Recruiting more people from the grey army has been floated before.(ABC News: Claire Moodie)
There's almost never been a harder time to find good staff.
Shop windows across the country are plastered with help wantedsigns, and most of those businesses are finding help pretty hard to find.
Health care, hospitality, IT, construction and manufacturing are just some of the industries clamouring for new staff, and competing for a fairly small pool of available workers.
The new Opposition Leader, Peter Dutton, has offered his first real policy idea in the role,arguing older Australians could fill many of the roles needed.
He'sleapt on an often-floated suggestion to lift the amount of work pensioners can do before their payments are affected.
It's not the first time the idea has been both raised and acted on, and many economists agree it would likely encourage at least some pensioners to either return to the workforceor pick up more hours.
But many also argue it won't solve Australia's labour force woes.
Putting old hands in new trades
Older Australians collecting the pension are strictly limited in how much money they can earn before their payments are reduced.
Single pensioners can currently earn up to $480 a fortnight without losing any of their pension.
It'sslightly more complicated than just that though.
Part of that $480 is a $300 work bonus —basically income that can only be earned through work, not other sources like rent, dividends or other income.
Some experts say other alternatives, like skilled migration, is the way to go.(ABC News: Claire Moodie)
That's what Mr Dutton wants to double, increasing it to $600, to make a total of $780 per fortnight.
The change would only last a year at first, and he's estimated it'd cost the budget $145 million if made in 2022-23.
He argues there are employers looking for staff, and pensioners who want to work more, and barriers between the two should be broken down.
A grey army, ready to work
While pensioners can do some work, few are choosing to do so.
Data from the 2020 Retirement Income Review found just 4 per cent of pensioners were reporting employment income.
And those who were working, weren't doing a whole lot —most were reporting less than $250 a fortnight, well below the amount that would impact their pension.
Advocates for older Australians argue the rules are both too tough and too confusing, discouraging pensioners from offering their skills and lifting their income.
And they offer anecdotes of pensioners turning down shifts so they stay under their income cap, leaving employers in the lurch.
Ian Henschke from National Seniors points to New Zealand, which he argues has a simpler system that results in far more pensioners working.
New Zealand's pension is not means tested, meaning it is offered to everyone regardless of their income or assets.
New Zealanders can continue working and collecting the pension, but their pension is taxed like ordinary income.
They treat their human resources as a resource, he said.
We are ignoring the human resource of the 2.5 million pensioners, many of whom would be willing to work.
Mr Henschke wants the New Zealand model partly adopted in Australia, allowing those who qualify for the pension to work as much as they like, but taxing their pension and income together.
The idea of a standing grey army just waiting to be told to go to the workforce is a reality, he said.
How willing are pensioners to work?
While there are undoubtedly pensioners out there keen to put their skills to paid use, some economists question how many there actually are.
Sarah Hunter from KPMG said the available data seemedto indicate most Australians over 65 didn't have a huge interest in workingif they could avoid it.
It does seem as though most people in that age group have decided to stop working, they're of retirement age, she said.
Of those that do work, a significant number are part time, 66 per cent, which is much higher than the rate for the whole of the population.
Dr Hunter said it wasalso important to consider which sectors were most in need of workers, and whether older Australians were likely to fill those roles.
Sarah Hunter says boosting skilled migration would be an easier and more efficient option to boost the workforce.(ABC News: Daniel Irvine)
She said many industries were looking for workers with precise skills, and others traditionally reliedon younger migrant workforces.
Some sectors that are very reliant on overseas workers — hospitality and agriculture are two good examples —this kind of change is unlikely to resolve their current situation, she said.
The structure of their labour force is different, and it's not so reliant on older workers.
So it's unlikely that if we just made this one change, that we'd be able to remove all of the constraints overnight.
Dr Hunter arguedworking to boost migrationby attracting more migrants and improving visa processing timeswould likely be a simpler and more effective solution.
In terms of the absolute numbers, in people re-entering the workforce and being available to work, it's probably likely that that would bring in more people, she said.
There are other, blunter options too
Others say if we really wanted to encourage older Australians to either stay in or re-enter the workforce, there are alternatives worth looking at.
Some are perhaps a little less carrot, and a little more stick.
Brendan Coates from the Grattan Institute agreedhaving more older Australians in the workforce would be an extremely good thing.
Boosting workforce participation among older Australians is a big opportunity, he said.
Old-age-workforce participation has already increased sharply in recent years, but older people are less likely to work in Australia than in many comparable economies.
However Mr Coates argues there's a solution available that would likely be both more effective than lifting the pension income test, and improve rather than harm the budget bottom line.
He said the government should look at raising the preservation age — which is the age at which Australians can access their superannuation —faster than planned.
The preservation age is currently moving, and will reach 60 from mid-2024.
The age at which people can get superannuation or the Age Pension affects retirement decisions of at least some workers, Mr Coatessaid.
A preservation age of 60 is hard to justify given the age for eligibility for the Age Pension is rising to 67.
He pointed to work already done by the Productivity Commission, which suggests lifting the preservation age only to 65 would lift the participation rate in older workers and lift tax revenues by $7 billion annually by 2055.
But denying Australians access to their superannuation for even longerand delaying the retirements of millions of Australianswould undoubtedly be unpopular.
Mr Henschke argues a sudden transition would be so politically toxic, it simply would not happen.
We should remember that our governments sit on sort of a knife edge;they've only got one or two seats in it, they've got to make sure that they do something that's politically palatable as well as governing the country.
And he said the carrot approach —allowing pensioners to work more and earn more —would be far more effective than a superannuation stick.
https://www.abc.net.au/news/2022-07-01/pensioners-work-more-workforce-shortage-alternatives/101194140
