Coming of age: policy framework for Australia's ageing workforce

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Council on the Ageing (Australia)

 

Coming of age:
An integrated policy framework for Australia's ageing workforce

 

Submission to Federal Budget 2002-03

FOR

Department of Employment and Workplace Relations
Department of Education, Science and Training
Department of Family and Community Services
Department of Attorney-General

Council on the Ageing (Australia)
Level 2, 3 Bowen Crescent
Melbourne Victoria 3004
Phone: 03 9820 2655 Fax: 03 9820 9886
Email: cota@cota.org.au

January 2002

 

CONTENTS

Summary of Recommendations
1. Introduction: an integrated plan for Australia's ageing workforce
2. Taking forward welfare reform
3. COTA Secretariat on Ageing Workforce
4. Education / lifelong learning
5. Federal age discrimiantion legislation
6. Meshing Newstart Allowance with retirement incomes policy
7. Defer abolition of Mature Age Allowance

 

SUMMARY OF RECOMMENDATIONS

1. An integrated plan for australia's ageing workforce

Recommendation 1

Develop an integrated and targeted employment policy for Australia's ageing workforce.

2. Taking forward Welfare Reform

Recommendation 2

COTA believes that effective return to work strategies under Welfare Reform should include specialised services:

Referral to appropriate services and training: good information and referral services urgently need to be developed specifically to meet the needs of all workers and potential workers aged 45 and over.

Careers advice: a national system of career centres that specialise in advising older people about potential careers and jobs that take account of their past experience, their current preferences, and their capacity for further education and training.

Assistance with job search: all older workers need an employment service that focusses on marketing them to employers.

Information technology training: courses need to be developed which build on the existing skills and experience of mature age people and their learning styles to ensure that they are able to compete for jobs in the new economy.

Transition to retirement programs: older workers need to be well advised about their income needs and lifestyle expectations in retirement and to be assisted to move away from full time paid employment as and when they wish.

Education about the labour market of the 21^st century: many older workers need help to come to terms with the changes in Australia's workforce and how they might best tap into new and emerging job opportunities.

Develop specialisation in the Job Network on mature age workers: the Job Network should have a national approach to the establishment of services for mature age workers, including specialised providers which are mandated to share information about best practice on mature age employment issues.

Better resources for Australians Working Together Initiatives including the Transitions to Work Program and the Prime Minister's Business Community Partnerships need sufficient resourcing to effectively meet their program objectives.

3. COTA Secretariat on Ageing Workforce

Recommendation 3

Funding for COTA to establish an Ageing Workforce secretariat for a period of three years. We estimate that a full-time project officer, office space and operating costs would require a budget of $500,000.

Project manager $60,000 per year x 3 $180,000
Admin officer $40,000 per year x 3 $120,000
Operating costs $50,000 per year x 3 - $150,000
One off conference organisation (year 2) $50,000
Total $500,000

4. Education / Lifelong Learning

Recommendation 4

The Federal Government needs to institute a number of actions to support a culture of lifelong learning in Australia:

• Develop an explicit policy of education for older adults.

• Reduce barriers to existing education and training opportunities for older adults such as costs, time and location.

• Provide incentives for the education and training of older adults in the workplace.

• Extend community and internet-based learning options.

• Foster the development of methodologies for the learning of older adults.

• A national policy framework for adult learning as recommended by Adult Learning Australia.

5. Federal Age Discrimination Legislation

Recommendation 5

• Follow through the commitment in the 2001 Federal Election to introduce a Federal Age Discrimination Act to match those of sex, race and disability

• Education campaign to complement introduction of the Act.

6. Meshing Newstart Allowance with retirement incomes policy

Recommendation 6.1

The social security assets test for mature age people should be revised to more realistically reflect lifecycle factors affecting savings and to be cognisant of the retirement savings requirements of older Australians. This may lead to the development a graduated age-related assets test.

Recommendation 6.2

Newstart Allowance for older unemployed people should be increased or replaced with another payment that more realistically reflects the duration of unemployment they are likely to experience: the current level of a pension payment would be appropriate. This new payment should be introduced for people 50 and over – or even 45, the age at which age discrimination begins to manifest itself. The income test for this payment should also be lifted to the same income test as for a pension income.

7. Defer abolition of Mature Age Allowance

Recommendation 7

Defer abolition of Mature Age Allowance until there is significant improvement in employment rates for people 60 and over.

******

1. Introduction: An integrated and targeted plan for Australia's Ageing Workforce

COTA considers that the issue of Australia's ageing workforce is one that warrants specific attention in the context of the 2002 Budget.

The proposals we recommend fit with a number of the most important national agendas:

• managing the challenges of the ageing population

• dealing with our competitiveness in global markets

• improving the social and economic participation in paid employment of people between the ages of 50 and 64 while reducing reliance on social security incomes.

There has been an ongoing debate in recent years in Australia, as elsewhere, about the possible effects on the economy and the capacity of governments to pay for the services that a large and dependent aged population is likely to need in the future. There has been little examination of the potential for increased labour force participation and later retirement ages for the older population as a tool in managing the costs to government of an ageing population. The sort of benefits of increased labour force participation include:

• greater capacity for individuals to make savings for retirement;

• lower dependency on publicly funded income support payments and services for longer periods;

• better health for longer periods (provided that the job itself does not pose a health risk);

• higher returns to revenue through taxation;

• higher standard of living in the pre-retirement and retirement years than would be available from early retirement.

COTA believes that predicted dependency ratios could be substantially ameliorated by increasing employment amongst mature age people. There is significant work to be done in the short to medium term in improving the employment to population ratios of people under the conventional retirement age of 65. A longer term project will be to encourage people over the age of 65, health permitting, to remain in employment if they wish, as well as removing barriers to their participation.

The imperative of policy action in the area of the ageing workforce has been highlighted by 2 recently released reports:

• the BIS Shrapnel long term forecasts of economic growth released on 21 January 2002 has pointed to the acceleration of ageing of the workforce such that workforce growth is slowing from a current figure of around 180,000 per year to 140,000 over the next decade to 60,000 over the following five years to zero in the late 2020s. The study authors recommend enhancement of the skills of the older workforce and the opening up of options for flexible employment and phased retirement.

The BIS Shrapnel reports supports the view that the ageing workforce is one of the most important medium to long-term issues facing Australia and requires urgent policy attention.

• the SPRC report on The Recruitment of Older Australian Workers: A Survey of Employers in a High Growth Industry (2002) by Michael Bittman, Mardi Flick and James Rice, shows the complexity of employer attitudes to older workers and their behaviour in the employment of older workers resulting in the low uptake of mature workers by employers despite positive attitudes. The study emphasises the importance of:

- early intervention for those who become unemployed

- up to date skills especially in computer related areas

- the potential of incentives such as wage subsidies in providing incentives to employers to employ mature age people.

The two reports point up the urgency of a coordinated policy response to Australia's ageing workforce.

Older Workers contribute to Economic Growth

As a small, open economy, the optimisation of Australia's human resource capacity will be essential to manage the challenges ahead in maintaining and increasing our international competitiveness. Our competitiveness will be linked inextricably to our capacity to be leaders in the knowledge economy. We cannot afford to lose our existing talent to other countries or to waste it through discriminatory employment practices and lack of attention to lifelong learning.

Over the past few years, COTA has been appalled at the waste of skills and experience of the mature age people who have contacted us. A number have reported that they can readily find work consistent with their skills and experience in Asia but not in Australia. Others are relegated to jobs below their skill level and many are forced into early retirement.

Australia's current treatment of its older workers is consistent with its relatively poor record in nurturing research and development, fostering innovation in new technologies and providing opportunities for career advancement for some of our brightest talents. Hopefully, the Government's Innovation Action Plan Backing Australia's Ability will begin to remedy some of these issues.

However, the Government still needs to go further in terms of positioning older workers to take advantage of opportunities in the new economy, to defer retirement plans and continue to contribute to the economic development of the nation.

The Government has a unique opportunity to redress the imbalances that have emerged in recent years through investments that will ensure that Australia is able to compete effectively in the global economy of the 21^st century. The Government has indicated that the 2002-2003 Budget will be very constrained in terms of spending measures with cuts sought across portfolio areas. Nevertheless, as this submission notes there are very important investments that must be made even if this takes the Budget into deficit.

Such investments in the medium to long term will:

• add to national saving

• flow on to positive net benefits to the community

• compensate for past under-investment in some public infrastructure and in intellectual capital (via research, skills development etc)

The infrastructure requirements to manage the ageing workforce cross a number of policies and programs in a range of areas, in particular:

• Education and lifelong learning

• Programs that focus on ensuring that mature workers are competitive in the contemporary labour market

• Effective age discrimination legislation combined with employer education

• Sound social security provisions.

The framework for policy for older workers need to integrate a range of such elements. The framework needs to be continuously evaluated for relevance and effectiveness.

In the future, individuals, employers and the society in its entirety, will not be able to afford the loss of skills and income caused by the premature attrition of mature age people from the workforce. The Government must act in the 2002 Budget to ensure that there is an improvement in the position of present cohorts of mature age people and future generations.

COTA is most concerned that the Government does not seek to bolster the Budget surplus through cuts to social and health programs. In addition, it should not retreat from commitments it has made through the Welfare Reform process to take forward an assertive policy agenda on mature age employment. Given the waste of some of the tax expenditure measures in 2001 such as the reduction in fuel excise, the Government should fund any Budget shortfall through revenue measures or be prepared to take the Budget into deficit.

Targeted policies needed

The Government has not supported the development of employment programs for particular population groups. In addition, the design of government employment policies is driven primarily by the objective of minimising welfare dependency in the short term.

However, this approach is unsuitable for mature age people, many of whom may have access, at least in the short term, to private income sources or who may have a strong claim for an income support payment other than Newstart or Mature Age Allowance.

Approaches need to be developed that offer opportunities for the employment, education and training of all older workers and need to be compatible with the life stage, experience, maturity, values and learning styles of diverse groups of mature age people.

In addition, it will be more constructive over the long term to consider the issues within a policy framework that emphasises the ageing workforce rather than older workers per se.

COTA envisages that services need to be developed specifically for mature workers encompassing the following elements:

• referral to appropriate services and training

• careers advice

• assistance with job search

• information technology training

• transition to retirement programs

• education about the labour market of the 21^st century.

COTA does not believe that the present Job Network arrangements are able to develop the methodologies needed for addressing the specific issues for mature age people. Mature age people are referred to generic education, training or counselling services but none specialise in the needs of older people. In addition, the competitive nature of Job Network arrangements means that there is little capacity for establishing linkages between providers that would lead to the establishment of national standards in best practice in the Job Network.

An American report on Unique Training Requirements of Low Income Older Workers shows that it is important to take account of the following factors in working with older people:

• the particular age related characteristics of mature workers relating to learning styles and interests;

• their past experiences in education and training;

• their level of confidence.

The Government needs to develop programs that specifically suit the issues faced by older people who need labour market assistance. More detail is provided in section 2 below under Taking Forward Welfare Reform.

Recommendation 1 Develop an integrated and targeted employment policy for Australia's ageing workforce.

2. Taking forward Welfare Reform

According to the Department of Family and Community Services 1999 submission to the House of Representatives Standing Committee on Employment, Education and Workplace Relations, there are around 33 per cent in the 50-64 age group receiving a social security income and 46 per cent do not have paid employment.

COTA has had long standing concerns about the impact of the high rates of social security dependence in the age group on their security and well-being in older ages.

To some extent the Welfare Reform process is addressing the needs of the group, aged 50-64 but the commitments in the 2001 Budget on mature age employment issues were quite modest. Targeted resources amounted to only $146 million over 4 years to be spent in the main ($100 million) on Centrelink services leaving only a small amount of $45 million for employment, education and training services – a mere $11 million per year.

Mature age people will also benefit from a number of the other measures flowing from Welfare Reform including the Working Credit scheme, greater access to Intensive Assistance and voluntary Centrelink interviews including the Transition to Work Program.

The 2001 commitment falls significantly short of the policy and program framework of the report Participation Support for a More Equitable Society, the final report of the Reference Group on Welfare Reform.

In particular COTA is looking to the Government to fully fund the following recommendation of the final report of the Reference Group on Welfare Reform.

A5: Expand the range of assistance for mature age people who have become or are at risk of long term joblessness. Assistance measures might include financial counselling, personal counselling, access to Job Network services and assistance for return to work needs.

COTA believes that the 2001 Budget initiatives have only partially met the requirements of this recommendation and much more needs to be done.

There needs to be a targeting of services not only to those who are already long term jobless but also those at risk. Early intervention is imperative. This may include a large number of people who are either on benefits and allowances other than Newstart but also those not receiving any social security payment.

Mature age people not in the labour market need access to a wide range of counselling services including financial and personal as recommended by the Reference Group. In COTA's experience many mature age people do not receive the assistance they need because of a range of factors:

• they are not informed about basic Centrelink assistance they might be eligible for mainly in the area of job search assistance;

• they are not eligible for personalised Centrelink or Job Network assistance because they are not on social security payments;

• even if they are eligible there are insufficient services;

• they cannot afford commercial services through private employment agencies.

The Personal Support Programme is narrowly targeted to people with very high level of personal problems and very unstable lives such as alcohol or drug dependence or homelessness.

The needs of mature age people are quite different. Their needs are for specific counselling in a number of areas including:

• transition to retirement considerations

• management of issues arising from being an older person in the labour market including age discrimination

• self esteem and confidence flowing from poor retrenchment practices and job search problems

• the demands of the 21^st labour market and new economy.

We would expect that most mature age people requiring assistance have relatively stable lives but whose major problems from their late 40s into their 60s arise from their negative labour market experience and poor job opportunities. High quality and specific counselling needs to be offered.

While it is possible that the Centrelink Personal Advisers may fill some of the gaps for counselling of mature age people, COTA believes that the demands of working with mature age people will require specialised training and in depth knowledge of issues facing this group. Our preference would be for people to be employed as advisers who have personal experience of the issues and who are mature age workers themselves.

The Transition to Work program will target mature age people and women with no recent workforce experience who are not in the social security net and hence is an important program. However the program is poorly resourced with only $39 million over 4 years. This funding needs to be significantly increased.

Another poorly resourced but worthwhile measure of Australians Working Together is the Prime Minister's Community Business Partnerships at only $10 million over 4 years. This program would be most useful for organisations such as Council on the Ageing to work with business groups on improving employment practices for mature age people where there is proven demand for partnership projects.

However, it does not seem possible that much will be achieved with such poor funding to cover so many groups – parents, indigenous people, people with disabilities as well as mature age people.

In addition, the recommendation A5 quoted above from the final report of the Reference Group on Welfare Reform covers better access to Job Network services and assistance for return to work needs.

COTA believes that the access of mature age people to the Job Network still needs to be increased. We believe that the most effective way of improving access is to provide targeted services to this group.

A number of Job Network services have already developed good strategies for working with mature age people effectively. It has been disappointing to COTA that the Job Network operates as a series of self-contained entities that are reluctant to share information with each other about best practice.

There should be specialised services developed based on the best practice strategies of those Job Network providers already assisting mature age people. These providers should receive additional funding to provide services to a wide range of mature age people including people on payments other than Newstart Allowance.

Recommendation 2 COTA believes that effective return to work strategies under Welfare Reform should include specialised services: Referral to appropriate services and training: good information and referral services urgently need to be developed specifically to meet the needs of all workers and potential workers aged 45 and over. Careers advice: a national system of career centres that specialise in advising older people about potential careers and jobs that take account of their past experience, their current preferences, and their capacity for further education and training. Assistance with job search: all older workers need an employment service that focusses on marketing them to employers. Information technology training: courses need to be developed which build on the existing skills and experience of mature age people and their learning styles to ensure that they are able to compete for jobs in the new economy. Transition to retirement programs: older workers need to be well advised about their income needs and lifestyle expectations in retirement and to be assisted to move away from full time paid employment as and when they wish. Education about the labour market of the 21st century: many older workers need help to come to terms with the changes in Australia's workforce and how they might best tap into new and emerging job opportunities. Develop specialisation in the Job Network on mature age workers: the Job Network should have a national approach to the establishment of services for mature age workers, including specialised providers which are mandated to share information about best practice on mature age employment issues. Better resources for Australians Working Together Initiatives including the Transitions to Work Program and the Prime Minister's Business Community Partnerships need sufficient resourcing to effectively meet their program objectives.

3. COTA Secretariat on Ageing Workforce

There are two elements in ensuring that mature age people are able to compete in the Australian labour market. They need, firstly, a level playing field to ensure that hiring and firing decisions are made on appropriate criteria and not on age. This involves educating employers about the benefits of age balance in the workforce. The second element is in ensuring that older workers are sufficiently able to take up opportunities that are available in the workforce. COTA is uniquely positioned to bring together both these elements and to some extent is already doing so in its work. We are able also to work within the context of the Government's welfare reform commitment:

The Prime Minister's Community Business Partnership will be asked to encourage business to identify and generate more opportunities for mature age people.

The policy area of the ageing workforce is an emerging one and there is need for focus on the appropriate responses to the challenges ahead. Many organisations, businesses and individuals have indicated to COTA that they have an interest in the area but there is no outlet for expressing this interest. COTA believes that it can play a major role in harnessing this interest, bringing groups together and developing long term strategic responses. However, some funding is required to do so.

COTA has been at the cutting edge of developing policies and the profile of issues relating to mature age workers in recent years. Our core activities include:

• National Congress Older Australians: A Working Future?, Adelaide, November 1999 attracting around 250 participants representing employers, unions, government and older people.

• Major submissions to inquiries:

- Reference Group on Welfare Reform, Welfare Reform Inquiry

- House of Representatives Standing Committee on Employment, Education and Workplace Relations, Inquiry into Mature Age Workers (two major submissions)

- Human Rights and Equal Opportunity Commission inquiry into age discrimination.

• Consumer focussed research with older, unemployed workers

• Presentation of a paper at US Committee for Economic Development conference on Aging of the Global Workforce, Washington DC, September 2000.

• Publication of major report Older Australians: A Working Future? with the Committee for Economic Development of Australia (CEDA) August 2000.

• Development of strategic alliances and partnerships with a wide range of organisations including Australian Human Resources Institute.

• Award of a Churchill Fellowship to a COTA staff member for study of ageing workforce policies in the USA and Europe in 2002.

• Award of an ARC grant with Deakin University for a project on Negotiating Transitions to Retirement examining the social and labour market support needs of people aged 45-64 years.

The intensity of our work in the area has outgrown our capacity to service the need and demand for our engagement in this area. We believe as a non-government organisation we are strategically positioned to work with government, business and the community sector in developing awareness of the issues and to develop responses. We have articulated these issues in a number of our publications and submissions.

COTA has received requests for assistance including:

• Requests from a wide range of professional organisations for strategic alliances in developing approaches and undertaking research relating to the issues.

• Requests from mature age people experiencing labour market difficulties for information, referrals, advice and assistance. In addition, we take a number of inquiries from individuals wishing to volunteer their services in promoting older workers.

• Requests from employers for advice on issues relating to ageing workers.

COTA proposes that it establish a secretariat to undertake the following functions including:

• Development and maintenance of strategic alliances/partnerships with key industry groups, employment and training providers, academics, seniors groups and others with an interest in older workers and ageing workforce issues with a view to promotion of their respective policy agendas (see recommendation 1, House of Representatives Standing Committee on Employment, Education and Workplace Relations, An Inquiry into Mature Age Workers).

• An education campaign targeting mature age people concerning the changing nature of the labour market and the issues associated with portfolio employment, including its possible benefits (see recommendation 19, House of Representatives Standing Committee on Employment, Education and Workplace Relations, An Inquiry into Mature Age Workers).

• Conduct a National Conference, with international contributions, on the issue of Australia's ageing workforce.

• Seek out funds from Federal and State Governments, businesses and philanthropic trusts to develop and trial specific programs for mature age workers.

• Develop expertise through continuous research into the ageing workforce.

• Foster the linkages between ageing workforce and retirement issues.
•  

Recommendation 3 Funding for COTA to establish an Ageing Workforce secretariat for a period of three years. We estimate that a full-time project officer, office space and operating costs would require a budget of $500,000. Project manager $60,000 per year x 3 $180,000 Admin officer $40,000 per year x 3 $120,000 Operating costs $50,000 per year x 3 - $150,000 One off conference organisation (year 2) $50,000 Total $500,000

Recommendation 3

Funding for COTA to establish an Ageing Workforce secretariat for a period of three years. We estimate that a full-time project officer, office space and operating costs would require a budget of $500,000.

Project manager $60,000 per year x 3 $180,000
Admin officer $40,000 per year x 3 $120,000
Operating costs $50,000 per year x 3 - $150,000
One off conference organisation (year 2) $50,000
Total $500,000

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4. Education / Lifelong Learning

A critical factor in managing the ageing workforce is to support a culture of lifelong learning. Lifelong learning aims to provide opportunities for adults throughout the life course to undertake education and skills upgrading. The Government's Innovation Action Plan: Backing Australia's Ability needs to be complemented in the 2002 Budget by a specific measure to promote lifelong learning.

There are several core reasons to develop a culture of lifelong learning in the context of an ageing population and ageing workforce.

1. Labour force needs
   The ageing of the population means an ageing workforce. There will be a smaller pool of younger, recently educated people to recruit from, in the future. For this most prosaic of reasons, the skills of mature age people will need to be fostered and enhanced to meet workforce requirements in the future.
   
2. Responding to economic and technological change
   The technological environment will continue to undergo profound and rapid change. A culture of lifelong learning will be needed if Australia is to be able to respond to these continuous changes. The costs to Australia of not developing a culture of lifelong learning may be very severe with respect to our rate of economic growth and our competitiveness in the global economy. Over the longer term this translates into a fall in our standard of living, further contributing to poor economic output. This will make it more difficult to manage the challenges of an ageing population.
   
3. Maximising social and economic participation
   Opportunities for lifelong learning are also essential to maximise social and economic participation. The Welfare Reform Reference Group identified a growing divide between "job rich" and "job poor" households which translates into households reliant primarily on a low social security income and those able to accumulate resources through paid employment. As mentioned above, around 33 per cent of people between the ages of 50 and 64 are primarily reliant on some form of social security income and 46 per cent are not in paid employment.

   Education is an important conduit into paid employment and is an important form of social participation in its own right. Lifelong learning opportunities therefore can make an important contribution in narrowing the gaps between rich and poor households. This has important effects in terms of social cohesion and equity. An economically polarised society damages the fabric of society creating negative effects for everyone.

4. Managing change and complexity
   The 21^st century will present a great many challenges across the globe – and in Australia. These challenges cross the environment, the society, family and the economy. The changing demographics are one of these challenges. It will be critical to the management of change and complexity that the society is well-equipped to respond in constructive and cohesive ways. Lifelong learning will empower individuals to develop constructive responses and will assist in nurturing Australia's democratic and peaceful traditions.

Current education policy

Lifelong learning does not feature strongly in current national education policy. Older adults with whom COTA has had contact report the following difficulties in pursuing educational goals:

• Cost – Australian education is fee-paying. Many professional courses require substantial outlays of thousands of dollars. Many older adults, especially if unemployed and with family responsibilities, are unable to meet these costs. While the Government's commitment in Backing Australia's Ability to allow people to defer fees under a HECS (Higher Education Contribution Scheme)- type system may be of some help but may still deter people who are not prepared to take on debts later in life.

• Uncertainty of investment. Many mature age people feel that the investment in obtaining new qualifications cannot be warranted in terms of the time they perceive they have ahead in the workforce and the uncertainty of the return. However, the perception seems to be derived from the idea that gaining new qualifications requires commitments of two or three year full time equivalent education.

• Inappropriate teaching and learning methodologies. Older adults have reported to COTA that they feel that the methods used in conventional educational courses are inappropriate to their background and learning styles.

• Lack of linkage to the workplace. Lack of information is a barrier for the training of mature age people. Most mature age people are risk averse and have insufficient information about the sort of education and training that will assist them in the labour market.

• Insufficient linkage to existing skills and training – insufficient recognition of prior learning.

• Youth focussed. Education policy is primarily concerned with the provision of education of people under the age of 25. There is very little concern with the educational needs of people beyond the completion of secondary school and primary degrees and qualifications.

Developing an Australian lifelong learning policy

Lifelong learning should, at the minimum, encompass the following characteristics:

• High level accessibility in terms of time, cost and location.

• Modularity – components of education should be linked to each other.

• Recognition of prior learning.

• Locally based.

• Relevant to both specific labour market needs and broader personal and social interests.

• Diversity in approaches, venues, methods, content.

• Appropriate use of technology.

Recommendation 4 The Federal Government needs to institute a number of actions to support a culture of lifelong learning in Australia: Develop an explicit policy of education for older adults. Reduce barriers to existing education and training opportunities for older adults such as costs, time and location. Provide incentives for the education and training of older adults in the workplace. Extend community and internet-based learning options. Foster the development of methodologies for the learning of older adults. A national policy framework for adult learning as recommended by Adult Learning Australia.

Recommendation 4

The Federal Government needs to institute a number of actions to support a culture of lifelong learning in Australia:

• Develop an explicit policy of education for older adults.

• Reduce barriers to existing education and training opportunities for older adults such as costs, time and location.

• Provide incentives for the education and training of older adults in the workplace.

• Extend community and internet-based learning options.

• Foster the development of methodologies for the learning of older adults.

• A national policy framework for adult learning as recommended by Adult Learning Australia.

5. Federal Age Discrimination Legislation

The Government has promised the implementation of Age Discrimination Legislation in the 2001 Federal Election campaign. This should be introduced as quickly as possible in the first sitting of Parliament in 2002.

At the present time, there is no specific Australian federal age discrimination legislation. Age discrimination is not unlawful in the federal sphere, although the Workplace Relations Act 1996 prohibits age discrimination in termination of employment. Although there is age discrimination legislation in state government jurisdictions, the lack of federal legislation means that not everybody is covered by age discrimination legislation. In addition, the lack of uniformity of state laws means that individuals can be treated differently in law depending on where they live. There are also concerns about the low level of enforceability of age discrimination legislation both within the state legislative framework and in any future federal legislation.

While legislation alone can be a blunt device for obtaining behavioural change, it nevertheless can be an important backdrop for educating the community about important social issues. Government can have a major role in attaching resources for education about age discrimination both in general terms and in relation to the specific legislation. A community education campaign will reinforce the intention of the legislation but should focus on the positive aspects of behaving and making decisions in ways that are free from age bias.

The need for federal legislation is underscored in the report of the Commonwealth's Human Rights and Equal Opportunity Commission on age discrimination (HREOC, 2000, p116):

The Commonwealth bears ultimate responsibility for the protection of human rights in Australia. It should also lead the way and model best law and practice.

We envisage that better federal age discrimination legislation will be an important springboard to engaging employers in issues about the mature age workforce. While some employers will continue to find ways to discriminate on the basis of age, comprehensive legislation will nevertheless be an inducement to examine assumptions that are driving hiring and firing decisions. We have seen this happen in the area of sex discrimination over the past 20 years.

There is a range of issues relating to the processes for enforcement of both present State and Territory legislation and future federal legislation which is beyond the scope of this submission. However, as for many forms of legislation, enforcement should be a measure of last resort, with the primary purpose of the legislation being promotion of positive behaviours and attitudes and prevention of discriminatory practices.

Recommendation 5 Follow through the commitment in the 2001 Federal Election to introduce a Federal Age Discrimination Act to match those of sex, race and disability Education campaign to complement introduction of the Act.

6. Meshing Newstart Allowance with retirement incomes policy

The Welfare Reform announcements of the 2001 Budget have provided a good starting point for reform of social security policy. Working Credit marks a significant improvement on current arrangements for encouraging unemployed people to take up opportunities for part time and casual employment.

However considerably more needs to be done for mature age people.

There have been significant shifts in government policy which are seeking to place greater emphasis on individual responsibility for income and care needs in old age. However, loss of a job followed by long term unemployment disrupts the accumulation process and places pressure on existing assets.

There are significant numbers of unemployed mature age people who are not eligible for any income support due to the social security assets test. Newstart Allowance is not payable to people with financial assets over the following amounts (September 2001).

Assets test for home owners

Family situation
Single	$141 000
Partnered (combined)	$200 500

Assets test for non-homeowners

Family situation
Single	$242 000
Partnered (combined)	$301 500

In the context of an asset base which would provide a reasonable level of independence from government income support in retirement, these assets limits are set at quite low levels. In addition there is no tapering of eligibility for Newstart Allowance, such that one dollar over the threshold, disqualifies an individual from any assistance at all.

The reasons for the strict assets test are well understood by COTA. The assets test has assisted in keeping outlays for unemployment payments in check and has ensured that assistance is targetted to those most in need. Short term income support has been and continues to be its primary purpose. Nevertheless, there are important questions about short term goals in social security financing versus long term goals for Australia's retirement incomes system. There is also an important question about the lifecycle context of the income support system.

Is the application of the same assets test to a 55 year old unemployed person as is applied to a 25 year old unemployed person consistent with the aim of Australia's retirement incomes policy to encourage self-provision?

COTA proposes that there is an inherent inconsistency in applying the same assets test for people in their fifties as is applied to younger people given that people naturally accumulate financial assets for retirement and old age as they age. Retrenchment payouts are often the single largest amount of money that people receive throughout a lifetime. This money may be the last savings an older person is able to make.

The problem for many mature age people is that once an asset base has been depleted opportunities for building it up again are severely limited by lack of employment or new income generating opportunities. These issues are not faced to the same extent by younger people. Therefore it is not reasonable to apply the same rules to older people and younger people.

Protection of the assets for retirement and old age should be a primary goal of a retirement incomes policy. In addition to protection of existing assets, most people in their fifties wish to add to the asset base for retirement purposes. For many people, the fifties may be the first opportunity they have to save once children are off their hands and the house is paid off. The cost of raising and educating a family is very high. In addition the later age of marriage and child rearing may significantly delay the saving process.

Recommendation 6.1

The social security assets test for mature age people should be revised to more realistically reflect lifecycle factors affecting savings and to be cognisant of the retirement savings requirements of older Australians. This may lead to the development a graduated age-related assets test.

In the event that a mature age unemployed person qualifies for Newstart Allowance under the assets test, the following issues emerge:

• Newstart assumes short term reliance and is set at a lower level than a pension for this reason: $182.30 for a single rate per week compared to $205.25 per week for a pension. For mature age people with an average duration of unemployment of around two years, dependence on Newstart Allowance creates significant financial pressures – debt build-up, depletion of savings, and possible deterioration of physical assets such as a house.

• Newstart Allowance does not attract the same level of fringe benefits as pensions. These fringe benefits are very important for supporting people with major household costs such as council rates and car registration.

• The income test for Newstart is much stricter than for pensions: $31 per week compared to $56 per week (singles) with a harsher withdrawal rate for private income earned over these amounts. This is a very significant anomaly although the Working Credit scheme may assist to ameliorate this problem.

The average duration of unemployment for people in their fifties calls into question whether or not Newstart Allowance at its current rate is the appropriate payment for this group. If poverty alleviation is a serious goal of the social security system, then the adequacy of Newstart as the primary means of support for unemployed people in their fifties experiencing long term unemployment must be questioned.

Recommendation 6.2

Newstart Allowance for older unemployed people should be increased or replaced with another payment that more realistically reflects the duration of unemployment they are likely to experience: the current level of a pension payment would be appropriate. This new payment should be introduced for people 50 and over – or even 45, the age at which age discrimination begins to manifest itself. The income test for this payment should also be lifted to the same income test as for a pension income.

7. Defer abolition of Mature Age Allowance

COTA believes that the Government's decision as part of Welfare Reform to abolish Mature Age Allowance from July 2003 (ie no new entrants) is premature. Joblessness amongst the over 60s is very high. Until such a time as there is a substantial improvement in employment opportunities for this group, a Mature Age Allowance which dovetails into the Age Pension will be needed.

Abolition of the payment will result in unnecessary stress and hardship. It is likely to result in more individuals in the age group taking up disability payments.

Recommendation 7 Defer abolition of Mature Age Allowance until there is significant improvement in employment rates for people 60 and over.

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Copyright © 2001 Council on the Ageing. All rights reserved.
Date: 1 March 2003
Revised:

Council on the Ageing (Australia)
Level 2, 3 Bowen Crescent, Melbourne Vic 3004
Tel (03) 9820 2655 Fax (03) 9820 9886
email cota@cota.org.au
www.cota.org.au