Population ageing and the public purse: Australia in comparative perspective

A comparative analysis of three decades of OECD public spending change is u sed to test propositions concerning the likely consequences of population a geing for public expenditure development in coming years. The World Bank an d the OECD Secretariat suggest that population ageing has a direct impact o n public expenditure through increased spending on pensions, health care an d services for the elderly; and an indirect impact through increasing level s of public indebtedness. The analysis here suggests that only the pensions effect is supported by available comparative evidence and that, even here, the relationship is weaker than often implied in the population ageing lit erature. The vulnerability of different nations to problems arising from po pulation ageing varies widely,with Australia among the least vulnerable.