Who’ll pay for our long lives and pensions?

Today in The Australian

There was good news late last year for governments struggling with soaring pension costs: according to a study published in the prestigious journal Nature, it may not be possible to extend the human lifespan beyond the ages already attained by the oldest people on record.

About Henry Ergas

Henry Ergas AO is a columnist for The Australian. From 2009 to 2015 he was Senior Economic Adviser to Deloitte Australia and from 2009 to 2017 was Professor of Infrastructure Economics at the University of Wollongong’s SMART Infrastructure Facility. He joined SMART and Deloitte after working as a consultant economist at NECG, CRA International and Concept Economics. Prior to that, he was an economist at the OECD in Paris from the late 1970s until the early 1990s. At the OECD, he headed the Secretary-General’s Task Force on Structural Adjustment (1984-1987), which concentrated on improving the efficiency of government policies in a wide range of areas, and was subsequently Counsellor for Structural Policy in the Economics Department. He has taught at a range of universities, undertaken a number of government inquiries and served as a Lay Member of the New Zealand High Court. In 2016, he was made an Officer in the Order of Australia.
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27 Responses to Who’ll pay for our long lives and pensions?

  1. stackja

    God alone knows. Mere humans can guess. Left say higher taxes. Maybe an asteroid will end it all.

  2. Jessie

    In worms, mice and flies, for instance, researchers have radically extended lifespan by suppressing genes involved in growth-factor signalling, or by restricting food. Human cells have been rejuvenated by delivering RNA encoding a protein that extends telomeres, protective caps on the ends of chromosomes that are associated with ageing and disease. If it wasn’t possible to extend the maximum lifespan in humans, says Faragher, “this would make us different from every other experimental species we’ve tried”.

    Medicine was not included in the study, so I found after making my short list.

    Obviously the pharmaceutical and medical device companies under Malcolm’s smart and entrepreneurial nation will have to increase the shelf-life (and veracity) of their patents.
    Less work for the TGA and its many King Hydra affiliates.
    Medicare inc PBS will be phased out/down and assist in this increased shelf-life.
    Tax payer funded research grants will be scrutinised 🙂

    Why then would investors be interested in investing in bio-medical/science? Short term gains?

    Calment, the study concluded, was a statistical outlier, with its best estimate being that the likelihood in a given year of seeing one person live to 125 anywhere in the world is less than one in 10,000.

    Interesting read, thank you Henry Ergas. And for your many other posts.

  3. OneWorldGovernment

    Who’ll pay for our long lives and pensions?

    Mostly the so called ‘public servants’.

    Get rid of the highest paid 33.3% of ‘public servants’
    Get rid of NBA, Gonski, NDIS, BOM, ABC, Excise Duties.
    Pay teachers, police, fire fighters, judiciary on results.
    Tear up the submarine contract.
    Shut down ADFA, ACCC, ASIC whatever boondoggles.
    Stop all overseas aid including Papua New Guinea and the UN.
    Halve the number of politicians in every parliament.
    Stop Student Loans and defund so called ‘universities’.
    Open up all Commonwealth and State ‘Parks’ for commercial development including ‘fracking’.
    Suspend all immigration for 10 years.
    Absolutely destroy RET, wind mills and solar panels and stop all subsidies
    Build 4 new coal fired electricity plants.
    Build 3 Nuclear Power plants.
    Stop subsidising Tasmania and SA.
    Distribute GST on basis of revenue collection.
    Wipe out Payroll tax, stamp duties.

  4. Sparkx

    I like the way you think OWG.

  5. struth

    Who’ll pay for our long lives and pensions?

    I’ve already paid for it, but the government spent it on ….
    The ABC
    Helicopter flights
    Trips to the gold cost to buy property.
    The yaaarts.
    Safe schools.
    The teachers union.
    Aboriginal parasitical duplicated services.
    The Clinton foundation.
    The UN
    The HRC
    Various green “subsidies”
    Employing more public servants than the entire population of many countries.
    Their own retirement.

    I’ve just realised I don’t have enough time to finish this.

  6. memoryvault

    Human beings are programmed to live, on average, for between seventy and eighty years. It’s hard-wired into our DNA. We knew that 5,000 years ago. All that’s happened lately is that more of us are getting to live out our allotted time without succumbing to illness, disease or accident prematurely. This will remain the case until/unless we learn to reprogram our DNA.

    All this recent talk – mostly by politicians – of us living until we’re 150, is to set us up for new laws to prevent people withdrawing out their super. Instead, you will be required to live on the income generated by the accumulated balance, and when you cark it the remaining funds will revert to the State, via some kind of death duties or some such.

    The folks in their eighties and nineties now, on which these longevity claims are based, were forged in a different era. They were born into depression and war and all the deprivations of those times. They grew up doing it hard, and doing it lean. They worked hard physical labour twelve hours a day, and they didn’t eat processed crap.

    Go sit outside a shopping centre in any Boganville for an hour or two. Half the under-forties are morbidly obese, and their kids are even worse. Their shopping trollies are bulging with pre-cooked, microwave-ready crap with the nutritional value of cardboard, chips, dips and a gallon or two of coke to swill it all down with.

    Most of them won’t make to sixty.

  7. Mundi

    I agree. Average Life span is risen by preventing deaths from illness, but overall lifespan in western countries seems to have peaked and is now on decline, mainly thanks to obesity.

    If you want love a long time the only trick is eating as little as possible. There is direct correlation between eating less and living longer, with the low calorie diets of Japan and medditerain islands giving them the longest life spans.

    The pension will slowly have its assets and income tests squeezed and the age you can get it risen continually, so there won’t really be a problem, as the only people in pension will be the ones who never worked.

  8. OneWorldGovernment

    Remove all excise duties and encourage people to smoke tobacco and drink alcohol.

    Cheap fuel, smokes and grog will cut obesity within 10 years.

  9. john constantine

    The long lives and retirement benefits of their social justice aristocracy will be paid for by their solyent green monopoly and the whipped and beaten productivity of the vast and teeming client herds of the shantytowns.

  10. min

    When all the savings are gone and nursing home care is needed who will pay for it? The costs are huge what I can see is another tsunami that will hit the government in a few years .

  11. struth

    Cheap fuel, smokes and grog will cut obesity within 10 years.

    If the ageing population was a problem for governments they would be encouraging smoking, drinking and the eating of spoonfulls of sugar.
    There would be no [email protected]
    Governments don’t think reasonably about taxation.
    They just look for an excuse.
    A big difference.
    My dog sometimes pretends not to hear certain orders she does not like but always hears the ones she does, before they are even finished.
    This enthusiasm for the latter is the canine version of a government and tax.

  12. incoherent rambler

    Absolutely destroy RET, wind mills and solar panels and stop all subsidies
    Build 4 new coal fired electricity plants.
    Build 3 Nuclear Power plants.

    I am on-board with this, except the 4 should be 8. Each of them around 2.5 GW.

  13. Roger

    Who’ll pay for our long lives and pensions?

    Struth presents the situation of the average worker at 8:32am.

    Without the government in his pocket over the course of his working life, he could have self-funded his retirement comfortably. A meagre pension with benefits when he can no longer work is not unjust under such conditions.

  14. Zulu Kilo Die Onuitspeeklike

    I’ve already paid for it, but the government spent it on ….
    The ABC
    Helicopter flights
    Trips to the gold cost to buy property.
    The yaaarts.
    Safe schools.
    The teachers union.
    Aboriginal parasitical duplicated services.
    The Clinton foundation.
    The UN
    The HRC
    Various green “subsidies”
    Employing more public servants than the entire population of many countries.
    Their own retirement.

    I’m a self funded retiree, still paying tax for the Government to spend on the long and dismal list above…

  15. Tator

    OWG, agree with most of your list, but don’t bring coppers and firies into performance pay. Firstly I have been through the detail of Police Performance Pay in detail and the downside is very ugly. How do you compare performance. Do you do it on arrest rates, expiation notice rates, guilty verdicts or reported crime rates, all of which have huge variations in workload in different circumstances. How do you compare for example, a major crime detectives workload with another. One might spend months on a complex murder, interviewing hundreds of people, compiling hundreds of declarations and working through various scenarios to identify previously unknown offenders to another whose case is a lay down misere where the crook is basically caught in the act or immediate aftermath. Or a Fraud detective working a complex fraud compared to a simple fraud.
    It is also open to corrupting officers by taking away their discretionary powers to caution people and forcing them to push people into the justice system.
    In addition, crime is not a steady state workload, there are major peaks and troughs in an hard to predict pattern as most of it is related to human behaviour and impulse control. Having worked in Police Comms for nearly a decade, I can tell you even the best laid operational plans for major peaks such as major holidays etc can come unstuck. As many from the military here can attest, even the best made plans never survive first contact.
    Then you also have the phenomenon called the shit magnet, the officer whose presence brings down the wrath of god on his peers creating mayhem and chaos and a bucket load of work yet there are coppers out there who live a charmed life who works shift after shift after shift with nothing happening. Do you want to force them to “create offences” so they meet their performance criteria. General duties policing is around 75% luck and 25% good police work, detective work is the opposite and then how do you develop a performance management matrix for groups like STAR Ops where their main role is for high risk incidents, search and rescue and VIP protection etc. How do you judge the performance of a police sniper who has never had to take a live shot, or an CQB assaulter who has never had to undertake a forced entry Direct Action. The metrics are too complex and also very subjective, as with the military, police are actually paid on what skillsets they acquire and use along with the level of accountability they assume along with penalty rates for the 24/7 shift work the job entails.
    In addition, there is performance management within the Policing Services, I know for certain there is within SAPOL for underperforming officers. Many of these cases are basically square pegs in round holes scenarios where the person is unsuited to that role. I know this because I was one, struggled whilst on general duties but once transferred to Comcen, flourished to the extent where I was relieving the Comms Sergeant whilst only a baggy arsed Constable. Many who are poor patrol officers turn out to be great Crime Scene examiners, prosecutors or even intelligence analysts. The strength of Policing as a career is the vast variety of specialities within the one occupation and it is this vast variety which makes it difficult to accurately measure performance.
    As for firies, same theory, what performance matrix would you use, number of fires fought, number of lives saved, number of crashes attended, value of property preserved and the list goes on and we even have shared zones where both paid and volunteer firies attend fires, how do you account for that in a performance matrix. You really don’t want firies going out lighting fires just to boost their stats do you??? There is a big enough problem keeping people out of the volunteer brigades who do that sort of thing.

  16. Tator

    disclaimer, I am now a retired copper, so I have little to gain from arguing for or against this topic, but it is one I do know relatively well.

  17. serene tiger

    They love to blame the old people for their shortcomings. It is not the old age pension that cost rivers of money for the government! It is the leeches with four wives and dozens of children – the not disabled on the disablity pension who are well anough to go and fight with ISIS – it is the waste of the Aboriginal Industry and it is themselves: the politicians.
    The excellent lists of previous posts would solve the problem in a month. Stop blaming the old people who worked all their lives, paid their taxes and never asked for hand-outs but rather tightened their belts. I am so sick of these bastard who should protect the people of our ountry instead of wipping us all the time and make us feel worthless, unwanted and depressed.

  18. Myrddin Seren

    When all the savings are gone and nursing home care is needed who will pay for it?

    At the moment – governments are ‘asking‘ the frail elderly if they would like the express lane to dropping off the twig ?

    Not a stretch to imagine governments like Dan Andrews’ in the DPRV just popping a mandatory needle in to the frail and chronically unwell to cut those care costs.

  19. Nicholas (Unlicensed Joker!) Gray

    The piece ignores other items of news, like the fact that you will soon be able to 3D print your own replacement organs. I don’t know how you’ll get a new heart into your body, but it will not be impossible! (Anyone for do-it-yourself heart replacement kits?) They’re already finding ways to get colour back into hair. I think he’s too pessimistic.

  20. Dr Fred Lenin

    Bring in full renewable power at twenty times coal cost ,abolish welfare .many thousands will die of cold ,heat and starvation . This will allow our hundreds of governments thousands of youniversidies and

    millions of public servants to raise their standards of living . The problem will be solved untill the TAXPAYERS all die then we will rethink the master plan . Innovation and original thoughts are our stregnths as malcolm ruddbull said .

  21. King Koala

    Who’ll pay for our long lives and pensions?

    All those muslims, africans and chinese we keep importing. Sure they use up more money than they pay into tax, sure they fleece as much wealth as they can to send back home, sure they don’t really like us but they are the future racists so get used to it.

  22. .

    Chinese immigrants are tax hoovers? This is a new one.

  23. John Comnenus

    I wrote a speech for my boss on this topic in a speech about medical innovation.

    My argument was that medical innovation will send us broke by keeping us alive too long. At the moment the wealthiest and most advanced countries can’t afford their pension systems where you use about half of your life 20-65 to fund the last quarter of your life 65-85.

    Now imagine how that works when your working life is roughly 45 years and your retirement is 60 years. The system doesn’t work and cannot work. Henry is wrong to say life expectancy isn’t as important as the percentage of people who are retired. I ain’t got no fancy sandstone uni phd in economics but if just about every one lives longer on average a lot more people will be retired and for a lot longer.

    Henry, as astute and erudite as he is, sometimes misses the most obvious points.

    There is no way to work the system under the current parameters. What will probably need to happen is that people will need to be cognitively and physically enhanced to enable them to remain in the workforce much longer. Fortunately medical innovation will help and this should be an area of massive government research focus. In the end this will become one of the most important areas of human – robotic research because it will need to be.

    It will also raise important ethical questions such as when do you cease to be a human, as we currently understand the term? When 20% of motor skill is computer driven through your physical augmentation or when 10% of decisions are implanted AI driven?

    These are really big challenges and they will change the very understanding of what it is to be human. Alas, Henry didn’t address any of these important issues in his article.

  24. Snoopy

    It’s all good. Dot’s going to pay for my pension and Dot is also going to pay for his pension. Everything will work out fine. Don’t panic.

  25. Me if you keep your fucking mitts off my super.

  26. Tator, you can’t quantify quality. Anything with complexity or wide variation is inherently unquantifiable.

    Quantifying police work is insanity.

  27. EB

    I’d be more worried about the medical spend to keep them going with a continual can kicking exercise. Through this foodie boom foods that were going out of fashion are being wolfed down and widening arses and clogging arteries like never before.

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