Cost of Ageing Populations

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Elections, budgets and governance in most western and now developing nations that are democracies are being impacted by increasing numbers of retirees and pensioners in the upper median age demographic, being catered to by politicians, especially conservatives.

Growing budget imbalances due to increasing numbers of retirees and pensioners drawing on budgets with declining net contributors of working age.

Older Households Drawing upon Budget (Image copyright Grattan Institute)

From the Australian Broadcasting Commission:

The costs of an ageing population keep growing, but who’s going to pay?

 

By chief economics correspondent Emma Alberici

Updated 27 May 2019, 9:29am

‘…..The politics may be tricky but future governments will have to confront the grim economic reality of the post-World War II baby boom.

Australians born after 1946 began to retire in huge numbers in 2011. Demand for the aged pension, aged care and health services have been rising commensurately.

The working age population is a net contributor to the federal budget. Older people, on the other hand, are the largest recipients of welfare, aged care and health care services.

Retirees are getting expensive

A report released last month by the independent, non-partisan Parliamentary Budget Office (PBO) warns the ageing population will exert “historically unique” pressure on the federal finances in the decade to 2028-29.

New figures in the report show that by 2028, Australians born between 1946 and 1964 will cost the Government more than Medicare does each year. Based on 2018 budget forecasts, the PBO estimates the cost of Medicare to be $32 billion in 2028-29. By then, lost revenue ($20 billion) and increased spending ($16 billion) on baby boomers will amount to $36 billion.

The number of working-age Australians for every person aged 65 and over has fallen from 7.4 in the mid-1970s, to 4.4 in 2015. That figure is projected to fall to just 3.2 in 2055.

Economists and policy makers need to find new taxpayers and increase workforce participation to support the hordes of older people entering retirement.

The ageing population means that by 2028-29, the PBO estimates there will be 600,000 fewer workers.

While the Australian population has been ageing, life expectancy has also improved.

As far as the government’s fiscal fortunes go, it’s a perfect storm. The pension was introduced in 1909 with 65 set as the qualifying age for men.

While mostly conservative parties attract most of the upper median age vote they are or have been compromised by financial policies catering to the same, but impairing budgets into the long term.  Who’s going to pay? Younger generations…..

For more articles or blogs about ageing democracy and demography, click through.

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White Nationalist Extremism – Mainstreamed by Politicians and Media

After the tragic white nationalist extremist event in Christchurch’s mosques by an Australian extremist white nationalist gunman, we have observed attempts by local and international politicians and media to explain.  However, they are also guilty of propagating or encouraging white Nativism, white nationalism and nowadays promoting ‘western civilisation’ for attention, power, influence over policy making and elections while demonising diversity and multiculturalism.

White nationalist extremism encouraged by mainstream politicians and media

Diversity and Multiculturalism (Image copyright Pexels).

In past decades, emanating from the US (according to Nancy MacLean author of ‘Democracy in Chains’), has been radical right libertarianism for corporates e.g. Kochs et al. and/or fossil fuel related sector to deny global warming, attacking science and education, demanding lower taxes, smaller government etc., while co-opting ageing conservative Christian evangelicals and white nationalists to vote the right way aka Trump and Brexit.

However, dog whistling and divisive narratives focused upon non-WASPs and non-Europeans, are also symptoms of a long-standing ideology, i.e. eugenics, which while being one and the same, has re-emerged amongst politicians, media and voters of the right in the Anglo world and parts of Europe (but described benignly as an electoral tactic), after becoming unpopular due to the Nazis’ experiments and holocaust.

This ideology, or power structure, is manifested and presented in multiple ways and media in Australia with refugees and ‘boat people’, US with Trump and UK with Brexit; back grounded by old WASP culture and isolationism.  Manifested as raw racism or promoting ‘whiteness’, ‘final solutions’ (to immigration), ‘globalisation’ (of people), promotion of border control or security, withdrawal from trade agreements, alarm round ‘high immigration’ or ‘exponential population growth’, use of offshore detention (camps/prisons), back grounded by criticism of ‘refugees’, Islam, and even local minorities whether women, recipients of welfare, LGBT, workers, indigenous or youth.

In addition to the poisonous ideology,  masked by dog whistling and proxy issues, is the transnational and systematic nature of the ‘architecture’ via academia, politicians and media (‘assembly line’ according to author of Dark Money, Jane Mayer) to normalise and spread the negative messaging; funded by (mostly) US radical right libertarians, oligarchs and selected think tanks.

Key architect, funded by oligarchs et al., was the recently deceased John Tanton, described in a New York Times article as the ‘most influential unknown man in America’, linked with Paul Ehrlich, Club of Rome, ZPG Zero Population Growth (supported by Rockefeller, Ford, Carnegie etc. foundations), Population Matters UK, Sustainable Australia, white evangelical Christians, white nationalists and his US Inc. based network now influences (or even writes) White House immigration policy.

‘Tanton’s own Social Contract Press has been influential: ‘The Social Contract Press (TSCP) routinely publishes race-baiting articles penned by white nationalists. The press is a program of U.S. Inc, the foundation created by John Tanton, the racist founder and principal ideologue of the modern nativist movement. TSCP puts an academic veneer of legitimacy over what are essentially racist arguments about the inferiority of today’s immigrants.

Not only had Tanton also supported the white Australia policy, liaised with ‘Sustainable Population Australia’ and its elite ‘environmentally minded’ local patrons, his TSCP also published and reviewed one of the most infamous white nationalist screeds which influences the controversial Steve Bannon et al., ‘Camp of the Saints’ (reviewed by Australian Academic Katherine Betts), from Sutherland in The Guardian 2004 ‘Far right or far wrong?’:

The book currently generating the most chatter is Jean Raspail’s Camp of Saints. First published in 1973, in France, no British publisher (a gutless crew) has been brave enough to take it on. In America, publication was sponsored, in 1985, by the ultra-right (ultrawrong), anti-immigration Laurel Foundation, under whose aegis it now sells like hot cakes.

Camp of Saints foretells an imminent “swamping” of Europe by illegals from the orient. Forget passports or border controls: they just hijack tankers and come, an armada of subcontinental sub-humanity: a brown tsunami. Europe is so enervated by liberalism and postcolonial guilt and depopulated by “family planning” that the alien tide (“with a stench of latrines”) just laps over the continent. A small resistance band (the “Saints”) is liquidated – by the French government. The immigrants come, they settle, they rape, they steal. Above all, they breed. Raspail calls it “the Calcutta solution” – genocide by stealth. Europe becomes a Dark Continent.

Raspail’s loathsome novel has recently achieved something like respectability. The author has a website and has been hailed “the Frantz Fanon of the White Race”. Camp of Saints articulates a western nightmare fashionable among neo-conservatives. Civilisations won’t “clash”. The developed world (and in the Middle East, Israel) will simply be out spawned into extinction.

What we now observe is frantic dissembling by most conservative politicians desperate to separate themselves from extremists, after their own unethical and divisive Nativist utterances or dog whistling from the past and present.

 

 

Per Capita GDP Growth and Ageing Populations

Australian economic, political and social narratives focus upon ‘high immigration rate’ and ‘population growth’ as negatives, claiming in first article following from The Conversation that the latter masks low or declining economic growth.  On the other hand, VOX CEPR suggests a linkage between ageing, longevity and declining per capita GDP; increasing numbers of retirees may well be a significant cause?

Vital Signs: Australia’s sudden ultra-low economic growth ought not to have come as surprise

March 7, 2019 1.28pm AEDT

Australia’s big little economic lie was laid bare on Wednesday.

National accounts figures show that the Australian economy grew by just 0.2% in the last quarter of 2018. This disappointing result was below market expectations and official forecasts of 0.6%. It put annual growth for the year at just 2.3%.

But the shocking revelation was that Gross Domestic Product per person (a more relevant measure of living standards) actually slipped in the December quarter by 0.2%, on the back of a fall of 0.1% in the September quarter…..

Population growth hides it

The more insidious answer in Australia is that, for a long time, our high population growth, fed by a high immigration rate, has masked a much less rosy picture of how we are doing. And neither side of politics has wanted to admit it.

At 1.6% a year, Australia’s population growth is roughly double the OECD average, which is perhaps why we hear politicians say things like “Australia continues to grow faster than all of the G7 nations except the United States,” as Treasurer Josh Frydenberg did this week.

The good news is that standard economic theory tells us that in the long run, immigration has very little impact on GDP per capita in either direction, unless it drives a shift in the population’s mix of skills.

But in the short term, it depresses GDP per capita because fixed capital such as buildings and machines has to be shared between more workers….

But the fundamentals of the Australian economy are looking somewhat weak. Like the US and other advanced economies, we are living in an era of secular stagnation – a protracted period of much lower growth than we had come to expect.

And until we do something to tackle it, such as a major government investment in physical and social infrastructure, we will continue to face anaemic wage growth, shaky consumer confidence, and mediocre economic growth per person.’

 

The impact of population ageing on monetary policy

Marcin Bielecki, Michał Brzoza-Brzezina, Marcin Kolasa 05 March 2019

Population ageing is likely to affect many areas of life, from pension system sustainability to housing markets. This column shows that monetary policy can be considered another victim. Low fertility rates and increasing life expectancy substantially lower the natural rate of interest. As a consequence, central banks are more likely to hit the lower bound constraint on the nominal interest rate and face long periods of low inflation, especially if they fail to account for the impact of demographic trends on the natural interest rate in real time

Many countries, developed and developing alike, are experiencing a process of population ageing – fertility rates remain below the level that guarantees the replacement of the population and the average life expectancy at birth keeps increasing. As a consequence, the ratio of the elderly to the working-age population – the old age dependency ratio – has been, and will be, increasing over the upcoming decades. To give some idea on the magnitude of this process, while the ratio of elderly (aged 65 or more) to the working-age population (aged 15-64) in the euro area was around 0.25 at the turn of the 21st century, the proportion is projected to exceed 0.5 by 2050 (see Figure 1).

The demographic transition will have many consequences related to various aspects of economic activity. To mention just a few, the increasing share of elderly in populations is likely to negatively impact the growth rate of GDP per person (Cooley and Henriksen 2018) and the sustainability of pension systems (Boulhol and Geppert 2018), and will lead to an increase in the share of GDP being spent on healthcare and related services (Breyer et al. 2011)….’

For more articles about population growth and NOM net overseas migration click through.

 

 

 

EU – GDPR General Data Protection Regulation – US – Australia

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In the US and Australia there seems to be much ignorance and complacency on the potential impact of the EU GDPR General Data Protection Regulation on private data, data collectors e.g. government agencies, and commercial entities, accessing and using data for commercial reasons; underpinned by lack of citizens’ rights?

‘Data privacy rules in the EU may leave the US behind

January 24, 2019 8.03am AEDT

France made headlines on Jan. 21 for fining Google US$57 million – the first fine to be issued for violations of the European Union’s newly implemented General Data Protection Regulations. GDPR, as it’s called, is meant to ensure consumers’ personal information is appropriately used and protected by companies. It also creates procedures to sanction companies who misuse information.

According to French data privacy agency the National Commission on Informatics and Liberty (CNIL), which levied the fine, Google didn’t clearly and concisely provide users with the information they needed to understand how it was collecting their personal data or what it was doing with it. Additionally, CNIL said Google did not obtain user consent to show them personalized advertisements. For its part, Google may appeal.

In other parts of the EU, similar investigations are currently underway against FacebookInstagram and WhatsApp.

This case demonstrates the increasingly prominent role that the EU intends to play in policing the use of personal information by major companies and organizations online. The U.S. lags behind Europe on this front. As a researcher who studies computer hacking and data breaches, I’d argue the U.S. may have ceded regulatory powers to the EU – despite being the headquarters for most major internet service providers. Why has the U.S. not taken a similarly strong approach to privacy management and regulation?

Do individual Americans even care?

There’s no single answer to why the U.S. hasn’t taken similar measures to protect and regulate consumers’ data.

Americans use online services in the same way as our European counterparts, and at generally similar rates. And U.S. consumers’ privacy has been harmed by the ever-growing number of data breaches affecting financial institutions, retailers and government targets. The federal government’s own Office of Personnel Management lost millions of records, including Social Security numbers, names, addresses and other sensitive details, in hacks. My research demonstrates that hackers and data thieves make massive profits through the sale and misuse of personally identifiable information….

Companies don’t want these regulations

Social media sites’ and internet service providers’ resistance to external regulation is also a likely reason why the U.S. has not acted.

Facebook’s practices over the last few years are a perfect example of why and how legal regulation is vital, but heavily resisted by corporations…..

….Should the U.S. continue on its current path, it faces a substantial risk not only to personal information safety, but to the legitimacy of governmental agencies tasked with investigating wrongdoing.’

 

For more related blogs and articles on digital literacy, digital marketing, digital or e-consumer behaviour, EU GDPR and social media marketing, click through

 

Ageing Democracy, Nativism and Populism

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Liberal democracies in western world need to make sure they do not become populist gerontocracies with changing demographics creating elderly ‘Gerrymandering’ where influence and numbers of older voters (with short term horizons) increasing proportionally over younger generations with longer term interests but less voice and influence.

Western world electorates are ageing and impacting democracy

Ageing Demographics, Democracy and Populism (Image copyright Pexels)

From Alan Stokes of Fairfax round 2016 elections:

It’s on for old and old: younger voters don’t stand a chance

One startling statistic shows why 65+ voters hold all the power at this election – and it will only get worse for the young’uns.

This election will not be decided by modern issues or fashionable personalities. It will not be aimed at the nation’s future. It will be about living in the past.

The 2016 election will be decided more than any other by Australia’s elderly.

We have seen a surge in the share of voters aged 65 and over – wartime children and now baby boomers, many of whom once burnt bras, voted for Whitlam, had a day off work when Alan Bond won the America’s Cup in 1983 but then backed John Howard, pocketed huge superannuation tax breaks from the mining boom, banked capital gains from home ownership and negative gearing, and can afford to say now that 70 is the new 50……

…One startling statistic defines this reversal of the 1960s-70s-80s generation gap.

Since Kevin07 rode youthful exuberance to victory nine years ago, the number of enrolled voters aged 18-24 has increased 7.9 per cent, reflecting some improvement in encouraging younger people to enrol.

But the number of enrolled voters aged 65 and over has increased 34 per cent.

Yes, oldies are out-growing young’uns by a ratio of more than four to one….

…As I wrote last week, the youth have good reason to be revolting. The 65+ voter demographic makes up 22 per cent of the vote this time – more than twice the 10.6 per cent for 18- to 24-year-olds….

…..These revelations are not intended to deny the elderly their voice. Rather, they raise questions about the morality of voting for self-interest when you will not be around to carry the burden of your decisions.

The median projection from the Australian Bureau of Statistics suggest the numbers of Australians aged 65+ will have increased by 84.8 per cent between 2011 and 2031. The proportion of the population 65+ will have increased from 13.8 per cent to 18.7 per cent….

….And what if parties realise they can win elections by kow-towing to the older demographic and downplaying issues that matter to younger Australians? We have seen this already on same-sex marriage, a republic, climate change and housing affordability….

….Expect to see more youthful candidates revolting against the demographic demons. We can only hope they can get through to older voters because the future belongs to the children, not the parents and grandparents.

Such is life …

 

Meanwhile in Europe:

Is Pensioner Populism Here to Stay?

Oct 10, 2018 | EDOARDO CAMPANELLA
MILAN – The right-wing populism that has emerged in many Western
democracies in recent years could turn out to be much more than a blip on the
political landscape. Beyond the Great Recession and the migration crisis, both of
which created fertile ground for populist parties, the aging of the West’s
population will continue to alter political power dynamics in populists’ favor.

It turns out that older voters are rather sympathetic to nationalist movements.
Older Britons voted disproportionately in favor of leaving the European Union,
and older Americans delivered the US presidency to Donald Trump. Neither the
Law and Justice (PiS) party in Poland nor Fidesz in Hungary would be in power
without the enthusiastic support of the elderly. And in Italy, the League has
succeeded in large part by exploiting the discontent of Northern Italy’s seniors.
Among today’s populists, only Marine Le Pen of France’s National Rally (formerly
the National Front) – and possibly Jair Bolsonaro in Brazil – relies on younger
voters…

…Most likely, a growing sense of insecurity is pushing the elderly into the populists’
arms. Leaving aside country-specific peculiarities, nationalist parties all promise
to stem global forces that will affect older people disproportionately.
For example, immigration tends to instill more fear in older voters, because they
are usually more attached to traditional values and self-contained communities.
Likewise, globalization and technological progress often disrupt traditional or
legacy industries, where older workers are more likely to be employed.

At best we are observing very cynical politics, influencers and media endeavouring to confuse, create fear and anxiety amongst older demographics round populist themes such as immigration, globalisation, nativism and identity.

For more blog articles about nativism, NOM net overseas migration, and demography, Click through.