Whatever one’s opinion on the Intergenerational Report (IGR), it is undeniable that Australia faces challenging economic and personal realities over the next 40 years. Treasurer Joe Hockey has emphasised the IGR highlights the need for Australia to respond to demographic changes. Proposed responses include extending the average working life and increasing participation by Australian seniors.

On April 14, the Senate Economics References Committee is due to deliver its report on affordable housing. This report is expected to highlight shortfalls in affordable and age-appropriate housing.

These major demographic and housing issues are closely connected. The challenges they present must be tackled against a background of deteriorating economic conditions and an oversubscribed health system.

The issues the IGR raises are many and varied. They are also subject to a plethora of contingencies. However, one issue that cannot be denied is the inescapable impact – one way or another – of an ageing population on Australia’s economic future.

The danger is that the government seems to be emphasising (albeit crucial) issues such as employment and health without taking a broader view of factors, of which housing is pivotal, that will nourish and buttress these aspirations.

Housing is tied to health and productivity

If Australian seniors are to remain healthy and work longer, the importance of appropriate housing cannot be underestimated. Much attention is being paid to the rising cost of health care for an ageing population. However, the nexus between secure accommodation and better health and financial outcomes for older people, the broader community and the economy is largely overlooked.

If older Australians are more secure in their accommodation, they are more likely to remain employed and in good physical and psychological health. All of the consequential benefits of this flow to the economy and the nation as a whole. Therefore, improved provision of affordable senior housing is vital to enable people to remain employed into their 60s, 70s and even 80s, and thereby lift Australia’s productivity and sustain economic growth.

To pursue these goals in the IGR, the government’s attention must extend to ensuring an adequate supply of affordable and suitable housing for seniors. The population of older Australians is naturally diverse, so individual housing preferences vary significantly.

The major asset of most Australian households is the family home. For seniors, housing equity makes up approximately half of their wealth. However, research to date suggests few of these households are drawing on this wealth during retirement.

Insecurity has multiple harmful impacts

For older people who do not own a home and must find affordable accommodation in a competitive market, life can be particularly daunting. As social policy researcher Bruce Bradbury has noted:

Australia is unusual in that economic exclusion among the elderly is closely linked to a lack of home ownership (or access to public housing).

Seniors have different housing requirements to younger people and families. Older Australians often require smaller and more accessible housing located close to services, care and support.

Transitions in later life are complex. These transitions, it has been observed:

… challenge older adults to make projections of a future self and to anticipate their emotional, medical and financial needs.

Housing with good access to shops and services becomes even more important to Australians as they age.AAP/Melanie Foster

Older people who are secure in the knowledge that they can stay in their accommodation for an extended period – or permanently – exhibit demonstrably better physical and psychological health than those in less stable accommodation. Insecurity in one’s home environment heightens the risks to physical and psychological health in the short and longer term, including feelings of powerlessness.

Insecure accommodation may also impact on older people’s social situations. They may become reluctant to engage in their local communities. If they have to relocate, they may lose support and friendship networks.

The prospect of possibly having to move weighs heavily on older people. This is especially so where options for accommodation elsewhere are limited.

Finally, significant economic costs are attached to the heightened risk of physical or psychological illnesses.

Beyond the headlines, a concerted strategy for an older – but healthier and more productive – population must be crafted. A focus on secure, affordable housing for seniors is a cornerstone for any such aspirations.

Eileen Webb receives funding from Lotteries WA and COTAWA for the project: Security of Tenure for Seniors in Western Australia and National Seniors Australia for the project: Seniors downsizing on their own terms: overcoming planning, legal and policy impediments to the creation of alternative retirement communities. She is a member of the ShelterWA Advisory Committee on Homelessness.

Gill North does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.