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*Boomers will work us over

FIGHT? The French? Crikey, this must have been serious.
 
Furious French students, farmers and unionists revolted as one in violence across the nation last week.

Protesters shut Orly airport and disrupted flights across the country, truck drivers blocked roads, all 12 oil refineries were paralysed by industrial action cutting off petrol to consumers, and a million people took to the streets throwing rocks, letting off flares, smashing windows, overturning cars, and injuring up to 100 police officers, who in turn fired back with tear gas.

If only these people had shown such ticker when the Nazis turned up in 1940. With the future of the free world at stake, the French surrendered.

If it weren't for the Anzacs and their mates, they'd be speaking German and collaborating with them to export Sparkling Rhinegold.

So what's upset them more than the threat of Adolf Hitler and National Socialism? The threat of work. You know - employment, toil, effort, labour. We call it yakka.

Put aside for the moment that many regard the French as untrustworthy, conceited and unreliable - unlikely as it sounds, last week they taught us a lesson.

We are all going to work well beyond the age at which our parents retired, and there will be real pain as we make the adjustment.

The French economy is most often characterised by its inefficient and recklessly subsidised farmers.

But can you believe that the friction last week was over their President, Nicolas Sarkozy, insisting the legal retirement age be raised from 60 to 62?

They already have the earliest retirement age, and over-generous pensions - so much so that the country was headed to bankruptcy. Indeed, economists say it has arrived and that there are too few taxpayers in France today to afford the pensions of those who no longer wish to work.

Early this year Greeks rioted in the streets - and people were killed - as they digested the news that they'd be working until at least 63.

Greece has other problems: not only are its pensions absurdly generous, it is still a corrupt society, and it spends too much on defence in case it need go to war with its NATO ally, and ancient foe, Turkey. That it will never be allowed to is beside the point.

Australia is not impeded by such security concerns, and we have already agreed - without so much as a rotten egg being lobbed - with the decision taken at the last Budget to ratchet up the age at which we qualify for the pension by six months every two years starting in 2017. In 2023, Australian men and women will need to be 67 to get a state pension.

No one has the courage to tell you yet, but that's just the start. An almost perfect storm of unimaginably expensive demographics is headed our way. The baby boomers - those born in the fertile years following World War II - start retiring next year.

As youngsters, they bought The Beatles' Sgt Pepper's Lonely Hearts Club Band album and were charmed by Paul McCartney's whimsical When I'm 64.

This year they are 64.

So there are a lot of them. Well, OK, us. But that's not the problem.

The problem is the years they can expect to live from here on.

The boomers were undoubtedly the foot soldiers who built the economies of the West over the past 40 years, but now they are a demographic time bomb whose persistent ticking should be keeping our politicians awake at night.

When aged pensions were introduced to Australia more than a century ago they were pegged at those aged over 65. Few lived to that age. Back then, the average life expectancy for men was 55 years and two months. For women it was 58 years and eight months.

Today, the average life expectancy for men is 78 years and seven months, and for women 83 years and five months.

The bad news for our economic planners is that, should you make 65, you are likely to live another 20 years.

When the Business Council of Australia suggested last year that the retirement age may need to be raised to 73, it was ridiculed, and quickly took some well-judged backward steps.

But the BCA was right, even if it got the number wrong. And it probably didn't.

Living as long are we do today means that many more of us fall victim to the main neurological disorders of old age - Alzheimer's and Parkinson's diseases.

They are incurable, degenerative and terminal. Patients will live on for years, but will spend many of them in states of high dependency - possibly at first with loving children or partners, but later in professional care.

That will be 24 hours a day, seven days a week, and every day of the year.

Boomers will, quite rightly, point out that they have spent a lifetime paying taxes and medical insurance, and that this is now their hour of need. But it won't be an hour. It won't be a week or a month. It will be uncounted years.

So to pay those bills we'll have to access much of the unused productive capacity sitting dormant in our economies; that is the fit, employable, would-be taxpayers who these days enjoy what we'll soon see as early retirement. We have no choice.

Australia's leading demographer, KPMG partner Bernard Salt agrees: "In 80 years we have extended life expectancy by 20 years.

"If you save a kid from measles that person then becomes an adult and pays 40 years of tax back into the system.

"When we extend the life expectancy of someone in their 80s or 90s, you're extending them so they can continue to draw down services from the state.

"I'm not saying its wrong. That's the economic fact."

Salt understands that a greater debate has begun to open up. All Australians may be equal, but is it right that 95-year-old has a right to use a $1 million piece of hospital equipment for six months to extend their life by that time? Or should we spend that money on a 25-year-old?

Salt says the 4.5 million Australian soon-to-retire boomers were born of a generation that lived through the Depression who valued "bizarre concepts like sacrifice and going without. Not the baby boomer".

"We as a society are very happy to pay you a pension from the age of 65. But you've got to promise to drop dead 10 years later. We haven't been keeping our side of the bargain!"

Salt sees older workers doing fewer hours and being taxed.

Talk about a game-changer; the baby boomers might deliver the baby bust.

Not only will all this fundamentally realign our economy, it will influence our thinking on what is a productive working life, migration, what incentives there should be for larger families, our attitudes to euthanasia, and will be the key driver of the debate about just how many people this country handle.

Kevin Rudd wanted a big Australia; Julia Gillard doesn't. But a small Australia won't pay the bills.

*Article by: Alan Howe, published in the ‘Heraldsun’ 25th October, 2010