The Business of Ageing
The Business of Ageing Project highlights the contribution seniors will make to New Zealand’s economic competitiveness over the next 45 years. The Business of Ageing reports outline the growing value of the labour market participation, income, tax, spending, and voluntary/unpaid work of seniors.
Realising the Economic Potential of seniors in New Zealand: 2016 - 2061
Three reports have previously been produced:
- The Business of Ageing: Realising the Economic Potential of Older People in New Zealand: 2011 - 2051
- The Business of Ageing: 2013 Update
- The Business of Ageing: 2015 Update
The 2017 model has been revised to include updated population and labour force projections and revised income data and methodology from Statistics New Zealand. The projections are consistent with those used by Treasury in the 2016 Long term Fiscal Statement. The values have also been rebased to 2016 dollars, so the data can be compared over time in real terms.
Key findings of the 2017 update
The revised projections confirm that seniors (65 years and over) will make a growing economic contribution as workers, taxpayers and consumers.
The most notable change from the 2015 report is slower projected growth in seniors’ workforce participation. Statistics New Zealand revised its projections down after lower increases between 2012 and 2015 than in the previous 10-15 years.
More seniors in the workforce
The 2017 update projects that between 2016 and 2061 (real 2016 dollars apply):
- the overall labour force participation rate for seniors (the proportion of seniors who are in the labour market) is likely to rise from around 24 percent (current) to around 25 percent by 2061. Statistics NZ estimates there is a 90 percent chance labour force participation rate for seniors will be between 16 percent and 31 per cent in 2061.
- seniors are likely to make up 12 percent of the overall labour force in 2061, up from 7 percent in 2016
- wage and salary (i.e. paid work) earnings of seniors are likely to rise from around $4.8 billion in 2016 to around $10.7 billion in 2031, $13.6 billion in 2041 and $22.8 billion in 2061.
- remuneration from self-employment for seniors is similarly likely to rise from around $1.7 billion in 2016 to around $3.8 billion in 2031, $4.8 billion in 2041 and $8.1 billion in 2061.
- the value of the unpaid work of seniors is projected to rise from around $11 billion per year at present to around $21 billion per year in 2031, $29.3 billion in 2041, and $47.5 billion in 2061, assuming a proxy value of $16.49 [the ‘Carer Wage’ adjusted for inflation 2014-2016].
- the total value of expenditures by seniors [inclusive of GST] is projected to rise from around $20.7 billion per year in 2016 to around $42.4 billion in 2031, $57.4 billion in 2041 and $94 billion per year in 2061. On present patterns of expenditure, some 28 per cent of expenditure is expected to be spent on foodstuffs, alcoholic drinks and tobacco, and clothing and footwear, and a further 22 percent is expected to be spent on housing and housing related items. Health (11%), transport (13%) and recreation and culture (11%) are other important market segments.
Projections at a glance
- more seniors will participate in the workforce
- the economic value of seniors’ paid and unpaid work is projected to increase from $6.5 billion in 2016 to $31 billion in 2061 (in 2016 dollars)
- the unpaid and voluntary work of seniors is projected to grow from about $11 billion per year in 2016 to an estimated $47 billion in 2061 (2016 dollars)
- seniors' contribution to tax revenue is projected to increase from a total of $5.5 billion in 2016 to $25 billion in 2061 (2016 dollars)
- consumer spending by seniors is projected to become more important, with spending of about $94 billion in 2061– a rise from about $21 billion currently (2016 dollars).
Why we are doing this
The Business of Ageing 2017 Update aims to inform and encourage discussion about the growing economic contribution seniors will make and the opportunities offered by this ageing group of consumers.
We will use the update to highlight the growing economic contribution of older people and the opportunities associated with an ageing population. We will continue to work to influence businesses to adapt to the ageing workforce and the opportunities offered by this growing consumer group. The update also informs the work we are doing as part of a group looking at New Zealand’s ageing workforce. This group has been established by the Employers and Manufacturers Association and Business New Zealand.
Where to next?
The reports aim to inform and encourage discussion amongst business groups, employers, NGOs, individuals and government agencies. They focus on two opportunities the growing older demographic offers for future economic growth. These are to:
- ensure the labour market is accommodating of those seniors already in, or wanting to re-enter, the labour market; and
- highlight the economic value and business opportunities that our ageing population creates