Australia says it needs thousands of over 65s to go back to work

Australian labour force participation rates for people aged 55-64 is lower than in New Zealand. Photo / Thinkstock

Australia is mobilising its grey army in a bid to offset falling migration and sliding population growth as demand for skilled workers outstrips supply.

Treasurer Wayne Swan yesterday announced measures designed to stem the flow of ageing Australians into retirement, including an expert panel to advise on the economic potential of seniors.

It will join an existing consultative forum on mature-age employment, established to find means of boosting workplace participation rates among older Australians and which will produce a series of reports this year.

Enticements to continue working already in place include a new "work bonus" allowing over-65s to earn A$6500 ($8450) a year before their pensions are affected.

A new full-time age discrimination commissioner will also start work in July to tackle prejudice against seniors in the workforce.

"In New Zealand labour force participation rates for people aged 55-64 are around 76 per cent," Swan said.

"In Australia that rate is only 63 per cent. If we could deliver a similar rate, we'd see 330,000 more workers giving us the value of their experience and know-how.

"Enhancing mature participation is simply one of the most important issues facing our economy today."

The impact of Australia's emerging skills shortage - heightened by flood and cyclone reconstruction - has already been felt in New Zealand, where increasing numbers are moving across the Tasman.

Statistics New Zealand said half of the steep decline in net migration gain in the year ended January - less than 50 per cent of the 20-year average of 12,000 and down from 22,600 the year before - was due to transtasman migration.

But Australia is attracting fewer people from the rest of the world.

Bureau of Statistics figures this week showed that as the nation struggled to find enough people to fuel its resources boom, its annual population growth rate in the year to last September slowed to 1.6 per cent - down from a peak of 2.2 per cent in the year ending December 2008 and the lowest since the September 2006 year.

Net overseas migration in the three months to the end of last September was more than 40 per cent down on the previous year's corresponding period.

Migration's share of the increase that took the nation's population to 22.4 million in the September year fell from 65 per cent to 54 per cent.

A population study released yesterday by accountancy firm PKF said falling rates of population growth had come as policymakers turned away from the earlier "big Australia" ideal.

"That changing political climate combined with external factors has seen a sharp swing in the rate of migration to Australia," the report said.

Strengthened by an ageing population, present trends could signal the start of a decline in growth that could last a generation.

PKF linked the decline to changes in immigration policy and tougher rules on foreign students.