1 00:00:03,470 --> 00:00:06,920 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean Aylmer. I 2 00:00:06,920 --> 00:00:09,980 Sean Aylmer: mentioned late last month, the release of the federal government's 3 00:00:09,980 --> 00:00:13,819 Sean Aylmer: intergenerational report. It's essentially a look at the next 40 4 00:00:13,820 --> 00:00:17,090 Sean Aylmer: years considering the outlook for the economy and the budget 5 00:00:17,090 --> 00:00:20,330 Sean Aylmer: in coming decades. As part of that, the report considers 6 00:00:20,329 --> 00:00:23,360 Sean Aylmer: the long term impact of current policies, as well as 7 00:00:23,360 --> 00:00:26,660 Sean Aylmer: how the economy could be affected by factors like demographic changes, 8 00:00:27,140 --> 00:00:30,680 Sean Aylmer: think immigration and population growth, as well as the ageing population. 9 00:00:30,980 --> 00:00:33,020 Sean Aylmer: It's really worth a closer look because there are some 10 00:00:33,020 --> 00:00:36,260 Sean Aylmer: fascinating elements to it. David Robertson is the Head of 11 00:00:36,260 --> 00:00:39,350 Sean Aylmer: Economic and Markets Research at Bendigo and Adelaide Bank. He 12 00:00:39,350 --> 00:00:41,630 Sean Aylmer: joins me this morning. David, welcome to Fear and Greed. 13 00:00:41,810 --> 00:00:43,489 David Robertson: Thanks very much, Sean. It's great to be with you. 14 00:00:43,820 --> 00:00:47,180 Sean Aylmer: So how reliable are forecasts that are looking 40 years 15 00:00:47,180 --> 00:00:47,900 Sean Aylmer: into the future? 16 00:00:48,620 --> 00:00:53,460 David Robertson: Yes, Sean, that's a fair question given the Treasury forecasts, well, 17 00:00:53,510 --> 00:00:56,720 David Robertson: they don't have a great track record over four year 18 00:00:56,720 --> 00:00:59,750 David Robertson: periods with the forward estimates and each year's budget. So it's hard 19 00:00:59,750 --> 00:01:02,120 David Robertson: to have a lot of confidence about 40 year forecasts. 20 00:01:02,120 --> 00:01:05,449 David Robertson: But look, the modelling in the Intergenerational Report, it does 21 00:01:05,450 --> 00:01:07,760 David Robertson: test the assumptions and the key variables so I think it 22 00:01:07,760 --> 00:01:11,810 David Robertson: does give valuable insights. It shows how sensitive our economy 23 00:01:11,810 --> 00:01:16,280 David Robertson: is to say population growth changes and other demographic change, 24 00:01:16,310 --> 00:01:19,039 David Robertson: how sensitive the economy is to interest rates and so on. 25 00:01:19,040 --> 00:01:21,830 David Robertson: And I think it does also just show that policymakers 26 00:01:21,980 --> 00:01:26,750 David Robertson: are looking forward and considering the reality of demographic change. So, no, 27 00:01:26,810 --> 00:01:30,080 David Robertson: I don't expect the forecasts will necessarily be all that accurate. 28 00:01:30,200 --> 00:01:33,380 David Robertson: And as it happens, there are some glaring omissions in 29 00:01:33,380 --> 00:01:35,750 David Robertson: terms of what their modelling. This is not a lot 30 00:01:35,750 --> 00:01:38,420 David Robertson: of modelling around climate change, for example, and what it's going 31 00:01:38,420 --> 00:01:41,810 David Robertson: to do to budget costs, revenue and so on. But 32 00:01:41,810 --> 00:01:46,230 David Robertson: what has been modelled and projected for 40 years is fascinating. 33 00:01:46,250 --> 00:01:49,730 David Robertson: How the forecasts have evolved from previous intergenerational reports I think 34 00:01:49,730 --> 00:01:54,890 David Robertson: is also insightful and how the country responds to the 35 00:01:54,890 --> 00:01:58,580 David Robertson: reality of demographic change is a critical question to answer 36 00:01:58,580 --> 00:02:02,510 David Robertson: and to question how those inputs will change over the decades. 37 00:02:02,990 --> 00:02:04,490 Sean Aylmer: I remember when the first one came out and I 38 00:02:04,490 --> 00:02:06,600 Sean Aylmer: think it was under Peter Costello quite a while ago. 39 00:02:07,070 --> 00:02:08,630 Sean Aylmer: The one thing about it that I did think back 40 00:02:08,630 --> 00:02:11,000 Sean Aylmer: then was at least it makes people think about the 41 00:02:11,000 --> 00:02:15,620 Sean Aylmer: future because politics is so focused on the electoral cycle, 42 00:02:15,770 --> 00:02:19,040 Sean Aylmer: to actually have something where you're thinking bigger picture, irrespective 43 00:02:19,040 --> 00:02:21,710 Sean Aylmer: of whether your Coalition or Labor is a good thing. 44 00:02:22,130 --> 00:02:24,950 David Robertson: Absolutely. I think that first one was back in 2002. 45 00:02:25,280 --> 00:02:29,120 David Robertson: And yes, it's one thing to be cynical about exactly 46 00:02:29,120 --> 00:02:31,580 David Robertson: how accurate the forecasts will be in 40 years time, 47 00:02:31,580 --> 00:02:33,740 David Robertson: but that doesn't mean we shouldn't be thinking about that 48 00:02:33,740 --> 00:02:38,090 David Robertson: and at least considering demographic change and going through the process. 49 00:02:38,300 --> 00:02:41,210 Sean Aylmer: Yeah. So the report starts with the statement that 'COVID-19 50 00:02:41,210 --> 00:02:44,239 Sean Aylmer: will have lasting effects on the economy and the budget'. 51 00:02:44,540 --> 00:02:46,430 Sean Aylmer: Whilst we're all in the middle of it and when many 52 00:02:46,430 --> 00:02:49,100 Sean Aylmer: people are in the middle of a lockdown, it's really 53 00:02:49,100 --> 00:02:51,410 Sean Aylmer: hard right now, it is only a moment of time. And 54 00:02:52,040 --> 00:02:55,280 Sean Aylmer: 2020-2021 will probably in history be looked back as those 55 00:02:55,280 --> 00:02:58,580 Sean Aylmer: dreadful years, I suppose a bit like 1917-1918 with the 56 00:02:58,610 --> 00:03:01,280 Sean Aylmer: Spanish flu or was it 1918-1919, I think that the Spanish flu. 57 00:03:01,669 --> 00:03:03,050 David Robertson: 1917 was it? Yeah. 58 00:03:04,070 --> 00:03:05,930 Sean Aylmer: Yeah. Yeah. I mean, so it is just a moment in time. But 59 00:03:05,930 --> 00:03:09,320 Sean Aylmer: it's just interesting that the Intergenerational Report says this actually 60 00:03:09,320 --> 00:03:11,660 Sean Aylmer: will be a marker for decades to come. 61 00:03:12,169 --> 00:03:14,600 David Robertson: Yeah, that's right. And you look at how strong the 62 00:03:14,600 --> 00:03:18,080 David Robertson: recovery has been thus far. So I think it is 63 00:03:18,080 --> 00:03:22,690 David Robertson: important to differentiate between temporary one-off factors versus lasting impacts. 64 00:03:22,850 --> 00:03:25,970 David Robertson: So it's been great to see the economy respond to 65 00:03:26,090 --> 00:03:31,420 David Robertson: policy support. Measures of economic growth are now above pre-pandemic levels, 66 00:03:31,430 --> 00:03:34,920 David Robertson: even though Sydney and Victoria we're back in lockdown so, 67 00:03:34,920 --> 00:03:37,910 David Robertson: you know, the vaccinations can't come soon enough. But if 68 00:03:37,910 --> 00:03:41,990 David Robertson: we think about the post-pandemic economy once say over 80 69 00:03:41,990 --> 00:03:44,660 David Robertson: per cent of the adult population is vaccinated, by then the 70 00:03:44,660 --> 00:03:48,800 David Robertson: economy hopefully will be back pretty close to full capacity. Nevertheless, 71 00:03:48,800 --> 00:03:52,670 David Robertson: there will still be lasting impacts from the pandemic, and 72 00:03:52,880 --> 00:03:55,730 David Robertson: they'll mainly be around high levels of government debt, which 73 00:03:55,730 --> 00:03:58,430 David Robertson: was necessary to deal with the health crisis and also 74 00:03:58,430 --> 00:04:01,970 David Robertson: the impact that's been on population growth, what that means 75 00:04:01,970 --> 00:04:05,090 David Robertson: for the ageing of population and so on. So if we 76 00:04:05,090 --> 00:04:08,840 David Robertson: think about government debt now in the Intergenerational Report, there 77 00:04:08,840 --> 00:04:11,420 David Robertson: are structural deficits for the budget as far as the 78 00:04:11,420 --> 00:04:13,940 David Robertson: eye can see, and that is a material change from 79 00:04:14,000 --> 00:04:17,360 David Robertson: the last intergenerational report back in 2015, which had surpluses because 80 00:04:17,839 --> 00:04:21,200 David Robertson: had no net debt by 2030. So there are material 81 00:04:21,200 --> 00:04:24,590 David Robertson: changes and I think they will be more permanent. And 82 00:04:24,950 --> 00:04:29,570 David Robertson: actually, if we think about the government's fiscal response embracing fiscal policy 83 00:04:29,580 --> 00:04:31,940 David Robertson: I think has been the factor that set up the 84 00:04:32,240 --> 00:04:36,590 David Robertson: strong economic rebound and these latest outbreaks. And lockdowns just 85 00:04:36,589 --> 00:04:39,400 David Robertson: show that we need more. But Australia's triple-A credit rated. 86 00:04:39,560 --> 00:04:42,520 David Robertson: We had that affirmed by Standard and Poor's recently. So, 87 00:04:42,890 --> 00:04:44,990 David Robertson: you know, if we think about the impact of the 88 00:04:44,990 --> 00:04:48,950 David Robertson: pandemic on that and that's outlined in the Intergenerational Report, 89 00:04:48,950 --> 00:04:52,010 David Robertson: structural deficits and higher government debt that's going to be 90 00:04:52,010 --> 00:04:55,040 David Robertson: in place for decades. But I'm okay with that as 91 00:04:55,040 --> 00:04:57,700 David Robertson: long as we continue to grow the economy and we 92 00:04:57,710 --> 00:05:01,370 David Robertson: grow it inclusively and sustainably. The focus on productivity, the 93 00:05:01,570 --> 00:05:04,810 David Robertson: living standards, then that's an impact of the pandemic that 94 00:05:04,810 --> 00:05:08,050 David Robertson: we can live with, with the correct policy response to 95 00:05:08,050 --> 00:05:10,760 David Robertson: grow the economy, to deal with higher levels of government debt. 96 00:05:11,080 --> 00:05:14,140 Sean Aylmer: So we'll come to population growth in a moment. But 97 00:05:14,260 --> 00:05:17,350 Sean Aylmer: maybe one thing about the pandemic is it's made debt okay 98 00:05:18,040 --> 00:05:22,750 Sean Aylmer: again because for many decades it wasn't and governments campaigned 99 00:05:22,750 --> 00:05:25,900 Sean Aylmer: on that. But also, what about the way we live 100 00:05:25,900 --> 00:05:29,080 Sean Aylmer: our lives? I mean, eCommerce is a very obvious example 101 00:05:29,080 --> 00:05:32,479 Sean Aylmer: of that. Things that the pandemic that's occurred during 2020 102 00:05:32,890 --> 00:05:37,270 Sean Aylmer: and into 2021, which will fundamentally change the way commerce 103 00:05:37,270 --> 00:05:39,100 Sean Aylmer: works in society. 104 00:05:39,880 --> 00:05:42,880 David Robertson: Yeah, that's right. And look, we were already heading in that direction. 105 00:05:42,880 --> 00:05:46,570 David Robertson: If we think about how we were undertaking commerce, how 106 00:05:46,570 --> 00:05:50,350 David Robertson: we were shopping, an increasing percentage of that online, and 107 00:05:50,350 --> 00:05:53,920 David Robertson: that percentage has gradually been creeping higher, but it's taken 108 00:05:53,920 --> 00:05:58,810 David Robertson: a quantum leap through the pandemic. So now 2020, such 109 00:05:58,810 --> 00:06:00,940 David Robertson: a difficult year for businesses. But it's a lot of 110 00:06:00,940 --> 00:06:04,510 David Robertson: businesses have used this tectonic shift, if you like, in 111 00:06:04,510 --> 00:06:08,260 David Robertson: behaviour to really reassess their business models and say, all right, well, 112 00:06:08,260 --> 00:06:11,650 David Robertson: we knew people would be doing more click and collect 113 00:06:11,650 --> 00:06:14,289 David Robertson: and more surfing the net to investigate a product and 114 00:06:14,290 --> 00:06:16,780 David Robertson: then maybe coming into our shop to buy. But now 115 00:06:16,779 --> 00:06:18,820 David Robertson: we need to make sure we've got a robust business 116 00:06:18,820 --> 00:06:23,169 David Robertson: model which caters even more so for the online for 117 00:06:23,170 --> 00:06:26,890 David Robertson: the virtual experience. So, yeah, that was, if I can say, 118 00:06:26,890 --> 00:06:31,630 David Robertson: an evolutionary process has been a sudden tectonic shift and 119 00:06:31,630 --> 00:06:34,420 David Robertson: businesses have needed to jump with it. But if you 120 00:06:34,420 --> 00:06:37,599 David Robertson: look at the aggregate data, a lot of businesses have 121 00:06:37,600 --> 00:06:42,450 David Robertson: managed to achieve that. It's just so uneven, unfortunately, the recovery. 122 00:06:42,460 --> 00:06:44,989 David Robertson: So some have been left behind all along the way. 123 00:06:45,400 --> 00:06:47,409 Sean Aylmer: Stay with me, David. We'll be back in a minute. 124 00:06:52,210 --> 00:06:54,850 Sean Aylmer: My guest this morning is David Robertson, Head of Economic 125 00:06:54,850 --> 00:06:58,510 Sean Aylmer: and Markets Research at Bendigo and Adelaide Bank. So let's 126 00:06:58,510 --> 00:07:00,820 Sean Aylmer: get on to population growth and economists love talking about 127 00:07:00,820 --> 00:07:04,930 Sean Aylmer: population growth, David. What are the projections about the size 128 00:07:04,930 --> 00:07:08,140 Sean Aylmer: of Australia's population going forward and the role of immigration 129 00:07:08,140 --> 00:07:09,850 Sean Aylmer: and how COVID plays into that? 130 00:07:10,630 --> 00:07:12,940 David Robertson: Yeah, Sean, the Intergenerational Report and this is the first in the 131 00:07:12,940 --> 00:07:17,140 David Robertson: series where they've actually downgraded population growth. So we're still 132 00:07:17,140 --> 00:07:20,140 David Robertson: set to hit 30 million but about three years later 133 00:07:20,140 --> 00:07:23,230 David Robertson: than had been forecast. So we'll get there by mid-2030s 134 00:07:24,220 --> 00:07:28,870 David Robertson: rather than about 2031. The report has the population reaching 135 00:07:28,870 --> 00:07:32,530 David Robertson: almost 39 million in 40 years time. So, look, if 136 00:07:32,530 --> 00:07:34,900 David Robertson: you look at the population growth rate, it had been 137 00:07:34,900 --> 00:07:38,619 David Robertson: running at about 1.5 per cent per year. About 0.9 per cent of 138 00:07:38,620 --> 00:07:41,800 David Robertson: that was coming from net migration to Australia. And the rest, about 0.6, 139 00:07:42,490 --> 00:07:46,570 David Robertson: was coming from natural population growth. But in this latest report, 140 00:07:46,720 --> 00:07:50,590 David Robertson: both of those percentage contributions are forecast to fall. So 141 00:07:50,590 --> 00:07:54,610 David Robertson: net migration, that's a policy decision, it can be increased. 142 00:07:54,610 --> 00:07:56,770 David Robertson: And in fact, some of the modelling in the report 143 00:07:56,770 --> 00:08:00,780 David Robertson: shows our economy would benefit if it was increased but 144 00:08:00,790 --> 00:08:04,300 David Robertson: via policy that's set. In the report, it's modelled at 145 00:08:04,300 --> 00:08:09,520 David Robertson: being flatlined at 235,000 per year is the net migration increase. 146 00:08:09,790 --> 00:08:13,570 David Robertson: Natural population growth is falling simply because people are deciding 147 00:08:13,570 --> 00:08:15,970 David Robertson: to have less children. But if we think about the 148 00:08:15,970 --> 00:08:21,430 David Robertson: impact of the pandemic on migration, we closed international borders. 149 00:08:21,700 --> 00:08:25,090 David Robertson: Our population actually shrank in the third quarter of 2020 and 150 00:08:25,090 --> 00:08:27,610 David Robertson: we haven't actually had a shrinking population as a nation 151 00:08:27,610 --> 00:08:32,800 David Robertson: since 1916. So it was a significant demographic shock impacting 152 00:08:32,800 --> 00:08:37,660 David Robertson: on net migration and overall population, it's a key driver 153 00:08:37,660 --> 00:08:40,810 David Robertson: of economic growth along with productivity and participation rates and 154 00:08:40,809 --> 00:08:41,040 David Robertson: so on. 155 00:08:41,040 --> 00:08:45,189 Sean Aylmer: And that's because more people, bigger pie broadly? 156 00:08:46,330 --> 00:08:48,760 David Robertson: Well, you'd certainly rather have a growing population than a 157 00:08:48,760 --> 00:08:51,940 David Robertson: shrinking one. You think about, I suppose, how that flows 158 00:08:51,940 --> 00:08:57,370 David Robertson: through to productivity and how that flows through to demand. So, yeah, 159 00:08:57,400 --> 00:09:00,430 David Robertson: I think just a basic tenet is a growing population 160 00:09:00,429 --> 00:09:02,410 David Robertson: is better than a shrinking population. And I think that 161 00:09:02,410 --> 00:09:05,770 David Robertson: applies at a macro level as well as just through 162 00:09:05,770 --> 00:09:08,130 David Robertson: any city, town or suburb. 163 00:09:08,830 --> 00:09:12,219 Sean Aylmer: And the report describes the ageing population as our greatest 164 00:09:12,220 --> 00:09:16,120 Sean Aylmer: demographic challenge. Now, Japan is the standout, but also the 165 00:09:16,120 --> 00:09:18,940 Sean Aylmer: other big economies like China is another one where you 166 00:09:18,940 --> 00:09:22,000 Sean Aylmer: have definitely an ageing population. What does that mean for 167 00:09:22,000 --> 00:09:23,189 Sean Aylmer: an economy like Australia? 168 00:09:23,559 --> 00:09:27,250 David Robertson: Yes, an ageing population. And I think that's best measured 169 00:09:27,250 --> 00:09:30,220 David Robertson: by what's called the old age dependency ratio, which is 170 00:09:30,220 --> 00:09:33,309 David Robertson: just the number of working age Australians, those who are 171 00:09:33,309 --> 00:09:36,670 David Robertson: 15 to 64 year old versus those who are 65 172 00:09:37,000 --> 00:09:39,819 David Robertson: or older. And today that ratio is about four, just 173 00:09:39,820 --> 00:09:42,280 David Robertson: under four. But it was six and a half in 174 00:09:42,280 --> 00:09:44,650 David Robertson: the early 80s. It was just over five at the 175 00:09:44,650 --> 00:09:47,260 David Robertson: start of the century. We're down to four and it's 176 00:09:47,260 --> 00:09:50,860 David Robertson: headed for 2.7. So basically what that means is for 177 00:09:50,860 --> 00:09:54,940 David Robertson: every working age person, their taxes will be needed to 178 00:09:54,940 --> 00:09:58,150 David Robertson: support a larger number of older Australians. And you can 179 00:09:58,150 --> 00:10:01,780 David Robertson: extend that logic to implications for government spending on health 180 00:10:01,780 --> 00:10:04,809 David Robertson: care and the aged pension and so on. So that's 181 00:10:04,809 --> 00:10:07,510 David Robertson: the reason it's so important and why it's been given 182 00:10:07,510 --> 00:10:10,510 David Robertson: that title as our greatest demographic change. And if you 183 00:10:10,510 --> 00:10:13,600 David Robertson: look at the report, GDP growth is forecast to slow 184 00:10:13,630 --> 00:10:16,599 David Robertson: over the decades ahead. Because of that, it's forecast to 185 00:10:16,660 --> 00:10:18,790 David Robertson: be down to only about two and a half per 186 00:10:18,790 --> 00:10:23,290 David Robertson: cent by 2050. So that does all feed into income 187 00:10:23,290 --> 00:10:26,670 David Robertson: and standards of living. So certainly it is a huge challenge. 188 00:10:26,740 --> 00:10:31,660 David Robertson: It's I don't think it's insurmountable because leveraging innovation and technology, 189 00:10:31,990 --> 00:10:33,940 David Robertson: I think can be the solution there. It's the same 190 00:10:33,940 --> 00:10:36,219 David Robertson: way we're going to beat climate change. But all those 191 00:10:36,220 --> 00:10:38,530 David Robertson: scary things that lie in the decades ahead, it's all 192 00:10:38,530 --> 00:10:42,339 David Robertson: going to come back, I think, to leveraging technology. But look, yes, 193 00:10:42,340 --> 00:10:46,390 David Robertson: this demographic change talked about the difficulties in long term forecasting, 194 00:10:46,390 --> 00:10:49,319 David Robertson: but that's one trend that I'm very confident will happen. 195 00:10:49,320 --> 00:10:52,240 David Robertson: And that's why the report is so important to try 196 00:10:52,240 --> 00:10:54,970 David Robertson: to come up with solutions to that demographic change. 197 00:10:55,809 --> 00:10:57,610 Sean Aylmer: And I suppose one of the reasons why there was such a debate 198 00:10:57,820 --> 00:11:01,270 Sean Aylmer: earlier this year and late last year about the superannuation 199 00:11:01,270 --> 00:11:03,880 Sean Aylmer: guarantee and the idea of not increasing it to 12 200 00:11:03,880 --> 00:11:06,670 Sean Aylmer: per cent because retirement savings is obviously going to play a 201 00:11:06,670 --> 00:11:09,400 Sean Aylmer: bigger role in the next 20, 30, 40 years. 202 00:11:09,950 --> 00:11:13,660 David Robertson: Yeah, that's exactly right. And again, the Intergenerational Report talks 203 00:11:13,660 --> 00:11:17,319 David Robertson: about the pillars of retirement income being the age pension, 204 00:11:17,320 --> 00:11:21,160 David Robertson: the super guarantee and voluntary savings and the aim is or 205 00:11:21,160 --> 00:11:23,950 David Robertson: what the treasurer hopes, I'm sure, is that there's more 206 00:11:23,950 --> 00:11:27,670 David Robertson: coming through personal voluntary savings and self-managed super funds. And 207 00:11:28,300 --> 00:11:31,479 David Robertson: that super is a larger piece of the pie, taking 208 00:11:31,480 --> 00:11:33,940 David Robertson: the pressure off the age pension. So great to see 209 00:11:33,940 --> 00:11:37,110 David Robertson: the super guarantee now up from 9.5 to 10, to 10 to 210 00:11:37,120 --> 00:11:41,890 David Robertson: 12 per cent by 2025. And the report does show 211 00:11:41,890 --> 00:11:46,480 David Robertson: a rise over time of Australians not needing the pension 212 00:11:46,480 --> 00:11:49,180 David Robertson: as a percentage, and it shows a fall of those 213 00:11:49,540 --> 00:11:53,089 David Robertson: on the full rate aged pension around 50 per cent today to 214 00:11:53,090 --> 00:11:55,689 David Robertson: only 25 per cent by 2060. So they've got a lot 215 00:11:55,690 --> 00:12:00,580 David Robertson: riding on the super scheme working and greater voluntary savings. 216 00:12:00,580 --> 00:12:03,670 David Robertson: But hopefully,, that is a trend that does continue and 217 00:12:04,120 --> 00:12:07,030 David Robertson: that can reduce, I suppose, the burden of age pension 218 00:12:07,030 --> 00:12:10,000 David Robertson: from a budget expense point of view. But more importantly, 219 00:12:10,000 --> 00:12:14,020 David Robertson: it can lead to better, higher retirement incomes, therefore better 220 00:12:14,020 --> 00:12:15,640 David Robertson: standards of living in retirement. 221 00:12:16,090 --> 00:12:18,949 Sean Aylmer: Yeah, I mean, I'm a very sprightly 54 year old, David. 222 00:12:18,970 --> 00:12:21,310 Sean Aylmer: Very sprightly, I'd like to add. But I think I've 223 00:12:21,309 --> 00:12:23,830 Sean Aylmer: got 15 years of work left in me, which I mean 224 00:12:23,830 --> 00:12:27,550 Sean Aylmer: I'm almost 70 by the time I retire. And I 225 00:12:27,550 --> 00:12:29,109 Sean Aylmer: don't think I can rely on the pension. I just 226 00:12:29,110 --> 00:12:31,750 Sean Aylmer: think that's the well to achieve the standard of life 227 00:12:31,750 --> 00:12:33,910 Sean Aylmer: I want. And so I think probably people of my 228 00:12:33,910 --> 00:12:37,300 Sean Aylmer: generation and younger increasingly are just going to have to 229 00:12:37,300 --> 00:12:39,970 Sean Aylmer: assume they're not going to get the pension or it's just 230 00:12:39,970 --> 00:12:41,339 Sean Aylmer: a top up at the end of the day. 231 00:12:41,650 --> 00:12:44,230 David Robertson: Yeah, that's right. And I won't I won't reveal my 232 00:12:44,230 --> 00:12:46,840 David Robertson: age but I'll say I've had two AstraZeneca jabs. That can give 233 00:12:46,840 --> 00:12:51,430 David Robertson: you a clue. But yeah, it's the age pension is 234 00:12:51,429 --> 00:12:54,069 David Robertson: there as a safety net, if you like, as a backup. 235 00:12:54,070 --> 00:12:59,020 David Robertson: But what the report shows is that with appropriate levels 236 00:12:59,020 --> 00:13:04,360 David Robertson: of saving and voluntary contributions, we can reach through voluntary saving, 237 00:13:04,360 --> 00:13:09,309 David Robertson: suitable levels of savings. And that will take the pressure 238 00:13:09,309 --> 00:13:11,540 David Robertson: off the aged pension as that safety net. 239 00:13:11,980 --> 00:13:14,680 Sean Aylmer: Just a quick one, super for women. So an area 240 00:13:14,679 --> 00:13:18,790 Sean Aylmer: where women certainly have fallen behind, men at least is 241 00:13:18,790 --> 00:13:21,820 Sean Aylmer: in superannuation savings. And much of that is because they 242 00:13:21,820 --> 00:13:25,030 Sean Aylmer: have interruptions in their careers and women have not been 243 00:13:25,030 --> 00:13:27,190 Sean Aylmer: paid as much as men over time. How does that 244 00:13:27,190 --> 00:13:29,449 Sean Aylmer: play out in an intergenerational sense? 245 00:13:29,980 --> 00:13:33,069 David Robertson: Yeah, the report did note the gender pay gap, the 246 00:13:33,070 --> 00:13:36,190 David Robertson: gender gap on super balances. It talked to what it 247 00:13:36,190 --> 00:13:40,050 David Robertson: called the accumulated economic disadvantages faced by women. So it 248 00:13:40,059 --> 00:13:44,260 David Robertson: acknowledged that reality. Fortunately, it does project a narrowing in 249 00:13:44,260 --> 00:13:48,400 David Robertson: the gap thanks to rising female participation rates, which are 250 00:13:48,400 --> 00:13:52,569 David Robertson: up at a record high and higher voluntary contributions. So 251 00:13:52,570 --> 00:13:55,570 David Robertson: by the end of the 40 year projections forward in 2060-2061, 252 00:13:57,250 --> 00:14:01,510 David Robertson: the projected distributions of men versus women on their super 253 00:14:01,510 --> 00:14:05,110 David Robertson: balances at retirement looks far more equitable than it does today. 254 00:14:05,290 --> 00:14:07,660 David Robertson: And if you look at the average or the median 255 00:14:07,990 --> 00:14:12,160 David Robertson: super balances today, they're actually only $125,000 as a median. 256 00:14:12,160 --> 00:14:14,590 David Robertson: But that picks up the whole cross section, but they are 20 257 00:14:14,590 --> 00:14:18,370 David Robertson: per cent lower for women versus men today. So in 258 00:14:18,370 --> 00:14:21,910 David Robertson: the report, it does show all of that improving over time, 259 00:14:21,910 --> 00:14:26,950 David Robertson: rising to, well, almost quadrupling to $460,000 in today's dollars by 2060. 260 00:14:27,740 --> 00:14:32,510 David Robertson: But more importantly, it shows a more even distribution by gender. So, yeah, 261 00:14:32,530 --> 00:14:35,770 David Robertson: the report does look at that. And fortunately, the outlook 262 00:14:35,770 --> 00:14:37,300 David Robertson: there does look far more equitable. 263 00:14:37,720 --> 00:14:40,480 Sean Aylmer: Very interesting concept, thinking about what's going to happen in 264 00:14:40,480 --> 00:14:41,620 Sean Aylmer: 40 years time, David. 265 00:14:42,940 --> 00:14:45,490 David Robertson: Well, again, the assumptions are in there. They do their 266 00:14:45,490 --> 00:14:47,860 David Robertson: modelling and that's the numbers the computer spits out. But 267 00:14:47,980 --> 00:14:50,410 David Robertson: look at part of its attitudinal and as you said, 268 00:14:50,440 --> 00:14:52,680 David Robertson: I think a lot of people today are thinking, well, no, 269 00:14:52,690 --> 00:14:54,489 David Robertson: I'm not going to rely on the aged pension. It's 270 00:14:54,490 --> 00:14:56,140 David Robertson: not going to be enough. So therefore, what do I 271 00:14:56,140 --> 00:14:58,560 David Robertson: need to do to prepare for those years ahead? 272 00:14:58,870 --> 00:15:00,430 Sean Aylmer: Yeah. David, thank you for talking to Fear and Greed. 273 00:15:01,300 --> 00:15:02,140 David Robertson: Absolute pleasure. 274 00:15:03,010 --> 00:15:05,620 Sean Aylmer: That was David Robertson, Head of Economic and Markets Research 275 00:15:05,620 --> 00:15:07,150 Sean Aylmer: at Bendigo and Adelaide Bank. 276 00:15:07,210 --> 00:15:09,190 Sean Aylmer: This is the Fear and Greed Daily Interview. Join me 277 00:15:09,190 --> 00:15:11,830 Sean Aylmer: every morning for the full Fear and Greed podcast with 278 00:15:11,830 --> 00:15:14,660 Sean Aylmer: all the businesses you need to know. I'm Sean Aylmer. 279 00:15:14,680 --> 00:15:15,450 Sean Aylmer: Enjoy your day.