Dr Matthew Thomas and Geoff Gilfillan
In keeping with the broader emphasis on older Australians in
this year’s Budget, much of the funding for employment participation measures
is directed towards supporting mature age job seekers to remain in or re-enter
the workforce. Mature age job seekers are defined as those aged 45 years and
older.
Mature age labour force
participation
As Graph 1 indicates, labour force participation for men
aged 45 to 54 years has remained strong and stable over the past 40 years, only
falling slightly from around 92.5 per cent in March 1978 to 88.2 per cent in
March 2018.[1] Over the same time
interval, the labour force participation of women of the same age has risen
significantly, from 46.6 per cent to 80.2 per cent.
Graph 1: labour force participation, 45 to 54 years
Source: Australian Bureau of
Statistics (ABS), Labour Force, Australia, detailed–electronic delivery, cat. no. 6291.0.55.001, ABS, March 2018.
The rate of labour force participation for men aged 55 to 64
years fell steadily from around 75 per cent in the late 1970s to around 60 per
cent in the mid-1980s, as indicated in Graph 2, and remained at about this
level for the next 20 years. The rate steadily increased from 60.3 per cent in
March 2000 to 73.6 per cent in March 2018. Labour force participation for women
aged 55 to 64 years stood at around 20 per cent from the late 1970s to the
mid-1980s, but has been rising steadily to around 59.9 per cent in March 2018. The
labour force participation rate for all people aged 55 to 64 years was exactly
two-thirds (66.6 per cent) in March 2018, which compares with 47.9 per
cent in March 2000.
Graph 2: labour force
participation, 55 to 64 years
Source: Australian Bureau
of Statistics (ABS), Labour Force, Australia, detailed–electronic delivery, cat. no. 6291.0.55.001, ABS, March 2018.
The labour force participation rate for both men and women
aged 65 years and older started to accelerate from around 2004. The rate for
men aged 65 years plus increased from 10.1 per cent in March 2004 to 17.6 per
cent in March 2018, while the rate for women of the same age increased from 3.3
per cent to 10.3 per cent. The labour force participation rate for all people
aged 65 years plus more than doubled from 6.2 per cent to 13.7 per cent during
the same interval.
Increasing the labour force
participation of older Australians
In the case of older Australians (55 years and older), labour
force participation has increased significantly as a result of a number of
factors. These are likely to include:
-
the generally improved health of older Australians
-
the availability of more flexible and less physically demanding forms
of employment which have been used by some older Australians to transition to
retirement
-
the extended period of economic growth in Australia from the
mid-1990s to the global financial crisis (GFC) of mid-2007 to 2009 which
created job opportunities for older people and
-
decisions to remain in employment longer which have been
influenced by the combination of a slowing in growth of superannuation balances
following the impact of the GFC and various measures introduced by successive
governments to increase older worker retention, such as the increase in the age
at which people are eligible for the Age Pension.[2]
Despite the substantial increase in participation, Australia
is on some estimates still only a mid-table performer where it comes to the
employment of older people compared with other OECD countries.[3]
There is also evidence that many older Australians who would like to work are
unable to do so, whether for reasons of age discrimination or a lack of
relevant skills.[4] Older people who become
unemployed tend to experience greater difficulty than younger people in gaining
subsequent employment.[5]
The Budget provides funding for a range of measures aimed at
improving the labour force participation of mature age people. These include:
-
$136.4 million over four years for training to assist job seekers
aged 45 years and over with tailored career assistance and the development of
information and communications technology (ICT) skills
-
$19.3 million over three years for matched suitable training
funding of up to $2,000 for workers aged 45 to 70 years who seek to stay in the
workforce longer
-
$15.2 million over three years to assist mature age workers who
are likely to be retrenched or leave the workforce to remain employed or find a
new job
-
$17.7 million over four years towards Entrepreneurship
Facilitators who will assist older Australians at risk of unemployment to
become self-employed[6] and
-
$17.4 million over four years to establish the Skills Checkpoint
for Older Workers program, which will provide employees aged 45 to 70 with guidance
on transitioning into new roles within their current industry or pathways to a
new career.[7]
The Government has also
indicated that it intends to ‘establish a collaborative partnership with the
Age Discrimination Commissioner, business peak bodies, universities and other
experts to encourage employers to create more mature age friendly workplaces
and reduce age discrimination’.[8]
Comment
The Skills Checkpoint
for Older Workers program is based on a pilot which ran from December 2015 to
May 2016. The pilot was delivered in three locations by select members of the
Australian Apprenticeship Support Network (AASN), and had 1,067 participants. The
findings of an evaluation of the pilot undertaken concurrent with its delivery
were generally positive, and some of its recommendations, such as raising the
upper participation age beyond 54 years, have been adopted. It was a
recommendation of the Australian Human Rights Commission’s national inquiry
into employment discrimination against older Australians and Australians with
disability that the program be rolled out across Australia.[9]
It should be noted that
much of the funding for the above measures is not new; many of the measures
have been partially funded from existing Department of Jobs and Small Business resources.
Other workforce participation
measures
While a majority of the
funding for workforce participation measures in this year’s Budget is directed
at mature age job seekers and workers, there is also funding for:
-
an online employment services trial for the most job-ready job
seekers ($12.2 million over three years)[10]
-
a trial of localised approaches to delivering employment services
in ten disadvantaged regions ($18.4 million over three years)[11]
-
assistance to ensure continuity of service in the transition to a
new funding model for Disability Employment Services ($9.9 million over two
years) and
-
the extension of the Transition to Work program which provides intensive,
pre-employment support to early school leavers aged 15 to 21 years to improve
their work readiness and help them into work or education ($89.0 million over
four years).[12]
It should be noted
that, once again, much of the funding for these measures has been derived from
existing resources. While the budget papers state that an additional $89.0
million has been allocated towards the Transition to Work program it is not
clear how this reconciles with the figures in the financial table at page 160
of Budget Paper no. 2, which indicate a reduction in funding over the forward
estimates.
None of the above
measures will require legislation.
[1].
Under the Australian Bureau of Statistics’ definition of employment,
which aligns closely with international standards and guidelines, employed
persons are those aged 15 years or over who, during the reference week, worked
for one hour or more for pay, profit, commission or payment in-kind, in a job
or business or on a farm (employees and owner managers), or worked for one hour
or more without pay in a family business or on a farm (contributing family workers),
or had a job, business or farm, but were temporarily not at work. Australian
Bureau of Statistics (ABS), Labour
statistics: concepts, sources and methods, cat. no. 6102.0.55.001, ABS,
February 2018.
[2].
See Australian Law Reform Commission (ALRC), Access
all ages—older workers and Commonwealth laws, ALRC Report 120, ALRC,
Sydney, 2013, pp. 55–56.
[3].
PwC, Golden
Age Index: how well are OECD economies harnessing the power of an older
workforce?, 2016. For more detailed data on ageing and employment in
Australia and other OECD countries, see the Organisation for Economic
Co-operation and Development (OECD), ‘Ageing
and employment policies’, OECD website.
[4].
Australian Human Rights Commission, Willing
to work: national inquiry into employment discrimination against older
Australians and Australians with disability, Australian Human Rights
Commission, Sydney, 2016.
[5].
Ibid., p. 11.
[6].
Australian Government, Budget
measures: budget paper no. 2: 2018–19, 2018, p. 157.
[7].
Ibid., p. 91.
[8].
Department of Jobs and Small Business, ‘2018–19
Budget Jobs and Small Business overview’, Department of Jobs and Small
Business website.
[9].
Australian Human Rights Commission, op. cit., p. 17.
[10].
Australian Government, Budget
measures: budget paper no. 2: 2018–19, 2018, p. 158.
[11].
Ibid., p. 159.
[12].
Ibid., pp. 160–161.
All online articles accessed May 2018.
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