The Challenge Of An Ageing Population
The Age
Wednesday September 12, 2007
Retirement villages will have a major social and economic impact, writes Lionel Frost.
AUSTRALIA'S population is ageing, as the population is in other developed countries.Projections as to the size of this demographic change depend on assumptions about variables such as life expectancy and fertility, but there is general agreement that the ageing of the population, and its economic and social impact, will be significant.An ageing population and the increasing number of people choosing to live in retirement villages are likely to have an impact on society. The change will affect the labour market, consumption patterns, local business, employment and local government revenue and expenditure. There is also likely to be a broader impact on service provision, housing stock, transport services and the environment.The Victorian Government points out that older volunteers support a wide range of government activities, with direct and indirect positive impacts on local economies.People over 55 volunteer predominantly in the areas of community, welfare and religion, and are particularly important providers of informal caring.They contribute significantly to the economy through the time they spend in voluntary work and in unpaid caring in their own households, to their family members in other households and to non-family members in the wider community.Further contributions are made through the use of homes, cars and other resources. It is estimated that Australian volunteers aged 55 and over contribute $74.5 billion a year. Australia's gross domestic product is about $550 billion.Mature consumers have different lifestyles with different needs and their share of the market varies greatly across consumer products. These people have more time and money than at any other stage of their lives, spending an above-average share of their income on holidays, books, magazines and the telephone, as well as gambling on lotteries, pokies and the horses.Mature consumers with time on their hands tend to cook at home, spending a below-average share of their incomes on fast food and restaurants and an above-average share on groceries and home wares. They are more concerned about their health and spend large amounts on pharmaceuticals, health insurance, fees and charges.Retirement villages also generate considerable expenditure (output) and employment opportunities while being built and when they are operating.As well, indirect flow-on benefits are generated in the local area, as the change in activity originating in the retirement village sector flows into the economy. The benefits vary according to the sector of the economy and also the level of service provision.The degree of fiscal pressure on local government depends on the degree that increasing expenditure demands are matched by revenue growth. The three major sources for this growth are municipal rates, grants from the Federal and state governments, and fees and charges.Local government will also face increasing pressure to upgrade or modify infrastructure to cater for an ageing population. Planning for developing age-related infrastructure may also come under pressure.Retirement villages provide increased opportunities for social interaction and community engagement. They can reduce social isolation, with consequent benefits to residents' health, wellbeing and quality of life.A wider range of resident-led interest groups operates in retirement villages compared with other residential districts. This indicates the benefits of a wider pool of people from which to draw companions.Retirement villages can offset shortfalls in homes suitable for later life by providing housing designed for the changing needs of older people and releasing properties in the wider community. In regions with many older people, councils will face challenges in designating enough land for retirement villages and high-care and low-care residential aged care and ensuring that new facilities are integrated with existing services.Changes in infrastructure are required to accommodate the safety, access and lifestyle needs of older people. For example, for older people to be able to walk to places, accessible infrastructure and public amenities are needed. As Australia has many older people, adaptations have already been made in many cases (such as ramps and disabled access).In some places, ageing infrastructure such as street lighting, footpaths, kerbs and sanitation services may have to be replaced and/or upgraded to improve safety and accessibility. This will enable older people to be independent and help to create a "people friendly" environment for all age groups. Local governments may also face higher community expectations of the standards of public amenities such as car parking, walking trails, seating and public toilets.Retirement villages in Victoria should have only a minimal environmental impact because of statutory planning controls governing development. For example, new planning provisions for residential subdivision released by the Department of Sustainability and Environment incorporate sustainability principles consistent with best practices in building and operating retirement villages.The provisions seek to achieve more liveable and sustainable communities, more compact neighbourhoods, within walking distance of shops and other community facilities, and where public transport is available.Retirement villages that are well designed and managed can make it possible for people to live in a community where they feel safe and valued, and have access to facilities and services as their needs change. Such villages will be of economic and social benefit as Australia's population ages. Lionel Frost is an associate professor in the department of economics at Monash University's Berwick campus.
© 2007 The Age