertions are inaccurate: South Korea has a comparable number of total cases to Australia — some 22,055 cases to Australia’s 26,607, yet has avoided widespread aged care outbreaks or deaths.

If the government’s response has been disastrous, the regulatory response has been no better. The newly amalgamated aged care regulator, the Aged Care Quality and Safety Commission — established in January 2019 — suspended unannounced spot checks of providers in March, leaving the sector essentially without regulation during the time it needed it most.

Worse, it allowed providers to self-assess their own readiness for Covid-19 outbreaks, emailing them a survey that included questions such as “Does the service have an infection control respiratory outbreak plan?” and “Overall, how would you rate the service’s readiness in the event of a Covid-19 outbreak?” Unsurprisingly, 99.5 per cent of Australia’s aged care providers assessed their Covid-19 readiness as either satisfactory (56.8 per cent) or best practice (42.7 per cent) — an assessment that has proven to be catastrophically overconfident. Only 0.5 per cent of aged care providers conceded that improvements were needed.

The regulator did not verify these surveys with in-person visits; instead, commissioner Anderson testified at the royal commission that when the regulator rated an individual aged care provider to be at a “high or very high risk” of a Covid-19 outbreak, it audited these responses through “a rigorously structured” phone call in which, she said, “we asked them the usual questions.” On occasion, she testified, the regulator would also ask providers to submit additional information. It was only in instances of “unmitigated risk” that the regulator undertook a site visit.

Only 2345 of Australia’s 2717 residential aged care providers completed the self-assessment survey. It is unclear how, if at all, the regulator followed up with the other 372.

Even as Victoria’s aged care facilities were swamped with cases in August and the inadequacy of the self-assessment mechanism was being interrogated at the royal commission, Anderson testified that the regulator’s fundamental approach of allowing providers to self-assess would continue. When asked how the regulatory approach had altered in the wake of the self-assessments, she replied that the regulator would be “repeating a self-assessment survey with a different and larger set of questions” in order to give providers “the most detailed opportunity to assess their own level of readiness and then to report back to the regulator.” It wasn’t until August that the regulator commenced an infection-control monitoring program.

Curiously, the regulator issued no sanctions or notices to agree — the most serious regulatory instruments available to it — to Victorian aged care homes between 1 January and 16 July, and it only issued two non-compliance notices in the entire year. Yet since 16 July, when Covid-19 had well and truly begun to spread like wildfire through Victorian aged care homes, it has put twenty sanctions and notices to agree in place in Victoria. Aside from two notices relating to financial malpractice, all of them revealed, among other serious issues, that the facilities were not meeting Quality Standard 3(g): the requirement to minimise infection-related risks. Clearly, leaving assessment of facilities’ preparedness for Covid-19 in the hands of providers was a disastrous misstep.

Would these widespread infection control shortcomings have been uncovered and remedied earlier if the regulator had not allowed providers to self-assess their own readiness for outbreaks, or had not suspended unannounced visits? The regulator’s belated issuance of twenty sanctions and notices to agree since July suggests so. Yet between January and March — crucial months in which Covid-19 was raging through aged care facilities overseas — the regulator only conducted a total of twenty-nine on-site visits among the 766 facilities in Victoria, a mere 3.7 per cent of Victoria’s aged care homes.

In the meantime, with nobody in the federal government or at the regulator helming our aged care response, the aged care sector and its workers were left to fend for themselves.

The federal government’s hands-off approach to the aged care sector during the pandemic is no accident: it is entirely consistent with its existing aged care policy settings and agenda, which privilege the interests of providers over those of vulnerable residents, and which have sought, in various ways — often abetted by providers and lobby groups — to progressively deregulate the sector and reduce governmental oversight. These policy settings are underpinned by the pernicious neoliberal shibboleth that vulnerable aged care recipients are empowered “consumers” who exercise “choice” within a free market, and that bad providers will ultimately be driven out of business by competition rather than regulation.

Beginning with the Howard government’s 1997 Aged Care Act — which removed probity requirements for providers, decoupled federal funding from care provision, and removed the requirement for a registered nurse to be on duty at all times in aged care — privatisation and deregulation have continued apace, significantly blunting the regulator’s power, decreasing public transparency about how Commonwealth aged care funding — now an annual $21.7 billion — is spent, and reducing regulation and oversight.

The 1997 Act and subsequent legislation, including Labor’s 2013 Living Longer Living Better reforms, have transformed Australia’s aged care sector, attracting providers “with a profit-maximisation orientation,” as management academic Marie de la Rama notes, rather than an “orientation to care.” With its stated aim of reducing the “regulatory burden” for providers, the Abbott government’s 2015 Red Tape Reduction Plan further eroded government oversight of the sector: among other objectives, it aimed to “streamline financial requirements for aged care providers” and allow consumers to “self-regulate their own care where appropriate.” Together, the 2016 Aged Care Sector Statement of Principles and Aged Care Roadmap consolidated this free market focus, explicitly identifying a “sustainable, consumer driven and market based system” as the ideal towards which the sector must strive.

In July last year, the forty-four accreditation standards for operators were reduced to a mere eight quality standards, which are now phrased in terms of “consumer outcomes.” Standard 3, for instance, states: “I get personal care, clinical care, or both personal care and clinical care, that is safe and right for me.” Rigorous quantitative standards are repeatedly eschewed in favour of “tailored” care and consumer choice — all of which might make more sense if the consumers in question were not vulnerable, elderly aged care residents, over half of whom suffer from dementia, many more of whom are otherwise incapacitated or physically disabled, and all of whom may fear retribution or neglect if they complain about their care.

Accompanying these meagre, vague quality standards is the newly minted Charter of Aged Care Rights, which supposedly sets out aged care residents’ consumer rights, including the right to be treated with dignity and respect, the right to safe and high-quality care, and the right to have control over and make choices about care, including where the choices involve personal risk. In reality, however, as legal academic Linda Steele and her co-authors have noted, the charter is a “soft rights document, in the sense that it is not enforceable.”

Concerns about the human rights abuses experienced by aged care residents run so deep among human rights scholars that some have suggested that the confinement, segregation, restrictive practices, and physical and social isolation that aged care residents experience rise to the definition of a “place of detention” for the purpose of monitoring for torture under the United Nations Optional Protocol to the Convention against Torture.

Yet the deregulation of the sector has been embraced wholeheartedly by both providers and lobby groups, which have vocally opposed increased oversight and mandatory staffing levels and have had undue influence on the formulation of federal aged care policy. Last year, the national industry group Leading Aged Services Australia, or LASA, even opposed mandatory air conditioning in aged care homes when the government considered including the requirement to provide a “comfortable internal temperature” among its quality standards.

In many cases, industry lobby groups have also contributed to the deskilling of the aged care workforce and the propagation of consumer-oriented rhetoric. In one prominent example, the chief executive of COTA, Ian Yates, advocated “consumer-directed care” and “consumer-centric practice” at the royal commission and asked rhetorically whether “everything that a nurse used to do ha[s] to be done by a nurse?”

The Covid-19 pandemic has exposed the mendacious myth of the “aged care consumer” once and for all. Far from being empowered consumers, aged care residents have been utterly powerless to exercise any agency during the pandemic, at the very time they have been subjected to egregious human rights abuses: sedated, placed on end-of-life medication, and denied the hospital care that all other Australian citizens enjoy. Residents have been left without food or water for hours or days, and left in soiled incontinence pads; many have been denied telephone contact with their families and kept in conditions akin to solitary confinement. When family members have attempted to extract them, they have been barred from leaving the premises. Many have been exposed to a deadly virus by care workers who are in many cases undertrained and lack appropriate PPE, and infectious fellow residents with whom they have been kept in close quarters. They have died alone, without the comfort of family — and in some cases, they have reportedly not received adequate palliative care or pain relief.

These human rights abuses are unfolding against a backdrop of ageist public discourse in which aged care residents’ very right to exist is being debated. Drawing on a long history of senicidal thinking that equates economic productivity with social worth, economists, op-ed writers and other commentators have repeatedly suggested that the elderly’s welfare is not worth the hit to the economy. As the aged care death toll in Victoria approached 500, former prime minister Tony Abbott suggested that governments should ask “how much is a life worth?” and weighed up the merits of making the elderly “as comfortable as possible while nature takes its course.” Prime minister Scott Morrison referred to aged care residents as “pre-palliative,” implying they are inhabitants of what has been called a “liminal zone between life and death” in spite of the fact that the average length of stay in residential aged care is 2.6 years, and many residents stay for longer periods yet.

The ageism extends to those clinicians and public health officials who have overtly argued that aged care residents should not be admitted to hospitals. This attitude was reflected in a decision taken by NSW Health in relation to Newmarch House “not to decant residents into hospitals given the precedent this would set.” Residents are “decanted,” like an inert, inanimate substance, rather than moved — and they certainly do not move of their own will. The deaths of aged care residents have even been described as “learnings” by politicians attempting to reframe human tragedy as an educational opportunity for our political class.

Amid the disempowerment, dehumanisation and degradation of aged care residents during the pandemic, the foundational fantasy of contemporary Australian aged care policy — that the system is a free market full of consumers exercising choice — crumbles into dust.

Left with the unenviable task of explaining why the government has been so deplorably unprepared to combat outbreaks in aged care, Scott Morrison recently abandoned his talking points about having had a “comprehensive” national plan, and gave the crisis a new spin. The outbreaks in Australian aged care were “unforeseeable,” he insisted.

The same notion was repeated by the embattled aged care minister Richard Colbeck in a disastrous appearance at the Senate select committee on Covid-19 during which he was unable to recall the number of aged care residents who had died of the novel coronavirus, nor the number of current infections — and nor even whether he had ever briefed the cabinet about the royal commission’s interim report, Neglect, published in October 2019.

The government’s claim that the virus’s effects in Australian aged care were unforeseeable merits close scrutiny. In doing so, it is important to consider what was known about Covid-19 in aged care internationally, well before the horrifying outbreaks in Victorian residential aged care that had, by 12 September, claimed 563 lives, or 78 per cent of all Covid-19 deaths in the state.

In Washington in late February, a Kirkland nursing home, Life Care Center, made international headlines as the first Covid-19 outbreak in aged care; ultimately, two-thirds of its residents contracted the virus, and thirty-seven died. On 10 March, eighteen residents of a single nursing home were found dead in Italy. By 18 March, Belgium had called Médecins Sans Frontières into its nursing homes, where they found staff, without protective equipment, showing the signs of trauma common in disaster zones. A week later, Spain’s defence secretary, Margarita Robles, reported that soldiers sent to disinfect nursing homes had found residents abandoned and dead in their beds.

The following month, in early April, researchers from the London School of Economics International Long-Term Care Policy Network had found that 50 per cent of all Covid-19 deaths in Europe were occurring in aged care homes. On 16 April, it was reported that in the Résidence Herron in Montreal, residents were found listless, dehydrated and unfed for days, with “excrement seeping out of their diapers.” That same week, Canada’s chief public health official, Dr Theresa Tam, noted that approximately half of Canada’s Covid-19 deaths — at that stage, 1193 people — were occurring in long-term care homes.

At the same time, in the United States, seventeen bodies were found in bags in a nursing home in New Jersey after an anonymous tip to police, and analysis published in the New York Times noted that the virus had taken an aggressive hold in nursing homes, where “a combination of factors — an ageing or frail population, chronic understaffing, shortages of protective gear and constant physical contact between workers and residents — has hastened its spread.” By the end of April, it was known that in Spain alone there had been more than 16,000 Covid-19 deaths in aged care homes.

By mid May, it was clear that Covid-19 had killed more than 29,100 aged care residents and staff in the United States, and 13,964 aged care residents in Britain. By 17 May, it was known that 90 per cent of the deaths in Sweden were among the elderly, and half of those were in aged care homes. By 12 June, 19,394 Covid-19 deaths had been recorded in British aged care. By mid June, American aged care deaths had reached 50,000. By early July, official estimates from Spain suggested that 18,830 aged care residents had died from Covid-19.

All of these reports were in the public domain long before the outbreaks in Victorian aged care.

But the government did not even need to look at that overwhelming international evidence to ascertain the scale of the threat. It could have seized on the evidence from two early local outbreaks in aged care: the outbreak at Dorothy Henderson Lodge, which commenced on 3 March and lasted until early May, resulting in the deaths of six residents of the sixteen infected; and the disastrous outbreak at Newmarch House, which commenced on 11 April with a staff member testing positive and ultimately resulted in twenty deaths among thirty-seven infected residents.

An independent review of the Dorothy Henderson outbreak by Professor Lyn Gilbert, delivered to the government back in April, warned the government that “spread of Covid-19 is very difficult to control in a household-like residential setting, with highly vulnerable residents” and that the “major challenge” was “maintaining adequate staffing.”

An independent review of the Newmarch House outbreak, commissioned by the health department and led by Professor Gilbert and Adjunct Professor Alan Lilly, found that the response was bedevilled by problems: interagency confusion; a lack of clarity about the hierarchies among government health agencies; “severely depleted” staffing; significant shortcomings with infection prevention and control; and “compromised” implementation of Hospital in the Home because of “inadequate staffing and support,” resulting in a failure to “provide care equivalent to that of inpatient hospital care.” All of these issues have recurred during the Victorian outbreaks.

“The human imagination does not do very well with large numbers,” Robert Hass wrote in a poem grappling with the monumental death toll of the Korean war. Individual instances of suffering are often easier to grasp than the big picture, he suggests; suffering on a mass scale often overwhelms us.

And it’s true that the scale of the global tragedy unfolding in aged care nearly defies comprehension. In the United States, where nursing home residents make up less than 1 per cent of the population, the current tally of Covid-19 deaths in aged care is a harrowing 77,018 — 42 per cent of the country’s total Covid-19 deaths. In Britain, where collection of Covid-19 aged care data is patchy and deaths significantly underreported, in excess of 30,000 aged care deaths had been recorded as of 12 June, with two-thirds attributed to Covid-19 and the remaining 10,000 yet to be confirmed; that country’s aged care deaths are presently estimated to comprise around 40 per cent of all Covid-19 deaths.

In Australia, aged care residents now represent 74 per cent of all Covid-19 deaths, a vastly higher proportion than most other developed nations. When confronted with this statistic at the Senate select committee on Covid-19, Brendan Murphy dismissed the fact that Australian aged care deaths make such a high proportion of Australia’s overall death toll as “a completely meaningless statistic.”

But surely the question of how our aged care residents are faring compared with ordinary Australian citizens is the most meaningful comparison of all. The figures suggest that we have failed to protect our most vulnerable to the same degree that we have protected “ordinary” citizens. They suggest a great disparity between the safety of Australian aged care residents and the safety of other Australian citizens. They suggest that aged care residents’ rights to remain free of the virus, and to live in environments where infection control is optimal, are not being upheld. Ultimately, they suggest that aged care residents have been kept in environments with unacceptable levels of risk, with no recourse to protect themselves, and no capacity to exercise personal agency or choice.

If it’s true that human catastrophes are best understood through the particular, it’s there where I’ll end, with just one fleeting image of the crisis in Australian aged care: of a dying ninety-five-year-old woman named Milka Keleman, who was found with ants crawling out of an infected leg wound in the Covid-19-stricken Kalyna aged care home in Melbourne, where she was supposed to be receiving palliative care. According to care workers, residents at Kalyna went without medication for up to five days, were not given food or water for eighteen hours, and went without showers or being cleaned for days. At one point, there were only two staff to care for sixty-eight residents. Carers found dried faeces caked on the floor that a nurse reported being unable to clean even with detergent and scrubbing.

Twenty-two residents at the Kalyna aged care home have so far died of Covid-19, but Milka was not one of them. She died of other causes: one of the countless aged care residents who have suffered unacceptable collateral failures of care as Australia’s aged care system has broken down.

Milka’s death notice, published in the Age, reminds us that behind the unfathomable numbers are citizens who deserve better, people who love and are loved. It reads: “Passed away peacefully 13 August. Beloved mother of Rudy and Carolyn and grandmother of Karl. We will miss you but have so many memories to treasure. You will be forever in our hearts.”

As she lay dying in her bed with a leg wound swarming with ants, Milka was not a “consumer” enjoying “choice” about aged care. She was a vulnerable woman — a mother and grandmother — who deserved much better at the end of her life from a system that was supposed to care for her. •

Funding for this article from the Copyright Agency’s Cultural Fund is gratefully acknowledged.

The post What happens when we treat aged care residents as “consumers” appeared first on Inside Story.

Last month’s survey asked participating economists whether they believed the legislated increases in compulsory superannuation contributions — set to climb from 9.5 per cent of wages to 12 per cent over the next five years — should proceed as planned, be deferred, or be abandoned.

If I’d been asked that question at almost any time since the increase was first proposed by the Rudd government in its response to the Henry review of Australia’s taxation system, I’d have said “yes,” unequivocally.

I’ve been a supporter of compulsory super since the Keating government legislated for the superannuation guarantee in 1992. I’ve never had any particular hang-ups about how the scheme gave unions a role in the management of superannuation savings that (in the eyes of some) is greater than warranted by their declining membership.

Apart from supporting the superannuation guarantee’s stated objectives of extending the benefits of superannuation (including very generous tax concessions) to a much larger proportion of Australians than those who had traditionally enjoyed them (mainly public sector employees and white-collar private sector employees), and reducing the proportion of retired Australians who were solely reliant on the age pension, I also supported the scheme’s expected contribution to lifting overall national savings.

For the first two decades or so of my career as an economist, the need to increase Australia’s national saving was seen as one of the most important policy challenges the nation faced.

Australia has long had a capital-intensive economy. Why? Because mining, an inherently capital-intensive activity, accounts for a much larger share of Australia’s GDP than that of other countries. This is because we have a relatively small population spread over a very large area and thus need to spend relatively more on transport infrastructure (another capital-intensive activity) than other countries. And because we have chosen to live in larger houses on larger blocks of land than people in most other countries, which means we spend more on housing and (hence) on urban infrastructure than most other countries.

In other words, investment has long been higher as a proportion of GDP in Australia than in most other “advanced” economies. And although we’ve also typically saved a greater proportion of GDP than many of those economies, we typically haven’t saved enough to fund all the investment we’ve wanted to undertake.

Hence, for most of our existence as an independent nation, we have needed to “import” savings from overseas — by borrowing or accepting foreign equity investment — in order to make up the difference between what we want to invest and how much we’re willing to save.

The counterpart of that requirement for foreign savings has been the deficits we’ve typically run on the current account of our balance of payments, which reflect the fact that, more often than not, we have imported more goods and services than we have exported, and paid out more by way of interest and dividends to foreign investors than we have earned from our own investments overseas.

During the 1980s and 1990s, when the current account deficit averaged 4.2 per cent of GDP (up from an average of 1.6 per cent in the 1960s and 1970s), we funded it largely by borrowing from abroad, so that our net foreign debt increased from 6 per cent of GDP in 1981 to 40 per cent of GDP by June 2000. Between 1988–89 and 2009–10, almost 11 per cent of our export revenues were absorbed by interest payments on our foreign debt — including a peak of over 18 per cent in 1988–89.

In this environment, “increasing national saving” was a core objective of economic policy. It was the main reason Paul Keating, as treasurer in the Hawke government, gave for pursuing budget surpluses in the late 1980s. (Running budget surpluses meant that the public sector was adding to national saving rather than absorbing it.)

It was one of the main reasons why the Reserve Bank, with the endorsement (as was required in those days) of Keating as treasurer, pushed interest rates up to 17.5 per cent in the late 1980s, bringing on the “recession we had to have.” (It was only after the event that history was in effect rewritten to say that it had been all about “snapping the inflation stick.”) And after Vince FitzGerald’s report on national saving, commissioned by the Keating government, it became one of the main arguments for the superannuation guarantee.

Of course, since those days we’ve learned that countries can run larger current account deficits for longer periods than was thought possible back then. And more recently Australia hasn’t been running current account deficits at all: since the June quarter of 2019, we’ve been chalking up current account surpluses for the first time since 1974. Or, put differently, national saving has exceeded national investment for the first time in more than forty-five years.

So the “national saving” argument for increasing the superannuation contribution rate no longer applies. But that’s not the main reason why I answered the Conversation’s latest question in a way I wouldn’t have considered as recently as three years ago.

The main thing that changed my mind was a November 2018 report by John Daley and Brendan Coates of the Grattan Institute (where, I should mention, I worked between August 2009 and December 2011). In my opinion, Daley and Coates convincingly demonstrated that a superannuation contribution rate of 9.5 per cent was sufficient to guarantee the “average worker” a retirement income of more than 90 per cent of their working income — well above the OECD “benchmark” of 70 per cent.

They also showed, persuasively, that lifting the rate to 12 per cent would have two perverse effects. Many workers would face the prospect of having a higher income in retirement than they had while working; others, particularly lower-income workers, would see a net reduction in their overall retirement income because the higher income from higher superannuation savings would be more than offset by a reduction in the age pension to which they would otherwise have been entitled.

Brendan Coates, together with Grattan colleagues Matt Cowgill and Will Mackey, followed up that report in February this year with a working paper demonstrating that although superannuation guarantee contributions are formally paid by employers, at least 80 per cent of increases in compulsory contributions are passed on to workers in the form of lower wage rises than they would otherwise have obtained.

This is entirely consistent with the intentions of the founders of Australia’s compulsory superannuation system. When the ACTU, under the leadership of Bill Kelty, first pursued the idea of wider access to superannuation in the second half of the 1980s, it was partly meant as a “trade-off” for the wage increases the Hawke government was trying to restrain in order to prevent an acceleration in inflation. As Keating himself has since said, “the cost of superannuation was never borne by employers. It was absorbed into the overall wage cost… In other words, had employers not paid nine percentage points of wages, as superannuation contributions, they would have paid it in cash as wages.”

The Fair Work Commission explicitly took into account the last increase in the compulsory super rate, from 9 per cent to 9.25 per cent in 2013, when awarding a smaller increase in the national minimum wage “than it otherwise would have been in the absence of the super guarantee increase.”

In the years before the current pandemic, persistently slow wages growth had become a matter of increasing concern to policymakers. In a speech to a peak business group in June 2018, Reserve Bank governor Philip Lowe went so far as to say that “slow wages growth is diminishing our sense of shared prosperity” and, if it persisted, could “make needed economic reforms more difficult.”

And, of course, wages growth has slowed even more since the onset of Covid-19, and (as forecast in the government’s most recent Economic and Fiscal Update) it is expected to remain slow in the years ahead.

None of which is to deny that there are problems with Australia’s current superannuation system. In particular, it isn’t delivering for women, who retire with 47 per cent less superannuation, on average, than men. Given that the average woman lives five years longer than the average man, this means that women’s retirement income is far less likely to be “adequate” than men’s.

But no one has explained how increasing the super contribution rate to 12 per cent for everyone is going to deal with that problem.

And that’s why I answered the Conversation’s survey question about the currently legislated increase in the super guarantee contribution rate in the negative, and it’s why I expressed a relatively high degree of confidence in my response, something I don’t always do. •

The post Why I changed my mind about super appeared first on Inside Story.

Australian aged care was already in crisis and a subject of considerable community concern before Covid-19’s arrival. In 2018, in response to serious and wide-ranging allegations of abuse and neglect aired on ABC Four Corners, the government established the Royal Commission into Aged Care Quality and Safety. Its interim report, simply called Neglect, concluded that “substandard care is much more widespread and more serious than anticipated.”

This “crisis” in aged care has been festering for at least the last two decades. Shaped by the Aged Care Act 1997, the Aged Care Quality and Safety Commission Act 2018 and numerous reviews in between, aged care has undergone considerable change during that time. Prior to the Aged Care Act, high-level aged care was effectively part of the health system and much of it was delivered in old institutional-style nursing homes. The new act was meant to better reflect what people said they wanted: a more social, homelike model with better facilities and a less clinical feel. “This is a person’s home, not a hospital” became the catchcry.

In response, homes became more “homelike” and the emphasis moved to social rather than clinical models of care. Nursing staff ratio requirements were abolished, with homes simply required to provide “adequate” care. The language changed to reflect this new approach. “Nursing homes” became “residential aged care facilities” (after all, having a nurse on the premises was no longer required) and the previous distinction between “low” and “high” care was abolished. State governments significantly reduced their role in providing and monitoring nursing homes, and bed licences were increasingly awarded to large national and multinational for-profit companies.

During these past two decades, both major parties have seen competition and the market as critical means of driving improvements in efficiency and quality, and both have sought to align with key industry and aged care consumer peak bodies. All these interests share a belief that consumers should be empowered to make choices, with more support on offer for people who choose to stay at home and providers encouraged to be innovative. The shared view was that rigid standards and regulations stifle innovation and responsiveness.

At the same time, population demographics and social values were changing. The baby boomers, now moving into older age, were more financially independent, healthier and better educated than the generation before. No longer was residential aged care a lifestyle choice: it was now the place you go when you have no other choice.

Two decades on, Australia’s 180,000 residential aged care beds are occupied by people who can’t live independently, even with formal community support, because of either physical frailty or dementia. My colleagues and I demonstrated this in 2018 when we independently assessed 5000 people living in residential care. Only 15 per cent were independently mobile, and most of that group had dementia. Half of the overall number required mobility assistance and more than a third (35 per cent) were bed-bound.

Yet aged care funding and governance has not kept pace with this development, and the pendulum has swung too far. Drawing on the rhetoric of a social model of care, governments, providers and some consumer peak bodies have been on the same page in declaring that there is no need for mandated nursing or allied health staffing or for rigorous clinical standards. After all, they argue, aged care is not healthcare and mandated staffing and clinical standards would distract from the need for the aged care facility to feel like a home.

While many homes provide good care, too many do not. On the funding side, aged care homes are now effectively funded for low care for a resident population that is demonstrably high care. Only 15 per cent of residents are receiving care that would be classified as four- or five-star in the five-star public rating system used in the United States. The sector requires a funding increase of about 35 per cent to bring it up to international benchmarks. Most providers want big funding increases but with no strings attached.

In this context, the arrival of Covid-19 created a perfect storm. Staffed predominantly by low-paid, often casual, personal care workers and with residents receiving an average of only thirty-six minutes of nursing time each day, many homes were simply unequipped to cope with the outbreak.

Infection control should be core business in aged care, not least because of regular flu and gastro outbreaks. Yet adequate personal protective equipment and training in its use have been lacking in many homes. Of 626 private homes in Victoria, about one hundred (with the number still increasing) have experienced an outbreak of Covid-19 and more than 1500 residents and staff have been infected so far.

Despite the experience at Newmarch in New South Wales (where fifty-six residents and thirty-four staff were infected and nineteen residents died), both the Commonwealth (as the level of government responsible for aged care) and providers seem to have been unprepared for the tragedy unfolding in private aged care homes across Victoria.

Notably, though, none of Victoria’s 178 public nursing homes has had a major outbreak. Even after controlling for size and location, this is an important difference. One fundamental reason is undoubtedly the extra funding and better nursing hours in public aged care homes regulated by the state government.

The federal government created a new aged care controversy this week when both the aged care minister, Richard Colbeck, and the secretary of the health department, Brendan Murphy, refused to provide a Senate committee with a list of Victorian aged care homes with Covid-19 among residents or staff. They did this in order to protect aged care homes from “reputational damage.”

For good public health reasons, it has been common practice throughout the pandemic to name schools, childcare centres, restaurants, hospitals and other venues where there has been a case. The decision to protect aged care homes from “reputational damage” is a powerful reflection on the relationship between Canberra and the private aged care industry. As a matter of good governance, it should not be the role of government to protect aged care providers from reputational damage.

The secrecy also cast a shadow over every private and non-government home. Given that this industry is 80 per cent funded by taxpayers, and given that people’s lives are at stake, where is the public accountability? This is not about blaming and shaming. We are living through a pandemic and it is about the public’s right to know. That said, aged care advocates took matters into their own hands and published a full list within the day. Aged care is increasingly a contested space.

A lot of hope is resting on the aged care royal commission, which will now not report until the first quarter of 2021. It is a once-in-a-generation opportunity to get aged care right. We cannot afford to keep getting it so wrong. •

This article first appeared in Pearls and Irritations.

The post The weakest Covid-19 link appeared first on Inside Story.

The more I think about the aged care impasse, the more I have come to see the sector’s seemingly intractable issues as symptomatic of a more fundamental failure: one that underpins the litany of ineffectual policy reforms, deficient regulation, negligent provider practices and lamentable outcomes experienced by many aged care recipients. This failure is not unique to politicians or providers, but their failure in this respect is more consequential. It is a collective failure that implicates us all. Fundamentally, the failure of Australian aged care is a failure of imagination.

“For all the death, we also die unrehearsed,” Les Murray writes at the end of his poem “Corniche.” This line of Murray’s has been on my mind lately, because it strikes me as incisively true, and yet not. Death is the surest thing we know, but its particular contours are unknowable. It is out there for each one of us like a distant comet in the night sky, hurtling towards us at an incalculable velocity. We do not know when death will reach us — only that it will.

And yet it could also be said that in the twenty-first century, we rehearse our deaths continuously. We live in a golden age — a dark age, perhaps — of cinematic and literary dystopianism. We voraciously consume scenarios in which natural disaster, climate change, alien life forms or malevolent technology threatens our survival. We contemplate death and the ways we might die all the time.

The appeal of this dystopian ideation is clear: it offers us a cathartic encounter with fears of societal collapse and the animalistic return to Darwinian imperatives, and then a predictable return to order at the narrative’s end. The lights of the movie theatre come up, the last page of the novel is turned, and we are back in our own unscathed bodies, exhilarated to be spared.

Many recent cinematic dystopias centre on the body’s vulnerability and fallibility. In the blighted desert landscape of Mad Max: Fury Road, humans are vampirically mined as “blood bags” and select women are held captive as breeding stock, useful only for furthering the human race. The characters in Bird Box must navigate the world blindfolded to avoid eye contact with monstrous entities that, upon being seen, force them to involuntarily commit suicide. In A Quiet Place, Earth has been invaded by extraterrestrial predators with hypersensitive hearing, consigning the human characters to creep around trying — and often failing — to avoid making any noise. In Get Out, the bodies of young black men and women are parasitically occupied by white counterparts, who leach the vitality from their hosts.

Many of these narratives also serve as morality tales: the virtuous, able, alert and tough survive; the immoral, weak and clumsy perish. Watching these films, the viewer is encouraged to adopt a position of superiority and to anticipate the disaster before it befalls a character: I would never make that fatal mistake, we tell ourselves. I would know better; I would survive.

Amid all this feverish post-apocalyptic speculation about the manifold ways humanity might be brought to the brink of extinction, there is one pervasive unacknowledged norm. The protagonists with whom we identify — whose struggles and trials and fears we vicariously experience — are overwhelmingly young. The healthy body is the default. The young have more at stake; their prospective loss is imbued with the poignancy of a life cut short in its prime. The middle-aged are at best ancillary characters, killed off through overconfidence or acts of self-sacrifice for the greater good. And the elderly? The elderly are nowhere to be seen in these brave new worlds. They are invisible. They don’t exist.

Of course, there is a notable exception to this rule of narrative exclusion. Senicide — the killing of the elderly, most often at an age of perceived inutility — stretches back centuries as a fate meted out in literature. The Jacobean satirical play The Old Law (1618–19) by Thomas Middleton and others — in which men are involuntarily executed at eighty and women at sixty — is an early progenitor of what is now an established geronticidal trope within dystopian fiction.

Anthony Trollope’s final novel, The Fixed Period (1882), envisages a future in which euthanasia is mandated after a fixed period; the elderly are shunted off into a college, the Necropolis, for retirement at sixty-five and then execution at 67.5. In Huxley’s Brave New World (1932), the elderly are killed at sixty, then cremated and recycled into fertiliser. In P.D. James’s Children of Men (1992), sixty-year-olds are subjected to a mass drowning called the Quietus. In Christopher Buckley’s Boomsday (2007), baby boomers are offered incentives to commit suicide at seventy. In Lidia Yuknavitch’s The Book of Joan (2017), the execution age is set at fifty; humans are recycled into a water supply for a colony orbiting the Earth on a satellite. In the horror film Midsommar (2019), elders of a cult must commit ättestupa — a ritual suicide by jumping off a cliff, drawn from Nordic folklore — at seventy-two.

It is no accident that the extermination age in these examples hovers around retirement age. Retirement is typically the point at which one is no longer economically productive, and therefore ceases being of value to the community. In many of these examples, the inutility of the aged body is further underscored by its transformation into useful resources such as fertiliser, water or fuel; this commodification underscores the fundamental importance of contributing productively to the community, even after death.

Senicide is, of course, not solely the province of fiction; documented instances exist of various cultures having supposedly killed the elderly through history, including in Sardinia, where women known as accabadoras would bludgeon or suffocate the elderly, and in Japan, where the possibly apocryphal practice of ubasute involved dumping elderly relatives on a mountaintop to die of exposure. In present-day India, in the southern districts of the state of Tamil Nadu, the well-documented phenomenon of elderly relatives being killed by family members is known as thalaikoothal, a practice in which the elderly are given cold oil baths to reduce the body temperature, then fed tender coconut water and milk, prompting renal failure. These overt acts of senicide are supplemented by the decades-old epidemic of “granny dumping” in the United States and elsewhere, wherein elderly relatives are abandoned far from home by family members who can no longer afford their healthcare and who view care giving as overly onerous.

This senicidal thinking is founded on the premise that human worth is aligned to productivity: a concept that stretches back to Plato’s Republic, where Socrates argues that medical treatment and intervention is only appropriate if it allows a productive citizen — Socrates proffers the example of a carpenter — to fulfil his role in the community. When the carpenter ceases to work and contribute productively to the community, Socrates argues, there is no sense in unnecessarily prolonging his life; therefore, medical treatment should be withheld: “No treatment should be given to the man who cannot survive the routine of his ordinary job, and who is therefore of no use either to himself or society.”

In dystopian literary narratives, the ruling generation typically justifies overt violence towards the aged through the lens of economic rationalism: the elderly, according to Margaret Cruikshank in Learning to Be Old (2003), are viewed as burdensome “parasites [who are] expensive to maintain” and consume resources without contributing anything of worth to the community.

Lionel Shriver picks up this theme of the economic burden of unproductive elderly citizens in her 2016 novel The Mandibles, set in 2029 after a market crash devalues the US dollar, consigning families to live in cramped squalor. In Shriver’s future, inheritance impatience is rife, and the elderly are shot en masse as an act of retribution for the crime of having sent the inflation rate soaring because of the cost of their pension benefits.

Yet the elderly are punished not only for perceived economic crimes but for environmental ones, too. Margaret Atwood’s 2014 short story “Torching the Dusties” underscores how easily scapegoating morphs into legitimised violence. “Torching the Dusties” centres on the residents of a retirement community, Ambrosia Manor, who are besieged by a mob of irate protesters who belong to an anti-elder movement, Our Turn. Our Turners burn down nursing homes with their occupants inside while wearing baby-face masks, and see their vigilantism as retribution for the wastefulness and greed of the previous generation.

It is not difficult to see real-world echoes of millennials’ visceral dislike and resentment of baby boomers in Shriver’s and Atwood’s dystopias. This intergenerational hostility has been further underscored recently by “OK Boomer” memes, and accusations such as those made by Bruce Gibney that boomers are a “sociopathic generation” who have “mortgaged the future.”

The eldest of the boomers, now in their mid seventies, will be the next cohort to enter residential aged care, if they haven’t already. While the average age of home-care adoption is eighty for men and eighty-one for women, and the average age of admission to permanent residential aged care is eighty-two for men and eighty-five for women, there is no minimum age requirement for access to aged care, and boomers suffering from early-onset conditions will already be receiving care in one way or another. The most common term used to describe the looming influx of the balance of the boomer generation into the aged care system — “silver tsunami” — likens boomers’ longevity and the associated ballooning cost of aged care to the onset of a natural disaster.

Kurt Vonnegut’s story “Tomorrow and Tomorrow and Tomorrow” goes further in directly apportioning blame to the elderly for the degradation and depletion of Earth’s resources. Set in 2158, in a world in which a drug called anti-gerasone has drastically extended the lifespan of Earth’s inhabitants, Vonnegut envisages a future in which insatiable pursuit of longevity by the elderly is responsible for nightmarish overpopulation, food shortages and the depletion of natural resources, consigning the remainder of the population to live in squalor and subsist on seaweed and sawdust. While Vonnegut illuminates the cruelty and greed of impatient descendants who try to kill off 172-year-old protagonist Harold “Gramps” Schwartz by sabotaging his anti-gerasone, he also offers a cautionary tale about the perils of failing to gracefully accept one’s mortality. It is desirable to die at an appropriate time, and indecent to live too long.

So it goes.

In truth, the apocalypse has already arrived for Australia’s elderly. We treat older people as a separate and subhuman class, frequently viewing them as a burden on their families, the community and the state. Increasingly, this dehumanisation has taken a corporatised tone; as the elderly exit the workforce, they become a commodity to be mined for profit and dividends by the aged care industry.

The profits posted by Australian aged care providers are directly financed by the government, which contributes the vast majority of the sector’s funding. Commonwealth funding is tipped to reach $21.7 billion in the year 2019–20, which represents 80 per cent of the sector’s total funding. Of this amount, approximately 68 per cent is spent on residential aged care; the rest goes to home-care, home-support and flexible aged care packages. Consumer contributions finance the remaining 20 per cent, either through often exorbitant Refundable Accommodation Deposit bonds, which at the most recent estimate represent a $27.5 billion contribution to providers’ coffers, or through Daily Accommodation Payments, basic daily fees or home-care payments.

Yet in spite of the high proportion of government funding underwriting the aged care industry, there is little transparency about how much providers spend on primary care. Reforms ushered in by the Aged Care Act 1997 mean that providers no longer need to demonstrate that the funding they receive via the Aged Care Funding Instrument is spent on care; rather, expenditure of taxpayer funds is entirely at providers’ discretion, and they don’t need to return any unspent monies to the government. The correlation that one might expect to see — higher funds equating to higher expenditure on care — doesn’t always play out. In 2017, Bupa’s funding from both the government and residents’ fees increased, yet it paid almost $3 million less to employees and suppliers.

Compounding this lack of transparency are the financial reporting requirements themselves. While three providers — Regis, Estia and Japara — are ASX-listed entities and therefore subject to stringent reporting requirements to ASIC, many other providers can file limited financial statements under the reduced disclosure requirements set by the Australian Accounting Standards Board, meaning there is minimal scope for scrutiny of their financial practices. While not-for-profit providers represent 55 per cent of all residential aged care providers and two-thirds of home-care providers, the ever-increasing share of for-profit providers, especially in the residential sector, signals that aged care is big business in Australia.

Australia’s top six for-profit aged care providers — Bupa, Opal, Allity, Regis, Estia and Japara — received $2.17 billion in government subsidies in the 2017 tax year while also posting significant profits and using aggressive tax-minimisation strategies such as discretionary trusts. Bupa, Australia’s largest private aged care provider, made a profit of $663 million in 2017, 70 per cent of which ($468 million) came from government funding. Opal, Australia’s second-largest private provider, posted a total income of $527.2 million in 2015–16, 76 per cent of which came from government funding, yet it paid a mere $2.4 million in tax on a taxable income of $7.9 million.

The foreign-ownership structures of several of the major players — Bupa is headquartered in the UK, and Opal belongs to a parent company in Singapore — have further enabled providers to pursue aggressive tax-minimisation strategies. In 2019, after a ten-year dispute with the Australian Taxation Office, Bupa paid $157 million in restitution for the alleged practice of “thin capitalisation” — that is, using high-interest offshore debt to artificially reduce its taxable income. The abolition of probity requirements by the 1997 Aged Care Act has further eroded the government’s capacity to assess, scrutinise and regulate ownership of aged care providers.

Yet at the same time that private providers are posting huge profits and paying minimal tax, the standard of Australian aged care is cratering. Most sensationally, Bupa posted a $560 million profit in 2018, the same year it made headlines when more than half of its aged care facilities across Australia were failing basic care standards, and 30 per cent were deemed to pose a serious risk to the health and safety of residents. With approximately 6500 frail and vulnerable residents spread across its seventy-two facilities, Bupa is now considered “too big to fail” and remains open in spite of repeated sanctions and scandals. Clearly, in the absence of strict regulation and public reporting, privatisation has only served to enable and entrench abuse and negligence, rather than to drive poor providers out of business.

The monumental failures of Australian aged care have been in plain view for a long time, well before prime minister Scott Morrison called the royal commission in 2018. Over the past decade, seventeen reviews and inquiries into the aged care sector have been handed down, many of which have passed with little media interest and the implementation of few or none of the proposed reforms.

To take one prominent example, the 2017 Carnell–Paterson Review of National Aged Care Quality Regulatory Processes — intended in part to probe how horrific abuse at the Oakden nursing home in South Australia could occur while the facility remained fully compliant and accredited — made ten sweeping recommendations to achieve tougher regulation and greater transparency within the aged care sector. These included the creation of a public register of the outcomes of complaints and investigations, the implementation of a public star-based rating service to track provider performance, increased powers for the complaints commissioner, and the adoption of clearer clinical-care measures in the assessment and accreditation processes.

More than two years after these findings were handed down, only a handful of aged care reforms have been passed, and none of the recommendations specifically aimed at achieving tougher regulation and greater public transparency have been implemented. Many have not even been considered. The government cites statutory secrecy under the Aged Care Act, Commission Act and Privacy Act as its justification for not making the reporting of complaints about provider performance more transparent. But the undue influence of peak bodies — which represent the interests of providers and vehemently oppose transparency measures — has also decreased the government’s appetite for reform. The government’s hands-off, market-driven approach to aged care is grounded in economic rationalism, callously ignoring the inconvenient fact that the physical and mental frailty of aged care recipients, combined with the dearth of public information about provider performance, preclude aged care “consumers” from exercising meaningful “choice.”

Perhaps most frustratingly, many of the issues plaguing the sector today were foreseen and thoroughly canvassed more than twenty years ago during the Senate inquiry that preceded the passage of the 1997 Aged Care Act. The removal of staff-to-patient ratios was predicted to result in compromised care, and experts also predicted that the accreditation process was inadequate to stop this from occurring. In the two decades since, review after review has exposed chronic understaffing, inadequate regulation and accreditation, the lack of transparency, and the poor care outcomes in the sector — and in each instance, successive governments of both political persuasions have responded with piecemeal reforms or no reforms at all.

This government inertia has played out against a backdrop of escalating failures in the sector, including a 170 per cent increase in serious risk notices in the year prior to the royal commission being called, and a 292 per cent increase in serious noncompliance. The standard of care in residential facilities has deteriorated unabated: between 2003 and 2013, there was a 400 per cent increase in preventable deaths in Australian aged care facilities from choking, falls and suicides. In 2017–18 alone, there were 3773 reportable assaults, including 547 reportable sexual assaults and rapes. These statistics represent a fraction of the true number, because they only account for incidents in which the perpetrator does not have an assessed cognitive or mental impairment. Given that more than half of aged care residents suffer from dementia, the actual assault figures are likely to be significantly higher.

In addition to these extreme instances of neglect, mistreatment and abuse, baseline levels of primary care are also shocking in both residential and home care. In the royal commission’s interim report, commissioners Richard Tracey and Lynelle Briggs noted a voluntary survey filled out by 1000 aged care providers that cited 274,409 self-reported instances of substandard care over a five-year period, including 112,000 instances of substandard clinical care and 69,000 incidents of substandard medication management. Considering that this survey was undertaken by fewer than half of Australia’s 2695 aged care providers and that there are only approximately 240,000 aged care residents in Australia today, along with approximately 118,000 home-care package recipients, it is evident that Australian aged care is failing on an industrial scale. And as Australia’s population rapidly ages — the number of Australians aged seventy years and older is projected to almost triple over the next four decades, reaching seven million by 2055 — the size of the problem will only grow exponentially.

Indeed, as the commissioners noted, if population trends identified in 2014 hold true, “more than a third of all men and more than half of all women will enter residential aged care at some time in their lives.” The difficulty the sector faces in attracting and retaining qualified staff, combined with the high rates of turnover and low skill base of the workforce, places even more pressure on providers’ capacity to accommodate these ever-increasing numbers. And while some providers are posting colossal profits, others are not making any profit at all. In 2019, the Aged Care Financial Authority reported that approximately 44 per cent of residential aged care providers are operating at a loss, and many are at risk of closure: factors that are only likely to wreak more chaos in the sector in the future, and produce more catastrophic outcomes like the recent shock closure of Earle Haven.

The sector’s failure to provide safe and dignified care is compounded by inadequate regulation; too often, providers are asked to “self-assess” or interpret vague and elastic guidelines rather than conform to hard and fast quantifiable standards. The commissioners also noted in their interim report that the regulatory regime administered by the newly formed Aged Care Quality and Safety Commission is “unfit for purpose.” The lack of effective oversight means that families often turn in desperation to installing hidden CCTV cameras to confirm their suspicions of abuse and neglect.

As the distressing footage screened on the ABC’s two-part Four Corners investigation, Who Cares?, in September 2018 and subsequent news bulletins have shown, our most vulnerable citizens are being slapped across the face by abusive carers, injured through “rough handling” — a dehumanising euphemism that anywhere other than an aged care facility means “assault” — raped and sexually assaulted in their most vulnerable state, drugged unnecessarily, cruelly restrained, and left to sit in distress in their own faeces and urine. There have even been several cases of aged care residents infested with maggots, including a dying woman in palliative care who was found with maggots living inside her mouth. Much of this abuse and neglect would never have come to light without the determination of relatives and advocates.

While media coverage of aged care has been dominated by the failures in residential care, the home-care sector has not performed any better. Due to a near total lack of regulation of home-care providers, there has been rampant rorting, including exorbitant administration fees levied that, in some cases, effectively halve the package for the recipient, as well as neglect, abuse, assault and even rape of older Australians in their own homes. The issues of unskilled, unqualified and unscrupulous staff in residential care also extends to home care: in March 2019, the royal commission heard from a health department witness that eight out of ten applicants applying to provide home-care services were unqualified “bottom feeders” who view the provision of care as nothing more than a “business opportunity.”

Even accessing care in the first place is proving increasingly difficult for older Australians. Thousands die each year while waiting for the Home Care Packages, or HCPs, they need, while others endure extraordinary time frames for their HCPs to come through. In the financial year ending June 2018 alone, more than 16,000 people died while waiting for HCPs, and as of June 2019, 119,524 people were languishing on the waiting list. The royal commission reported that actual wait times are significantly longer than the public guidelines cited on the My Aged Care website, which provides an estimate of twelve-plus months as the expected time for levels 2–4 HCPs.

The stark reality, according to the health department, is that for those requiring the highest level of support — a level 4 HCP — the mean waiting time is twenty-two months, and a quarter of those people will wait three years to receive care. The consequences of this logjam, the commissioners note, are dire, including “inappropriate hospitalisation, carer burnout and premature institutionalisation.” The federal government’s response to the royal commission’s interim report was to announce funding for a further 10,000 packages, which represents less than 10 per cent of the number required to clear the waitlist.

While the royal commission has played a valuable role in exposing the policy failures that have wrought the current state of affairs, as well as the shocking scale of the endemic abuse and neglect across the sector, it is fair to say that the concomitant outrage has been muted. Real-time media monitoring demonstrates 300 per cent less media coverage of the aged care royal commission than there was of the banking royal commission. It is difficult to imagine the mistreatment of any other vulnerable group being met with such widespread indifference. And the apathy and cognitive dissonance of politicians — many of whom, like aged care minister Richard Colbeck, who is sixty-one, are not far from retirement age and may be facing entry to the aged care system far sooner than they think — are profound.

As someone who cares deeply about this issue, having given evidence to the royal commission about the sadistic mistreatment my father has been subjected to in aged care, I admit I am baffled by this lack of empathy for older people. It is a failure that flies in the face of the obvious: as Proust says in Time Regained, “life makes its old men out of adolescents who last many years.” We are all ageing every day; it is the one activity that every human being on earth is doing continuously.

If we are lucky, we too will one day grow old. Old age is, ultimately, what we are supposed to aspire to.

The utopian fantasy of a comfortable retirement — years replete with travel, golf, walks on the beach, and bouts of grey nomadism underwritten by a fat super account and a paid-off mortgage — is the enduring (if increasingly unobtainable) Australian dream. Even the faintest suggestion from Labor that it might tinker with franking credits and therefore impinge on the lifestyle of retirees was enough to swing a federal election. Yet in spite of all this aspirational saving and leisure planning, we devote no time to contemplating the realities of ageing or the possibility that the frailty and vulnerability that often accompany old age may one day arrive for us. The one way we cannot imagine ourselves spending our final years is in an aged care facility. It is not an exaggeration to say, as Simone de Beauvoir once did, that “old age fills [us] with more aversion than death itself.”

Perhaps this is because, for all of our utopian and dystopian imagining, the reality of ageing is too frightening to contemplate. When I think about my father — a man who was once a livewire, a brilliant scholar and mineral metallurgist, and who is now consigned to a wheelchair with Parkinson’s disease, dementia, incontinence and a host of other complaints too numerous to list — his loss of selfhood, independence and agency overwhelms me.

My father relies on carers for the basic actions that so many of us take for granted: they brush his teeth; they toilet, shower, dress and feed him; they hoist him in and out of his wheelchair. He frequently hallucinates, finds himself lost mid-sentence, suffers from sudden panic attacks when he loses his bearings, and often doesn’t recognise his own bedroom. He cannot co-ordinate his movements to even pick up a cup and drink from it. He has difficulty swallowing due to his Parkinson’s and is at constant risk of choking: a common cause of death among Parkinson’s sufferers. His personality has changed. His body and mind are no longer in sync; he lives in continual frustration and confusion. He will spend the rest of his life wandering lost in a wilderness of his mind’s own making. The French philosopher Catherine Malabou, writing about destructive brain plasticity in Ontology of the Accident (2012), best describes the state my father lives in: “Between life and death,” she says, “we become other to ourselves.”

The fear of becoming other to ourselves — of not knowing who we are, of losing agency and control — is so acute precisely because it threatens the very foundation of selfhood. We spend our childhood and youth striving towards self-sufficiency and independence; the notion of that independence eroding is terrifying. While I am bereft for my father and the precarious, vulnerable state he is consigned to, I resist imagining myself in his place, even though I know intellectually it is possible the same things may happen to me. The very thought produces an overwhelming existential terror in me, a visceral fear.

So what would it mean to admit to myself that one day I may become old? It would mean accepting that my mind, which I prize above all things, may flicker out like a tired filament, that I may not be able to keep pace with the conversations and arguments I take for granted, that I may forget the people around me, that I may forget who I am, my very name. I may not know where I am. I may become vulnerable — utterly vulnerable — to strangers. That, worse, I may lose control over my body, which may rebel against me in humiliating ways; that I may not be able to walk, or speak, or even swallow. I may become diminished in the eyes of others. There may come a time when nobody listens to what I say because I no longer make any sense. I may no longer be able to taste food, as dementia sufferers cannot; I may no longer be able to see, or hear, or smell. My world may become blanched of colour, texture and joy. It is hard to imagine that a life without all those powers and pleasures is any kind of existence at all, but I am haunted by the knowledge that this litany of privations is exactly how my father experiences his days.

It is tempting to embrace the consolatory fantasy that those with diminished cognition don’t remember or can’t understand the full weight of what is happening to them — but the painful truth is that, bereft of memories of the past or the prospect of the future, my father only experiences an unceasing present tense. His impossible fate is to inhabit his every remaining minute in the throes of his needs, his discomfort, his hunger, his longings and his frustrations without the refuge of nostalgia or the prospect of change. Above all, to imagine becoming old is to admit a fundamental truth that threatens me viscerally: I may one day become worthless to others. I may become invisible.

But my father’s frailty and diminished quality of life are not the only things I must try to imagine: I owe it to him to also try to comprehend the negligence, neglect and abuse he has experienced in his aged care facility, which formed my testimony to the royal commission. Dad sustained a broken hip and was lying on the floor for God knows how long before someone found him, because there was nobody to take him to the bathroom. He suffered six broken ribs — including two that went untreated and were partially healed by the time they were found by a radiologist — from two other falls incurred for the same reason. He has been given contraindicated medication that effectively left him without his Parkinson’s medication for months. He has been frequently left unclean, without his dentures or his glasses, or without a cup of water within reach. He has suffered numerous injuries and infections that have gone undiagnosed and untreated.

Most unforgivably of all, he has been deliberately abused and neglected by a malicious carer, who left him in soiled incontinence pads for hours, who shut the door on him and told other staff he was sleeping when he was awake and desperate to be showered, who taunted him and told him to get his own nappies out in the hall, and who pushed his wheelchair away from his bed on purpose, leaving him immobile. When I try to imagine myself in my father’s place, I can only begin to speculate about his emotions — fear, despair, sadness, impotence, helplessness — before I’m overcome with grief and rage.

It would be destructive, perhaps even madness-inducing, to live with the continual awareness of our mortality. We go to extraordinary lengths to repress our awareness of death; this repression is a protective mechanism that likely serves an evolutionary function. The poet Philip Larkin described this repression in “Aubade,” his great contemplation of death, as the mind “blank[ing] at the glare.” To live in constant terror and awareness of death is no life at all. Yet we rarely interrogate the cost of the fantasy of our own immortality. As Ernest Becker says in his extraordinary work The Denial of Death (1973), man literally drives himself into blind obliviousness with social games, psychological tricks, personal preoccupations so far removed from the reality of his situation that they are forms of madness — agreed madness, shared madness, disguised and dignified madness, but madness all the same.

Among the most destructive forms of shared madness are our collective fantasies about the end of life. I have heard these same stock fantasies from my friends, colleagues, family members and acquaintances so often that I have even started to catalogue them: they are varieties of magical thinking, delusional and destructive because they stand in the way of genuine concern and understanding for the elderly. These fantasies also hamper our capacity to imagine our own futures realistically and contemplate our own far more likely fates as recipients of some form of aged care.

The most common fantasy I hear when I mention aged care is that of voluntary suicide. “I’ll kill myself before I ever go into a nursing home,” people tell me nonchalantly: a farcical pronouncement that presumes that they will be well enough to kill themselves before life gets bad enough that they need to. Nobody does this, and nobody will, but it is a powerful and enduring fantasy because it suggests we will exert agency at the precise moment when we have none. It is also something my father used to say repeatedly; of course, he, like everyone else, never really meant it.

People my own age (late thirties/early forties) often buy into what I call the commune fantasy, in which a group of friends age and die together, chipping in to buy a common property to live in, pooling resources and paying for carers together like a geriatric co-op. This fantasy presumes, of course, that all the friends in the group will have the same care needs at the same time, will sell their assets simultaneously, will be able to oversee their own care needs even if those needs include cognitive impairment or dementia, and will somehow be able to afford the astronomically expensive medical equipment used in aged care facilities, including hoists, pneumatic mattresses and a twenty-four-hour nursing and caring staff. Essentially what someone means when he or she tells me about their utopian aged care kibbutz is this: I will build my own private nursing home from scratch. This, for all the obvious reasons, also never happens — but it is a powerful fantasy precisely because it suggests that in our time of greatest need, the tribe will be there for us.

Then there are the technological optimists, who believe that by the time they reach old age, the conditions that the elderly suffer from now will have been eradicated by science, or a fountain of youth will render these problems moot. This is, of course, a profoundly narcissistic approach — what about all the elderly suffering in aged care in the meantime? — as well as a ludicrous one.

People also fantasise about dying peacefully in their beds, although as our life expectancies increase without a commensurate extension in our quality of life, we are more likely to become institutionalised than previous generations, rendering this scenario less and less likely.

And finally, there are the fatalists who joke darkly about how we won’t know any better because we’ll all be drooling in wheelchairs parked in front of a television. I don’t get the sense that those who say this really believe it. Rather, they say it flippantly, jokingly, although the subtext is more sinister. The system’s broken and nothing can be done to fix it. Why bother trying?

My blood thunders when people repeat these fantasies to me, because ultimately such magical thinking begets apathy and inertia. If we refuse to imagine what it is like to age — and accept that one day we, too, will become old — then nothing changes and the appalling status quo will continue. Our collective failure to imagine the lives of the elderly is the primary obstacle in the way of genuine empathy: an empathy that should be predicated on the acknowledgement that one day we will join their ranks. If we spent as much time contemplating the realities of the end of life as we do fictive dystopias and the extermination of humanity, we would have the reforms we need in aged care, and greater human rights and dignity for our elders.

In the meantime, the shambolic, diabolical state of aged care remains a horror each successive generation seems bent on discovering for itself, when it’s far too late. More’s the pity. As Larkin wrote: “Most things may never happen: this one will.” •

This essay is republished from GriffithReview 68: Getting On, edited by Ashley Hay (Text), where a referenced version can be found.

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Among the many problems with this kind of journalism, one immediately stands out. On the definition used by the Pew Research Center, millennials were born between 1981 and 1996. Hardly any of them still fit the image of “young people,” who are typically between sixteen and twenty-five. The oldest millennials are approaching middle age (which is generally said to start at forty-five) and some of them have children old enough to be in the workforce or attending university. Yet articles about millennials scarcely ever talk about the experiences of thirty-something parents.

As I’ve been pointing out for twenty years now, most of what passes for discussion about the merits or otherwise of particular generations is little more than a repetition of unchanging formulas about different age groups — the moral degeneration of the young, the rigidity and hypocrisy of the old, and so on.

This isn’t surprising. The experience of youth and early adulthood doesn’t change much from one decade to the next — at least in the absence of a war or an economic depression, which rarely coincide with the lines drawn by players of the generation game. The standard “young people these days” story hasn’t basically changed, and so the lazy equation of “millennials” and “young people” has lingered on.

As children become adolescents and then adults, they have to discover a great deal about themselves. This self-absorption is easily cast as narcissism, a diagnosis routinely levelled against millennials, just as it was against their then-youthful boomer grandparents in the 1960s. On completing their education, young people must find work in a labour market that is increasingly difficult for new entrants, fully aware that they’ll be sacked the moment that becomes more profitable than keeping them on. Not surprisingly, they look out for their own interests and take the best offer they can find at any given time. This is denounced as job-hopping by people in secure jobs, who forget the difficulties they may have had in landing them.

Even the genuine differences between age cohorts largely reflect changes in society as a whole. Take the fact that young people are drinking less than earlier cohorts did at the same age. Given that alcohol consumption in Australia peaked at an annual thirteen litres per person back in 1974–75, that’s hardly surprising. The hard-drinking culture of the time was alternately celebrated and denounced in films like The Adventures of Barry McKenzie and Wake in Fright, and was personified by the immensely popular Bob Hawke, holder of a world record for fastest consumption of a yard of ale (eleven seconds).

Consumption had declined sharply to around ten litres per person by 1990 (coincidentally, a period when Hawke, as prime minister, famously abstained from drinking) and has bounced around at a basically stable level ever since. Restrictions on alcohol advertising have played a role, as have campaigns against drink-driving and expert advice against drinking more than two or three standard drinks a day.

What this means is that older cohorts have experienced, on average, more positive social attitudes to drinking than younger cohorts. The same phenomenon can be seen in attitudes to issues like marriage equality and climate change: younger cohorts have views shaped entirely by recent experience, whereas older cohorts retain the effects of earlier experiences when the dominant views were very different.

A final factor is the power of names. “Millennials” makes for more appealing headlines than the anodyne “gen Z,” which seems, in the absence of any compelling alternative, to have become the established term for those born between 1996 and (about) 2010.

The same is true in spades, of course, of generation X, born between the end of the baby boom in the early 1960s and the beginning of the millennial cohort in the early 1980s. Xers now hold the great majority of powerful positions in Australia (they include all premiers and chief ministers, and the PM) yet barely appear in generation game articles, except as authors. Indeed, in my darker moments, I wonder whether the whole thing is a gen X plot to discredit both their elders and their juniors, and thereby hold positions of power for as long as possible. •

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But first, it’s useful to say what this kind of discussion gets right, and why. The starting point is an analysis of the political attitudes of white Americans by statisticians Yair Ghitza and Andrew Gelman of Columbia University. (There’s an immediate alert here: American attitudes differ far more by race than by generation. For most issues, gender and social class also outweigh generation.)

Ghitza and Gelman focus on party preference and show, unsurprisingly, that people’s attitudes are formed relatively early in life. People who grow up during a period when the Republican Party is popular, for instance, are more likely to vote Republican as adults. This influence is greatest in the years between fourteen and twenty-four, smaller between twenty-five and forty, and quite limited after that.

Ghitza and Gelman give the example of people born in 1941 who came of age during the popular presidency of Dwight Eisenhower. By the time Eisenhower left office in 1961, these people had accumulated a level of pro-Republican sentiment that would last their entire lifetimes. People born a decade later — baby boomers — were obviously too young to be influenced in the same way; their childhoods and formative years under presidents Kennedy and Johnson left them relatively pro-Democratic.

So, birth cohort matters — but nowhere near as much as the popular discussion suggests. By 2015, around 55 per cent of Ghitza and Gelman’s 1941 cohort preferred the Republicans, compared to 49 per cent of those born ten years later.

Importantly, members of a generation don’t all experience their formative eras in the same way. During the 1960s and 1970s, some boomers marched against the Vietnam War and fought for civil rights but others supported the war and helped give Richard Nixon his landslide victory in 1972. To a large extent, these attitudes have persisted. The typical boomer isn’t a radical turned conservative, but someone whose party preferences, radical or conservative, have remained stable.

That said, there has been a broader shift to the right among older voters, and this needs to be explained. For issues where the tide of opinion has run consistently in one direction for a long time, the OK Boomer meme is closer to reality.

Think about climate change. Although scientists have been discussing the relationship between atmospheric carbon dioxide and climate for more than a century, they didn’t reach even tentative agreement until the 1980s. (Before that, there was discussion of, but no agreement on, the possibility of a renewed Ice Age.) It wasn’t until the 1992 Earth Summit that the issue reached the broader public.

By then, boomers were aged between thirty and fifty, old enough that their attitudes on most issues had been formed. For those who had already adopted conservative views and obtained their (mis)information from sources like the Murdoch press, that was the end of the story. Their prior beliefs were reinforced by a constant drumbeat of lies and conspiracy theories.

But even those who accepted mainstream science saw climate change as a concern for subsequent generations, perhaps as early as their grandchildren. Only in the past few years (or, for many Australians, the past few weeks) has the reality of climate change really hit home.

Compare the experience of a person aged sixteen, like Greta Thunberg. Throughout her life, the reality of human-caused climate change has been accepted by all major scientific organisations. Deadly European heatwaves have occurred in 2003, 2006, 2007, 2010, 2018 and 2019. Melting icecaps, retreating glaciers, droughts and wildfires are everyday news items, as is the failure of national governments to take the action needed to solve the problem.

Every year earlier a person was born is another year in which they were, at most, only partially aware of the threat of climate change. The result is a sharp decline in concern about climate change with rising age.

Similar trends can be found on other “cultural” issues, including LGBTQ rights. Anyone over fifty grew up at a time when homosexuality was a criminal offence in much of Australia. Anyone under thirty can’t remember a time when such a law would have seemed other than absurd.

Of course, attitudes don’t break along the sharp generational lines popularised by memes like OK Boomer. People born in 1963, at the end of the baby boom, have had life experiences very similar to the earliest members of generation X, born the following year. Both have had radically different experiences from those born in the immediate aftermath of the second world war or, like the last of generation X, born around 1980. The lack of a sharp break is reflected in the recent polling data on cultural issues like climate change and marriage equality.

The rise of culture war politics on the political right, based on appeals to nostalgia for an idealised past, has made issues of this kind far more salient. As a result, differences in cultural attitudes are now closely linked to political views. Young people in Britain, the United States, Australia and other English-speaking countries are now much more likely than older people to support parties of the left. This gradient is much steeper than at any time in the past.

What are the long-term implications for Australia? If the strong influence of early adult experiences observed by Ghitza and Gelman continues to affect party preferences, the parties of the right are set for a long period in the wilderness, perhaps as long as Labor’s twenty-three years in the mid twentieth century.

But there are countervailing forces. If the left pushes for more radical cultural change while the right accommodates the changes that have already taken place, we might see a continuation of the existing age gradient. So far there is little sign of this; on many issues, the right seems to be digging in. Alternatively, if other issues, such as foreign policy, come to dominate policy debate, allegiances formed on the basis of cultural issues may dissipate. Finally, there is the possibility that the existing party system will be replaced by a new one, as has happened in a number of European countries recently. •

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“Wichita Lineman” was written by Jimmy Webb. Glen Campbell had a hit with it in 1968, and most people of a certain age can probably conjure up the sound of his smooth vocals in their mind’s ear: “I am a lineman for the County / And I drive the main road / Searching in the sun for another overload.” There are only two verses, the first half of each dealing with the singer’s job, the second half with his relationship. The relationship is obsessive (“I hear you singing through the wires / I can hear you through the whine”) and the job is demanding — he needs “a short vacation.” The way Campbell tells it, being the “Wichita Lineman” isn’t much fun.

But Cash’s comma ushers in pride. “I am a lineman, for the County,” he sings. Just listen to him! This man has a trade, a profession: he’s a lineman. What’s more, he works for the County. It’s a prestigious gig. So to hear him, in verse two, practically begging — “And I need you more than want you / And I want you for all  time” — is all the more affecting.

Cash’s recording first appeared on the vinyl version of The Man Comes Around, the fourth American Recordings album produced by Rick Rubin in 2002. His voice was ravaged and quavery, seldom in tune, but full of the wisdom of experience. It was the quality that told him to make that gap after “lineman.” He was only seventy, but sounded older. He died the following year.

Elderly voices can do things younger voices can’t. They don’t try so hard. In his new book, It Gets Me Home, This Curving Track, Ian Penman writes about Joni Mitchell’s recording of two of her own songs from three decades earlier, the title track and “A Case of You,” on her standards album Both Sides Now (2000). He likens them to late Rembrandt self-portraits.

“She returns to these songs of her (and our) youth,” he writes, “and sings them inside out with her fifty-seven-year-old voice and all it contains: all the love, desire and disappointment; all the lessons learned from long hours working with brushes and paint. Cigarette smoke, lipstick and holy wine.”

The lines come near the end of the book’s final chapter, which is actually about Prince, who had recorded his own memorable version of “A Case of You.” Prince is one of seven musicians given a chapter by Penman. The others are James Brown, Charlie Parker, Frank Sinatra, Elvis Presley, John Fahey and Donald Fagen. At the outset, you wonder what these men might have in common, and the answer, you gradually realise, is something to do with lateness. Parker, Presley and Prince died relatively young, though arguably they all had late periods, but Brown, Sinatra, Fahey and Fagen continued performing into old age. Even early in Steely Dan’s career, Fagen seemed a generation ahead of those he was singing about (“Showbiz Kids,” “Hey Nineteen”).

The theme of the book is never spelt out, and anyway this isn’t a through-composed piece of writing. It is a collection of essays, written between 2012 and 2018 for the London Review of Books and City Journal, but it slowly becomes clear that Penman’s main concern is something like musical truth. One of the first clues, in his introduction, comes from songwriter and producer Dan Penn, who contrasts Chuck Berry with Bobby “Blue” Bland and Aretha Franklin. “He was cute and he was smart,” Penn said of Berry, “but he never went to church. I never heard that in his voice.”

Penman doesn’t believe Penn meant this in a literal sense. It wasn’t so much that Berry was godless, but that he never went “somewhere altogether elsewhere and unexpected the music takes you, somewhere that’s hard to name.” Without attempting to name the place, the book undertakes a search for it, finding it, time and again, in the work of these musicians and particularly their late work. It is as though in maturity they became more themselves. Perhaps we all do.

So it is that Penman finds Sinatra’s truth (because musical truth is really what we’re talking about) on albums from the 1960s and 70s that we tend not to take very seriously. Vocally, Sinatra’s great period was probably before the war, singing with Tommy Dorsey’s orchestra. Musically, his best work is surely from the 1950s, working alongside Nelson Riddle and others. But he was never more himself than in the late 1960s. The choice of material was hit and miss, so were the arrangements, and nobody needs to hear Sinatra’s versions of “Mrs Robinson” or “Both Sides, Now.” But on A Man Alone (1969) and Watertown (1970), which Penman says he reveres “like holy objects,” Sinatra is “disarmingly convincing.” The songs are not of the quality of the standards found on the singer’s Capitol recordings with Riddle, but they are effortlessly, truthfully performed. You can hear the commas.

Penman, naming no names, writes of today’s stars attempting to pull off Sinatra’s style and admits they sometimes get the surface details right. But ultimately they always fail. “They can’t ‘do’ Sinatra, because Sinatra didn’t ‘do’ easy, imitable exaggerations. His tone was toned right down: his slow-burn intensity came from somewhere deep inside… None of this can be applied like spray tan. It’s probably not something that can even be learned any longer.”

Sinatra, Penman writes, “may be the last big mainstream entertainer to perform without carefully applied quotation marks.” And there it is: musical truth.

The title of It Gets Me Home, This Curving Track comes from a 1958 poem, “Walks,” by W.H. Auden. But Penman imagines the “curving track” of black vinyl, while home is the place that all musically truthful singers take us. •

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Why would hard-headed investors put their money into a venture based on the assumption, as Traill recounts it, that “a bunch of do-gooder non-profits could run a very large-scale business and do social good.” Traill surprised the doubters: the money from charities, private investors, banks and government that he helped bring together into a winning bid created a highly successful social enterprise called Goodstart.

The new company paid $95 million for a stripped-down version of ABC Learning, which at its peak had more than 1000 centres, and raised another $70 million to fund its ongoing operations. A non-profit outbidding private rivals was one surprise. Another has been the success of combining an unsentimental business approach with a soft heart.

Today Goodstart is the largest provider of childcare and early learning in Australia, with 665 centres catering for 75,600 children and employing 16,700 people. In 2018–19, its revenue grew by 8.2 per cent to $1.1 billion. The surpluses it earns as a not-for-profit are invested in raising the quality of early learning and supporting centres in disadvantaged areas.

That’s not to say everyone is happy. Particularly in the earlier years, staff complained about cost cutting, minimum staffing levels and having to pay for needed resources out of their own pocket. More recently, an employee posted a comment that “a lot is expected to be done out of goodwill” and another that staff were “not being recognised and rewarded for their hard work.” But Goodstart argues it has been steadily improving its performance.

According to John Cherry, the company’s advocacy manager (and a former Australian Democrats senator), the number of Goodstart centres meeting the national quality standard — which measures such things as staff-to-child ratios and staff qualifications and is administered by state and territory governments — has grown from about half in 2012 to 93 per cent. It’s now higher than the average among preschools, which have been regarded as the high-quality end of the early learning sector. Fee increases have been below average for the past four years, in contrast to those of ABC Learning, which were above average.

Cherry says Goodstart pays above award wages, has spent about $100 million on professional development and has increased the number of teachers it employs by about 300, bringing the total to 1300. Its social inclusion budget — which helps disadvantaged children get access to early learning — has risen from $1.5 million to $12 million in the past four years, though arguably this is still a modest amount in proportion to its revenue. Goodstart’s policy is not to turn any child away, and it provides speech therapists, occupational therapists, psychologists and other support.

What would Goodstart be worth now? “You would probably list it for over $1 billion if you wanted to run it more commercially,” says Traill, who chairs the company. As part of the original deal, three charities — Mission Australia, the Benevolent Society and the Brotherhood of St Laurence — each put in $2.5 million, an investment that returned them 12 per cent a year, as well as another 15 per cent in the form of a dividend based on the success of the business. Another $22.5 million was raised from forty-one investors, who put in amounts ranging from $100,000 to $3 million and also earned 12 per cent a year, with the money repaid after seven years. The National Australia Bank lent $50 million and the federal government a further $15 million — debts that have also been repaid.

Traill is driven partly by his upbringing in Morwell, a disadvantaged town in country Victoria, where he witnessed bright kids missing out on the opportunities that his own parents were able to give him. He went to Melbourne University and then to Harvard for an MBA, before joining Macquarie Bank, where he spent fourteen years during the 1980s and 1990s. He was co-founder and executive director of the bank’s private equity arm, Macquarie Direct Investment, which boasted a gross rate of return of 32.3 per cent.

Deciding there was more to life than getting rich at the millionaires’ factory, he left in 2002 to start Social Ventures Australia. A not-for-profit, it has supported more than fifty projects that deliver social as well as financial returns, and has a busy consulting arm.

Achieving a return on investment in its broadest sense remains central to Traill’s thinking. “We know that waiting until a child begins formal schooling is the least effective intervention if a child’s development is falling behind their peers, both for the individual and from a return on investment point of view,” he wrote in an introduction to the Goodstart’s 2018 annual report. “If as a nation we begin to place an emphasis on early learning — as nations as diverse as Finland, China and New Zealand are already doing — we will reap the rewards for this and the following generations.”

A wealth of evidence attests to the ability of children to soak up learning in the first five years of life. A report to federal and state governments in 2017 argued that children who received high-quality early education were more likely to complete year 12 and less likely to repeat grades or require additional support. A recent PwC study that attempts to quantify the returns on investment in early childhood education calculates that every $1 spent produces about $2 in benefits, taking into account factors such as children’s higher future earnings, extra income for parents and carers from additional work, higher government revenue from taxation, lower welfare and healthcare costs, and reduced criminal activity.

Other countries, particularly Britain and the United States, are ahead of Australia in social impact investing. British legislation gave the not-for-profit social sector access to almost £600 million (A$1.13 billion) in unclaimed money in banks that has been leveraged into £1.7 billion (A$3.2 billion) in investment. Mostly, though, social businesses here and overseas operate on a small scale. Goodstart’s success has attracted attention particularly because of its size.

“I think we are regarded as a bit of a global exemplar,” says Traill. “My hope has always been that Goodstart becomes a precedent, and not just in early learning.” He sees its application in areas such as aged care, further education, and social and affordable housing — areas where there is scope for the superannuation sector in particular to invest in low-risk, long-term ventures with many of the same characteristics as infrastructure projects.

One of Traill’s other hats is as chair of the investment committee of Sunsuper, an industry superannuation fund that has put $200 million into an investment trust for aged-care housing — money it says is a good property investment that also delivers social benefits. The HESTA industry super fund has a $70 million social impact investment trust managed by Social Ventures Australia and recently allocated $20 million to a Melbourne apartment project to provide affordable housing.

Traill is exploring further opportunities in aged care, where he sees many similarities with early childhood education. The hearings of the royal commission into aged care certainly are reinforcing the need for high-quality, ethical care, as are the financial difficulties the sector is facing. Traill argues that returns in the order of the 12 per cent achieved for Goodstart investors should be attractive, particularly in the present circumstances of a low-growth economy, and that it would be a comfortable level of risk for a well-run company. He adds that as a board member of Sunsuper he has a legally enforceable responsibility to maximise the return to fund members. “If these businesses are run ethically there is no reason they should not be able to generate a long-term rate of return.” He also sees potential in the further education sector, where private colleges “have lost sight of the quality agenda.”

Traill says there is no need for stratospheric executive salaries, with Goodstart showing that a business can achieve a depth and balance of skills without having to pay “nosebleed” packages. “People are paid well by non-profit standards, but nothing like the seven-figure bonuses people of comparable talent would be getting in the private sector.”

Of course, aged care is not the only sector that has suffered reputational damage. There’s the banks. And there’s business more generally, in the wake of a global financial crisis that has led to a debate about the very future of capitalism. “We need a more sophisticated form of capitalism, one imbued with a social purpose,” Michael Porter, one of Traill’s lecturers at Harvard, has argued. “But that purpose should arise not out of charity but out of a deeper understanding of competition and economic value creation… It is not philanthropy but self-interested behaviour to create economic value by creating social value.”

This not only challenges the traditional obligation of the corporation to act solely in the best interest of shareholders but greatly expands notions of corporate social responsibility. Consumers, particularly young people, are increasingly insisting that businesses behave honestly and transparently, says Traill.

And then there is government. Why is it, Traill asked in a speech five years ago, “that despite a generation of economic growth and in many areas quite significant funding growth, the data tells us that we haven’t made much progress on the core moral and economic issue that we face in this country — that many Australians live in a cycle of exclusion and cannot fully participate in the community?” He quoted two examples: at age fifteen, the poorest 25 per cent of students were nearly two-and-a-half years behind the most affluent students; and, based on 2014 statistics, more than 1.6 million Australians were without work or without sufficient hours of work. “Our conclusion is simple and powerful: money isn’t flowing to the right places to achieve social impact.”

The question is how much difference can be made by social impact investment. With governments progressively withdrawing from public or social housing and with 190,000 households on the waiting list, there is plenty of scope for a social enterprise like Goodstart. But the scale of the problem is such that, even with investment by superannuation funds, such a project can go only a small way towards filling the gap.

The same applies more generally to affordable housing. According to a report prepared for federal and state Treasury heads, the main barrier to the supply of affordable housing by the private sector is the lower returns compared to those for other property. It argued that no innovative financing model could close this gap and that “a sustained increase in the investment by governments is required to stimulate affordable housing production and attract private and institutional investment.”

Traill was appointed this year to chair a federal government taskforce to develop a social impact investment strategy. But what the government has in mind, at least at this stage, is far more modest than large scale social entrepreneurship. Rather, it is exploring the use of the social impact bonds that Traill, through Social Ventures Australia, helped pioneer in the states. According to a federal government announcement last month, it is looking for “solutions to address entrenched disadvantage and some of society’s most intractable social problems” in areas ranging from welfare dependence to social housing. As well as providing $5 million for the taskforce, this year’s federal budget dipped a small toe into the water by allocating $14 million for three social impact investment trials.

Details remain to be worked out, but the Department of Social Services says the trials will seek to increase labour force participation of people receiving working-age income support payments and to “strengthen the wellbeing and self-reliance of families with children.” Organisations will receive funding based on the results they achieve. These outcome-based payments, as opposed to fee-for-service or block grants, are a key element of social impact investments. But the department says the trials won’t involve another typical characteristic — funding from private investors.

The taskforce comes under the prime minister’s department, reflecting Scott Morrison’s interest in the area. This was expressed most clearly in 2015, when as social services minister he dressed up the concept in conservative garb. Governments would get smaller in proportion to the size of the social challenges, he said, which meant that non-government players would have to get bigger, including through private investment in social needs. “What I am basically saying is that welfare must become a good deal for… private investors.”

If this is the real motivation of governments then it raises an obvious question. If social impact investing is simply a substitute for government programs, what exactly will it achieve? According to proponents, it is a more efficient way of delivering services that focuses on the outcomes actually achieved; a more innovative approach to some of the social problems that have defeated successive governments; and perhaps, if private wealth is harnessed for social purposes, a modest attempt to address inequality.

The first social impact bond was launched in New South Wales in 2013. The state’s seven “social benefit bonds,” as they’re called, cover challenges like reducing the number of children in out-of-home care, driving down rates of youth unemployment, homelessness, and reoffending among former prisoners, and improving palliative care and mental health services.

Victoria has its own version, called Partnerships Addressing Disadvantage, which aim for a wider source of private funding, including pure philanthropy and loans. The Andrews government stresses they will not replace existing government services, whereas Gladys Berejiklian’s NSW government says that “achieving the outcomes should reduce the need for, and government spending on, acute services.” South Australia has introduced a social impact bond to target homelessness and Queensland has three pilot bonds, with many of the projects in the different states covering similar areas to those in New South Wales.

On paper, the early bonds introduced in New South Wales have been successful, with outcomes better than those under government programs, as well as returns to private investors of up to 12 per cent a year and potentially as high as 30 per cent for investors prepared to risk losing their capital if the project is not successful. But they have been operating on a small scale. The first bond, Newpin, an intensive and therefore costly program to reduce out-of-home care for children, has returned 328 children to their families in six years, compared to the estimated 114 in the absence of the program.

That result is impressive, but the net figure of 214 makes barely a dent in the 17,879 children in out-of-home care in New South Wales in 2017 and the 47,915 in Australia. It does show the potential savings available, though, given that it costs around $60,000 a year to keep a child in out-of-home care. But many children do not meet the criteria of the Newpin program.

The structure of the bonds can be complex. An average of 11,712 staff hours was taken up in developing each of the first two NSW bonds. While experience has streamlined the process, the requirements for measuring outcomes and investor risks and returns can vary. A substantial risk premium is needed to attract investment in the first place, meaning the total cost of a social impact investment project is higher than if it were funded directly by government — and also explaining why some of the more recent projects have moved away from seeking private investment, reducing their complexity but retaining the emphasis on outcomes-based funding.

Contrary to the impression often given, the money raised from private investors via the bonds doesn’t represent additional funding, since investors expect their money back, plus earnings. The only exception is if projects fail and investors’ capital is not protected. The advantage to government — assuming that it would otherwise have funded the program itself — is that it has contracted out the risk.

Elyse Sainty, director of impact investing at Social Ventures Australia, sees social impact bonds occupying the middle ground between purely experimental projects, where outcomes are hard to predict, and tried and tested programs where governments have greater certainty about results and so are more confident about carrying the performance risk themselves.

Olivia Wright, engagement manager at the NSW Council of Social Service, says there have been some savings to the NSW government from social benefit bonds but they are less than expected. She sees merit in the scheme but also has serious reservations. “They probably are not the silver bullet that they were conceived to be maybe five years ago,” she says. Her main concern is that they are a huge burden on the social sector, requiring large amounts of time, money and human resources, meaning they are not an option for the many small social welfare organisations and those dealing with disadvantage as the result of very complex social problems. “They are really only available as a tool for a very small number of organisations that have access to the human and financial resources to allow them to go through the long and arduous process of developing a bond.”

On the other hand, she sees benefits in the discipline that social impact bonds impose, especially with the requirement for measurable outcomes. And she sees an increasing trend towards people wanting to use their everyday investments to do good. “The primary issue from our perspective is how does the social sector build the capacity to meet that demand?”

On the present evidence, social impact bonds will only contribute at the margins to tackling social disadvantage, compared with the kind of resources that can be marshalled by governments through taxation revenue. But social entrepreneurship on the scale of Goodstart can make a larger impact. Traill’s ambition is to shift the traditionally conservative mindset of the superannuation funds and unlock the $2.8 trillion that they manage. Just a tiny fraction of that would be enough to fund hundreds of Goodstarts.

That requires a wider acceptance of the idea of capitalism with a social purpose, or capitalism 2.0, as it has been dubbed. It suggests a profound change in business culture that will be a challenge to achieve. But at least rhetorically, change is in the air. Some large businesses in Australia are more openly promoting social and environmental values, even at the cost of offending conservative politicians. In August the US Business Roundtable, representing big business, declared a new purpose — not just serving shareholders but also investing in employees, fostering diversity, inclusion, dignity and respect, dealing ethically with suppliers and supporting the communities in which businesses operate.

It may only be words at this stage, but it at least suggests that even big business feels under pressure to change the way it sees its role. •

The post Is Goodstart just the beginning? appeared first on Inside Story.

Japan has a lot of old people and about 16,000 of them go missing every year. Afflicted with dementia, they step out the front door and wander off into a dangerous world. It’s a real and present danger — about 500 of these innocent old people meet with fatal accidents each year.

It’s set to get worse. By mid-century the fastest-growing cohort in Japan’s population will be those aged over eighty. And Japan’s future, to a large extent, is the world’s future.

It seems like only yesterday that Elvis was inventing the teenager. Now there are more sixty-year-olds on Earth than there are kids under five. Women are having fewer babies. Better healthcare means that more of us will die as centenarians.

It’s a global phenomenon. India, China, Russia and even Catholic Italy are on the same inexorable path to senescence. Only the nations of Africa, and the big immigrant countries, such as Australia, Canada and the United States — provided it remains a place where huddling masses are still welcome — will buck the trend to some extent.

The old graph of human ageing was pyramidal; a large number of young people at the bottom supporting a small number of aged at the top. Now it’s swelled at the belly, fattened by the growing numbers of the middle-aged. Soon the graph will swell at the head, and rest daintily on a small platform of youngsters. For the first time in human history, the pyramid will have been turned turtle. Along with AI and climate change, this demographic revolution will become the defining story of humanity in the twenty-first century.

The British journalist and former Downing Street policy wonk Camilla Cavendish was prompted to write Extra Time after observing her parents in old age.

Her father decided he was past it at fifty, descended into depression, divorced Cavendish’s mother, and died in his eighties after living unhappily for another three and a half decades. Post-divorce, her mother borrowed to buy a house, and lived in such terror of defaulting on the mortgage that she lied about her age at work and never joined the firm’s pension fund lest she be identified as an easily expendable old codger.

According to Cavendish “we have created an entirely new stage of life — an extended middle age.” As in sport, in this “extra time” there is everything to play for. But if the lives of her parents are any guide, Cavendish argues, this apparent boon to humanity could easily become a burden.

Extra Time is designed like a self-help book with several easy-to-follow lessons.

There’s the technological fix. Japan, for example, seems obsessed more than other countries with solving its demographic problems using robots. When they’re not being hunted down in the streets for their own good, elderly Japanese are attending exercise classes led by Pepper, a five-foot-tall humanoid robot who will exhort them in a high-pitched giggly voice to bend and stretch.

Where might this trend lead? Back-to-base ankle bracelets strapped to the infirm for “their own good”? ID chips for both the family cocker spaniel and grandma? What about a robot companion that is also a stool pigeon, with all-seeing, all-recording eyes? In a world where citizens happily give away their personal information to billion-dollar companies, why should we expect old age to be the last bastion of privacy?

Then there are the personal fixes. According to Cavendish the people who live longer will — with a bit of effort — be healthier as well. She has christened this rising cohort of humans the Young-Old.

They’ll work longer and pay taxes longer; they’ll keep dementia at bay and, in some cases, get access to anti-ageing drugs. They’ll reinvent community and discover their late-onset ikigai — a Japanese word meaning “purpose in life.” Retirement needn’t feel like a long walk off a short pier, Cavendish advises: just commit to staying useful. There is also a growing body of research that says you’ll live even longer because of it.

Though Cavendish paints an optimistic picture of humanity’s extra time, she tempers it with some realistic fears. “The social contract is being stretched to breaking point,” she writes, “by the changing ratio of old to young, the increasing share of wealth owned by older generations and poor job prospects for the young.”

She warns that the traditional transfer of wealth from the old to the young has actually reversed in some countries, probably for the first time in history — mainly due to rising health costs and the lowering of retirement ages.

George Orwell famously explained that he became a writer because he had “a facility with words and a power of facing unpleasant facts.” Cavendish also has a nice way with words — and anecdotes and characters — but she sometimes fails to face unpleasant facts.

When Cavendish discusses Britain’s need to develop a social-care insurance policy, for example, she comments, correctly in my view, that “what is needed is grown-up cross-party discussion, plus better health services.” But she chooses not to remind us that the austerity policies and Brexit referendum of her old boss, former PM David Cameron — possibly the biggest blunderer in British political history — killed the idea of bipartisanship in Britain for a generation.

She also praises the benefits of the gig economy, particularly to the asset-rich Young-Old, who desire an interesting — and health-enhancing — semi-retirement filled with purpose and exercise. But later in her book she notes how detrimental the gig economy is to the Actual Young, who will struggle to build up enough wealth to cover their old age by working short-term contracts. Maybe the “portfolio career” only works if you inherit a share portfolio as well?

And finally, Cavendish at no point tackles the issue of assisted dying. Not everyone will want extra time, no matter how charming the robots become.

Despite occasional lapses, though, Extra Time is well researched, mainly non-ideological and easily digestible. •

The post Late-onset ageing appeared first on Inside Story.

Let’s start by looking at the evidence. In this case it’s voting-intention data from the three months leading up to each federal election, when Newspoll (who provided the 1987 to 2010 data) and Essential Research (2013 and 2016) asked voters about the forthcoming election. Newspoll used computer-aided telephone interviewing of randomised respondents from the general population, Essential used an online panel, and in both cases only respondents’ primary voting intention, not their preferences, was included. Using results grouped in five-year age brackets we can tabulate how respondents are likely to vote at different ages. By comparing each age group against the all-age average, we can then pinpoint age-related patterns.

Why do it this way? Elections come and go, and support for the major parties waxes and wanes: 1996 was a triumph for the Coalition, 2007 for the Labor Party. By using the gap between the age-specific average and the all-age average, we can see shifts in age-group support independently of overall ebbs and flows. I’ve shown these gaps by graphing the data from the opinion polls as bar charts, with the height of the bars indicating the size of the gap, and the direction — up or down — indicating whether the gap favours that party or not.

Chart 1: Voter support for the Liberal–National Party Coalition, 1987–2016

Source: Author’s calculations using Newspoll and Essential Research data. See technical note at the end of this article.

Chart 1, which shows the age-related pattern of support for the Coalition from 1987 to 2016, shows a changing pattern of support over time. During the late 1980s and early 1990s support for the Coalition was based on middle-aged and older Australians (indicated by positive bars for those age groups). As the 1990s wore on, its support became more concentrated among the older age cohorts, and particularly those over fifty. By the early 2000s, support was almost exclusively to be found among those aged over fifty-four, with a very large concentration in those aged sixty and over. Since 2007 this group of older Australians has become the bastion of Coalition support: as they have aged, their voting patterns have remained wedded to that side of politics.

In the hope of deepening that trend, the Coalition has increasingly favoured seniors in its policy-making. Back a decade, before the Kevin07 landslide swept it from office, the Howard government shrewdly crafted a political deal that welded the “seniors’ vote” to the fortunes of the Coalition. Howard’s largesse towards older Australians was legendary; as Saul Eslake caustically observed, “Self-funded retirees were a protected species.” Among the measures that favoured both the wealthy and retirees, Eslake listed the senior Australians tax offset and tax-free superannuation for over-sixties. Treasurer Peter Costello’s 2007 budget, unveiled the year the Coalition lost office, saw a $1.4 billion package targeted at older Australians, including a “seniors bonus payment.”

The electorate repaid the favours. Throughout the Howard years older Australians consistently voted for the Coalition. Retirees became the Howard heartland: in 2004 some 56 per cent of voters aged sixty-five or over intended to direct their first preference to the Coalition, and in 2007 the figure was 53 per cent. These figures contrasted with an all-age average of 44 per cent in 2004 and 40 per cent in 2007.

What about the “baby boomers,” the cohort born a generation behind these Howard stalwarts? Did they retain their progressive values as they became older, mortgaged and time-poor? Dealing with this question is far from easy, and there is no precise answer. First, we face methodological issues: how do we separate the ageing effects (the impact of getting older on voters’ preferences), period effects (the historical context) and cohort effects (a particular generation)? Second, these polling data define age in five-year bands, but the gap between federal elections is generally three years (and occasionally less). So, even if we identify a baby boomer cohort in 1987, for example, we can’t neatly track them through the data, election by election.

Then there is the issue of who fits into the definition of a baby boomer. Some commentators use the term to encompass people born between 1946 and 1964, but those born at the tail end of this period would only have reached their late teenage years as the 1970s ended. How likely would they have been to share the values of their older sisters and brothers who lived through the political and cultural turmoil of the 1960s and early 1970s?

Finally, we shouldn’t assume that even those who fitted into the earlier cohort of baby boomers — the sixties generation — were invariably left-wing. After all, as political scientist Rod Tiffen reminds us, “although John Howard may have been born among the people who became the flower-child generation of the sixties, it’s much more likely he was attending a meeting of the Young Fogies Society than dropping out on a hippie commune.” Tiffen nevertheless accepts the broad proposition that “different age groups tend to have distinctive outlooks.”

Despite all these difficulties, can we draw any conclusions about whether a baby boomer bulge, moving through the years, has shifted politics towards the left and away from the conservatives? On Chart 1, a fall in Coalition support among those in their forties and fifties is certainly evident when we compare the early 1990s with a decade later. But that chart has certain limitations. By the mid to late 2000s, the sixties generation — baby boomers born in the 1940s — were entering their sixties, at which point they are swallowed up in the data by the “Howard seniors,” who still dominated the ranks of the retired population.

Fortunately, the recent opinion poll data — from 2004 onward — provides an additional age bracket: sixty to sixty-four years of age. Using these data, Chart 2 allows us to track the baby boomers as they move into their sixties. Across all years — from 2004 through to 2016 — those voters aged sixty-five and over continued to solidly support the Coalition, but those in their late fifties and early sixties steadily jumped ship. By 2016, those in their early sixties were barely on the Coalition’s radar, and those in their fifties were long gone.

Chart 2: Voter support for the Liberal–National Party Coalition, 2004–16

Source: Author’s calculations using Newspoll and Essential Research data. See technical note at the end of this article.

This demographic pattern seems fairly convincing, but is it a case of a more left-wing cohort gracelessly rejecting the Howard-Costello largesse? Are we seeing the 1960s hippies winning out over the young fogies? At this point, the lack of precision in these data — and the methodological challenges mentioned above — warrant caution. If you look at support for the Labor Party and the Greens (and in earlier years, the Democrats) using the same year and age-group tabulations, then an almost mirror image of Chart 1 emerges. Where the percentage gap is positive for the Coalition, it is negative for this “left combination,” and vice versa (see Chart 3).

Chart 3: Voter support for Labor and the Greens (and the Democrats), 1987–2016

Source: Author’s calculations using Newspoll and Essential Research data. See technical note at the end of this article.

But the mirror image is far from perfect, particularly during the late 2000s. For example, if we look at the late baby boomers — those born in the early 1960s — the support for the Labor–Greens side of politics in recent years has weakened among those now aged in their late fifties. This particular age cohort seems to have deserted both the Coalition and the Labor–Greens combination. Their support has gone somewhere else.

What might be happening here? Of course, voters do have other alternatives to the Coalition and Labor­–Greens. These are the micro0-parties and individuals that pollsters usually group together as “Other,” along with a miscellany of right-wing parties — including One Nation and the Palmer United Party — and independents and mavericks like Bob Katter.

In the Newspoll and Essential opinion data used for this article, the “Other” category is quite small, which means that tabulating age-related voting patterns isn’t feasible. But one insight into this question can be gleaned from the Australian Election Study, an ANU-based survey that asks respondents how they voted in the last election. These data show that in 2016, more than half of the voters who supported either One Nation, Palmer United Party or Katter’s Australia Party were aged over fifty. This is an age profile similar to that of Coalition supporters. By contrast, the age profiles for those who voted Labor or Greens are much younger (decidedly so for the Greens).

But this group of voters — the supporters of One Nation, Palmer United Party or Katter’s Australia Party — were not simply deserters from the Coalition. Indeed, they were just as likely to have voted Labor in the previous election in 2013 as to have voted Liberal.

In other words, the voting intentions of baby boomers turns out to be more complicated than at first glance. Certainly there is a long-term shift in support away from the Coalition as the population ages, suggesting that the “cohort effect” is more powerful than the “ageing effect.” But this hasn’t necessarily translated into gains for the Labor–Greens side of politics. Some of these baby boomers have gone elsewhere, primarily to the micro-parties and independents.

What might lie behind this trend? It is worth considering the other “effect” that can shape voting patterns over time: the period effect. The relevant period for today’s voters is characterised by considerable discontent. Since Brexit and Trump, it has almost become a cliché to point to a drift away from the mainstream, which in many cases becomes a lurch to the right. In Australia, the latest Fairfax–Ipsos Poll, taken in mid August, showed a sudden drop in the Coalition two-party-preferred vote from 49 per cent to 45 per cent, which triggered leadership challenges later in that week and culminated in the departure of Malcolm Turnbull from the prime ministership.

More revealing was the primary vote: Labor and the Greens barely shifted from their long-term average, while the vote for “Others” jumped from 15 per cent to 19 per cent. At the last election it was just 13 per cent. At that election, in July 2016, the Coalition primary vote was at 42 per cent, but the August Fairfax­–Ipsos poll had the Coalition scoring a primary vote of just 33 per cent. Hence the leadership turmoil.

By itself, the voting-intention data discussed in this article is not sufficient to fathom discontent among baby boomers. But the age patterns in these data are consistent with the Brexit–Trump story. It is no coincidence that economic restructuring has often left some voters in their fifties and sixties high and dry. Discontent readily surfaces among those retrenched from blue-collar jobs, often in industries subjected to privatisation or severe cost cutting and the mass redundancies that usually ensued. Similar discontent can surface among voters in country towns where employment opportunities have dried up under the onslaughts of agribusiness and drought.

Even for those older voters not afflicted by economic restructuring, a certain nostalgia for what Australia “used to look like” has also played into the hands of the right-wing micro-parties. The parallels with recent developments in Europe — in Austria and now Sweden — come to mind. ●

I am grateful to both Newspoll and Essential for making the data available for this analysis. Thanks to Murray Goot, Peter Browne and Jan O’Leary for valuable feedback.

Technical note: All the charts use the data from Newspoll and Essential Research for the opinion polls leading up to each election in which respondents are asked for which party they intend to vote. The data are combined for all the polls in that year, providing large sample sizes of between 10,000 and 15,000 observations. This allows for the breakdown of the data into these age groups. The gap is calculated as the difference between the average voting intention of a particular age group and the all-age average. A positive percentage indicates greater support for that party in that age group, a negative percentage indicates the opposite.

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Whatever its provenance, the big surprise is that it has scientific backing. Indeed, it’s the subject of Natural Causes, Barbara Ehrenreich’s twentieth book.

For those for whom Ehrenreich is not yet a household name, let me introduce her. She began as a biochemist, with a doctoral thesis from one of the top American science labs, but was diverted from that promising career when her university was implicated in supplying chemicals to the military for use in the Vietnam war. In short, she became an activist, and soon made her name as a writer on socio-political themes. She is perhaps best known for Nickled and Dimed: Undercover in Low Wage America, her book-length demonstration that the minimum wage was next to impossible to live on in Clinton-era America. But earlier books, like The American Health Empire: Power, Profits and Politics and Complaints and Disorders: The Sexual Politics of Sickness, drew on her scientific understanding.

With Natural Causes, she’s back in this territory, exposing the myths of today’s “wellness” industry with her usual forensic thoroughness, all the while reminding us that the very fact of being human means dealing with the certainty of death. Even if life expectancy for recent first-world generations has surpassed that of our parents and grandparents, our lengthened lives rely on an inordinate amount of intervention, expenditure and effort. As the demographic bulge of ageing baby boomers looms, government, corporations and middle-class individuals alike have breathed oxygen into the imperative of healthy living, each for reasons of their own. But how healthy living is defined and who is ultimately responsible for it is still unresolved. And for all the concern, all the dietary precautions and fads, all the weights we lift and the kilometres we run, death remains inevitable. What’s more, in a sobering reversal of the assumed natural order of things, it’s beginning to look like the lives of forthcoming generations could turn out shorter than ours have been.

Having survived breast cancer in her fifties, septuagenarian Ehrenreich has spent years forestalling the inevitable by regular sessions at a gym. Two years her senior, I’ve enhanced my mobility with two hip replacements and extended my life by avoiding red meat and alcohol and years of walking and bike-riding. But being faced with relentless, often conflicting advice about the benefits of the many touted practices, supplements, diets and foods has left me wondering how much of what’s left of my life I want to spend on extending it, even assuming I could afford it. Added to this is the growing uncertainty about any of their claims, and a growing appreciation of how little, healthwise, any of us do control.

It’s this persistent, arguably pernicious illusion of control that Ehrenreich has firmly in her sights. A particular target is the contemporary stress on “mindfulness” or “mind–body” wholeness, the widespread belief that health is achieved through a kind of equilibrium or harmony between the mind and the body, a holistic system in which the mind may listen to the body but need never relinquish ultimate control. As ideas go it has merit, but only perhaps as metaphor, to be jettisoned now as the once prevailing “body as machine” has been.

Why this iconoclasm? It all comes out of Ehrenreich’s reading about macrophages, those amazingly efficient little soldiers of our immune systems. These are the proteins that attack invading microorganisms, those viruses and bacilli that make us ill and can even lead to death. Macrophages, in other words, are vital for our survival. But ten years before writing this book Ehrenreich came across an article in Scientific American reporting on studies linking macrophages with cancer. “This changes everything,” she told herself after reading it (the emphasis is hers).

Further investigation followed, suggesting a totally new paradigm. Our bodies at the cellular level are not the perfectly balanced, holistic systems the mindfulness gurus tell us, but are continually poised on the brink of civil war. The same macrophages that defend us against the ravages of infectious diseases are implicated in the spread of cancer and other autoimmune diseases, from multiple sclerosis to osteoporosis and its antithesis, arthritis. Soldiers they are, but “the warriors may get greedy and turn against their people, demanding ever more food and other resources.”

All of this is expounded in fascinating detail in what might be called Ehrenreich’s keystone chapter, “The War Between Conflict and Harmony,” without which the book’s entire edifice could fall. And much to our credit it was an Australian, later to become Sir Frank Macfarlane Burnet, who advanced our understanding by acknowledging the nebulously metaphoric basis of immunology, the most accurate metaphor on offer being that militaristic one. As Ehrenreich writes:

We could say, in retrospect, that Burnet was torn between two paradigms: One, the holistic, utopian one, saw the body or organism as a well-ordered mechanism, evolutionarily ordained to be exactly as it is. In the other emerging paradigm, which could be called dystopian, the organism is a site of constant conflict — as between cancer cells and normal cells or between the immune system and other tissues in the body. The conflict may result in some sort of compromise in which, for example, the disease settles into a chronic condition. Or it may end, sooner rather than later, in the death of the organism.

Apart from what this has meant for treating diseases, the recognition that what may be the cure for one disorder may only make us vulnerable to another does much to dismantle the wellness metaphor, which has been seized on by governments and employers to deal with the disruptive economics posed by ageing populations, and by individuals on the merry-go-round of attempting to postpone an inevitable death. This new understanding of how our cells work raises urgent questions about how best to live one’s life. Exercise, diet, medical monitoring and intervention — all these become increasingly necessary as we age. But a greater appreciation of the ETO should lead us towards a more philosophical approach. If we’re going to die, either from invading microbes or their antibodies gone crazy, we may as order our priorities and spend what time we have doing whatever it is that makes life on this earth worthwhile to us. Within reason, of course, always hedging our bets.

How Ehrenreich manages to pack such a thoroughgoing analysis into 235 pages is a tribute to both her erudition and concision. Natural Causes can be a tough read, but it is a compelling one, and for all of us trying our damnedest to stay alive, a path towards liberation. ●

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The Super Guarantee works by forcing people to save while they are working so they’ll have more to spend when they retire. But it’s no magic pudding. As the Henry Tax Review and others have noted, higher compulsory super contributions are ultimately funded by lower wages, which means lower living standards for workers today.

This is more than just economic theory. When the Super Guarantee rose from 9 to 9.25 per cent in 2013, the Fair Work Commission’s minimum wage decision stated that the proposed increase was “lower than it otherwise would have been in the absence of the Super Guarantee increase.”

Sources: Superannuation Guarantee (Administration) Act 1992 as amended; 1995­–96 Budget Speech; Labor’s Fairer Super Plan, April 2015

Yet the policy set in train by the Rudd and Gillard Labor governments means that the Super Guarantee will rise incrementally from 9.5 per cent of wages today to 12 per cent by July 2025. Tony Abbott’s government delayed the increases but stuck to the same goal.

The superannuation lobby argues that working Australians need more super to fund a reasonable retirement. But the truth is that current levels of compulsory super contributions, along with non-super savings (such as shares, bank deposits and interests in businesses or investment properties) and the age pension, are likely to provide a reasonable retirement for most Australians.

Our research predicts that low-income Australians who make compulsory super contributions for forty years will, after accounting for inflation, retire on an income of well over 100 per cent of their working-life wage. (This is also known as a “replacement rate” of more than 100 per cent.) In other words, many low-income Australians will get a rise in pay when they retire, because the age pension and the income they get from compulsory retirement savings will be higher than the wage they received during their working life.

Notes: Results from modelling the retirement income of a person born in 1985, who works uninterrupted from thirty to seventy, and dies at age ninety-two. Superannuation and pension policy is as legislated (Super Guarantee to rise to 12 per cent by 2025­–26). Includes savings outside super. Employment earnings adjusted to account for movements up and down the earnings distribution. Retirement savings drawn down so that a small bequest is left in addition to the home. Source: Grattan Retirement Incomes Model

In calculating replacement rates, the super industry assumes that incomes should grow through retirement in line with future living standards, and not just keep pace with inflation. But it’s expensive — people must save through their working life for a higher standard of living after retirement than they had when they were working.

Even under this higher standard, though, Australians’ retirement incomes are still adequate according to international benchmarks. Most retirees can expect a wage-adjusted retirement income of at least 70 per cent of their pre-retirement income. Seventy per cent happens to be the replacement rate for median earners used by the Mercer Global Pension Index and endorsed by the OECD. Australian retirement incomes are even further above the World Bank’s target replacement rate for the average worker, which is 50 to 60 per cent of pre-retirement earnings. Most people have much lower spending needs in retirement, particularly in the later stages of life when government covers most of the significant costs of health and aged care.

Retirees of today — many of whom didn’t benefit from compulsory super contributions for their whole working lives — already feel more comfortable financially than younger Australians. The non-housing expenditure of retirement-age households is typically more than 70 per cent of that of working-age households. And pensioners who own their home are less likely to suffer financial stress — based on measures such as skipping meals or not being able to heat their home — than working-age Australians. The retirees of tomorrow might be more worried, but they can expect to be even better off than the retirees of today.

Notes: Results from modelling the retirement income of a person born in 1985, who works uninterrupted from thirty to seventy, and dies at age ninety-two. Includes savings outside super. Employment earnings adjusted to account for movements up and down the earnings distribution. Retirement savings drawn down so that a small bequest is left in addition to the home. Voluntary superannuation contributions partially offset the fall in compulsory contributions if the Super Guarantee remains at 9.5 per cent. Draw-down behaviour does not change. Assumes employees absorb any Super Guarantee increase in the form of lower wages. Source: Grattan Retirement Incomes Model

Of course, the super lobby wants you to believe another story. The Association of Superannuation Funds of Australia, or ASFA, has prepared its own measure of what is needed to live a “comfortable” retirement, and argues that most workers won’t achieve it. Many have argued that, as a result, the average Australian isn’t saving enough.

But ASFA’s measure of a “comfortable” retirement supports an affluent lifestyle more luxurious than most Australians enjoy during their working lives. It was originally designed to quantify a “comfortably affluent” lifestyle for those in the top 20 per cent of retirees. Then it was relabelled as “comfortable,” which misleadingly implies that anyone with less income will be “uncomfortable.” The average household can only reach ASFA’s “comfortable” benchmark in retirement by being “uncomfortable” while working.

All of this means that increasing the Super Guarantee to 12 per cent will further increase replacement rates for low- and middle-income earners — but only at the cost of lower earnings during their working lives. In fact, increasing the rate may even reduce retirement incomes for low-income earners, for two reasons.

Notes: Results from modelling the retirement income of a person born in 1985, who works uninterrupted from thirty to seventy, and dies at age ninety-two. Superannuation and pension policy is as legislated (Super Guarantee to rise to 12 per cent by 2025­–26). Includes savings outside super. Employment earnings adjusted to account for movements up and down the earnings distribution. Retirement savings drawn down so that a small bequest is left in addition to the home. Voluntary superannuation contributions partially offset the fall in compulsory contributions if the Super Guarantee remains at 9.5 per cent. Draw-down behaviour does not change. Assumes employees absorb any Super Guarantee increase in the form of lower wages. Source: Grattan Retirement Incomes Model

First, the more superannuation someone has, the less age pension they will receive in retirement. For each $1000 of assets above the pension asset test threshold — currently $253,750 for a single homeowner and $456,750 for a single renter — a pensioner now loses $78 a year in pension payments.

Second, the age pension is indexed to wages (which exclude compulsory super contributions), which means that increasing the Super Guarantee reduces pension growth. Our research shows that increasing the rate to 12 per cent would make future pension payments 2 per cent lower than otherwise. By suppressing the value of their pension payments, it could make existing pensioners worse off by up to $460 a year for singles and $640 a year for couples.

Notes: Results from modelling the retirement income of a person born in 1985, who works uninterrupted from thirty to seventy, and dies at age ninety-two. Includes savings outside super. Employment earnings adjusted to account for movements up and down the earnings distribution. Retirement savings drawn down so that small bequest is left in addition to home. Voluntary superannuation contributions partially offset the fall in compulsory contributions if the Super Guarantee remains at 9. 5 per cent. Draw down behaviour does not change. Assumes employees absorb any Super Guarantee increase in the form of lower wages. Source: Grattan Retirement Incomes Model

Nor will lifting the Super Guarantee do much to help women with broken work histories. Superannuation is a contributory system: since women tend to earn less than men over their working lives, they accumulate fewer retirement savings and receive lower incomes in retirement.

The main beneficiaries from a higher Super Guarantee will be high-income earners, who already reap most of the benefits from generous superannuation tax breaks. By being forced to put even more into super, they’ll no longer pay income tax on that income; it will instead be taxed at a flat 15 per cent rate as extra contributions to their super fund.

Notes: Results from modelling the retirement income of a person born in 1985, who works uninterrupted from thirty to seventy, and dies at age ninety-two. Includes savings outside super. Employment earnings adjusted to account for movements up and down the earnings distribution. Retirement savings drawn down so that a small bequest is left in addition to the home. Voluntary superannuation contributions partially offset the fall in compulsory contributions if the Super Guarantee remains at 9.5 per cent. Draw-down behaviour does not change. Assumes employees absorb any Super Guarantee increase in the form of lower wages. Source: Grattan Retirement Incomes Model

Raising the Super Guarantee doesn’t just reduce workers’ take-home pay, it also hits the federal budget. Instead of workers receiving wages that are then taxed at full marginal tax rates, the extra compulsory contributions to their super fund will be taxed at a flat 15 per cent. The 2014–15 budget calculated that delaying an increase to the Super Guarantee of 0.5 percentage points saved $440 million in 2017–18. Raising the Super Guarantee to 12 per cent could therefore cost the budget around $2 billion a year in additional tax breaks.

The purpose of superannuation is to save for the future and reduce future age-pension payments. In both the short and long term, though, superannuation costs the budget more than it saves, because the tax breaks cost the government more than the pension savings.

A Treasury analysis in 2013 estimated that the tax revenue foregone as a result of moving to a 12 per cent Super Guarantee, added to past increases in the Super Guarantee, would exceed the budgetary savings from lower age-pension spending by 0.4 per cent of gross domestic product a year. Eventually — by 2050 — the net budgetary cost of superannuation tax breaks will be “only” 0.2 per cent of GDP a year. On these trends, superannuation won’t start saving the budget money until about 2060 — and then there will be eighty years of budget costs to pay back before government is in front.

Based on these figures, the Super Guarantee, including the planned increase to 12 per cent, will increase Commonwealth net debt by 10 per cent of GDP by 2050. These numbers may have improved since the federal government changed the age-pension assets test and modestly tightened superannuation tax breaks. But even then, it’s unlikely that the Guarantee will “help” the budget any time soon.

Notes: The 2010–11 federal budget predicted that increasing the Super Guarantee by 0.25 percentage points would cost the budget $240 million in 2013–14. The 2014–15 budget predicted that not increasing the Super Guarantee by the previous government’s policy of 0.5 percentage points would save $440 million in 2017–18. These cost estimates were done before recent policy changes: a higher pension assets test taper rate and tightening of superannuation tax breaks. These changes will add up to a fiscal saving of 0.1 per cent of GDP in 2018–19 (higher taper rate saves $1 billion, super tax changes save $0.1 billion). Shaded area indicates 2010–11 budget policy. Sources: The Treasury Charter Group 2013; Budget papers; Grattan analysis

Despite what the super lobby claims, the current 9.5 per cent Super Guarantee — taken together with the age pension and non-super savings — is sufficient to deliver an adequate retirement income for low- and middle-income Australians. Increasing the rate will not help these earners in retirement: most of the benefits will flow to high-income earners, while low-income Australians could cop both lower incomes in retirement and lower wages today. And it will cost the budget money.

If our politicians really want to help low-income workers and are serious about fixing the federal budget, they should abandon plans to raise the Super Guarantee. They will need to act soon if they want to cancel the incremental increase in the Super Guarantee scheduled for July 2021, because new enterprise agreements currently in negotiation will take into account the increase in the Guarantee when setting wage rates. ●

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Australia has around 2700 accredited residential aged-care facilities. Together, in 2015–16, they provided care to 234,931 permanent residents, the majority of whom required high levels of care. Although most older Australians prefer to receive services in their own homes, a whole range of factors — including longer lives, dementia, and the inability of working families to provide care — mean that increasing numbers will eventually move into residential care.

Naturally, that likelihood increases with age. The average age of entry to permanent residential care in 2015–16 was 82.0 years for men and 84.5 years for women (up from 79.5 years and 82.8 years respectively twenty years earlier). Eighty-three per cent of these new residents needed high-level care, compared to less than 60 per cent in 1997–98, mainly because of rising rates of dementia.

For men, the risk of entry to permanent residential care is associated mainly with disease; for women, social vulnerability and functional capacities are more predictive. People in residential care have an average of eight health conditions, of which heart disease, stroke, arthritis, mental health and behavioural disorders, and dementia are the most common. Often, a long stay in hospital signals the transition from home-based care to a nursing home. Most residents (91 per cent) will die there, 40 per cent of them within the first nine months, but the average length of stay is 2.1 years for males and 3.2 years for females.

Those are the numbers today, but the future looks even more challenging. Australian baby boomers number around 5.5 million, and by 2050 the youngest of them — more than one million people — will be aged eighty-five and over. They are overseeing the care of their elderly parents, even as they begin planning for their own long-term care. Many of them have glimpsed a possible future, and it’s not one they want for themselves. This is the generation that can spearhead a campaign for better care.

We can be fairly certain about how numerous older Australians will be in the future, but we’re much less certain about the proportion who will need care and the type of care that will involve. But those estimates are essential for planning, especially given the long lead times involved for residential care.

Here’s how the system works at present. The government sets a capped target for aged-care places, both community and residential, based on the number of people aged seventy and over. The target ratio is set to increase from 113 operational places per 1000 people in 2012 to 125 by 2021–22, but this increase will all be in home-care places. The ratio for residential care is currently set at 86 (but is only 79.9) and will decrease to 78 in 2021–22.

It’s assumed that a higher proportion of baby boomers will want home care, but the big unknown is the gap between what people want and what they will need. Achieving the target ratios by 2021–22 will require an additional 49,000 residential places. According to one estimate, $33 billion will be needed over the next ten years to build new facilities and refurbish existing ones. The current shortage of nursing home places, already quite severe in some areas, could easily get much worse.

The biggest obstacle to equitable access to residential places is the accelerating shift from religious, community-based and charitable organisations to for-profit providers. The aged-care sector is continuing to consolidate, with the number of residential places increasing while the number of providers falls. In 2016, for-profit providers — a shade over a third of the industry — were awarded 63 per cent of the 10,940 new places, including nine of the ten largest allocations.

Of the residential-care sector’s $17.4 billion in revenue in 2015–16, $11.4 billion came from the federal government and around $4.5 billion (excluding accommodation deposits) from residents. The average annual profit margin has been calculated at $11,134 per resident; given that this includes data from both the non-profit and for-profit sectors, it’s clear some providers are making substantial profits. One study shows that the most profitable quarter of providers are making 2.5 times as much as the average provider, while others, especially in rural and more remote areas, are struggling.

This increasing reliance on a mainly government-funded private sector is a recognised recipe for disaster unless there is strong, independent oversight of performance against agreed standards. And so it has proved. The consequences are far worse than the equity problems created when new facilities are concentrated in well-to-do metropolitan areas. The push to generate profits affects workforce numbers and qualifications and leads to rationing and neglect and gaming the accreditation system, and the results can be life-threatening for residents.

Workforce numbers are the vital factor. Quality and safety, protection of rights and dignity, respect for culture and lifestyle — all these rely on adequate numbers of well-trained staff, especially for those residents who have no one else to watch over them.

An estimated 235,764 people were working in residential care in 2016. The majority were personal care assistants, with nurses (both registered and enrolled) making up a small and declining minority. Some 1701 fewer full-time equivalent RNs worked in aged care in 2016 than in 2003, a period in which the number of residential aged-care places increased by 30 per cent. Acknowledged skills shortages are one factor, aggravated by low wages, but in too many cases the number of trained nurses is kept low as a cost-saving measure. The use of casual staff to fill workforce gaps only exacerbates sustainability, thus creating a vicious cycle.

A recent survey of the aged-care workforce found that people are worried about staffing levels at their workplace and want more time to care for residents. The analysis showed that residents should be receiving an average of four hours and eighteen minutes of care each day, but currently only two hours and fifty minutes is being provided. In many situations, a single registered nurse is responsible for over one hundred patients; administration and paperwork requirements mean that most nurses are spending less than a third of their time on care.

The consequences can be severe: falls, urinary tract infections, malnutrition, pressure sores, assault by other residents. Partly as a result, preventable deaths in residential aged care have risen 400 per cent over the past decade, mostly as a result of falls, choking and suicide.

It’s predicted that the aged-care workforce will need to grow by about 2 per cent annually for the next thirty years to meet demand, even with technological innovation and changes to service-delivery models. Staff will need to be trained to provide complex care to people from culturally and linguistically diverse backgrounds and from the LGBTI communities.

Although the government recently established a taskforce to develop an aged-care workforce strategy, it has done nothing to tackle the deficiencies in data and lack of nationally agreed standards that make it difficult not only to analyse the current workforce and also to assess future needs. Operators have found it far too easy to satisfy accreditation audits, announced months in advance, which focus on compliance with paperwork and rarely follow up concerns raised. Failures of care are mostly brought to light by family members, and adverse media coverage also generally originates with families. Earlier this year, abuse and neglect was revealed at a South Australian nursing home that had easily passed accreditation audits despite a decade-long history of poor care. Aged care minister Ken Wyatt has at last announced that providers will now be subject, without warning, to comprehensive inspections over several days.

Much more needs to be done. The current standards — which require nursing homes to provide “adequate nourishment and hydration,” for instance, and “maintain an adequate number of appropriately skilled staff” — are so general as to be almost useless. No federal standards exist for nutrition and menu planning or for staff-to-resident ratios and skill prerequisites. Infection control practices are patchy and guidelines about the use of physical and pharmacological restraints are ignored. In too many cases, family members who speak out about residents’ care and conditions are banned from visiting. Small wonder that conditions at one nursing home were likened to Guantanamo Bay.

The government’s 2015 Aged Care Roadmap aimed to move aged care towards a market-based, demand-driven system, with proposals to uncap places, open up pricing, reduce regulations and get rid of red tape. But even the chair of the committee that produced the report says these are radical changes and cautions that the risks to providers, consumers and government of such changes would need to be carefully managed.

Australian government spending on aged care will more than double relative to national income between 2010 and 2050. Long-term solutions that are financially viable for both government and users of the system will not be delivered simply by new business models in the private sector. Aged care is much more than “an industry” within the Australian economy, it’s about providing respect, dignity, comfort and care to elderly Australians at the end of their lives. ●

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In this new book, which completes his trilogy on the life course of several generations of gay men in Australia, he is again in largely uncharted territory. Few scholars have brought together the gay community and the world of work. Early in the book, he recalls how, when he was younger, he wondered what all those young gay men beginning a stretch of London clubbing at 11pm on a Monday night did for a living. Could they really all be hairdressers — he was referring to a common stereotype of gay employment — who had the following day off?

Certainly, the world of work was not terribly conspicuous in the dominant images of the gay community that emerged in the 1970s and 1980s. Gay liberation forged the notion of a political identity based on homosexuality, but it had little specifically to say about work, beyond the reality that men and women who publicly identified as gay — or were “outed” by the police or the media — rightly feared workplace discrimination or even dismissal. The gay commercial culture that emerged in the 1970s and was flourishing by the time AIDS hit in the early 1980s constructed gay men as consumers, rather than as producers or workers.

Interestingly, one author who did attend to these matters a long time ago, if only in passing, was Humphrey McQueen, who provides the foreword for this latest book. Back in the mid 1970s, in an essay on “Rewriting Textbooks,” McQueen criticised the portrayal of male homosexuality by Australian writers. “What is needed,” he argued, “is the recognition that homosexuality is not confined to the exceptionally gifted or to the biologically half-baked. Instead, we’ll need textbooks that show that the plumbers next door, who play reserve grade soccer, and eat out of cans because they can’t cook cordon bleu,” might be gay. I don’t think Peter Robinson introduces us to any plumbers or reserve grade soccer players in this book; to be fair, cordon bleu chefs don’t feature all that prominently either. But he has certainly taken up the challenge that McQueen issued more than forty years ago.

Here we see gay men earning a crust, to use a saying that might only be instantly recognisable to Robinson’s older and middle cohorts. And we also find them in retirement, as well as planning, or not planning, for life after paid work. Robinson is a brave man: he even asked some millennials whether they had started planning for their retirement. As ever in his books, the answers tell us something about the lives of the men concerned, even when they are young people who can barely yet conceive what life might be like as “an old gay man,” to borrow from the title of a chapter from Robinson’s first book.

The sociologist Ken Plummer uses the term “shrewd” to describe Robinson’s commentary in this book, and that’s the word that often occurred to me, too, as I read through it. What I like most about his work is that he is alive to both the particularities of the gay experience as well as what is shared with others — that is, with all of us who work, and form relationships, and grow old. He locates his work with great skill in a space that can be easy to overlook when working on sexuality. The sexual revolution invited us to think of sexuality as the core of identity; Robinson acknowledges its claims, yet also resists the assumption that once we grasp an individual’s sexuality, we can then go on to understand pretty much everything else we might want to know about them. This is difficult work; a balancing of theory, history and the complexities of experience as captured — however imperfectly — through the interview.

Gay Men’s Working Lives, Retirement and Old Age is not primarily a study of workplace discrimination against gay men, although it deals with that theme. Robinson tells the story of one of his informants — a gay man living and working in New Zealand — that is awful enough in terms of the workplace bullying he experienced in two jobs decades apart. Other interviewees occasionally reported bullying or harassment, too, and one had to leave his job as a teacher in the 1950s because he feared that a policeman was trying to blackmail him after an arrest for loitering with intent.

But what is striking about these stories is that the intersection of gay identity and experience with the world of work has had much more subtle effects than can be captured in a practice such as bullying or blackmail. Gay men’s experience of the world of work is sometimes different from that experienced by heterosexuals; or rather, Robinson shows that it contains a potential for difference that is realised to a different degree in different historical periods and different work situations.

To take just one example: Robinson has been one of our subtlest commentators on “coming out” — something that he shows might occur not once but often repeatedly across a life course. A gay man might have come out to friends but there’s also family and — as he shows here — there’s the workplace; indeed, as men change jobs — and many of his interviewees changed both occupations and jobs many times across their lives — there’s the question of “coming out” each time.

For most of us, work is an opportunity for sociability and relationships, but in many workplaces there is still a widespread assumption of heterosexuality. Work can therefore be socially isolating for gay men; a pressure point rather than an expression of their identity in its fullness. And just as men from the older cohort among Robinson’s informants “could not,” as he puts it, “share the fraternal bonds of heterosexual masculinity,” homophobia continues to affect the lives of gay men in an era of anti-discrimination legislation.

Robinson also turns his attention to life after paid work. Some of those now entering their fifties and sixties and contemplating retirement — if they’re not retired already — spent an earlier part of their life imagining that they would not live until middle age, let alone old age. Until the arrival of anti-retroviral drugs in the mid 1990s, planning for retirement and old age seemed rather pointless for people living with HIV-AIDS; but these men have had to adjust to the reality of a much longer life than they expected. As Robinson points out, this could be a difficult adjustment for men who had reconciled themselves with death. As one of his interviewees told him, “Dealing with mortality was hard but moving from mortality to longevity has been harder.”

For these men and others who are old, or thinking about when they get old, there are genuine and understandable worries about a loss of control over the conditions of one’s own life. Of course, the heterosexual elderly often have similar fears. But gay men face the possibility of landing in a homophobic environment — especially considering the role of churches in providing aged care — in a setting perhaps devoid of congenial male company, one that might even force them to return to the closet for the sake of a peaceful life.

We apparently don’t yet have gay retirement homes, or gay aged-care facilities, in this country. One of Robinson’s informants frankly sets out his objection to living in a home with women, a view that Robinson concedes “might distress gay-friendly women who like to think homosexual men are empathetic, cuddly versions of their husbands.” For all its achievements, he suggests, the gay community has not yet been able to deal adequately with the challenges posed by old age. Again, he is the friendly critic, and his cool appraisal doesn’t falter in considering these difficult matters.

Like the best sociology and the best history of sexuality, this book also tells us a great deal about the wider world in which these men have lived their lives. Peter Robinson traces a story from the time after the war when opportunities for secure work — backed by a decent social safety net — were widespread, through the more precarious world bequeathed by the end of the long boom in the 1970s. He points to a conjuncture that, so far as I’m aware, has not been discussed enough in work on gay men: that the emergence of gay liberation coincided with the coming of more troubled economic times.

Then came HIV-AIDS: many gay men who entered the caring professions did so in work of value to the gay community itself, work that could be seen as effecting social and political change, although the experience was not in every case happy. One man reported bullying while employed on an AIDS project in a workplace staffed by other gay men. The caring professions — defined broadly — remain important to many younger men but they are less likely to work specifically among gays. Of course, for men across all of Robinson’s cohorts, work was also simply work — a way of making a living, of making ends meet. He found this attitude not only among blue-collar workers or those doing low-paid jobs, but also among some of the well-off. But it became less common over time; his younger men place greater stress on the creative aspects of work.

We meet a diverse group of workers, from the rather poor to the very wealthy. There is one man who moved from a London toy shop to the travel industry to teaching travel and tourism in higher education before training as a counsellor and becoming a professional drag queen in New Zealand. He reflected that if he’d been straight, he’d probably have spent his life “with seven kids” — and presumably a wife — “working on a dairy farm.” Yet Robinson also introduces us to an eminent Sydney-based judge, now retired, a man with deep interest in human rights including those of LGBTI people, who has had a partner for more than forty years.

At least in developed countries, there is a growing legal recognition of such relationships. But it remains remarkable that, quite apart from its own ban on same-sex marriages, Australia has also refused to acknowledge valid marriages performed in countries such as Britain, the United States and even New Zealand. Robinson comes to same-sex marriage late in the book, and he has some concerns about it, worrying over its “homogenising” aspects, its “designer-gaydom”, and its ideal of the gay man as a “pseudo-straight.” “Gay marriage,” he suggests, “is a nice easy way to appease homophobes and attract the support of gay-friendly straights” but the reason some gay men hesitate over it — and Robinson here clearly includes himself — “is that it seems like just another example of having to take on the accepted ways of straights-ville instead of the straight world being asked to accept gay men and their ways.”

As always in Robinson’s work, it’s a dance of sameness and difference, and it provokes us to look at the world in new ways, to question easy liberal assumptions about the meaning of progress and the basis of the good society. What more could one ask for in a scholar and intellectual? ●

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Like many elderly Australians, he died in hospital, ushered into oblivion on a gently rising tide of opiates just one day after his seventy-seventh birthday. My mother had an equally common demise. She died in a nursing home at the age of eighty-six after drifting for years through the ice floes of dementia.

Old age is tough: your body betrays you; no one gives a crap about your hard-won wisdom; and the whole project rushes towards its inevitable conclusion like an out-of-control billycart.

But there’s brighter news, according to Don and Patricia Edgar in Peak: Reinventing Middle Age. Old age is starting later, and middle age is growing correspondingly longer.

The signs have been there for a while, of course. My father’s father died at the age of thirty from tuberculosis; my mother’s father retired at sixty after forty-four years with the same firm, then dropped dead of a heart attack aged sixty-three. (A lifelong teetotaller, he asked for a brandy, took a sip, and expired.) Their wives outlived them, but neither lasted as long as my mother – both died in their early seventies.

The Australian Bureau of Statistics predicts that Australian males born today will live to 80.4 years, and women will last even longer, until 84.5. With advances in medicine, more and more of us will easily make it to one hundred. Many of the children born in the first decade of this century will see in the new year at the beginning of 2100.

According to the Edgars, this historic shift in life expectancy is also rearranging the structure of our lives. Roughly speaking, they believe there are now four stages to an Australian life.

People are “younger” for longer. By the time you’ve been schooled, enjoyed a gap year, gone to university, and frittered away a few years travelling, you’ll be twenty-five. By that age, my father had been in the workforce for a decade.

From twenty-five to forty-nine, the Edgars say, Australians will enter a period of “maturity.” This quarter-century slice of life might be called “Zorba Time.” Remember that Zorba the Greek famously said, “Am I not a man? And is a man not stupid? I’m a man, so I married. Wife, children, house, everything. The full catastrophe.”

According to the Edgars – both aged eighty and still engaged enough to write this engaging book – the next stage carries the biggest change. The years from fifty to seventy-five, they argue, have become the new middle age.

For Australians born before the cold war, arriving at that stage of life meant you were way over the hill and well into the valley of the shadow of death. With old age arriving much later than it did just a few decades ago, the final stage of existence stretches from about seventy-five to a century.

The new middle age is a demographic reality that can’t be avoided. For today’s Australians – both the much-criticised baby boomers, and the generations they generated – “This is our peak; these years are the gift medical science has given us.” In order for us to use this gift wisely, the Edgars argue, Australia needs “a radical and creative rethink of the way we should restructure a hundred-year life.” And we have to start by reimagining this time of life as a bonus, not a burden.

Peak is split into two halves. The first part paints the big picture. It tells the story of Australia’s haphazard struggle to meet the challenges of living with longevity, particularly in the labour market and family relationships.

With higher rates of long-term unemployment among the over-fifties coupled with a higher incidence of “grey divorce,” the new middle age might look more like a trough than a peak, but the Edgars remain optimistic. The newly middle-aged are a potent political force – and membership is pretty much unavoidable – so why can’t change occur?

But can the modern digital economy absorb these changes? The world is ruled by the workaholics who have created it in their own image. And now robots, algorithms, automation and AI are conspiring to create a workless economy. How does this mesh with the demographic revolution identified by the Edgars?

The second half of the book is a series of profiles based on interviews with ordinary Australians drawn from the authors’ circle of friends and acquaintances. They remind you that everyone’s life, written down, looks a bit like a small raft bouncing through the rapids of a big river. They make you wonder what your own mini-biography would look like – and how satisfied you would feel with it.

But there’s a sameness about the experiences portrayed. There are divorces, deaths, illnesses, and economic challenges, to be sure, but the Edgars have profiled people who are all accomplished “reinventors.” It might have been useful to hear from some of those Australians whose lives have run aground on societal change.

Part pep talk, part revolutionary pamphlet, the Edgars’ book is a quick and informative read on a subject that will engross more and more of the population. Clearly written – and published in a pleasingly large, easy-to-read font – Peak grapples with one of the great themes of the twenty-first century: what the hell are we going to do with all this extra time? •

The post Hundred-year lives appeared first on Inside Story.

Now, the Turnbull government is attempting to manage the problem by introducing an entirely new five-year temporary visa, commencing next July. With the immigration department apparently unable to provide basic information about how great the demand for such a visa might be, it looks like a political fix rather than a coherent policy initiative, and is likely to create a new set of problems. To understand how we arrived at this point, it helps to go back to Melbourne’s outer eastern suburbs on that March night more than a decade and a half ago.

In his opening presentation, Philip Ruddock proudly described the government’s success in swinging the pendulum of permanent migration away from family reunions and towards skills. Under the Hawke and Keating Labor governments, family visas had made up around two-thirds of all places in the migration program; after the Coalition took office under John Howard in 1996, the share soon fell to less than half. (Since then the share has fallen further; for many years now, the family stream has made up only about a third of the permanent migration program, or 57,400 of 190,000 places in 2015–16.)

Ruddock bolstered his bias towards skills with numbers. According to the neat charts he projected onto the screen, every 1000 people who entered the country as skilled or business migrants created a net gain to the federal budget of $36.7 million over five years. The same number of family migrants, by contrast, cost the budget $1.8 million. And because not all family visas were alike – migrant parents impose “a significantly higher ongoing cost” than spouses and partners, for instance – he had changed the character of family migration by capping parent visas at 500 places per year. With 20,000 applications pending, he cheerfully revealed, the waiting time to bring aged parents to Australia was roughly forty years.

For many in the audience – Australians of migrant backgrounds who were keen to find ways of bringing older relatives to join them here – that last piece of information wasn’t at all cheering. But it wasn’t news. Ruddock’s capping of parent visa numbers was one salvo in a war of attrition with the Senate. In 1998, the Coalition had attempted to manage the growing demand for parent migration by introducing a contributory parent visa, which would have allowed sponsors to bring their parents to Australia as permanent migrants as long as they were willing to stump up $17,000 – a revenue-raising measure designed to offset some of the costs these migrants might impose on the community as they aged. Labor and the Senate crossbenches initially disallowed the new visa on the basis that it amounted to “queue jumping”: the rich would have the capacity to bring their parents swiftly to Australia; the poor would wait forever. Ruddock returned fire by imposing his 500-place cap.

In Knox that night, I saw how this blunt instrument had swung many migrant families to his side. Given the choice between an indefinite and uncertain wait for an affordable parent visa and a relatively short wait for an expensive one, they would choose the latter. I recall passionate pleas from participants at the consultation, promising to take full responsibility for their parents living expenses, to provide for their housing and to guarantee their healthcare costs, if only the minister would allow them to bring parents to Australia quickly. The government had to understand how crucial it was in their culture to honour and care for your parents in their elder years, and how essential it was for grandchildren to know their grandparents and hear their stories. If required, migrant families of all backgrounds were willing to pay large sums to get their parents to Australia.

Ruddock’s tactics were ultimately successful. When the Senate relented in 2003, the contributory visa immediately became the main mechanism used by families to bring parents to Australia. In 2003–04 the cap on parent visas was raised from 500 to 5000 places, but around 70 per cent of visas were in the new contributory category. In recent years 80 to 85 per cent of parent places have been set aside for contributory visas. (In 2015–16, this translated into 7175 out of 8675 parent places.) If the Coalition government had got its way, the non-contributory parent visa would have disappeared altogether. It tried to abolish the category in 2014, but was again stymied by the Senate.

Predictably, the cost of the contributory visa has also increased sharply over time, from $26,200 when it was introduced in 2003 to $47,295 today (and this doesn’t include the cost of migration advice or outlays for such things as medical checks and police reports). Despite the high charges, the federal government has no trouble filling its annual quota, and there are almost 30,000 applications in the pipeline. Applications are usually finalised within two years of being lodged, although as the right-hand graph in this chart from the Productivity Commission shows, processing times have been lengthening.

In the parental queue: places and waiting times

Source: Productivity Commission, Migrant Intake into Australia, figure 13.3.

As the graph shows, however, the waiting time for a non-contributory visa (which carries a base visa application charge of $3870) is much longer; currently it is a ludicrous thirty years, so only relatively young parents would have much hope of living to see their visa issued. Despite the wait, there is nevertheless a backlog of more than 50,000 applications. Clearly there is huge pent-up demand for parent migration, especially when you consider that applicants for the two parent visas must also satisfy the balance-of-family test: at least half the parents’ children must be living permanently in Australia, or they must have more children living permanently in Australia than in any other country. Tens of thousands of potential parent migrants no doubt fail to meet these criteria.

This unsatisfied desire to bring parents to Australia has fuelled what might seem like a paradoxical campaign for a new, temporary visa category for families that don’t meet the balance-of-family test, or can’t afford the expensive option of permanent migration under a contributory visa and don’t want to suffer the indefinite wait for a non-contributory visa.

It’s important to be aware that migrant families are already bringing parents to Australia on temporary visas. For now, however, their options are limited to a maximum twelve-month stay on a subclass 600 tourist visa. When that visa expires, the foreign parent must leave Australia and remain outside the country for at least six months before applying for another visa.

Frustration with this arrangement coalesced into a concerted campaign for a temporary “long-stay visa for parents.” Adelaide bus driver Arvind Duggal, who was instrumental in getting this campaign off the ground, told SBS that the visa restrictions prevented him from fulfilling his responsibilities as a son and that he was tired of answering his children’s repeated questions about why grandma was leaving again. Duggal’s appeal struck a chord: two years ago he started an online petition to immigration minister Peter Dutton that has now attracted almost 30,000 signatures. Migrant communities saw an opportunity in the lead-up to the 2016 election. They lobbied Labor and the Coalition on the issue, including in marginal electorates, and both parties responded with apparently hasty campaign promises that passed largely under the radar of the media. Labor pledged a temporary visa that would allow parents to remain in Australia for three years and would only require them to leave for four weeks before qualifying for a renewal. A few days later, the Coalition upped the bidding, promising a five-year parent visa.

The final factor in the mix that may have influenced the government’s thinking on a temporary parent visa was the Productivity Commission’s report into Australia’s migration intake. The report suggested a new “provisional visa” that “would permit parents to stay for a longer period of (say) five years” and could, “after a given period of absence from Australia, be renewed multiple times.” While the commission’s report was not made public until well after the election, it had been presented to government in April 2016, about a month before the campaign kicked off. So the idea of a new temporary parent visa may well have been knocking around already in the heads of immigration department officials and ministerial advisers.

Returned to office, the Turnbull government moved relatively quickly to make good on its election commitment. On 23 September, assistant immigration minister Alex Hawke announced a series of community consultations on the design of the new visa. The immigration department also published a discussion paper and called for public submissions to be lodged by 31 October.

Supporters of Arvind Duggal’s push for a long-stay parent visa were elated. “My heart is in celebration by the chance of having my mum close to me for longer than six months sporadically,” wrote Viviana Aroujo on the campaign’s Facebook page. “I cannot express how happy I am for reading this media release… having my mum for at least three years near her only grandchild is a dream… Gosh, I am in tears!!!!!!!”

The Productivity Commission looked at the issue with much drier eyes. Its support for a temporary parent visa was motivated less by any emotional and physical well-being that results from bringing families together than by the huge future costs of the system of permanent parent visas, whether contributory or non-contributory.

The commission’s argument goes like this. Compared to other immigrants, parent migrants are likely to have weaker English-language capabilities, fewer skills, lower personal incomes and lower volunteering rates, thus reducing their chances of forming “deep and broad community connections.” True, “immigrant parents can make valuable social contributions to their families,” but these “mainly benefit the family members themselves.” Even when unpaid childcare is provided, for example, this essentially amounts to a private benefit – in the form of family savings on childcare costs – rather than a public good. Indeed,the “need for childcare is greatest for infants, and so often not enduring,” whereas “the responsibilities of taxpayers for supporting the parent visa stream apply throughout the rest of their lives.”

The long-term costs of supporting parent migrants were the commission’s main concern – and according to its calculations, those costs are considerable. It estimated the “cumulative lifetime fiscal costs” of a migrant parent on a permanent visa in 2015 to be “between around $335,000 and $410,000 per person (with the ‘best’ estimate being just over $370,000).” As the report concluded, “the current contributory visa charge of $47,295 meets only a small fraction of the fiscal costs for the 7175 contributory parent visa holders in 2015” (while the 1500 non-contributory parent migrants make an even less significant contribution).

The commission calculated that the net liability for providing assistance to the 8675 parent visa holders who arrived in 2015 was, over their lifetimes, “around $2.9 billion.” Even if there were no increase in the number of parent visas issued each year, it estimated, the costs to the Australian community of permanent parental migration would still be between $68 billion and $85 billion from now to 2050. (The commission noted in passing that this cost might rise even further due to “the effect of decreased mortality rates for successive cohorts” – in other words, if migrant parents inconveniently start living longer.)

In short, the commission thinks permanent parent visas are a thoroughly bad idea. To reduce the future burden of supporting more old migrants, it suggested the government dramatically increase the application charge for the contributory parent visa – “by roughly double in the first instance” – and simultaneously cut the annual intake. It suggested scrapping the non-contributory visa altogether, and instead introducing a strictly limited “compassionate parent visa.” This visa would only be available in a few compelling circumstances – if both parents of Australian citizen children were killed in a car crash, for instance, and the foreign grandparents were the most appropriate alternative carers.

Alone, such recommendations were not going to be politically palatable; they would enrage migrant communities lobbying to bring their parents to Australia. But the commission also sought to resolve the “tension between… the significant fiscal costs of this visa category and the desire to allow some parent and child reunion” by proposing a temporary but “longer-term” visa class, periodically renewable, which would allow parents to stay for longer than the maximum twelve months permitted under a visitor visa.

That’s the outline of the new visa now under discussion. In theory, it enables the government to reconcile the competing pressures identified by the Productivity Commission: the growing demand by migrant communities to bring parents to Australia, versus the associated public costs. As the discussion paper on the proposed visa puts it:

The Australian Government believes that parents should have the opportunity to visit children and grandchildren who live in Australia as long as parents and their sponsors can satisfy community expectations and that their stay in Australia does not have an undue cost impact on the Australian community.

This will be achieved by attempting to privatise all the costs of parent migrants under the guiding principle of “user pays.” In other words, temporary migrant parents will be required to have private health insurance and cover all their own medical bills, housing costs and living expenses. Sponsors – their Australian children – will be responsible “for ensuring that their parent does not become a burden on the Australian community.”

Sponsors’ capacity to meet this responsibility will be subject to threshold tests: an income assessment to show that they can support their parents, and a minimum number of years “living in and contributing to Australia” to ensure that they “have had sufficient time to become engaged with the Australian community and to contribute to Australia financially.” The longer a sponsor has been resident in Australia, the higher his or her priority for getting a visa for a parent living overseas. Sponsors will also be required to post a “significant” financial bond (immigration minister Peter Dutton has suggested between $5000 and $15,000), which government can use to recoup some costs in cases “where sponsorship obligations have not been honoured.”

But while drawing a boundary between temporary and permanent migration might appear bureaucratically neat, it won’t resolve all potential problems. As some of the questions posed in the immigration department’s discussion paper make apparent, things could get messy:

What (if any) limits should be placed on the total liability of sponsors where their parent incurs significant health or aged care costs not covered by their private health insurance?

In the event that the holder of a parent visa is unable to depart Australia due to illness or accident:

• what responsibility should be borne by the sponsor and their immediate family, and
• to what (if any) extent would it be reasonable for these costs to be borne by the Australian community?

If a sponsor dies:

• in what circumstances, and what timeframe, should their parent be required to leave Australia
• what liability should remain with their immediate family, and
• in what circumstances should their immediate family be able to take over the sponsorship to enable the parent to remain in Australia?

It’s not hard to imagine difficult scenarios:

• A son-in-law sponsors his wife’s widowed mother to Australia but a few years later the marriage ends. The estranged husband withdraws his sponsorship and demands his bond back and the wife can’t step in because she has no independent income. The mother’s visa will be withdrawn, yet the distressed wife is in a vulnerable psychological condition, possibly suicidal, and she and her children need the support of her temporary migrant mother more than ever.

• After living in Australia for more than ten years on a temporary visa, an elderly parent develops Alzheimer’s. He claims he is being subject to elder abuse by his sponsor child. The relationship deteriorates to the point where the child withdraws sponsorship so the parent must leave Australia. But there is no one in the homeland to care for him. Does the father get sent back anyway? If not, who intervenes and who pays for the parent’s high-needs care?

These are not far-fetched possibilities. Human lives are messy and complicated and tend to explode administrative systems and rules, no matter how detailed and thoughtful. Cases like this will end up in the media and as lengthy, resource-intensive and tortuous appeals to immigration ministers to use their discretionary powers. The more people who use the visa, the more unforeseen circumstances and unintended consequences are likely to emerge. Such problems may be many years down the track, and so will land in the laps of future governments, but that’s no reason not to take them seriously today.

At this stage, though, the immigration department appears unable to offer even such basic information as an estimate of the expected demand for a new visa. We know from the length of the existing queues that there are at least 80,000 potential applicants, but the numbers are likely to be significantly higher once we factor in people who are put off by the current cost or the length of the wait, or who fail to meet the balance-of-family test. The discussion paper makes no mention of the potential number of future temporary migrant parents, and when I asked the department for data on how many people currently use work-arounds like the twelve-month subclass 600 tourist visa, I was told that the information was not “readily available.”

For those of us old enough to remember the non-alcoholic beverage Claytons – “the drink you have when you’re not having a drink” – the new temporary parent visa seems a lot like Claytons immigration. We allow people to live in Australia long-term – for five, ten, perhaps even fifteen or twenty years – but we never permit them to become Australian because of the costs they might impose on us. The requirement to leave for a month or two every five years is just a fig leaf to enable the deception: it means government can call migration temporary even when it is essentially permanent settlement, as with New Zealanders on special category visas, or refugees on temporary protection visas. The government can maintain the pretence that parents are just visiting, when in reality they are making their homes here.

The question of parent migration is undoubtedly difficult. All of us can understand the strong desire to keep fathers and mothers close by as they age, to have grandparents pass on cultural and familial knowledge to Australian-born kids, and to express our love for our parents in tangible, practical, intimate ways. Yet the Productivity Commission’s dry-eyed data is also compelling. As the commission argues, public funds spent supporting ageing migrant parents are funds that will be diverted from other areas of social policy. “Ultimately, every dollar spent on one social program must require either additional taxes (reduced private consumption) or forgone government expenditure in other areas … such as mental health, homelessness or, in the context of immigration, the support of immigrants through the Humanitarian Programme.”

A temporary parent visa might seem to offer a way out of this dilemma, but it risks creating a new cohort of people who are not quite Australian – who live in the nation for an extended period but have no say in the decisions that are made, no representation and no access to public support in times of need, and have restricted rights. To exclude long-term Australian residents from full membership of the political community in this way is inequitable and undemocratic, and age should make no difference to those fundamental principles. •

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The Frenchman observed a trend that extended back at least a century. This was the “demographic transition” from a population with high birth rates, high death rates and a low average age to one with low birth rates, low death rates and a high average age. “Ageing happens, as it were, from both ends,” he wrote, “that is to say by a decrease in natality (fewer young people) and by the lengthening of human life (more old people).”

As it turned out, Sauvy was prematurely correct about the decrease in natality. That long-term trend was interrupted by the “baby boom,” which was just beginning when he wrote his essay and was initially believed to be a temporary blip once couples were reunited after the war.

But even in error, Sauvy was closer to the mark than today’s ageing alarmists. In the standard version of the story, baby boomers are seen as the major cause of population ageing, responsible for all manner of social ills. In reality, the baby boom deferred the demographic transition by several decades. If the boom hadn’t occurred, the average age of the population would have risen much earlier.

A more fundamental conceptual error in Sauvy’s framing of the problem, repeated in nearly every subsequent treatment of the topic, is that populations are ageing. This isn’t the case: populations don’t age, people do. In fact, each of us ages at the rate of precisely one year per year, until we die. The longer we avoid death, the older we get and the greater is our contribution to the average age of the population. From this viewpoint, the ageing “problem” is best summed up by a witticism popularised by the actor Maurice Chevalier: “Growing old doesn’t seem quite so bad when you stop to consider the alternative.”

The logical error here is the “fallacy of composition.” The fact that the average age of a population is rising, or falling, says nothing about the individual experience of members of that population. Most obviously, “population ageing” implies a future that is exactly like the one we have at present except that old people are more numerous and young people are fewer. People at any given age, it’s assumed, will have much the same characteristics and live in much the same way as they do at present. This way of thinking is wrong for at least three reasons: because of changes in healthcare, in work and in technology.

First, the assumption that, say, sixty-five-year-olds in the future will be much like sixty-five-year-olds have always been, except more numerous, is inconsistent with the main process leading to population ageing – namely, that people at older ages can now expect more years of continued life. If the average sixty-five-year-old can expect to live twenty years today, he or she must be healthier than the average sixty-five-year-old of the 1950s, who could expect only thirteen years.

The mistaken assumption goes right back to the beginning of the ageing literature. Sauvy, at least, made it explicit: 

A progressive unlevelling occurred because of the considerable progress of techniques and the almost total powerlessness of biology upon senility. Though the infant in its cradle finds its expectation of life increased… sclerosis of the crystalline always begins at twenty-five.

He noted that “this statement is made without prejudice to the possible progress of science in the future,” and his example illustrates the point very clearly. “Sclerosis of the crystalline” is an obsolete term for macular degeneration leading to nuclear cataracts of the eye, which are now both preventable and easily treatable. 

The same is true of loss of mobility and many of the other disabilities traditionally associated with ageing. Improvements in diet and exercise based on a better understanding of conditions like osteoporosis make it possible to maintain good health for longer. Anti-arthritic drugs mitigate the effects of chronic conditions.

Treatments like hip replacements, now routine, provide years of extra mobility. Alarmists often see such treatments as a huge cost burden. But a hip or knee replacement costing $25,000 is a bargain however you look at it. It’s much less than the cost to society and the patient of six months in a nursing home. More pointedly, it’s less than the cost of a new car, seen as a necessity for working-age people to achieve the mobility needed to go to and from work.

Even dementia, where there has been little if any advance in treatment, is declining in its age-specific prevalence. This is a by-product of improved cardiovascular health and (more speculatively) increased education levels among the middle-aged and old. 

These factors, and declines in other sources of premature death – including infant mortality, infectious disease, car crashes and smoking – have helped extend the “standard” lifetime at every stage, with middle age running into the sixties and healthy old age into the seventies and eighties. At the end, there is a period of frailty and decline, leading inevitably to death. The really big costs in the medical system are those incurred in the last year of life. And, by definition, the last year comes only once in a lifetime.

The second and closely related problem is the assumption that patterns of work won’t change. This is illustrated most clearly in the way the Australian Bureau of Statistics divides up the population. For the ABS, the working-age population is made up of people aged fifteen to sixty-four, which reflects the fact that when the definition was formulated it covered the years between the school-leaving age of fifteen and the statutory retirement age of sixty-five. On this basis, the ABS calculates a “dependency ratio,” namely the ratio of those outside the fifteen to sixty-four age range (“dependants”) to those within it.

This definition has remained unchanged even though the school-leaving age has increased to seventeen, compulsory retirement has been abolished, and the pension age is set to increase to sixty-seven (with a further increase to seventy on the cards). In practice, most young people are dependent on their parents into their early twenties and sometimes beyond. Retirement ages are so variable as to defy any precise definition, but it seems clear that after falling for most of the twentieth century, the average age of retirement has started to increase. A truer and more useful comparison would incorporate these changing circumstances.

Finally, and more subtly, discussions of population ageing ignore the technological progress that has been one of the main contributors to reductions in mortality. Technological progress has led to increased productivity and has largely eliminated unskilled jobs in many parts of the economy.

Two implications flow from this. First, young people must spend more time in education to acquire the skills needed for a technologically advanced economy. While dependency ratios are calculated on the assumption that working life begins at fifteen, the reality is that high school completion is the norm, and that a majority of young people acquire post-school qualifications of some kind. The need for education means that the increase in the birth rate sought by former treasurer Peter Costello would take many decades to yield net economic benefits.

The decline in unskilled jobs and the increase in years of education mean that more people are capable of working longer if they choose. In the economy of the twentieth century, access to the age pension at sixty-five was an obvious boon to the typical unskilled worker who might have spent fifty years working in a physically demanding job. This group of workers hasn’t disappeared, but it now represents less than a fifth of the workforce. For the majority, retirement at sixty-five is no longer a physical necessity; rather, it is the outcome of choices, personal in the case of voluntary retirement, or social, in the sadly common case where older workers find themselves unemployed and unable to find new jobs because of age-related bias.

As a society, we have the choice of taking the benefits of improved technology in the form of reduced lifetime hours of work. We could continue, as we did for much of the twentieth century, to lengthen the period of retirement. Alternatively, and more sensibly for many people, we could reduce the intense workload experienced during the peak years of work and family responsibility (roughly age twenty-five to fifty-four) while delaying full retirement until seventy or later.

The increase in longevity produced by improved medical treatments, reductions in the risk of death, and healthier living is a huge boon for Australians, individually and collectively. Yet the framing of the issue around “population ageing” has presented it as a near-catastrophe, not only creating unnecessary negativity but also closing off discussion of the opportunities created by our longer lifespans. We need to stop talking about “population ageing” and start talking about people living longer and healthier lives. •

The post Time’s up for ageing alarmists appeared first on Inside Story.

The helpline volunteers meet regularly for group supervision, where we discuss the calls we’ve had: how we responded, how we felt about it, what we could do better next time. While every call I’ve taken stays with me in some way, it was a call I didn’t take that made me reflect the most.

There we were one weekday evening, sitting in a circle of chairs in an old church hall as rush hour swept through the city; a motley group composed of different ages, colours, accents. One of the volunteers offered to discuss a call he had found difficult.

“She was an eighty-six-year-old woman,” he said. “She called because she was moving into a nursing home later that morning and didn’t want to go.”

He confessed that it took him a long time to understand her distress. After all, weren’t nursing homes nice places – warm pockets of bingo and crochet blankets over frail knees? Why would she not want to go? Did she really prefer rattling around in her house by herself?

“It was her kids who had organised the move. They didn’t think she was safe living alone.”

I could almost hear her voice then, talking about her “kids.” They must be in their fifties, perhaps even sixties.

“I tried to find out if she had any resources, anyone else she could talk to. But she said her kids didn’t understand and she didn’t want to worry them anyway. Her husband had passed away twenty years before. And her friends – all her friends have died.”

What would this look like for me? No partner at home to talk to each evening; no brunch dates with my siblings on the weekends; no text-message pings from my phone; no point in logging on to Facebook, all of the pages frozen with inaction.

“That’s when I realised that, for her, moving really was a crisis,” said the volunteer. “She had absolutely no one. I wanted to give her a referral to some kind of service; I wanted to let her know that it would be okay, that she had options. But she really had no one left. And I couldn’t think of anywhere to refer her to. Was there something else I could have done for her?”

“Couldn’t she see her kids were worried about her?” a woman in her fifties asked. “It sounds like she was just being difficult.”

“They would only be doing it because they care about her. They don’t want her to be lonely.” One of the other volunteers, a man in his early twenties, offered this, shrugging his shoulders beneath his hoodie and rocking back a little on his chair. As far as I could tell, it didn’t seem like a crisis to him.

“Unless they just want to get their hands on the family home,” countered another woman, her palms wrapped around a styrofoam cup of tea, her comment prompting laughter.

“She spoke about being tired of this world,” said the man who had taken the call. “And that the only thing she had to look forward to was one day meeting her late husband again. I asked her if she had thoughts of suicide.” This is something we are obliged to cover with every caller who gives any indication of such thoughts. “She said she had – that she often thought about walking into the sea, but she didn’t want to chance being punished by God and ending up in limbo, unable to be reunited with her husband in heaven.”

“That’s sweet,” said the woman with the tea. It was the first time I had heard a caller’s thoughts of suicide described as sweet.

“But why would she bother doing away with herself? She’s only got a couple of years to go anyway,” said the hoodie-wearing volunteer. The circle broke into awkward laughter, taken aback that he should say such a thing.

But was it simply what some of us had been thinking?

The just-born crowd are below, spreading along the base. The old teeter at the top, a single antenna reaching for the skies. If you graph by age Australia’s population at most points throughout the twentieth century, it looks like a pyramid: the largest age groups are the young, and there are very few elderly people perched at the top.

Postwar prosperity and increased longevity have changed the shape of our population. The pyramid has become wider as the overall population has increased, and the arrival of the baby boomers can be seen in all their onomatopoeic glory: a sonic boom sending shockwaves across the chart so that there is a noticeable bulge around middle age. There are still fewer elderly people at the top than young propping it up from below, but the whole thing is stouter, like the trunk of a boab tree.

It is only when we graph the projected population of the twenty-first century that the advances in healthcare, living standards, and technology, which have contributed to increased life expectancy and lower fertility rates, are most apparent. The pyramid becomes a tower, straight up and down, slightly narrower at the top and bottom. In some projections it resembles a coffin or a sarcophagus: narrow at the feet, where the children are located, and broad across the shoulders of the retirees, before tapering to the elderly.

All projections by the Australian Bureau of Statistics make one thing clear: Australia’s population is ageing. At present, 14 per cent of us are aged over sixty-five. By 2060, this is likely to have increased to approximately 25 per cent, or a quarter of the population.

These graphs represent unprecedented success. Our life expectancy has so increased that a non-Indigenous girl born in 2012 can expect to live ninety-four years, her twin brother almost ninety-two. (There is still, of course, a gap in life expectancy between Indigenous and non-Indigenous populations.) This success should be celebrated, since most of us want to reach old age rather than die young.

Yet all around is evidence of hypocrisy in our youth-loving culture. There is an invisible turning point where we stop respecting the old and begin punishing them for existing.

When Treasury released its Intergenerational Report in 2010, it named our ageing population, along with climate change, as one of the most difficult economic challenges facing Australia in the next forty years. The recently updated report of 2015 is similarly steeped in apprehension for the slowing of growth in a post–mining boom economy, just as an ageing population increases the need for aged care, healthcare, and the age pension. The 2015 report, however, hardly mentions climate change, choosing to focus on older generations and their very existence as a “threat” to the budget.

This anxiety about the ageing population is neatly summed up by the oft-cited concept of dependency ratios, which considers part of the population (those aged between fifteen and sixty-five) as productive working providers, and the rest as freeloading dependants. The 2015 report takes as a given that Australia should aim to achieve the same unsustainable rate of growth in living standards that we have done over the last few decades, even if it comes at the expense of the environment and social cohesion.

In alarmist documents such as this, older people are often seen as a burden. In the eye of governments looking to make savings, older people require too much in the way of pensions and healthcare, and they provide too little to be counted as productive citizens. This assumption is incorrect – apart from a lifetime of tax-paying contribution, older people are the backbone of the volunteer industry and provide care for a quarter of children. Nonetheless, this negativity filters down into day-to-day interactions, feeding the kind of stereotypes that label old people as frail, dotty and unnecessary.

We all want the opportunity to grow old, yet we penalise those who already have.

Anne, seventy-nine

The only time I think about my age is when I wake up in the morning and my legs are a bit slow to get going. Thomas, my cat, and I stagger around, especially when it’s cold. But I don’t think about my age much. If people ask me I tell them, but the response I usually get is, “I didn’t think you were that old.”

I’ve got a neighbour who’s younger than I am, but she’s not young. She’d be well into her sixties, I reckon. She’s still working; she’s a very senior person in an aged-care centre. She was their acting manager a while ago, which she hated because she wanted to spend more time with the patients. She went white-haired fairly early and she got tired of being invisible so she paints a splodge of colour – it’s either pink or purple – in her hair. And she said, “The first day I went out with it, people noticed me.” It was like she existed in the world again.

I’ve got several other friends who do the same thing, actually, though I’ve never bothered. I mean, it’s very irritating being invisible, but I’m very confident about making myself visible by using my voice, and I enjoy working with other people to make that happen.

I was in a knitting shop once and I bought some wool for a yarn-bombing project. I spent quite a lot of money in there, actually. And this new, young woman – very young, early twenties I would think – talked to me as if I were a three-year-old. She handed me my change or my receipt or whatever and she said, “Bye, sweet pea!” And I walked out of the shop and I was just stunned! I thought, Why didn’t I do something? It really irritates me when people accept being treated differently.

I’m better now. “I don’t like to be called darling,” I told one woman. “But I call everyone darling,” she replied.

“Not me, you don’t! I’m not your darling.”

Active ageing, productive ageing, positive ageing. These are buzz phrases that encourage people to remain healthy and active as long as possible. The intended payoff is twofold: older people remain in better health and can enjoy their retirement and increased longevity, and governments don’t have to watch the ageing population tip their budgets into the red. It is reasonable to expect individuals to make a concerted effort to take responsibility for their health and attempt to age well, but are the intended outcomes actually achievable in the face of our increasingly sedentary lifestyle and the realities of getting old?

The World Health Organization promotes active ageing as a holistic concept, encouraging older people’s participation in social, economic, cultural, spiritual and civic affairs. But the term has primarily been co-opted by those who seek to medicalise ageing, and is most often used to refer to physical, and perhaps social, activity. Under the banner of ageing well, all levels of government encourage older people to join exercise classes and eat a healthy diet in order to maintain their independence and delay age-related illnesses as long as possible. In short, to postpone becoming old.

Part of the positive-ageing agenda relies on health-promotion material and superannuation ads that show happily active and untroubled older people who are not frail or in need of constant support. Almost 95 per cent of older Australians live at home, a quarter of them alone, so this may be a true representation. But can this relentless positivity do harm as well as good?

Aged-care advocate Linda Sparrow is concerned that positive-ageing campaigns carry “the risk of developing a new and equally misleading myth about older people – that all old people are, or should be, fit and healthy, productive and engaged with life.” She points out that this focus on successful ageing puts the blame for failing to age well on the shoulders of the individual, ignoring wider systemic causes and refusing to accept that some things – such as the inevitability of death – cannot be treated or cured.

This positive-ageing view, according to Sparrow, “undermines those who find themselves burdened with the diseases and conditions that can and do affect old people, such as Parkinson’s disease, arthritis, dementia, and impaired vision. Rather than enhancing the dignity and self-esteem of those who are old and frail and in need of care, it adds a sense of failure to the difficulties they already face.”

This sense of failure can translate to feelings of burden – on family, partners and society – and can lead to older people feeling as if they have no right to continue. As Karen Hitchcock points out in her wonderful essay Dear Life, to the outsider an older person’s life can look meaningless: “Unable to walk to the shops. Taking ten pills a day. Isolated. Housebound. Sitting for two years in a nursing home, waiting to die.” Yet to the older person themselves, each day may still be a medley of achievements and joys among the frustrations: a walk to the park, a visit from a family member, a favourite show on television.

In his book Being Mortal, doctor Atul Gawande documented how the slow demise of his father, whose health failed as he aged, led Gawande to closely consider people’s experience of old age and how society can better manage it. As a son and a doctor, Gawande attempted to seek treatments and cures for the things that ailed his father. But he also noted the way that over time his father adjusted his desires for his remaining years in line with the limitations of his body. Gawande points out that as people age, they seek to continue to have agency: “to make choices and sustain connections to others according to their own priorities. In modern society, we have come to assume that debility and dependence rule out such autonomy.”

While well-meaning, the positive-ageing agenda is partly born of this terror of debility and dependence. It posits that a person’s best self is their young self – before the onset of any age-related concerns – and sees old age as a corruption of the natural way of things rather than a continuation. In the essay “The Seductiveness of Agelessness,” academic Molly Andrews writes: “The unspecified but clearly preferred method of successful ageing is, by most accounts, not to age at all, or at least to minimise the extent to which it is apparent that one is ageing, both internally and externally.” She argues that we are all products of an ageist society, and upon reaching old age most of us still try to distance ourselves from the old. Andrews calls this a desperate plea for exceptionalism. It doesn’t challenge the ageist stereotype, only the application of it to ourselves.

While people of all ages should be encouraged to strive for good physical and mental health, trying in and of itself will not ensure one succeeds. In many ways, positive ageing is an endeavour not to age at all – to achieve the fantasy of agelessness. But it’s a goal we will all fail to some degree. If living longer is really about staying young, do we risk turning a blind eye to issues facing the elderly?

For many, old age is not a kind place to be. The body’s natural ageing process can be difficult to experience. But ageing can also be expedited and exaggerated by other factors – such as poverty and insecure housing, loneliness and mental illness. Our society sees these issues as problems when they affect younger and working-age people, but too often overlooks them as just an ordinary part of old age.

The international survey Global AgeWatch found that one-third of older Australians live in poverty, meaning they live on an income that is less than half of the country’s median income. This is partly due to the fact that while 80 per cent of older people receive a pension, it is a very small amount, coming in at approximately $1850 a month (less if you’re part of a couple), or less than 28 per cent of the average income.

While making for a miserable day-to-day existence, poverty and disadvantage are also risk factors for chronic physical and mental illness, as well as hospitalisation, social isolation and early death. This is particularly apparent in Indigenous populations, where a history of discrimination and racism has resulted in high rates of psychological harm and chronic illnesses. Many aspects of positive ageing, such as remaining physically and socially active, do not require a high income, but it would be disingenuous to ignore the fact that ageing well is more achievable by those who have had a lifetime’s access to good, preventative healthcare, and the education to make beneficial lifestyle choices.

The difficulties of eking out an existence on a small income in a time when the cost of living is increasing should not be underestimated. While isolation in old age will strike people from all walks of life, it is exceptionally hard to ameliorate the effects when you are worried you won’t have enough money to pay rent. If you’re having trouble hearing, your sight is failing, or your knees won’t allow you to walk as easily as you once did, you might find it difficult to participate in a harried, fast-paced world. If your partner has died, and so have many of your friends, and your children visit just twice a year, you may spend days without speaking to another person.

Occasionally the media will report on an older person who has died at home and not been discovered for months, or perhaps years. The loneliness of such an existence is candidly rendered in the journal of one unnamed woman who passed away in her kitchen in Sydney in 2014, her death undiscovered for six months: “When we moved into our present house in 1966, the atmosphere of the streets was more or less one of a village formed by different nationalities. Today the friendly atmosphere of the neighbourhood is extinct. Except for a few privately owned houses, the whole neighbourhood has been transformed into apartment blocks of strangers. A smile and a good day or a helping hand have become as rare and as exceptional as a white whale.”

If you have ever experienced loneliness, you understand how ruinous a feeling it can be, and there is much evidence to suggest that loneliness is a major public-health issue: it’s related to depression and other forms of mental illness, as well as to physical impairment and reduced quality of life. It is also associated with a greater risk of chronic illness, with lonely people more likely to undergo early admission to residential aged care.

Older people with depression and anxiety have a much higher risk of suicide than the general population, and this is particularly apparent among older men, who tend to have lower levels of social support than older women. In 2013 the highest age-specific suicide rate for men was in the group aged eighty-five and above. For every 100,000 men in this group, close to thirty-eight ended their own life. Compare this to the fourteen out of every 100,000 men aged fifteen to nineteen, or almost twenty-four for every 100,000 men aged forty-five to forty-nine. The real numbers in all age groups could be much higher, as suicide is notoriously under-reported.

Just as depression does not always result in suicide, suicide is not always a result of clinical depression. As psychiatrist Michael Baigent says, “I think in the elderly we’ve got circumstances that don’t arise as often in younger people. One of them is that they generally have a lot of medical problems that people don’t experience when they’re younger. And there’s no doubt that the presence of chronic medical conditions, particularly if they cause pain, is a factor in people ending their lives. So you could put that together with the horrible kind of isolation that happens when your friends move away or pass away; you do become very isolated – it is a very lonely thing.” His comments are backed up by research that shows stress and social disconnectedness account for a larger proportion of cases of suicidal ideation among older people than the presence of mood disorders.

Our increased social awareness of the high suicide rate of younger men may have been one of the reasons the rate has halved since a peak in 1997. This suggests that if we applied the same awareness to the situation of older men, we might have a similar result.

Yet it seems too difficult to move away from the belief that a loss of a young life is worth more than an old one. We lament a young person’s death because we can see the future he or she has foregone. But by limiting our empathy for older people because they’ve had a “fair innings,” we are denying them the worth of their present.

Bob, eighty-one

What’s changed with age? I’ve become accustomed to people standing up on the tram for me, and instead of saying no I’ve started to say thank you. Occasionally I realise that I’m being bypassed in the conversation and I don’t know what’s going on.

Retirement’s good as long as you keep yourself interested in something. And as you get older, your circle of friends drops. Family is important, but on the other hand my wife and I have still got a good circle of friends.

We want to stay here in this house and for it to be comfortable for us for as long as possible. So we’ve just started taking steps to remodel the bathroom. We’ve got most of the approvals and now we’re waiting for government approval, which will take twelve months. So we hope we’ll be around to see it! We wish to be as independent as possible, not to be a burden, and to be helpful, as much as we can be.

I’ve always struggled with depression at critical times in my work life and sometimes I regret some of the things that have happened there, and reflecting on that brings it up today. But generally speaking I endeavour to look at the good things that I can remember, rather than the less so. The family know, they have a saying – “Come winter, Dad’s down.” So I’ve just come back from ten days up north, getting away from the cold.

And I work at it, but I’m aware I sometimes become morose. Each of us experiences our own sense of depression – you droop, you’re less lively – but how you come out of it is from your own experience. With help.

The current inclination to treat ageing as a medical problem to be solved or arrested rather than to see it as a natural part of the life course robs older people of the right to be themselves. The positive-ageing agenda says: it’s okay for you to keep on living, so long as you don’t become old. And in too many circumstances we seem to give up on older people when they do face problems, framing these difficulties as an inevitable part of ageing.

Yet they don’t have to be. We need to stop pushing people to the margins of society as they age, or deeming their needs inordinate and their contributions insufficient. We need to recognise that old people are not lesser than young people, and that true intergenerational cooperation is both desirable and necessary.

Realising the right to be old and putting it into practice in our cities, communities and personal lives asks us to rethink the concepts of productivity and participation, and to consider what kind of society we wish to live in, both now and in the future. Because we will all age, and we all have a right to be old. •

This is an extract from Melanie Joosten’s latest book, A Long Time Coming: Essays on Old Age, published by Scribe.

The post The right to be old appeared first on Inside Story.

Porter developed his theme on Sky News. “In every single category of the very large spend in social services,” he said earlier this month, “the growth is, in any rational observation, unsustainable if it were to go on the way it’s gone on over the last ten years. In all areas, things like the disability support pension and a range of other payments – and there are many of them in the portfolio – they are growing at a rate greater than the ability of the tax base to sustain them.”

If these remarks sound familiar, it’s because they bear a strong resemblance to statements by Porter’s predecessor, Scott Morrison, who argued that “the social services budget could swamp the federal budget” and that “eight out of ten taxpayers work every day to pay our $150 billion welfare bill.” And last year Morrison’s predecessor as social services minister, Kevin Andrews, described welfare spending as “unsustainable” and “relentless.”

The disparity between spending and taxing that worries the Daily Telegraph is essentially meaningless, of course, because it compares spending in eleven years’ time with tax levels today. And, just like the argument that eight out of ten taxpayers work every day to fund the welfare system, the calculation appears to include only personal income taxes, not overall tax revenue (from where social security spending is financed).

Setting the context

To understand changes in welfare spending we need to factor in changes in the context in which welfare dollars are spent – population growth and the impact of an ageing population, for example, and changes in government policies and welfare categories.

One approach draws on the fact that in any year, by definition, the total amount of money spent on a social security program is equal to the number of people receiving the payment multiplied by the average amount of money they are paid. Using this simple arithmetic, it’s possible to look at the factors that determine the number of people receiving benefits and identify what influences the amounts they are paid. (This method has been used in Australia by Peter Saunders of the Social Policy Research Centre at the University of New South Wales, and more recently by researchers in Ireland.)

The number of people receiving payments reflects interactions between Australia’s growing population, changes in the age composition of the population, trends in the job market and in family structure, and the impact of government decisions about who is eligible for payments, as well as changes in other parts of the welfare system. The way individuals respond to changing incentives within the welfare system also affects patterns of payment.

The average level of payments will mainly reflect government decisions about benefit levels and income tests. (It’s important to remember that Australia’s income testing of benefits means that the average level of payments will nearly always be lower than the basic rate of entitlements.)

One of the more important decisions governments make is which indexing approach they will use to ensure that payments reflect changes in community living standards. A number of major payments – the age pension, the disability support pension, or DSP, and the carer payment – are currently indexed to wages, while most other income-support payments and family payments are indexed to prices.

As long as real wages are rising, payments indexed to earnings will rise in real terms – as will the overall cost of those payments, but even if payments are indexed to prices, the overall cost will rise, assuming the population isn’t falling. In these circumstances, the only ways to avoid the payment’s overall cost rising faster than inflation is either to cut the proportion of the population receiving the payment or to cut average benefits in real terms.

We also need to look at the system as a whole, and not just its parts. This is particularly important because Australia has a categorical system of income-support payments. To be eligible for a payment an individual needs to fall into a defined group – by being over the age of sixty-five, for example, or having a disability, or caring for someone with disability, or being unemployed or sick, or studying, or caring for children. We even have a payment – the special benefit – for low-income people who don’t satisfy the criteria for any of the other categories.

For any one person, these categories are mutually exclusive. An individual can simultaneously be over the age of sixty-five and have a disability that prevents him or her from taking paid work, for example, and a lone parent can also be looking for full-time work or caring for someone with disability. But these individuals can only receive one of the categorical income-support payments, even if they are potentially eligible for more than one.

This may make it possible to “game” the system by claiming the payment with the most favourable conditions. But it also means that when government policy changes and a payment is either abolished or phased out, or eligibility conditions are tightened, individuals may be entitled to claim a different payment. This also applies to groups of people at different times: following a change of policy, a class of people who might previously have been able to claim one type of payment might be eligible for another payment.

In fact, some policy reforms are designed to move groups very quickly from one payment to another. If we only analyse one payment at a time we overlook this potential substitution and gain a very limited view of what is actually going on in the welfare system.

The final context for analysing welfare spending is historical. In my earlier assessment I used Department of Social Services, or DSS, statistical reports going back to 1991 and data collected by its predecessor departments since the 1960s. Because the population has not only grown significantly but also changed its age composition, the following charts divide the population into people aged between sixteen and sixty-four (the working-age population) and people aged sixty-five or more.

Picking the trends

Chart 1 shows trends in the percentage of people aged sixty-five and over who received income support of different forms between 1995 and 2014. As it makes clear, the proportion of older people receiving an age pension either from the DSS or the Department of Veterans’ Affairs, or DVA, has increased from around 64 per cent of the population in 1995 to close to 70 per cent in 2014. The proportion receiving a DVA service pension in combination with an income-support supplement, however, has fallen from around 19 per cent to 6 per cent, while the proportion receiving other payments – mainly the DSP, the carer payment or the special benefit – has increased from 1.7 to 2.6 per cent.

The total number of people receiving one of these payments has gone up by close to 700,000, but this is simply because the number of people over sixty-five has increased by 1.36 million. The proportion receiving one or other of these payments has fallen from around 85 to 78 per cent.

Chart 1: Trends in the percentage of the older population receiving income-support payments, Australia, 1995–2014

Source: Calculated from Department of Social Services, Income Support Customers, A Statistical Overview, various years; Department of Social Services, DSS Payment Demographic Data, June 2014; ABS, Australian Demographic Statistics, 2014.

The decline in the share of the older population receiving a service pension plus an income-support supplement largely reflects the movement of the people who were in service during the second world war into this payment between the 1970s and 1980s and then out again, through death, and the subsequent lack of any large-scale war experience.

Age pensions (either from DSS or DVA) are alternatives to service pensions. But the fact that the increase in the share receiving age pensions was only about half the size of the decline in the share receiving service pensions suggests that potential new entrants are better off than previous groups of people turning sixty-five. And, as compulsory superannuation increases retirement resources in future years, the share of older people receiving an income-tested payment is likely to decline further – although the full effect will not be seen until after 2030 when retirees will have had the opportunity to contribute over their full working lives.

Trends among people of working age differ significantly from those among people over the age of sixty-five. Chart 2 shows the proportion of people aged sixteen to sixty-four receiving income-support payments between 1995 and 2014. After a small jump in 1996 there was a long, steady decline, with a more modest rise and fall since 2008.

Chart 2: Trends in the percentage of the working-age population receiving income-support payments, Australia, 1995–2014

Note: Working age is defined as the population aged sixteen to sixty-four years. Source: Calculated from Department of Social Services, Income Support Customers, A Statistical Overview, various years; Department of Social Services, DSS Payment Demographic Data, June 2014; ABS, Australian Demographic Statistics, 2014.

The rate in the chart has been calculated to show the impact of one of the most important policy changes in social security over the past twenty years. In 1995, the Keating government began lifting the eligibility age for women to receive the age pension from sixty to sixty-five years. This was phased in between 1995 and 2013, with the number of women aged sixty to sixty-four years receiving an age pension falling from 211,000 in 1995 to zero in 2014.

In order to be consistent over time, female age pensioners between sixty and sixty-four years are included in the working-age group over the whole time period. This figure also excludes a smaller – but growing – group of people who are receiving working-age payments but who are actually over sixty-five years of age.

Chart 2 shows that at the peak in 1996, nearly 25 per cent of the working-age population was receiving basic social security payments. By 2014 the figure was 16.8 per cent, a decline of around eight percentage points, or close to a third.

While numbers on payments are available for 2015, Australian Bureau of Statistics, or ABS, data on the age composition of the population are not. But we do know that the number of working-age people on payments rose by around 1.9 per cent in the year to June 2015 and the total Australian population rose by 1.4 per cent in the year to March 2015. Given that the population under sixteen years of age has been rising at a slower rate than any other group, it seems unlikely that the rate of receipt of payments has changed to any large extent, although it is possible that it has gone up slightly.

What explains these fluctuations? The number of working-age people receiving welfare payments at any one time is strongly related to the state of the labour market. Not surprisingly, it increases significantly in periods of recession. During the last major recession, in the early 1990s, unemployment peaked at 11 per cent, but by February 2008 it had fallen to 4 per cent, the lowest level since 1974. So part of the explanation for the long-term decline is Australia’s very strong employment performance, particularly before the global financial crisis.

But other factors are at work as well, including the dynamics of different categories of payments. Changes in the number of lone parents receiving benefits partly reflect shifts in family formation, for example. People who are unemployed for lengthy periods and experience a disability may drop out of the labour market and end up on the DSP. Unemployment can lead to family breakdown and growing lone parenthood.

Policy changes are also a major cause of trends in the number of welfare recipients. In periods when benefits are more generous or easier to access, the number of recipients naturally tends to grow, while tighter or less generous conditions have the opposite impact.

Reflecting these and other factors, as was shown in Chart 2, the proportion of people receiving welfare payments peaked at nearly one in four of the working-age population in 1996, before falling to roughly one in six in 2008, just before the global financial crisis. After the GFC, the proportion of working-age people receiving benefits rose to 17.5 per cent in 2010, then started to fall again, reaching 16.7 per cent in 2014 – not quite back to the 2008 level, but the second-lowest level in the past two decades.

Chart 3 breaks down trends since 1995, showing what has happened to the share of the working-age population receiving the DSP, the share receiving unemployment-related payments, the share receiving the carer payment, and the percentage receiving any other form of working-age income support, including parents, the sick, wives, widows, partners and recipients of student assistance.

Chart 3: Trends in the percentage of the working-age population receiving selected income-support payments, Australia, 1995–2014

Note: Working age is defined as the population aged sixteen to sixty-four years. These figures are adjusted to include women aged sixty to sixty-four years on age pensions in the working-age payment population and to include people sixty-five years and over and not on age pensions in the retirement age payment population. Source: Calculated from Department of Social Services, Income Support Customers, A Statistical Overview, various years; Department of Social Services, DSS Payment Demographic Data, June 2014; ABS, Australian Demographic Statistics, 2014.

What is apparent is a fairly steady rise in the share of people on the DSP, from 3.9 per cent of the working-age population in 1995 to a peak of 5.4 per cent in 2011, falling slightly to about 5.2 per cent in 2014. The number of people of working age on this payment fell further from 790,000 in 2014 to 778,000 in 2015. Interestingly, the number of people aged sixty-five and over who receive the DSP rose from around 4000 in 1995 to nearly 40,000 in 2014, presumably because they have not lived in Australia long enough to receive an age pension, but acquired a disability after they settled here.

The long decline in the share of the working-age population receiving unemployment payments before the GFC is also apparent, with an increase in 2008–09 and a sharper increase between 2012 and 2013. The proportion of people on the carer payment rose from a negligible 0.2 per cent of the working-age population in 1995 to 1.4 per cent in 2014.

What is most striking, however, is the trend in the number receiving “other” payments, which peaked at 13.6 per cent of the population in 1996 but had fallen to 5.1 per cent by 2014. In numerical terms, the number of people receiving these benefits has fallen from 1.6 million in 1996 to 781,000 in 2014 (and further to 758,000 in 2015). The improvement in labour-market conditions between 1996 and 2008 is likely to have contributed to the decline in the share of working-age people on these other payments, but policy changes appear to be the most important factor.

What these figures show is that if we only look at the programs in which numbers have been going up – the DSP, the carer payment and, more recently, unemployment payments – then we will have a very partial view of overall trends and miss the contribution of policy changes in other parts of the system.

Looking at the system as a whole

Why has the percentage of the working-age population receiving DSP and the carer payment been rising since 1995, and the share receiving unemployment payments rising since 2008, while the share receiving other payments has declined significantly? The state of the labour market is part of the answer, and so are two other factors that have had a major impact among people of working age: the ageing of the baby boom generation and the major social security policy reforms introduced by successive Australian governments over the past two decades.

Chart 4 shows the age profile of the main social security payments for people of working age in 2014 (the most recent year for which ABS data on the age structure of the population are available), including the Newstart unemployment benefit as well as payments already mentioned. The figure excludes student payments, which primarily go to people under twenty-five, and age pensions, which go to people over sixty-five. (Around 9 per cent of people under twenty-five receive student assistance and 72 per cent of people over sixty-five receive an age pension or another DSS payment.)

Chart 4: Percentage of age group receiving income-support payments by payment type, Australia, 2014

Source: Calculated from Department of Social Services, DSS Payment Demographic Data, June 2014; ABS, Australian Demographic Statistics, 2014.

The proportion of people receiving social security benefits clearly increases with age – doubling from 10.5 per cent of those aged under twenty-five to 21 per cent of those aged fifty-five to sixty-four, although for those between these two age groups rates of receipt only range between 14 and 15 per cent.

Not all payments are higher among older age groups: employment-related payments are received by around 5 per cent of each age group, and the parenting payments peak at around 5 per cent of those aged twenty-five to thirty-four years and then decline. But in the other major categories, payment rates rise significantly with age – particularly for people receiving DSP, who make up around 2 per cent of those under thirty-five, 4 per cent of those aged thirty-five to forty-four, 7 per cent of those aged forty-five to fifty-four and close to 12 per cent of those aged fifty-five to sixty-four.The proportion of people receiving the carer payment also rises from less than 1 per cent of those aged twenty-five to thirty-four to 2.6 per cent of those aged fifty-five to sixty-four. People receiving wives, widows or partner payments are predominantly aged between fifty-five and sixty-four years.

Why? The obvious answer is that the likelihood of acquiring a disability increases with age as a result of lifestyle-related diseases and natural wear and tear, particularly for those with manual jobs. The US Social Security Administration estimates that more than 25 per cent of current twenty-year-olds will acquire a disability before the age of sixty-five. It is also obvious that the number of people who need to care for relatives with disability will rise as the structure of the population shifts.

For these reasons, the number of people receiving social security is influenced not only by changes in the population but also by changes in its demographic profile, particularly by the share of the population in the age groups over fifty years of age.

Chart 5 shows changes in the size of the population in different age groups in Australia between 1995 and 2014, separating out the changes since 2005 from those over the longer period.

Chart 5: Percentage changes in the size of the population by age group, Australia, 1995–2014

Source: Calculated from ABS, Australian Demographic Statistics, 2014.

Between 1995 and 2014 the total Australian population increased by close to 31 per cent and the population over sixteen years of age increased by just over 35 per cent. It is important to understand the implications of this: if all income-support payments were simply indexed to prices and if the share of the population over sixteen and the percentage of the population receiving benefits remained constant, then we would expect real social security spending still to have increased by 35 per cent since 1995.

Different age groups have also grown at very different rates. The number of children in the population has increased by only 14 per cent since 1995, or less than half the rate of the increase in the total Australian population, while the proportion of the population between sixteen and forty-nine has grown by around 20 per cent. Meanwhile, the proportion of the population aged sixty-five and over increased at more than twice the rate of the total population. Even more strikingly, the population aged between fifty and sixty-four – those working-age groups whose receipt of social security is highest – increased by nearly 72 per cent.

But trends in the second half of this period differ in subtle but significant ways. The total Australian population increased at about the same rate as in the whole period, but the share of children rose at a faster rate. The rate of increase in the population aged fifty to sixty-four years fell by close to 70 per cent, but the number of people aged sixty-five years and over grew marginally faster in the second period than it did over the whole period.

These trends reflect divergent demographic movements, primarily the ageing of the baby boom generation and to a lesser extent the increase in total fertility rates after 2000. Baby boomers were born between 1946 and 1964 and started to turn fifty in 1996 and sixty-five in 2011. The ageing of this generation initially increased the percentage of the population in the age groups likely to receive DSP and the carer payment, and more recently has boosted numbers in the age range potentially entitled to the age pension. Up until 1996, as demographer Natalie Jackson has shown, changes in the age structure of the Australian population acted to slow the growth of the DSP. But when people born in 1946 started to turn fifty in 1996, that slowdown was reversed.

The effect of the ageing of the baby boom generation is illustrated in Chart 6, which shows the change in the number of people by years of age between 1996 and 2014 (after taking account of deaths and migration). The largest population increase is among fifty- to sixty-seven-year-olds, with each year group being around 100,000 larger than the comparable group in 1996. Cumulatively, there were 1.9 million more people aged fifty to sixty-four – the age at which rates of receipt of the DSP start to rise significantly – in 2014 than in 1996.

Chart 6: Change in number of people sixteen and over by age, Australia, 1996–2014

Source: Calculated from ABS,Australian Demographic Statistics, 2014.

Between 1996 and 2012 the proportion of people of working age receiving the DSP rose from 4.3 per cent to 5.6 per cent. If the age structure of the population had held constant at 1996 shares, then the figure would have been 5.0 per cent – in other words, roughly half of the total increase can be said to be unrelated to changes in the labour market, the incidence of disability or individual behaviour, but simply reflects changes in the age structure of the population.

The chart also shows that, beginning in 2015, the increase in the size of each year cohort will decline significantly, and then increase again, before declining again. For example, while there were 93,000 more fifty-year-olds in 2014 than in 1996, there were only 42,000 more forty-nine-year olds (and 15,000 more each of thirty-five- and thirty-six-year-olds). These shifting patterns suggest shifts in the number of potential inflows into the DSP and other payments predominantly claimed by people over fifty.

More importantly, a series of policy changes from the late 1980s and mid 1990s also had a major impact on the number of people receiving the DSP and other payments.

One of the most important of these was the increase in the age pension qualifying age for women from sixty to sixty-five, as already mentioned. Before 1995, women receiving the DSP were required to shift to the age pension once they turned sixty, and women who became disabled after turning sixty weren’t able to claim the DSP unless they had lived in Australia for less than the ten years needed to qualify for an age pension.

As the cut-off age started to increase, women with disabilities in this age group increasingly claimed the DSP. As Chart 7 shows, the proportion rose from close to zero to 13.3 per cent by 2013. (Age breakdowns by gender are not available for subsequent years.) But as the number of women receiving the DSP went up, the number receiving the age pension went down – and, as Chart 8 shows, it went down by much more.

Chart 7: Change in percentage of women aged sixty to sixty-four years receiving the DSP, Australia, 1995–2013

Source: Calculated from Department of Social Services, Income Support Customers, A Statistical Overview, various years; Australian Bureau of Statistics, Australian Demographic Statistics, June 2013.

In 1995, only about 650 women aged sixty to sixty-four received the DSP and 212,000 received the age pension. By 2013, 86,000 women in that age group received the DSP, and only 27,000 were age pensioners. (And since 2014 none have received the age pension.) The number of female carers has risen from 132 in 1995 to more than 24,000 in 2013. Where once 67 per cent of women of that age received a pension or other payment, now the figure is 31 per cent. Overall, close to a quarter of the growth in the number of DSP recipients over the past twenty years can be accounted for by the growth in the number of women aged sixty to sixty-four receiving the DSP rather than the age pension. And close to 10 per cent in the growth in numbers of recipients on the carer payment is accounted for by this age group.

Chart 8: Percentage of women aged sixty to sixty-four years receiving the DSP, age pension or other income support, Australia, 1995–2013

Source: Calculated from Department of Social Services, Income Support Customers, A Statistical Overview, various years; ABS, Australian Demographic Statistics, June 2013.

In future, these two major pressures on the DSP numbers – the ageing of the baby boomers and the increase in women’s pension age – won’t operate to the same extent. Because the last of the baby boom generation turned fifty in 2013, the pressure on the DSP numbers should have started to lessen. The younger part of the baby boom generation won’t turn sixty-five until 2028, but the rate of increase will slow because that age group is not growing as rapidly. In the United States, for similar reasons, both the Social Security Administration’s actuaries and the Congressional Budget Office project that spending on the US disability insurance program will fall as a share of GDP in the coming decade as baby boomers convert from disability to retirement benefits and are replaced in the peak disability-receiving ages by smaller cohorts. If anything, the effect is likely to be even stronger in Australia because the increase in the pension age for women was also fully phased in by 2014 and this pressure will also decline.

It is worth remembering, however, that the Rudd government announced an increase in the pension age for both men and women from sixty-five to sixty-seven years, to phase in between 2017 and 2023. Some of the people affected by this change will probably be entitled to the DSP, leading to an increase in numbers on the DSP after 2017, but past experience suggests that the overall number of people in this age group receiving payments will reduce.

In addition, the 2010–11 budget included revised access procedures for some DSP claimants, to commence on 1 January 2012, and new participation requirements from 1 July 2012, affecting current and new DSP recipients under the age of thirty-five who are assessed as having a work capacity of eight hours or more a week. As shown in Chart 9, these changes appear to be associated with a very large slowdown in the rate of increase in the number of people being paid the DSP, albeit after a relatively large spike in numbers following the GFC (after a lag).

Chart 9: Annual average percentage change in the number of people receiving the disability support pension, Australia, 1995–2015

Perhaps as a result, the most recent figures for numbers on the DSP show a fall from around 827,000 in 2012 to 814,000 in 2015; excluding people over sixty-five who receive the DSP this is a fall to around 5.2 per cent of the working-age population, about the level it has been since 2002.

“Dependency” payments

What explains the reduction in the number of people receiving payments other than DSP, the carer payment or Newstart?

Starting in the 1980s and continuing for more than twenty years, the federal government began phasing out a number of other payments or limiting access to new claimants. Access to Widow B pension, for example, was limited in 1987, and then closed to new entrants in 1997. In 1994, the government introduced the partner allowance to provide support to the partners of beneficiaries who had previously received a “married rate” of payment; then, in 1995, it restricted this to older women without recent workforce experience while introducing Parenting Payment Partnered for partners with dependent children. As well as phasing out these payments, the government changed the income test for unemployment payments in 1995 to require both individuals in a couple to claim the benefit in their own right, and part of their individual earnings did not affect their partner’s benefit entitlements.

The wife pension was closed to new entrants in 1995; the partner allowance and the mature age allowance were closed to new claimants in 2003; and by 2008 there were no longer any recipients of the mature age allowance. Since 2005, new grants of the widow allowance have been limited to women born on or before 1 July 1955.

Most of these payments had effectively been based on the assumption that women were “dependents” of men, or in the case of widows that they had been dependent and should not be expected to look for work. Even the lower age for women to receive the pension had been partly based on the assumption that women would want to leave the workforce at roughly the same time as their assumed older husbands. Economist Bob Gregory has also argued that these changes affected the likelihood of partnered men claiming payments, because their behaviour could be influenced by their partner’s failure to qualify for a payment.

These changes had a profound impact not only on the total number of people receiving welfare payments but also on which payments they received. In the mid 1990s, the “closed payments” – mainly for women – were received by around 4 per cent of the working-age population; now, only 1 per cent of the population receive their successor payments.

About 1.3 per cent of the working-age population are receiving the carer payment. As with the age pension/DSP trade-off for older women, the rise in the number of people on the carer payment is more than offset by the decline in the number of people on these “dependency” payments.

A further change to parenting payments by the Howard government in 2006 required new lone parents with a youngest child aged eight or over to claim Newstart rather than parenting payment single and for partnered parents with a youngest child aged sox years and over to claim Newstart rather than parenting payment partnered. Parents already receiving the benefits, however, were “grandfathered” and continued to receive these higher levels of benefit.

What about the unemployed?

Two main factors have driven the growth in Newstart numbers. The number of people receiving unemployment benefits tracks broader labour-market trends fairly closely, and so the increase in the unemployment rate from around 5 per cent to closer to 6 per cent since June 2012 could be expected to result in roughly 100,000 additional people on benefits.

Changes to the DSP under the previous government, which appear to have slowed its growth, may have increased numbers on Newstart, while policies designed to shift people from parenting payments to the lower Newstart payments since 2006 (and particularly since the beginning of 2013) have also added to the total.

The Gillard government forecast that around 10,000 people would lose all entitlement to benefits in 2013 as a result of the decision to move the “saved” lone parents from parenting payment single to Newstart, and that around 75,000 would transfer onto Newstart. (This effect is the same as the substitution between the age pension and the DSP, carer payment and other closed benefits, as described above.)

The monthly statistics on labour force payments show that between December 2012 and February 2013 the number of people on unemployment payments jumped from around 700,000 to 796,000, an increase around four times as great as the corresponding periods for the previous two years. Moreover, around 83 per cent of the increase was made up of women, reinforcing the impression that this very large jump is mainly explained by parents transferring from parenting payments.

The table below shows trends in the number of lone parents receiving either the parenting payment single or Newstart between 2006 and 2014. From a negligible number of lone parents receiving Newstart in 2006, the number has grown to around 120,000 in 2014. Data on the number of lone parents receiving other payments such as the carer payment or the DSP are not publicly available, and it is possible that a sizeable number of people who would otherwise have received the parenting payment single would now be receiving one or other of these payments, if they were eligible. Nevertheless, Table 1 shows that while Newstart numbers have grown significantly, the total number of lone parents receiving one or other of these payments has fallen.

Number of lone parents receiving either parenting payment single or Newstart, Australia, 2006–2014

Source: Data provided by ACOSS from answers to Parliamentary Questions on Notice

Chart 3 showed that the share of the working-age population receiving Newstart has risen since 2008, with about 300,000 more people on Newstart in 2014 than just before the GFC. In 2014, as Table 1 shows, there were about 100,000 more lone parents on Newstart and 100,000 fewer on parenting payment single than in 2008, and as suggested earlier a rise in the general unemployment rate by 2 percentage points could have been expected to add around 200,000 more people to Newstart.

While the situation is complicated by other changes in the population – including a fall in the number of lone parent families since around 2003 – these figures suggest that a very significant component of the rise in numbers on Newstart can be explained either by labour-market change or deliberate policy change.

What has happened to spending?

Not surprisingly, governments interested in balancing the federal budget are most concerned with program spending, even if the number of recipients is one of the main drivers of aggregate spending. Governments also tend to focus on nominal spending over the forward estimate period.

Just as it is preferable analytically to focus on recipients of benefits as a percentage of the population, it is also preferable to treat spending as a percentage of GDP as the best measure of the affordability of the system. This is because, as we’ve seen, real spending will grow simply as a result of population growth, even if all other parameters are held constant.

The most consistent and comprehensive time series on social spending as a percentage of GDP can be found in the OECD Social Expenditure database, which provides overall levels of public social spending up to 2014, though details of spending disaggregated by program are available only to 2012. (The social spending figures for Australia aggregate federal and state government spending, but virtually all spending on cash benefits is undertaken at the federal level.)

Chart 10 shows trends in spending on age and related pensions (mainly DVA payments) from 1995 to 2012. With the exception of the year 2000, spending on age and related pensions has remained between 3 and 3.4 per cent of GDP. (The spike in spending in 2000 is the result of the compensation package for the introduction of the GST in that year.) These pensions are indexed to wages, so the stability of spending as a per cent of GDP is likely to reflect the declining coverage of the service pension, as discussed earlier.

Chart 10: Spending on age and related pensions, Australia, 1995–2012

Source: OECD Social Expenditure database.

Chart 11: Spending on working-age cash benefits, Australia, 1995 to 2012

Source: OECD Social Expenditure database.

Chart 11 shows trends in spending on the other major cash transfers from 1995 to 2012. Overall, spending has fallen from 5.5 to 4.9 per cent of GDP over this period. Spending on working-age payments spiked in 2008, at the time of the stimulus payments made during the GFC. Excluding “other incapacity” (mainly state government workers’ compensation payments) overall spending fell from 4.7 to 4.3 per cent of GDP.

Spending on the unemployed – which includes spending on parenting payments in the OECD’s definition – fell from 1.2 to 0.6 per cent of GDP. The only component to rise as a percentage of GDP was disability payments (which include the carer payment), from 1.1 to 1.5 per cent of GDP.

Spending on family cash benefits rose substantially from 2.1 to 2.6 per cent of GDP between 1995 and 2003, but has since fallen back to 1.9 per cent of GDP (although with a spike at the time of the GFC).

Overall, the spending trends in the OECD data are consistent with the picture derived from considering trends in the number of recipients. Spending has gone up in some categories, notably the DSP and carer payment, but spending in other social security areas has fallen to more than offset these rises.

Where to from here?

The data show a prolonged fall in the number of welfare recipients since the mid 1990s, reflecting a long period of economic growth, a strong labour market, and the positive impact of policy changes since the early 1990s. While trends have not been as positive since 2008, they have been mild by the standards of earlier economic downturns in Australia. Trends in spending as a per cent of GDP show broadly similar patterns, with no evidence of major increases after 2008.

This analysis also shows that past trends are not necessarily a reliable guide to the future. The two main pressures on DSP numbers – the ageing of the baby boomers and the increase in women’s pension age – are unlikely to continue to have such a significant impact, suggesting that numbers of recipients and levels of spending relative to GDP are unlikely to grow in the near future unless there is some form of economic shock.

While concerns about relentless growth are difficult to substantiate – particularly when the total number of welfare recipients is close to its lowest level in the past twenty years – we should not be complacent.

Our main concern should be to avoid any significant blow-out in unemployment. Previous increases in unemployment in the recessions of the 1980s and 1990s had very long-term consequences, particularly for jobless families with children. Nor should we be complacent because welfare numbers are at their second-lowest level in the past two decades. Successive governments have argued that the “best form of welfare is work” and it is clear that the economic wellbeing of individuals and families is much greater in paid work than outside it.

The problems that some people on welfare face in moving into work require a comprehensive analysis, however. Not all these problems are caused by the welfare system: other barriers to work include labour-market programs that are not equally effective for all, a lack of job opportunities in the regions where people live, poor public transport, inadequate and expensive child care, mismatched skills, and negative employer attitudes to people disadvantaged in the labour market. Changing incentives in the welfare system through reform of eligibility for specific payments is only part of an effective response to these challenges.

In addition, the growth in the size of the population aged sixty-five and over will put upward pressure on spending over coming decades. Preparing for the continued ageing of the population, however, does not necessarily imply that the solution is to seek to further cut spending on working-age payments. •

The post Is welfare sustainable? appeared first on Inside Story.

Atul Gawande, a Rhodes scholar with a master’s degree in philosophy, politics and economics from Oxford University, is a general surgeon at the Massachusetts General Hospital in Boston. He interrupted his medical studies at Harvard to work for Bill Clinton as a health adviser during the 1992 presidential campaign. His articles in the online magazine Slate, written with the rare perspective of a literate, practising surgeon interested in more than the quotidian details of his clinical practice, brought him to the attention of the New Yorker magazine, and he has been a staff writer there since 1998. His essays are lessons in gentle pedagogy and open-minded public health policy, and his previous three books have helped change surgical practice across the world. The second of them, Better, was in Amazon’s top ten books of 2007.

Being Mortal describes how modern medicine fails us when we need it the most – in our old age, and particularly during our last months, weeks and moments. It describes a system that so often strives to prolong life without considering what makes a life worth living. Gawande’s narrative skill, combined with his insider’s knowledge and access, produces a powerful handbook for action.

The first part of the book is a primer on the causes of ageing (“We just wear out,” is the final, if unsatisfactory, conclusion of one expert) and what it means to get old in the United States today. The second and, for me, better half is an exploration of how the medical profession, including Gawande himself, has failed to care wisely for those in their final illnesses.

It will be no surprise to learn that the population of the industrialised world is ageing. But the American healthcare system’s response will definitely come as a revelation. In 1790, only 2 per cent of US citizens were over sixty-five; today it is 14 per cent (and in parts of Europe it is 20 per cent). Yet the number of geriatricians in the United States fell by a quarter between 1996 and 2010. Only 300 doctors are in geriatric training programs – not enough even to replace those reaching retirement. While competition for training in radiology and plastic surgery, for example, is intense, less than one-in-thirty medical students take even a short course in geriatrics.

This should give pause to those who would increase fees in medical schools on the grounds that future earnings compensate for student debt, no matter how massive. If the economic theory that drives these deregulators holds true, it follows that specialties promising higher pay will be oversubscribed and the others will languish. Our current practice of remuneration, which over-rewards technical skills and use of medical technologies, will accentuate the sense of entitlement already displayed by debt-ridden graduates. I have repeatedly seen financial possibility trump altruistic intention in even the most idealistic young doctors.

Two generations of doctors have grown up in a population that began to curb its smoking in the late 1970s. This, in combination with the development of coronary artery stenting and therapies to control hypertension and blood lipids, has meant that one of the biggest causes of premature mortality, coronary artery disease, has been tamed. The death of men in middle age from a heart attack was once an unremarkable event, but it is now seen as unnatural and medically preventable.

These younger doctors face a demographic blip of postwar fecundity: the legion of ageing baby boomers, the oldest of whom are now in their late sixties. But although death has been postponed, and despite the predictable complaints about the sheer injustice of it,they will all eventually die. Cognitive and physical decline is inevitable (“We just wear out”) and the cost of supporting the millions who will need assisted accommodation and medical care is testing every modern economy. Contemporary medical services struggle to cope with current pressures; future demand will push them to breaking point.

Gawande describes the painful path of a number of his patients who have, he argues, suffered needlessly in their last months. He examines why we continue to offer patients invasive treatments when there is no hope of cure, and how increasing sub-specialisation makes it hard, if not impossible, for patients to get off the treatment conveyor belt once they step onto it.

Resistance to the idea of palliative care is common across the globe. For people who believe, for instance, that they must “battle” their cancer right up to the end, the word “palliative” equates to an admission of defeat. This refusal to give up is often abetted by members of the medical profession who display a poorly informed optimism about their patients’ prospects of survival. When 500 doctors were asked how long they thought their terminally ill patients would survive, 63 per cent overestimated the time (by over five times, on average) and the better they knew their patients the more likely they were to get it wrong.

Add to that the widely held belief that choosing a palliative care pathway will mean that you die sooner. In 2010, a landmark US study assigned 115 patients with advanced lung cancer to receive either normal oncology care or normal oncology care plus visits from a palliative care team. On average, those in the palliative care group stopped chemotherapy sooner, entered a hospice earlier and experienced less suffering. They also lived 25 per cent longer than those who received only standard oncology care. This is a stunning, counterintuitive finding. “If end-of-life discussions were an experimental drug,” says Gawande, “the FDA would approve it.”

To change the system we must first change ourselves. Helping people understand that they don’t have to pursue every option, no matter how expensive, uncomfortable or futile, requires considerable skill and training. In the late twentieth century, patient autonomy became the primary concern in medical ethics, and hence in doctors’ education; the paternalist doctor gave way to the informative doctor. This new medico would be a skilled technocrat, a holder of knowledge who gently, but dispassionately, outlines all treatment options so that patients can make their own informed choices. The doctor is the vendor of information, the patient the consumer.

This was how Gawande was trained. But despite the added autonomy, this new style of communication is fraught: the anxious, the less well-educated and those programmed by their culture to accept the words of authority without question may flounder in a one-way transaction. And so a third type of interaction has emerged, incorporating elements of the other two. This interpretive relationship is sometimes referred to as “shared decision-making.” The interpretive doctor asks questions as well as giving answers. What is most important to you? What are your worries? What are your goals for this treatment?

The value of shared decision-making is brought home to Gawande when his urologist father is diagnosed with a slow-growing but incurable tumour in the upper part of his spinal cord. The first neurosurgeon the family consults is considered to be the leader in his field, but his purely informational approach leaves the senior Gawande confused and the junior indignant. They travel interstate to see a surgeon who understands that the doctors on the other side of the desk – Gawande’s parents and himself – are now a patient and family. This doctor’s interactive consultation lets them make a careful plan of future treatment. For the son, managing his father’s rage against the dying of the light requires a careful balance of intervention and respectful distance. Gawande’s description of his father’s last weeks is told with a doctor’s precision but seen through a son’s tear-clouded eyes.

The palliative care philosophy is to live for the best possible day today instead of sacrificing time now for time later. Yet how often do we see (and permit) patients and friends lose their gamble of buying time for the future? Opting for heroic surgery with little or no chance of cure and then dying in intensive care, sedated so that you can tolerate the tubes down your throat, is one medical version of the Faustian bargain.

Although this is a book largely about end-of-life issues, Gawande touches on the euthanasia debate only briefly. He interprets the fact that in 2012 one-in-thirty-five Dutch people sought assisted suicide at their death as a measure of societal failure, not success. “Our ultimate goal,” he says, “is not a good death but a good life to the very end.”

As they age, most doctors learn that the satisfying part of their job has less to do with the technical mastery of their craft and more with the opportunity to help their patients in ways other than the merely physical. Gawande sums his beliefs up in this way: “I never expected that among the most meaningful experiences I’d have as a doctor – and, really, as a human being – would come from helping others deal with what medicine cannot do as well as what it can.” While teamwork is an essential feature of modern practice, a captain is needed to make hard decisions on the field to stop patients getting caught in the slipstream of a supersonic medical machine that sucks them along on a ride with no apparent driver or obvious final destination. Perhaps it comes down to a simple rule: one practitioner alone needs to take ultimate responsibility for the extraordinarily complex care that the seriously ill require.

The ideas contained in this book are not novel; indeed you could argue that there is a degree of naiveté in the author’s late awakening to the challenges of caring for the aged, his shock when he experiences close up the suffering of terminal illness, and his amazement that it could be so mismanaged. For more than a decade most health systems have recognised the need to address the arguments that he makes for better end-of-life care. But some of this “discovery” is literary device; sections of Gawande’s audience are influential and very powerful and I have no doubt he knows that this kind of popular exposition can be far more effective in delivering change than erudite policy documents ever can. In fact, I think this will be Gawande’s most important work. Making surgery safer across the world is not a bad early career achievement, but helping the medical world to recognise its limits and learn how to inject care, not just medicine, may just top it. •

The post What matters in the end appeared first on Inside Story.

Last year, in a letter to the British Medical Journal, fifty-two doctors argued that four medical researchers, including me, were “in danger of being an affront to the millions of people with dementia and their families” and risked “undoing much of the good done over recent years.” This impressive number of clinicians was responding to our view that plans to screen for “pre-dementia” ignore the drawbacks of making an early diagnosis of a disease without a cure.

What do these two anecdotes have in common? In both cases, the central dogma of dementia research had been questioned and in both cases the mainstream research and medical fraternity sought to stamp this out. There is only room for one theory of dementia and that is “the amyloid cascade hypothesis.” Roses had erred by finding an important dementia gene that did not support that hypothesis. My colleagues and I had erred by writing a review commissioned by the British Medical Journal stating that screening for preclinical dementia based on the amyloid hypothesis is not useful and will lead to significant overdiagnosis of Alzheimer’s disease and over-medicalisation of ageing.

Why would the dementia research community uphold one theory with such fervour and exclude other views or questioning as heretical? Surely people involved with dementia research and healthcare would want to explore all possibilities, particularly since the problem is so important, the stakes so high and progress so painfully slow?

Enter the distinguished medical anthropologist Margaret Lock and her book The Alzheimer Conundrum. Lock, a McGill University sociology professor, has written several books that place the cultural, economic and social context of modern medicine and biotechnology under the microscope. When Lock applies her anthropological gaze to the problem of Alzheimer’s disease, the result is uncomfortable, captivating and unsettling. It should be absolutely compulsory reading for all people who deal with dementia.

Lock presents us with a rich tapestry of science, history, sociology and medicine, interwoven with transcripts of interviews with patients, carers and leading researchers in dementia and Alzheimer’s disease. The result is both knowledge and context, with context as the clear winner. In fact, any medical researcher or doctor would be wise to ask Lock to write a book about his or her chosen area before basing a career on what might turn out to be hubris and hope, or worse still, political and financial pressures. In this age of scientific supersubspecialisation, it is too easy to focus on, and believe in, the gene or the protein or the chemical – and totally overlook the wood for the trees.

Lock introduces her deconstruction by placing dementia research in the context of three broad and overarching tensions: brain versus mind; normal ageing versus pathology and disease; and genetic versus environmental causes of disease. Then she rapidly focuses on the central role of the amyloid hypothesis in directing, and perhaps stifling, research into dementia and Alzheimer’s. It’s important to be clear about the terminology here. To the layperson, dementia is easily recognised as confusion and forgetfulness in an older person. But according to the most recent set of definitions, it is possible to be perfectly normal and still be given a dementia diagnosis on the basis of new tests of unproven accuracy or predictive ability. Alzheimer’s disease has come to be regarded as the commonest cause of dementia.

The first case of Alzheimer’s disease was described by the neuropathologist Alois Alzheimer in 1906. He recorded the clinical features and brain pathology of Auguste Deter, a woman in her fifties who had died of dementia. Australian scientists have very recently obtained tissue from the slides that Alzheimer used and found that Deter’s early-onset dementia was caused by a very rare genetic condition. Alzheimer found microscopic plaques in her brain that contain an unusual protein called amyloid protein (an oxymoronic phrase because amyloid means starch-like, and proteins are not starch). These amyloid plaques are also very common in the brains of people as they get older, which is why the diagnosis of Alzheimer’s disease is now given to most older people with dementia.

Unfortunately, as Lock points out, the association between the symptoms of dementia and the presence of amyloid plaques in older people is not very convincing. Amyloid plaques and genes might well cause dementia in younger people, but in old people the causation doesn’t seem to hold. Lots of older people with amyloid plaques in their brains are perfectly normal and don’t develop dementia, and lots of older people with dementia don’t have amyloid plaques. Or if they do, these are often mixed up with other pathological changes, including those associated with ageing. Although there are said to be thirty-five million people with dementia worldwide, genetic causes only appear to apply in a few hundred families, and they are usually related to the genes associated with amyloid.

In other words, dementia is overwhelmingly a problem among older people yet the research has been dominated by the genes that cause dementia in young people. Perhaps this is a type of ageism? Or perhaps studying the ageing process is just too hard.

Since 1991, when it was first published by John Hardy and David Allsop, the amyloid cascade hypothesis has held dementia research in an iron grip. On the basis of the genetic causes of dementia in young people, the two neuroscientists concluded that most dementia is caused by Alzheimer’s disease, which in turn is caused by amyloid plaques building up and killing nerve cells. If correct, the implications of this hypothesis are immense. If we can detect amyloid in the brain then we can detect dementia early enough to prevent it from progressing. And if we can remove the amyloid with antibodies or vaccinations or enzyme blockers, then we can prevent or even cure dementia.

Unfortunately, all clinical trials using treatments aimed at amyloid have failed. It has been pointed out recently that over one hundred clinical trials at a cost of over $50 billion in dementia have failed to show that any amyloid-based treatment has any effects. (This is all the more remarkable because by simple probability we would expect at least some of the one hundred trials to reach statistical significance.) Proponents now argue that we just need to give the treatments earlier, so trials are being commenced in those rare families with genetic causes of Alzheimer’s disease.

The need to diagnose dementia earlier so that we can start treatment earlier generates another commercial opportunity – testing to detect the presence of amyloid in normal people and/or for genetic variability that causes or predisposes to dementia. The latest imaging tests are claimed to detect dementia nearly twenty years before the onset of symptoms, and the only reason the tests aren’t too accurate, it’s claimed, is that many people will die before they develop dementia.

There’s a bigger question, of course. What is the purpose of performing screening tests to see whether people are at risk of developing dementia when there are no effective interventions? The usual response is that people want to know and be able to plan for the future. Lock responds with a quote from the anthropologist E.E. Evans-Pritchard’s book Witchcraft, Oracles and Magic among the Azande: “when the oracles announce that a man will fall sick… his condition is therefore already bad, his future is already part of him.” A positive test means you go from being normal to being someone who will develop dementia – your future becomes your present. Yet we all face the prospect of dementia and frailty if we live long enough.

Another mantra of dementia research is that “dementia is not a part of normal ageing.” Lock shows that this statement is more political than it seems. It reaches into a semantic battle between those people who believe that diseases are separate entities and old people are just unlucky to have several at the same time, and those who believe there is a definable biology of ageing that underpins many of the problems that occur with ageing. Proponents of this latter concept believe in the “longevity dividend,” whereby strategies to delay ageing will also delay a whole suite of age-related diseases and disabilities. Ignoring the role of ageing in dementia is equivalent to ignoring the role of tobacco in lung cancer.

Perhaps the amyloid hypothesis will be judged more favourably in time. It will just take one successful therapy to convert those who have tenaciously supported and defended the amyloid hypothesis into heroes. Meanwhile, as Lock points out, we already have promising approaches to reduce dementia – they just don’t have the commercial potential of amyloid-based treatments. Patients, after all, are customers too.

Lock concludes that “emerging knowledge in both epigenetics and epidemiology” strongly suggests that we should take “a public health approach, including lifestyle changes, reduced exposure to toxins, reductions in poverty, increased community support, and other variables…” This is likely, she argues, “to reduce the prevalence of dementia worldwide to a much greater extent than would an approach confined to expensive molecular micro-medical management of segments of those populations deemed to be at risk that happen to be located in wealthier countries.” In fact, one of the first studies to show that physical exercise was an effective intervention was carried out by Australian scientists. And only now, after two decades of failed amyloid therapies, are serious, large-scale studies of interventions that target lifestyle and vascular risks being embarked on internationally.

The Alzheimer Conundrum reminds us about the real needs and lives of people with dementia and their carers. It asks whether research into Alzheimer’s disease, the amyloid hypothesis and genetic causes of dementia are truly cutting-edge, paradigm-shifting science or simply seductive hype with political clout that captures the public imagination and capital investment. While this attention means that funds are increasingly being directed to dementia research and care, the hype risks minimising and sidelining the elephants in the room: the role of ageing in dementia, the role of lifestyle interventions to delay dementia, and the pressing healthcare needs of people with dementia and associated multimorbidity, behavioural disturbances and carer stress. Lock reminds (and perhaps chastises) all of us involved in healthcare and medical research, no matter what the disease might be, that we should always make the science follow the needs of the patient, not vice versa. •

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AT AN ANNUAL cost of around $40 billion, the age pension is the federal government’s largest single social security program, and age pensioners account for around half of all Australians receiving social security benefits. So it’s not surprising that the speculation about cuts in welfare spending has focused on this payment, and specifically on the possibility that the qualifying age could age rise to seventy and that future increases in pension rates might be linked to prices rather than wages.

The treasurer, Joe Hockey, has argued that the pension age “was set at that level in Australia in 1908 when life expectancy was fifty-five… Now life expectancy is eighty-five and as of today, it’s still pension age sixty-five.” But would raising the pension age be fair – and, just as importantly, would it be a practical and effective means of meeting current and future budget challenges?

The budget challenge

A common way of looking at the budget implications of an ageing population is to consider changes in the “age support ratio” - the ratio of potential workers to people of pension age. According to Treasury’s most recent Intergenerational Report, the age support ratio is projected to fall over the next three or four decades. In 2010, there were five people of working age for every person aged sixty-five and over; by 2050, says Treasury, that figure will have fallen to 2.7.

Everything else being equal, this means that the cost of financing any given level of pension payment will be greater. A halving of the support ratio, for instance, implies that the taxes required to fund age pensions would roughly double for each person of working age at that point in the future. (For the moment, we’ll ignore the fact that these future workers are likely to be better-paid than current workers.)

If the government wishes to achieve and maintain a budget surplus, total taxes would need to increase (the cost of age pensions is already more than 10 per cent of total Commonwealth tax revenue), spending on other budget items would need to fall or the level of age pension per recipient would need to be cut.

Population ageing also has implications for other parts of the federal budget. Older people are likelier to use the healthcare system, and if they are eighty-five or older they are much more likely to need long-term care. On that basis, the Intergenerational Report estimates that spending on health is projected to rise from 4 per cent to 7.1 per cent of GDP by 2049–50 and aged care is projected to rise from 0.8 per cent of GDP to 1.8 per cent.

Would increasing the pension age be fair?

The attraction of increasing the pension age is that it has the potential to adjust both sides of the support ratio simultaneously. If people stay in paid work rather than claiming the age pension, then the numerator (people in work) rises, while the denominator (people on pensions) falls, achieving a double whammy. If people spend more time in paid work they are also likely to save more through the superannuation system, raising their living standards in retirement.

It is for these and related reasons that bodies like the OECD and the European Commission have been arguing for increased labour force participation for older workers for a number of years.

Any assessment of the fairness of a policy proposal, however, should take into account how a specific reform proposal compares with other options. As Daniel Nethery has pointed out, the changes to the indexation of pensions canvassed by the treasurer would cause pensions to fall relative to community incomes. Over a thirty-five- to forty-year period the difference in future retirement incomes would be very large, eventually approaching a 50 per cent cut in payment levels relative to current indexation, with significant implications for poverty in retirement. Australia would then face the same problem with pensions that we currently face with Newstart – people reliant on pensions for their main income source would become increasingly impoverished compared to those in work.

Increases in the pension age need not have a direct impact on pension incomes. But they may reduce the period over which age pensioners receive the payment, and thus reduce what the OECD calls “future pension wealth,” which it defines as the ratio of the “lifetime flow of retirement incomes” to average earnings. In these circumstances, pension wealth is cut even if the amount received per year is unchanged.

Would this reduction in pension wealth be fair? In this context, one of the most important factors to remember is that life expectancy varies across the population and the majority of people don’t actually live as long as “average” life expectancy would suggest.

In the case of the United States, Barry Bosworth has estimated that there is a gap of roughly ten years in life expectancy at age fifty-five between rich and poor for both men and women born in 1940. In other words, men and women born in 1940 who were in the richest 10 per cent of the population in the middle of their working career could expect to live to just over ninety years, while life expectancy for men and women who had been in the poorest 10 per cent of workers would be around eighty years. This would mean that if the retirement age was increased to seventy then rich Americans could expect to collect social security pensions for twice as long as the poor.

Astonishingly, Bosworth’s study finds that life expectancy for the bottom 40 per cent of women in the United States actually declined between those born in 1920 and those born in 1940.

Research by the Office of National Statistics in England and Wales concluded that inequalities in male life expectancy caused by socioeconomic circumstances increased during the past twenty-five years despite improvements over time for all classes. At age sixty-five, the life expectancy of males classified by occupation as “higher managerial and professional” was 18.8 years, compared with 15.3 years for those assigned to occupations classified as “routine.” At the same age, the life expectancy of females classified by occupation as “higher managerial and professional” was 21.7 years, compared with 18.5 years for those assigned to occupations classified as “routine.” While the gap increased more rapidly for women, there were improvements in life expectancy for all income groups.

In Australia, the most striking discrepancy is between Indigenous and non-Indigenous life expectancies. In 2005–07, according to the Australian Bureau of Statistics, life expectancy at birth for Aboriginal and Torres Strait Islander males was 67.2 years, 11.5 years less than that for non-Indigenous males (78.7 years). For Aboriginal and Torres Strait Islander females, life expectancy at birth was 9.7 years less than for non-Indigenous females (72.9 years and 82.6 years respectively).

On average, in other words, Indigenous men couldn’t expect to reach a new pension age of seventy and Indigenous women would receive the age pension for less than a quarter of the time that non-Indigenous women would. (A good deal of the difference in life expectancies is due to the fact that Indigenous men and women aged sixty-five or less have much higher mortality rates, so that even now a significant number don’t live long enough to claim an age pension.)

Across the population as a whole, the Australian Institute of Health and Welfare found differences in life expectancy between major cities and very remote regions in Australia of nearly seven years for men and six years for women – although most of this is due to differences in the share of people who are Indigenous.

A recent Australian study by Philip Clarke and Andrew Leigh found that at age sixty the difference between life expectancy for those in the highest income quintile and the lowest income quintile was five years for men and 5.4 years for women, with men in the lowest quintile expected to live to just over seventy-eight years and women in the same income group to eighty-three years.

These differences are significantly less than the figures for the United States, although this is at least partly because the American estimates are broken down into smaller groups (deciles) and thus pick up more of the disparities at the top and bottom of the income distribution. Comparing the second and eight deciles (rather than the poorest and richest) would reduce the US disparities to about seven years for both men and women, still greater than in Australia.

On the surface, this suggests that higher-income groups in Australia could get a pension for about half as many years again as would lower-income groups if the pension age was increased to seventy. But there is one factor – unique to Australia among rich countries – that would offset this: we are the only OECD country where the public pension is income-tested and excludes most of the highest-earning 20 per cent of people over sixty-five.

The effects are also likely to be less severe in Australia than in the United States in particular because differences in life expectancy do not appear to have as steep a gradient with income, and because Australia’s income-tested pension system distributes public spending on pensions more progressively than many other countries’. The relative disparities in pension wealth are much more significant in the case of Indigenous people, however, although possibly the better way to think about this is to ensure that we become much more effective in reducing the life-expectancy gap between Indigenous and non-Indigenous Australians.

To sum up, increasing the pension age potentially has an adverse effect in equity terms. An increase in the pension age reduces the pension wealth of lower-income groups proportionately more than it reduces the pension wealth of higher-income groups.

Would increasing the pension age be effective?

Apart from the equity problems, it is equally important to ask whether increasing the pension age is an effective way of addressing current and future budget challenges.

In terms of immediate fiscal concerns, it would have no effect on the current budget deficit because the rise is unlikely to commence during the next eight years. As part of the 2009 pension reforms, the Rudd government announced an increase in the pension age from sixty-five to sixty-seven, starting in 2017 and fully phased in by 2023. If the pension age were raised to seventy at the same rate, the change would not be fully effective until 2032. It’s possible to increase the pension age at a faster rate – say by six months every year – but this would still not see the pension age reaching seventy until 2029; this means that most of the baby boomers born before 1959 or 1962 (depending on the speed of increase) would not be affected. Increasing the pension age is not a solution to current problems; it is a contribution to meeting challenges in the 2020s and 2030s.

It has been argued that if Australia lifts the pension age to seventy, Australians will have some of the oldest workers in the world. According to the most recent edition of the OECD’s Pensions at a Glance, seventeen out of the thirty-four OECD countries have legislated for increases in pension ages above sixty-five. Only Iceland and Norway are currently at sixty-seven, but Australia, Denmark, Germany and the United States have plans to match them, and Britain has announced an increase to sixty-eight.

Most OECD countries have provision for early retirement, however, including Australia, which allows access to superannuation from sixty years of age. So it would be important to consider increasing the superannuation preservation age, which allows those with sufficient super to retire at sixty and potentially avoid the effects of an increase in the pension age. And to the extent that higher-income people are able to run down their super during this period of early retirement and then claim some or all of the age pension, concerns about fairness become more salient.

In considering the effects of pension rules, however, a better measure is what the OECD calls the “effective age of labour market exit” – the average age at which workers are no longer participating in the labour market. (This is estimated over a five-year period for workers initially aged forty or over.) Australia currently has the twelfth-highest effective exit age for men, at 64.9 years, while for women Australia ranks sixteenth-highest, at 62.9 years.

Many of the OECD members with higher effective exit ages are lower-income countries, including Mexico, Chile, Korea, Portugal and Israel, though in Japan the average exit age for men is over sixty-nine years and for women it is close to sixty-seven years. This suggests considerable scope for Australia to increase effective ages of labour force exit, if it aimed to match Japan.

Would increasing pension ages be effective in increasing employment at older ages?

Part of the objective is to have an indirect effect earlier in people’s working lives. If people now in their forties or early fifties know that they won’t be able to claim an age pension until they are seventy, they may adjust their retirement planning and savings behaviour and extend their working lives. For any such effect to occur, however, it would be necessary to have complementary policies that support people in balancing their work and caring responsibilities, in particular.

But it’s important to recognise that there appears to be little correlation between official and effective ages of retirement. Norway, for example, already has a higher official pension age than Australia but a slightly lower effective age of labour force exit. The vast majority of countries with low effective ages of labour force exit have the same official pension age as Australia currently has; at the extreme, Luxembourg has a pension age of sixty-five but an effective exit age for men of 57.6 years.

Specific national experiences do suggest, however, that increasing the pension age can have a significant effect on employment at older ages and also on how many people receive social security payments. New Zealand increased its age of eligibility for its public pension scheme, National Superannuation, from sixty to sixty-five years between 1992 and 2001. Research by the Melbourne Institute found that there was clear increase in employment rates in this age group due to the policy change. But it also noted that only 40 per cent of middle-aged couples in New Zealand had private or employer-sponsored superannuation at the time, with a low median value of $30,000 – meaning that there were limited alternatives for many people approaching pension age. Earlier research also suggested that the effect was due to the fact that older workers who already had jobs stayed in employment.

Closer to home, Australia increased the age pension age for women from sixty to sixty-five years between 1995 and 2013. According to the ABS, the labour force participation rate of women in this age group increased from 16.6 per cent to 45.6 per cent in this period. Research at the University of Sydney found that an increase in the pension eligibility age of one year for women induced a decline in the probability of retirement of approximately 10 per cent, but also increased enrolment in other welfare programs, especially disability pension, or DSP.

While the number of women aged sixty to sixty-four who received the DSP increased very significantly over the period, the net effect was a very large fall in receipt of social security payments, from around 60 per cent of women in the age group in the mid 1990s to around 20 per cent currently.

This experience might suggest that raising the pension age could potentially have a major impact in restraining welfare costs, but there are reasons to be cautious about whether past trends are necessarily likely to have the same effect in the future.

As shown in the chart below, disability is strongly related to age. Although it remains around 10 per cent of the population up to the age of forty-five years, it increases rapidly to more 40 per cent by the age of seventy. Overall DSP rates fall between the two prevalence rates shown here, being closer to the rates of profound or severe core limitation than to overall disability rates. Nevertheless, it is clear that a higher proportion of those aged sixty-five to sixty-nine years could be expected to have a disability than among those aged sixty to sixty-four years, suggesting that future increases in the pension age are likely to have diminishing returns compared to past reforms.

Chart 1: Prevalence of disability by age, Australia, 2012

Source: ABS, Disability, Ageing and Carers, Australia: Summary of Findings, 2012.

Which crisis?

Increasing the pension age is likely to be just one part of any set of reforms to address the challenges of population ageing. While it could be expected to have a positive impact on the budget balance it is implausible that it could fill the gap by itself. Many complementary policies will need to be considered, including a requirement that superannuation be taken in the form of lifetime annuities to ease the pressure on age pensions. New ways of financing long-term care would also appear to be essential in preparing for population ageing.

Moreover, as recently pointed out by Veronica Sheen, obtaining and maintaining employment in later life is not straightforward. The loss of a job, and difficulties finding another, tend to precipitate a decision to retire. Age discrimination barriers are significant and need to be addressed. Work-life balance issues become more sharply defined with age.

Increased workforce participation among older people also has potential costs in other important areas of social life. Women’s lower participation in the labour force partly reflects their greater family responsibilities (looking after elderly parents, for example). Workforce practices that allow these responsibilities to be more effectively shared between men and women will need to be developed.

More fundamentally, it isn’t clear that the federal government’s budget challenge is primarily caused by the level of spending on age pensions. Australia currently has the fourth-lowest level of public pension spending of any OECD country and is projected by 2050 to have the third-lowest level of pension spending.

Where Australia is unusual is that it has by far the highest level of tax concessions for private pensions in the OECD, at four times the OECD average, and people of pension age pay much lower taxes than workers at the same level of gross income.

A fair and effective approach to the challenges of population ageing would involve much more than increasing the pension age. •

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WITH THE federal budget looming, Joe Hockey has flagged two possible changes to pensions. The first, raising the age at which individuals become eligible for the age pension to seventy years, has attracted widespread media coverage, in part because its impact is easy to grasp. The second, modifying the indexation of pensions, has received relatively little scrutiny, yet represents a profound structural reform. It would affect not only senior citizens, but also those receiving a disability support pension or the carer payment.

In the 2012–13 financial year, there were 2.36 million age pensioners, 822,000 disability support pensioners and 220,000 people receiving the carer payment; taken together, these pensions account for around half of all government expenditure on benefits. But the complicated rules governing indexation make it very difficult for recipients to work out what the changes would mean for them.

Pension base rates are currently indexed on two indexation days in March and September. The pension increases in line with prices or wages, whichever have increased the most over the preceding period. Two measures of prices are used. In addition to the usual Consumer Price Index, or CPI, the Rudd government’s pension reforms, which came into effect in September 2009, established the Pensioner and Beneficiary Cost of Living Index, or PBLCI. The two indices are related, but the PBLCI more closely reflects the spending patterns of individuals on government benefits. Whereas the basket of goods used to calculate the CPI includes house purchases, the PBLCI instead considers mortgage repayments – age pensioners may still be paying off their home, but are unlikely to buy a new one.

Since its introduction, the PBLCI has resulted in a better outcome for pensioners on three out of ten indexation days, reflecting that the cost of living for those on government benefits has been increasing in real terms. Indeed, it has outstripped the CPI on five of the ten indexation days, so its effect on current pension rates of payment would be even more pronounced were it not usually masked by wage indexation.

Because wages tend to grow faster than prices, wage indexation has determined six of the last ten pension increases. Under current arrangements, single pensioners cannot receive less than 27.70 per cent of what the Australian Bureau of Statistics refers to as male total average weekly earnings; the corresponding benchmark for pensioner couples stands at 41.76 per cent. This is the mechanism of pension indexation which Hockey has suggested may need to go.

Making sense of all the moving parts becomes simpler with a few numbers. In September 2009, the single pension basic rate stood at $615.80 per fortnight. Since then, it has increased to $766.00 per fortnight. Now suppose that as part of its 2009 pension reforms, the Rudd government had abolished wage indexation. Under this scenario, the pension would have only increased to $701.80. After four and a half years, a single pensioner would have forgone indexation increases of $64.20 per fortnight; pensioner couples would be $96.80 per fortnight worse off. The chart shows that wage indexation has contributed 43 per cent of the increase in the single pension basic rate since September 2009.

Indexation of the single basic pension rate (per fortnight)

Abolishing wage indexation of pensions would constrain them to increase in line with other government benefits like Newstart Allowance, the basic unemployment benefit. Pensions would no longer keep pace with wages for those who provide care or who cannot participate in the workforce due to age or disability; the pension would instead provide for a fixed standard of living based on what the government, at one point in time, considered to be an adequate level of consumption for these groups of people.

In 2009, the Rudd government offset part of the cost of providing more generous pensions by tightening the income test and increasing the age pension age from sixty-five to sixty-seven years. This time around, the Abbott government is preparing voters for a rise in the eligibility age and lower indexation increases. And while it seems highly unlikely that any government would risk alienating pensioner voters with such a harsh reform – even if the full effect of abolishing wage indexation would not be felt for some years – the complexity of the pension and its indexation rules leaves plenty of opportunities for governments to leave their stamp. That same complexity also makes it very difficult for those who depend on the pension for their livelihood, rather than for their legacy as responsible fiscal managers, to interpret rumours in the lead-up to the budget. •

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A FEW days ago I turned seventy-five but, truth be told, I’ve been pondering the three-quarter-century mark ever since I reached seventy-four. Why it’s a milestone is hard to say, as it is with any kind of milestone. Officially, I became old on my sixtieth birthday, fifteen years ago. That’s when I got the treasured seniors card that enables me to travel on public transport at mercifully reasonable rates, although recent changes in the age pension mean that I wouldn’t now be eligible for it until I’d lived another year and a bit. Later, had I had superannuation, I would have been able to access my annuity tax-free, but I didn’t and, as a working senior, I still contribute to consolidated revenue in the form of income taxes. On the face of it, Commonwealth treasurers since Peter Costello must love me, but that isn’t so.

From the point of view of any treasurer, seniors like me pose a problem. We are living too long and there are too many of us. What’s more, our numbers are ballooning. For decades we were warned that when the baby-boomer cohort reached retirement age there would be too few taxpayers to support the drain on our pension and health systems. In response to this dire scenario, the Hawke–Keating government introduced compulsory superannuation. Some thirty years later, the scheme has become so sacrosanct that it’s almost impossible to argue that it has its own costs, although some fine minds such as Brian Toohey and others have been brave enough to do so. Another, less expensive response has been to raise by increments the official retirement age — the age, that is, when, all things being equal, you’re eligible to get the age pension or a part thereof. The Rudd–Gillard government’s objective was to raise this to sixty-seven, and as far as I can tell the Coalition will continue nudging it up, maybe to seventy.

Baldly put, what we see here is the profound and largely consensual impact that neoliberalism has had on growing old. If ever-lower taxes are the sine qua non of the good economy, then individuals must shoulder the bulk of the responsibility for their retirement, even if that means postponing it to an ever-rising age. This is the theory, anyway. That it has inbuilt contradictions and doesn’t quite fit the facts is another matter. The Labor government raised the age pension and tried to inject a smidgen of equity by proposing a tax on super payouts over $100,000, but Tony Abbott is reversing that. He’s also abolishing the Advisory Panel on Positive Ageing because it has “outlived” its “original purpose” and doesn’t forward Coalition objectives, whatever that means.

For all the figures and modelling supporting these policies, they are largely a consequence of our unbelievably varied but largely negative views about ageing and death. Both Patricia Edgar and Lynne Segal have made these views their subject. As Edgar’s title suggests, her aim is to counter the negativity associated with age in our resolutely secular yet market-worshipping society. Segal’s approach is similar but more expansive, drawing on the work of a range of writers grappling with the essentially paradoxical phenomenon of avoiding death only to find oneself old. Although their takes on the subject are radically different, both have written absorbing accounts of just what it means to look into the mirror and think: Wow! Who is that grey-headed/puffy-eyed/wattle-cheeked/hunchbacked/wrinkled prune of a stranger?

PATRICIA Edgar, founder and former head of the Australian Children’s Television Foundation, is a year older than I am and, formally at least, has retired. While taking issue with many of the givens about ageing that underpin government policy, Edgar places the burden of her arguments on eight “elders,” seven women and men in their eighties and nineties, and a centenarian who has since died. In Praise of Ageing is, accordingly, “about active, engaged older people who are enjoying their lives and continuing to contribute.” Edgar maintains that these elders of hers represent the true trend, not the spectre of disease and dependency that governments and policy-makers routinely hold up to us.

Let’s begin, then, with her centenarian. Muriel Crabtree was born in 1908 in Launceston. In 1925 her family moved to Melbourne so that she could take up tertiary study — unusual support for a girl in those days, for a start. She graduated in science in 1930, received a first-class master’s degree in biochemistry a year later, and then took up a graduate scholarship at the American Ivy League women’s college Bryn Mawr. She pursued a scientific career in England and on the continent and returned to Australia just before the outbreak of the second world war. Later, she was the deputy principal of Melbourne University Women’s College when Edgar was a student there. Crabtree, in short, was a high achiever, though she did face discrimination in seeking promotion in her chosen field. But the most remarkable thing about her, for Edgar’s and our purposes, was how she changed direction entirely and became an artist in later years. Then, after a fall compromised her mobility, she was confined unhappily in a nursing home where — until Edgar and others made a sufficient fuss — she wasn’t allowed to continue producing her pastels. She died, aged 102, just before an exhibition of her work was opened by the governor-general, Quentin Bryce.

Jim Brierley’s is the most amazing of Edgar’s stories by my reckoning, even though at eighty-nine he’s the youngster among her subjects, “a classic example of someone who has reinvented himself many times in his work and his private life following trauma and cultural change.” What distinguishes him for me (bearing in mind that I effectively gave up driving seven years ago) is how he continues to jump out of planes. A paratrooper in the war, he began jumping again at fifty-eight after his first wife died, and at the time of Edgar’s writing had jumped some 3200 times.

But the story I connected with most was Mary Owen’s. I knew Mary back in the 1970s at the height of my involvement in the women’s movement, when I was a Canberra femocrat and she had started up the very influential Working Women’s Centre in Melbourne. It astounded me to read that Mary was now ninety-two: first, because I couldn’t imagine any of us being that old — but, yes, some of us truly are, with others not far behind — and second, because I remembered her as a chain smoker and would never have dreamt it possible that she could reach such a grand old age. Apparently, though, she never inhaled, and in any case gave up the habit after a mini-stroke.

MARY was a friend in the flesh. The many friends Lynne Segal has reminded me of are writer friends, people I’ve never met but whose works have electrified me through the years — old companions such as Simone de Beauvoir, Germaine Greer, Joan Didion, Saul Bellow, John Berger and Julian Barnes, to pick out a few. Then there are the writers Segal has introduced me to, including May Sarton, Diana Athill and Stanley Kunitz, implanting an impossibly greedy desire in me to wolf down everything they’ve written before I succumb to either blindness or death. But these short lists give no real idea of the breadth of Segal’s reading on her mission to plumb the phenomenon of ageing.

Segal is an Australian who has lived in England for many years. Like Edgar, she’s a feminist, but of a very different stripe. For the most part, Edgar’s life has followed a relatively stable trajectory: a country childhood nurtured by a loving family firmly plugged into the local community, followed by a career and a marriage of fifty-four years. Segal, born in 1944, has been an activist, academic and author of many books, including the memoir Making Trouble: Life and Politics, which came out in 2007. Unlike Edgar, Segal has had varied relationships and partners, has lived in alternative communities and now lives alone. In contrast to Edgar’s generally positive spin, Segal is more reflective and ambivalent, and it’s not insignificant that her subtitle gives equal weight to the perils of ageing and its pleasures. But if Segal’s has been the bumpier ride, that has made her insights all the more challenging and intriguing, and her book that much denser and, it should be said, more taxing to read.

The first of Out of Time’s six chapters is devoted to the surprisingly difficult task of measuring “old age” and, indeed, of deciding what it actually means — difficult because we age at differing rates, but also because of the complex emotions that colour the process, and our equally complicated attitudes to it. The feminist critic Elaine Showalter opens the book’s introduction with these provocative words: “It’s not easy to come out as an old person, especially as an old woman.” The words “coming out” are deliberately chosen to demonstrate just how different it is from coming out gay. As hard as that is, there’s a significant and outspoken minority to welcome and support anyone who makes the avowal. Acknowledging being old, on the other hand, can be tantamount to consigning yourself to irrelevance. “Identifying yourself as old is to admit to something everyone can see, and thus is somehow more shaming, carrying more of a stigma,” writes Showalter. The real comparison, she contends, is not with coming out gay but with owning up to being fat.

But ageing is not about the body’s decline alone. Like many aspects of human life, it’s a cultural construct, accentuated now by our rapidly increasing longevity — sixty, as one ad I came across recently would have it, being the new thirty-five. While that’s a tad overstating it, Edgar’s eight elders certainly demonstrate the vigour of people in their eighties and nineties, and Segal argues that the very notions of “ageing well” or “badly” are bound up in the neoliberal ideologies of Western democracies. She, too, presents us with a sufficient number of “narratives of resistance” to refute this pernicious dichotomy, and it’s here that we find her approach and Edgar’s most closely aligned.

But Segal’s examination goes beyond demographics and heroics, dipping into art, culture and, occasionally, the treasures of the psyche. Her interest in psychoanalysis is prompted by a recognition of the unconscious’s ageless self. In our dreams, we are usually young, averaging around thirty-five, but it’s only recently that psychoanalysts have begun to seriously investigate this phenomenon. Freud himself found old age abhorrent, leaving us to speculate that this might have been the source of his lack of interest. In “The Uncanny,” an essay published in 1919, he related the repulsiveness of old people to their intimation of mortality and to atavistic fears of visitations from the dead.

In her chapter on intergenerational warfare Segal throws a cloak of political culture on the issue, writing of the deep antagonism of women towards their mothers that characterised the women’s movement in the sixties, seventies and eighties. But her most illuminating findings, from my point of view, concern the workings of memory, the assertion that, far from losing it, as is generally believed, the ageing mind is “dense” with it, with past and present interleaved in a kind of palimpsest — “layers,” not “litter,” as she quotes from the poet Stanley Kunitz.

FOR all the forensic investigations of the subject — scientific, economic, or popular — the wisdom, for my money, comes from writers and poets. And what a magnificent bunch Segal has brought together. Many, Philip Roth most famously perhaps, rail against age’s indignities, though Segal suspects that resistance to its ravages is more likely to be felt by redundant males than by women who’ve been conditioned since childhood to accommodate themselves to whatever circumstance they find themselves in. Still, there are enough of both sexes who exhibit a kindly sensitivity to the passing of time to earn Segal’s special praise. Julian Barnes is one, as is Stanley Kunitz. Another is Penelope Lively.

Lively’s enchanting Ammonites and Leaping Fish is not exactly a memoir, but one woman’s penetrating backward glance on a long and satisfying life. “The view from old age,” is how this accomplished author puts it. She has confined herself to five topics — old age itself, the historical dimension of her life and times, the mystery of memory, the pivotal place of reading and writing in her life, and six objects she has carried with her through the years because of their significance for her. Each of these is explored in an essay informed by the idiosyncratic mix of ease and formality that’s a hallmark of Lively’s writing.

Everything that’s been examined by Edgar and Segal is here, condensed yet somehow extended by Lively’s wit and sagacity. She is eighty years old, has had her fair share of health problems — including macular degeneration, the abiding fear of all ageing writers — but her words are as crisp and full of magic as newly fallen snow. Throughout history (that underrated yet hotly contentious discipline Lively read at Oxford and remains devoted to) there have never been so many old people. “We are the pioneers,” writes Lively, “an established group gobbling up benefits and giving grief to government agencies.”

So, what to do? It seems to me — even more after reading and reading around these three remarkable books — that the aged are a problem only when we’re poor, and societies allowed to become ever more unequal will be burdened, one way or another, with the impecunious elderly. Compulsory superannuation was meant to change this, but as it’s panned out it’s been so only for a relative few, and the charge on our revenue must continue to be enormous unless governments find the political will to rein in the concessions made to the wealthy and redistribute resources more fairly.

As for me, I always felt ageing was the perfect state for a writer, to be forever that invisible fly on the wall rather than attract the kind of attention the young inevitably clamour for (notwithstanding the need to garner just enough notice to continue in our profession). But a few weeks ago I foolishly ran for a bus, tripped, fell and, though I was lucky not to have broken any bones, I’ve been full of aches and pains ever since. Old age may not be much fun after all. But before I began to feel really sorry for myself, I received Lively’s book to review. Now, sore as I am, I’m happy to be kicking around, at least for a few more years. You never know what’s waiting in the mailbox. •

The post The ageless question appeared first on Inside Story.

The 2013 election was probably the first in Australian history in which half of the votes were cast by electors aged fifty or over. Although only 47 per cent of people on the electoral roll fall into that age group, the lower voting rate among young adults means it’s highly likely that the older group’s share of actual votes topped 50 per cent.

Twenty years ago, when Paul Keating fought back to defeat John Hewson in the 1993 election, only a third of adults entitled to vote were aged fifty or over. By 2004, when Mark Latham faced John Howard, the figure had grown to 42 per cent. It will continue to creep up, slowly but steadily.

While the challenges posed by an ageing population attract a great deal of attention, this milestone is a reminder that little notice has been paid to the implications of an ageing electorate.

An older electorate complicates and probably narrows the options the federal government has for dealing with an ageing society. For evidence, look no further than the experience of the Howard government. Faced with the policy pressures of demographic change, treasurer Peter Costello frequently asserted that the federal government needed to curb overly generous benefits for the elderly. But John Howard, faced with what he saw as an electoral imperative, believed that older people were the key to the Coalition’s re-election, and so they needed to be given more, not fewer, handouts.

In the short term, an ageing electorate with manifestly conservative views obviously helps the Coalition. Age cohorts don’t all share the same political outlook, of course: although John Howard may have been born among the people who became the flower-child generation of the sixties, it’s much more likely he was attending a meeting of the Young Fogies Society than dropping out on a hippie commune. But different age groups tend to have distinctive outlooks.

When political scientists look at the correlation between age and voting they offer two types of explanation, each with some validity. In the days when party identification was more stable than it is now, the most important effect was thought to be generational. What were the formative experiences of that age group? These days, the oldest age group voting in Australia is made up of people in the Depression generation, who experienced the traumas of the Great Depression and the second world war as they were growing up but then came to adulthood at the beginning of decades of expanding opportunities and material comforts. Members of that generation are often characterised as more security-oriented than their children and grandchildren (though that doesn’t translate directly to a more conservative voting pattern – they tend to resist the appeals of neoliberalism and deregulation, for example).

In contrast, gen Y adults grew up in an Australia that was in the midst of more than two decades of continuing economic growth. It offered far more opportunities for stimulating (if stressful and insecure) work, but also fewer prospects for accessible home ownership and affordable, high-quality childcare.

Most notably, perhaps, the electorate is becoming greener in outlook. Young adults are not only more likely to vote Green, but they also hold much stronger views about environmental issues. Within the ageing commentariat, “climate sceptics” are still overrepresented; among the newest voters, they are very much scarcer.

Political differences between age groups also arise for a second reason. As they grow older, some people become more fixed in their views; some react against the pace and scale of change; some become less tolerant towards crime, asylum seekers and other perceived threats; and some are less sensitive to emerging challenges, such as environmental issues or the problems faced by young families. On balance, these tendencies benefit the more conservative parties. Combined with the generational effect, they mean that the electoral impact of an ageing society won’t always be predictable. But we can get a sense of its impact on the 2013 federal election result by conducting an artificial but revealing experiment.

Imagine that Australia was electing two houses of parliament, each consisting of 100 members, on a national, proportional basis – one house chosen by the under-fifties, the other by the fifty-and-overs. (This is quite different, of course, from the system we use in the House of Representatives, which turns an almost permanently “hung” electorate – where no party attracts more than 50 per cent of primary votes – into a clear majority for one of the major parties.) For simplicity, the votes for the micro-parties – mainly the Palmer United Party – and for independents, which are usually clustered in local areas rather than spread nationally, have been combined as a national figure for “Other.”

Based on Newspoll data gathered just before the 2013 election, our two houses would look like this:

Older voters’ house (voters fifty years and over)

52 Liberal–National
32 Labor
7 Greens
9 Others

Younger voters’ house (voters eighteen to forty-nine years)

42 Liberal–National
36 Labor
13 Greens
9 Others

In the older people’s house, the conservatives have a slashing majority. If we assume that six of the nine Others would align themselves with the Coalition, then it would hold the house by a 58–42 margin.

In the younger people’s house, the Coalition and the six-out-of-nine Others would only have a combined forty-eight seats, and Labor and the Greens would have a bare majority. In a year when Labor and the Greens both polled badly, this contrasts strikingly with the other house. Support for the Greens was almost twice as high as in the older people’s house, and support for the Coalition parties ten percentage points lower. (This week’s Fairfax Nielsen poll found an even larger gap in support between young and older voters.)

More basic than the question of which party benefits from an ageing electorate is the impact ageing has on policy-making. As the electorate gets older, the ever-present tendency to allow immediate electoral expedience to override longer-term planning and considerations of inter-generational justice can become more pronounced. The danger is that Australian politics will be more backward- than forward-looking. Given its voter base, will Tony Abbott preside over a government by the old, for the old? •

The post Government by the old, for the old? appeared first on Inside Story.

ONE of my regular neighbourhood walks takes me past a fine example of Queen Anne architecture. The elegant family home has three sculptural red-brick chimney stacks towering from its multi-gabled roof, its ridge lines capped with decorative terracotta ornaments. A fretwork verandah frames the generous curve of a bay window that greets the street. The house is well maintained, but its charms have begun to look slightly faded in recent years. The paint on the woodwork is no longer fresh and a front garden that was once cared for now looks as if it is simply maintained.

“Mary,” who owns the house, is in her late eighties and has lived there alone since the death of her husband several years ago. In popular parlance, she is the archetypal little old lady rattling around in the old family home. In the language of public policy and economics, Mary is an “overconsumer” of housing and her choice of dwelling is “inefficient.” By living in a residence that could comfortably accommodate a family, Mary is contributing to the “underutilisation” of Australian housing. Put another way, she is helping to reduce supply and inflate prices.

The number of older Australians like Mary who live alone in large homes is startling. An analysis of 2011 census data reveals that of homeowners aged seventy and over who live alone, 62 per cent have a house with three or more bedrooms. That adds up to 238,078 houses with at least three bedrooms occupied by just one person. The situation is similar for houses owned by older couples (with at least one partner aged over seventy): 82 per cent of these dwellings – 332,752 houses – have at least three bedrooms.

The share of older people or couples living alone in large houses is generally higher in regional and rural areas than in capital cities; it is also noticeably higher in Western Australia and Queensland than in the other states. Older homeowners in the Australian Capital Territory are the real standout, however: more than three quarters (77 per cent) of older singles in the ACT reside in a house with three or more bedrooms, as do more than nine-out-of-ten older couples (93 per cent).

Given the way that ageing is transforming Australian society, the phenomenon appears certain to become much more pronounced. In its 2010 Intergenerational Report, Treasury projected that the share of the population aged over sixty-five would rise from 13 per cent to 23 per cent by 2050 (an increase from three million to more than seven million people). Within that group, the number of “very old people” – people aged eighty-five or more – is expected to more than quadruple, from 400,000 to 1.8 million. Since close to 80 per cent of Australians aged sixty-five or older own their own homes, that means legions of Marys are potentially “rattling around” in large houses.

In addition, the final act of the outgoing parliament was to pass the final legislative elements of the Living Better, Living Longer package, which will see the focus of aged-care policy and funding shift even further towards providing support to people in their homes rather than in residential facilities. In many ways this is a welcome reform, since most people want to remain living independently for as long as they can. It could have a downside, however, if it encourages older people to stay in houses that are too big for them and that they can no longer keep in good condition. If more and more older Australians end up living in unsuitable, poorly maintained housing, then the costs of delivering aged care to the home will rise rapidly as service providers, and by extension governments, are called on to provide more cleaning, repairs and modifications.

Not only that, but if the share of older Australians living alone or as couples in large houses continues to increase, then underutilisation will exacerbate the shortages and cost pressures that already strain our housing system. It will delay the redevelopment of the middle rings of Australian cities – the so-called greyfield suburbs – where there is great potential to increase affordability and sustainability by replacing ageing detached houses on large blocks with more diverse, medium-density dwellings.

But it would be highly presumptuous, even draconian, to insist that someone like Mary should downsize simply because she has grown older and now lives alone in an empty nest. People of all ages live in houses that have many more rooms than occupants. I could include myself in this category, along with numerous friends and acquaintances who might take offence if I were to tell them that their housing choices were “inefficient” and amounted to “overconsumption” or “underutilisation.” Those spare bedrooms are needed for visiting friends and family, as home offices, studios or music rooms, or to provide a refuge when sleep is impossible because a partner is snoring. The big backyard is needed for pets, for outdoor entertaining, for children to play in, or for growing vegies.

One other factor that we may fail to recognise, or at least admit to ourselves, is that an owner-occupied house in Australia is a highly tax-effective vehicle for accumulating, storing and passing on wealth. Under such conditions, it is hardly surprising that those who can afford to do so often buy houses that are larger than we might actually need.

THE idea that it is inappropriate for older couples or older single people to continue living in large houses is known as “the mismatch argument.” Crudely put, it is an argument that denies agency to older people, especially older women, by suggesting that they don’t know what is best for them and have therefore become trapped in dwellings that are too large and too expensive to heat and cool, to keep clean and to maintain. The argument takes no account of how older people might use and enjoy their extra rooms for hobbies, professional activities, accommodating guests, study, entertaining or hosting family gatherings – activities that often make a major contribution to an older person’s physical and psychological wellbeing. The mismatch argument often has a moralistic undertone, a suggestion that by “underutilising” big houses, old people are denying others, especially young families, the chance to live in an ideal home.

On an individual level, Mary’s choices, like mine and like those of my friends and acquaintances, are entirely a personal concern. At a societal level, however, the sum of our private choices can add up to a major public problem. The point is not to tell Mary or anyone else how to live their lives, but to recognise that our choices are framed by policies that create incentives and disincentives that have a profound impact on outcomes. If these policies deter older homeowners from downsizing then this acts as a brake on supply and keeps housing costs high.

Nor is it being morally judgemental to acknowledge that housing purchased at a particular stage in life may no longer be suitable in altered circumstances. A freestanding three-bedroom home bought by a working couple to raise a family in is not necessarily ideal for a widow like Mary in her eighties.

If government policies deter older homeowners like Mary from downsizing, then their choices are potentially being constrained rather than expanded. As a result, their wealth will remain locked up in real estate rather than being used to make later years more comfortable. Someone who “overconsumes” housing is apt to “underconsume” other goods and services, particularly if he or she is on a fixed income like the pension, and could end up shivering frugally in a cold, rundown but spacious house, rather than turning on the heating or calling in a plumber.

A range of newer financial instruments – including reverse mortgages and partial sales – can enable older homeowners to convert some of their equity into cash to meet immediate needs without moving house. But in a paper for the Australian Housing and Urban Research Institute, or AHURI, Rachel Ong and her co-authors note that retired homeowners typically “appear to view housing wealth as precautionary savings that are only rolled out in extreme circumstances.” In other words, people are often reluctant to draw down on their housing wealth to meet current expenses.

Evidence of this could be seen recently on another of my local walks, which took me past a house in a leafy street with a neatly made protest sign posted in the front garden. The sign criticised the local council’s refusal to offer discounted rates to the resident, a single pensioner. Given that the house was probably worth well over a million dollars, it was hard to feel a great deal of sympathy for the homeowner’s plight.

There is evidence that many Australians are open to the idea of moving into a smaller residence as they grow older. A detailed survey carried out by AHURI reveals that while the majority of us want to “age-in-place,” this doesn’t necessarily mean that we expect to stay in the same house. For most, attachment is less to a particular pile of bricks and mortar than to a local area – to the network of friends, services and familiar places that bind them to a community.

SO WHY don’t more people downsize and either indulge in a bit more SKIing (Spending the Kids Inheritance), or acting like OWLS (Oldies Withdrawing Loot Sensibly)? There are two answers to this question. The first has to do with the type of housing we build, the second with the way we tax it.

Almost three-quarters of occupied private dwellings in Australia have three bedrooms or more. As a result, people who want to move to a smaller house have limited options, especially if they want to stay in the same locality. Zoning and planning rules often exacerbate this situation by inhibiting the construction of more diverse housing stock. Under a new zoning system introduced in Victoria, for instance, local governments have been given extensive powers to determine what kinds of development can take place in different locations. The City of Glen Eira in Melbourne’s southeast is the first local government to implement the system. It has classified almost 80 per cent of the municipality as a Neighbourhood Residential Zone. This enforces a binding two-storey height limit on all buildings and a limit of two dwellings per lot. The aim is to protect the amenity and character of quiet residential streets and concentrate higher-density development along major roads, public transport routes and shopping strips. It’s likely that most Glen Eira residents are pleased with the immediate outcome, but in the long term the planning may not serve them so well. Any residents who want to transition in future from a freestanding family-sized home to something smaller will almost certainly find that they have to leave Glen Eira’s leafy streets behind.

But a lack of housing choice is not the biggest barrier to downsizing for older Australians. More important is the way we tax property and the way this interacts with pension payments.

Let’s return to the example of Mary. She has no economic incentive to move into a smaller residence. Quite the opposite: were she to downsize, Mary would be financially penalised. First there is the transaction cost of any move – particularly stamp duty, which would amount to tens of thousands of dollars. Second, because her home is her primary residence, it is exempt from the assets test for the aged pension; if Mary were to sell the house, though, the proceeds from its sale would not be exempt.

Given its location in a quiet, tree-lined street close to a park, shops and transport, Mary’s Queen Anne home would be worth more than a million dollars. If she swapped it for a $500,000 unit and saved the difference, then she might well find herself ineligible for the aged pension. For a single homeowner with assets worth up to $196,750, the basic pension is currently $733.70 per fortnight. For every $1000 in assets beyond that threshold, the pension reduces by $1.50. In other words, if Mary downsizes, then for every $100,000 that she puts in the bank she stands to lose $150 a fortnight, or about 20 per cent of her age pension.

The Productivity Commission recognised this problem in its comprehensive review of aged-care policy, Caring for Older Australians. Its recommended “first best option” was that the means test for the age pension should treat income and assets “in a consistent manner.” In other words, certain types of wealth such as a family home should not be excluded from the assets test or treated differently from other types of wealth, like bank deposits or shares. Recognising that this was unlikely to be adopted as policy, the Commission recommended a more politically palatable fix in the form of a government-backed Australian Age Pensioners Savings Account Scheme. Older Australians would be able sell their homes, and deposit the proceeds in the account, without affecting their government entitlements.

The government initially rejected this recommendation on the basis that it would increase pension outlays and would be expensive to set up and administer. In the most recent budget, however, the Gillard government announced that it would trial a similar but much more limited scheme over three years, beginning in July 2014. Under the trial, which is set to cost $112.4 million and benefit around 30,000 people, pensioners will be able to put up to $200,000 from the sale of their home into a special account that is exempt from the assets test. The trial is hedged with caveats. To be eligible, pensioners must have lived in their own home for at least twenty-five years. Funds are only exempt from the pension test if they remain in the account. This rather undermines the thrust of the Productivity Commission’s original recommendations, which were designed not only to encourage retirees to downsize but also to free up the capital in their homes so that they could use it for other purposes, including making a greater contribution to the cost of their own care.

There is a deeper and more fundamental objection to the pilot project – and to the Productivity Commission’s proposed Australian Age Pensioners Savings Account. Schemes like this will only benefit those who already have substantial housing wealth, and will exacerbate rather than redress inequality. They offer nothing to older Australians who live in rented accommodation or to those who own poorly located property that is not worth much money.

Given the potential value of her house, Mary could do well even without the Commission’s plan. If she were to downsize, by either purchasing or renting a smaller dwelling, then she could probably spend the rest of her days living comfortably on the proceeds from selling her house, without ever needing to draw a pension. The only loser in this case would be Mary’s son, who would see his inheritance gradually reduced.

AND this brings us to the nub of the issue. In Australia, the family home is exempt from any form of taxation except the stamp duty paid on purchase. It is exempt from both capital gains tax and land tax and is not included in the assets test for the age pension. As a result, we use the family home as the primary store of personal wealth to be passed on to the next generation.

In research commissioned by the Brotherhood of St Laurence, economist Judy Yates calculated that in 2005–06 owner-occupiers benefited from government tax expenditures (that is, revenue forgone) totalling $45 billion. In a background paper for the Henry Tax Review in 2010, researcher Gavin Wood and his colleagues showed how these substantial benefits to homeowners increase with age and wealth. They calculated that, in 2006, the tax treatment of the primary residence represented an annual average subsidy of more than $5000 to homeowners aged over sixty-five. The exemption of the primary residence from the pension assets test increased the subsidy, on average, by another $2500.

Older Australian homeowners have “huge incentives to stay put,” says Yates, because they are getting the equivalent of a tax-free income. “They have almost no housing costs and sit on an asset that has the potential to appreciate. Unless you start removing those kinds of incentives, there are not a lot of reasons to trade down, especially for people whose houses are already in good locations.”

A high rate of home ownership has enabled Australian governments to keep pension rates relatively low by international standards, because most retirees do not have to pay rent. In many ways, this has served the nation well, but the system is beginning to fray at the edges. The incentives to use the family home as a store of wealth contribute to house price inflation, and as Yates has shown, the decline in affordability is contributing to a decline in home ownership rates in younger age groups. Already there is a strong correlation between renting and poverty among older Australians. In future, an increasing number of pensioners might not have the traditional welfare buffer of owning their home.

Government now also offers huge tax concessions on superannuation, a second form of wealth accumulation that is meant to fund an increasingly long-lived old age. It is debatable how long the nation will be able to afford to maintain both schemes as the ratio of working-age adults to retirees declines. It is also questionable whether a better society will emerge from two tax concessions that increase inequality by offering disproportionate advantages to the wealthy and those on high incomes.

Once a benefit has been granted, though, it is very hard to take it away. The concessional tax treatment of the family home is so entrenched that it has become deeply embedded in our cultural assumptions. We feel that we have a right to stay in our homes and pass them on to our kids. We worked hard to acquire property, doing it tough to pay off mortgages while riding the interest-rate roller coaster. The subsidies that support our home ownership remain largely invisible to us. To suggest that the family home should be taxed, or included in the pension assets test, is to risk being labelled unAustralian. There is no sign that either side of politics will be brave enough to canvass such radical ideas.

The one tax reform that could conceivably be implemented with bipartisan support would be the abolition of stamp duty and its replacement with a broad-based tax on the value of land. The ACT is the only jurisdiction in Australia currently moving in this direction. It is recognised across the political spectrum that stamp duty adds to Australia’s housing affordability problems and has other negative side effects, such as discouraging people from moving from regions of low employment to places where the job prospects are better. By reducing the transactional costs of moving house, the abolition of stamp duty would remove one significant impediment to downsizing with age. A land tax would also capture some of the windfall gains that accrue to home-owners from sitting on a well-located property, and from government investments in civic improvements and better infrastructure. And as Judy Yates points out, “the arrival of an annual land tax bill might also prompt some older Australians to ask themselves whether they really want to be paying for the privilege of living in such a large house.”

I don’t know why Mary has chosen to stay in a house that is much larger than her apparent needs. Perhaps it is because she likes the area. Mary is on friendly terms with her neighbours, who often phone or drop by to make sure that all is well. Perhaps she has never seen any reason to move. Perhaps she has considered moving but feared it would disrupt the network of friendships that anchor her in the community. Perhaps she likes to live surrounded by her memories in the home where she and her late husband raised a family. Whatever her reasons, Mary has every right to stay put. The question is whether the tax and pension systems should be encouraging her to do so, or whether it is time to change the policy mix in a way that might prompt her to consider other options and also help to make Australia’s housing more affordable and more equitable. •

The post The rising costs of the great Australian dream appeared first on Inside Story.

There is a scene in Todd Phillips’s buddy film The Hangover (2009) that reminds us, even as we celebrate the contemporary phenomenon of extended youth, that nothing lasts forever and that a day of chronological reckoning will come. Three latter-day musketeers, having misplaced the fourth, are quizzing a hospital resident in an effort to fill in the drug-induced blanks of the previous night and find their lost friend. As he responds to their questions, the doctor continues in a routine and detached way to examine an elderly patient. The old man, dressed only and unflatteringly in his underpants, is both in the scene and out of it. The chatter goes on around him, but he doesn’t speak, other than to thank the doctor politely at the end of the examination. He is, we infer, suffering a form of disorientation and disconnection that is beyond restoration.

It is a funny scene, not least because the joke is on the young(ish) men as much as on the old man. As he sits there in biddable silence, he embodies a state of mind – of being acted upon rather than acting, of forgetting what happened yesterday – that is so central to our perception of what it means to be really old that, like the hyperactive heroes, we can hardly bear to look for fear of having to confront what may lie ahead. It is one of the most unsettling of twenty-first-century dilemmas: forty may be the new thirty, and sixty the new fifty, but surely the day will come when we are forced to relinquish our youth – when no more extensions will be granted – and accept, with as good a grace as we can muster, that old is old?

But then again, maybe not. If we take as our guide another film, one that focuses directly on the aged rather than glimpsing them via the gaze of the young, things can look rather different and rather more encouraging. Stephen Walker’s documentary Young@Heart, made for television in 2006 and subsequently released in a theatrical version in 2008, follows a choir of the elderly – current members are aged from seventy-three to eighty-nine – through the process of preparing for a major concert. Within the relatively low-key world of documentary films, it has done very well (so well, in fact, that it is scheduled for a “narrative remake” by Working Title). It is frequently re-screened, and has won numerous audience awards at film and music festivals around the world. The sight (and sounds) of older people putting in the hard work and long hours of rehearsal to perfect their performance is genuinely uplifting, testament to the revitalising power of music and of a shared commitment to a common end.

But a good part of the popularity and impact of the film can also be attributed to the contrast between the age of the performers and the age of the songs they sing: pop and rock classics decades younger than the people singing them. It is a contrast that produces, for instance, a particularly resonant rendition of the Ramones’ 1978 hit, “I Wanna Be Sedated.” Looking ahead, though, it can be only a matter of time – in fact the process may already have started – before the newer recruits to the Young@Heart chorus will be more nearly contemporaneous with their concert repertoire. The songs of the 1960s, 70s and eventually 80s will, in a very real sense, be their own. What difference will this convergence make, to them and to their audience?

This question – what happens when we re-enact and reinhabit our own past – is one that Ellen Langer, professor of psychology at Harvard, has been researching for much of her career. In Counterclockwise: Mindful Health and the Power of Possibility, Langer recalls an experiment she first conducted with her graduate students more than thirty years ago. For a week, a group of elderly men were sequestered in a location that had been got up to mimic the world of two decades before: its furniture, its food, its music, films and newspapers.

By being obliged to live in the past, and to speak of it in the present tense, the men quickly reacquired much of the sociability, confidence, and mental and physical agility of their younger, prime-of-life selves. They were being “cued” to be vital and energetic and they had, temporarily at least, broken the cycle of decline. (A second group of men participated in the same experiment, with one crucial difference: in their interactions with one another, they spoke of the past as the past. This group also improved, but not as much.)

Langer’s work forms the basis of a recently aired BBC series called The Young Ones, in which six octogenarians are brought together in a house that has been turned into a 1970s time capsule. There they are left alone, apart from the cameras, to get on with it, without the benefit of any outside help. We see improvements, including physiological improvements, just like those in the original experiment, some of them manifesting themselves in only a matter of a few days. The participants, stimulated by the right cues, get younger.

There seems little doubt that the experiment works: the executive producer of The Young Ones, Tom McDonald, records in a BBC blog posting how he looked on in amazement as “the atmosphere in the house changed from being a slightly sad retreat for some very nice elderly celebrities into being a dynamic, living, breathing space where collectively everyone was living as their younger selves.” It is not so clear quite how this happens, or what exactly the “cues” are and how they produce the effects that they do. Neither Langer in her book nor the television program really pins this down.

Being immersed in a time in which they were confident and in charge seems to prime the participants to be confident and in charge once again. But there are other things going on too: companionship, shared laughter, and a stimulating change of scene; the sense of renewed connection with the world events that shaped their lives rather than of being overwhelmed by the one-damn-thing-after-another of the twenty-four-hour news cycle; the enforced mutual- and self-reliance in the face of the sudden absence of helpers and carers; the feeling of being involved in something significant and of great scientific interest. All these and more could potentially be playing a part.

Langer is not, in any case, saying that in order to feel younger, old people should live in the past. Her point, both more subtle and more difficult to act on, is that as we age further and further into the last third or so of what is now a normal lifespan of seventy or more years, we increasingly follow a set of cues that are recognised by all – young and old alike – as signalling not vitality and active participation in the world, but decline and the inevitable loss of capacity. If, for instance, young people are culturally programmed to speak more slowly and to articulate more carefully to old people, then the old will continue to slow down, perpetuating a reflexive cycle of cues. Langer has no patience with this learned behaviour. For her, our life stories are not – or rather, they need not be – conventional narratives, made up of a beginning, a middle, and a slow, sad and disappointing end. Decline is not pre-ordained.

What happens, she asks by way of example, if we reverse the standard order of the typical eye chart, in which the letters start large and gradually get smaller, and instead have the lines of letters progress from small at the top to large at the bottom? Rather than reaching a point we have already anticipated, where we know we won’t be able to read the letters, we move instead from the smaller letters to the larger ones, towards capacity and achievement. But more than that, we find that by doing it this way we can actually read more of the letters. Quoting research conducted by Harvard colleagues and published in 2009, Langer records how participants in just such an experiment, faced with the reversed chart, “were able to read lines they couldn’t see before on a standard eye chart.” Tantalisingly, she doesn’t follow up on her next remark: when asked to assess their own performance, the subjects in the experiment “thought they did better on the normal chart.”

As this experiment shows, the effect of reversing convention is that “people can see what they couldn’t see before.” If we cultivate and maintain what Langer calls mindfulness, if we remain alert to the possibilities of novelty and reinterpretation, if we force ourselves to do things differently, we will impose ourselves on the world rather than allow ourselves to be imposed upon. “Rather than try to learn from experience,” she says, in a formulation that may in the end say a little less than it seems to, “we might be better off to experience learning.”

In Agewise: Fighting the New Ageism in America, Margaret Morganroth Gullette is even more impatient than Langer at the notion of ageing as an inevitable decline, with the letters just getting inexorably smaller. Ageism, she says, is insidious and “menacing,” a conspiracy to sap confidence and deny competence. Gullette argues for a countervailing “progress narrative,” a kind of “vast, anti-ageist conversation that will move our hearts [and] tune up the policy engines.” But the difficulty with proposing a conversation as a solution is that it isn’t really a solution at all; rather, it is an acknowledgement of the insurmountable nature of the problem. The narrative of ageing as decline is so powerful that it will take more than a conversation, however robust, to turn it in a different direction.

Gullette is surely right, though, to say that for many people ageing “is the new fate worse than death.” She quotes survey data to suggest that “Americans over the age of fifty-five fear Alzheimer’s more than any other disease, even cancer.” What she calls “the terror of forgetting” is, in effect, the fear of losing control over our own lives. In this sense at least, the fear of forgetting is all of a piece with its apparent opposite, namely the very contemporary worry, generated by the rise of the new technologies, that nothing will ever be truly forgotten. In both cases, what we are really frightened of is losing control of how we present ourselves to the world; of, so to speak, losing our minds.

One reason for the cultural dominance of the “decline narrative,” for the fact that old age is, if not the new “fate worse than death,” then at least an equally unattractive prospect, is that many more people are living long enough to be confronted by both. In his engaging overview of what it means to be old, You’re Looking Very Well: The Surprising Nature of Getting Old, the developmental biologist Lewis Wolpert points out that “in the industrialised world in the twentieth century there was an unexpected and unprecedented growth in the older population – some thirty years were added to life, an increase greater than in the previous 5000 years.” Of course, there have always been old people. The difference now is that there are many, many more, with these numbers, both in absolute terms and as a proportion of the total population, set to increase even further, not just in the developed world but in many developing countries as well.

In addition to his professional qualifications, Wolpert speaks with the authority of an octogenarian. His own experience occasionally creeps into You’re Looking Well, further illuminating the summaries he provides of the ever-increasing mass of research into ageing. It is hard, for instance, not to read some personal frustrations behind his account of the phenomenon of “benevolent prejudice,” whereby “the warmth felt towards older people means there is often public acceptance that they are deserving of preferential treatment – for example, concessionary travel.” This is all very well, but what, Wolpert asks, if benevolent prejudice also leads, rather in the manner of Langer’s cultural cues, to “assumptions that it is ‘natural’ for older people to have lower expectations, reduced choice and control, and less account taken of their views”?

In the face of prejudice, benevolent or otherwise, Langer, Gullette and Wolpert, like many other contemporary commentators on the phenomenon of ageing, tend to advocate the path of most resistance, of very definitely not going quietly – even as they acknowledge that this can work for only so long. Nature will eventually take a hand. In trying to come to terms with this reality, Wolpert tells a story against himself. “I once proposed,” he says, that “we all should have a gene which ensured painless death when we were eighty.” Having reached the age of eighty-one, he has “now increased that age to eighty-five.”

If, like Wolpert and the increasing numbers of people who are living longer, your objective is to stave off both a “declining” old age and its close companion, death, for as long as possible, the most logical strategy is to remain healthy and active and at the same time to push the boundaries of the normal lifespan. To this end, The Longevity Project: Surprising Discoveries for Health and Long Life from the Landmark Eight-Decade Study, by Howard S. Friedman and Leslie R. Martin, offers guidance, based on survey data going back as early as the 1920s. By analysing this evidence, certain trends can be identified. A long, healthy life seems positively correlated, for example, with career success, with an optimistic (but not necessarily sunny) temperament, and with conscientiousness and organisational skills. (Langer, while acknowledging the link between an optimistic temperament and the likelihood of a long life and continuing good health, speculates that “perhaps excessively scheduled lives portend premature death.”) Marriage, on the other hand, whether unsatisfactory or happy, doesn’t seem to make much of a difference to longevity – except perhaps for men, who could, the authors speculate in one of their lighter moments, be benefitting from having someone always on hand to call an ambulance.

Despite the claim on the cover that “this book… will optimise your chances,” the reality is that the insights it provides are essentially retrospective. It is true that at one point we are told that our life “patterns can be altered and improved,” and the authors even stray into slightly creepy territory with their comment that “being selective about whom you socialise with” and building up “a network of healthy friends” might nudge the odds in your favour. But by and large, while some of the key factors contributing to longevity are convincingly identified, we don’t really learn very much about how to plan in advance for a long and healthy life. Conscientiousness may be linked to longevity, but what if we aren’t really conscientious at all but just pretending to be? Will that work?

With all the evidence so far suggesting that the best-laid plans for a long life and a healthy and vigorous old age may well go awry, it is little wonder that the best option for many people seems to be not to get old – and even, ideally, not to die – at all, but to remain forever young. (Once, not so long ago, this phrase served as a consolatory metaphor for the early death of a loved one, but it is now more likely to signal a determination to stay very much alive and perpetually in the second, third or fourth flush of youth.) To put it another way: is it really possible, as Ellen Langer’s research seems to suggest, to recover and preserve enough of our past selves and our past confidence to ensure that we remain, even into old age, “forever young” and in control?

The answer, probably, is “up to a point.” Once upon a time, the injunction to “act your age” meant to act your chronological age (or even slightly older, as in “grow up”) – to stop being immature and to go with the flow of time. Now it could just as easily mean that we should act the age we think we are or would prefer to be; after all, to further mine the database of age-related clichés, you’re as young as you feel. There is no longer any social compulsion, as Wolpert notes, to wear age-related clothing, or to adopt age-related behaviour. The experiments of Langer and the experience of the Young@Heart chorus appear to say that we can, to some extent at least, reject the conventional trappings of old age and determine for ourselves just how old we want to be. We can follow our own cues.

The problem is that acting, and that includes acting your age, requires an audience to see you, and as countless “senior citizens” have observed to their chagrin, with old age comes a form of invisibility. For many people, to be old means to be no longer centrestage, or even in the chorus. As for the old man in The Hangover, it means sitting in the corner being half-attended to while the young have all the fun. It may be that what truly revitalises the members of the Young@Heart choir, or the participants in Langer’s social experiments, making them feel younger and more alive, is having an audience to play to. Which leaves us with another question: how do we act our way out of old age if no one is watching? •

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