Partners Wealth Group Australia in 2050: Life, Work, Relationships and Retirement Bernard Salt 5 June 2014
Disclaimer These slides are not for commercial use or redistribution. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. KPMG have indicated within this presentation the sources of the information provided. KPMG has not sought to independently verify those sources unless otherwise noted within the presentation. No reliance should be placed on additional oral remarks provided during the presentation, unless these are confirmed in writing by KPMG. KPMG is under no obligation in any circumstance to update this presentation, in either oral or written form, for events occurring after the presentation has been issued in final form. The findings in this presentation have been formed on the above basis. Forecasts are based on a number of assumptions and estimates and are subject to contingencies and uncertainties. Forecasts should not be regarded as a representation or warranty by or on behalf of KPMG or any other person that such forecasts will be met. Forecasts constitute judgment and are subject to change without notice, as are statements about market trends, which are based on current market conditions. Neither KPMG nor any member or employee of KPMG undertakes responsibility arising in any way from reliance placed by a third party on this presentation. Any reliance placed is that party s sole responsibility. The presentation (and the accompanying slide pack) is provided solely for the benefit of the conference attendees and is not to be copied, quoted or referred to in whole or in part without KPMG s prior written consent. KPMG accepts no responsibility to anyone other than the conference attendees for the information contained in this presentation.
We are an urban people with city-based jobs and interests Areas of high population growth (>2% pa) and loss (<-1% pa) between 1992 and 2013 DARWIN BRISBANE PERTH SYDNEY CANBERRA Winners 2014 KPMG, an Australian partnership and Losers a member firm of the KPMG network of independent member firms affiliated with KPMG ADELAIDE MELBOURNE HOBART
Strong population growth is driving household formation at a national level 500,000 450,000 400,000 393,000 pa 416,000 pa 350,000 300,000 220,000 pa 250,000 200,000 150,000 100,000 50,000 0 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Natural Increase NOM Net population growth for Australia between 1950 and 2023 (based on ABS 2013 projections)
Australia s tribal composition is shifting from an Anglo base to a fusion culture Country of Birth 2011 United Kingdom 1,101,100 New Zealand 483,400 China 319,000 India 295,400 Italy 185,400 Vietnam 185,000 Philippines 171,200 South Africa 145,700 Malaysia 116,200 Germany 108,000 2006 % change 1,038,200 6% 389,500 24% 206,600 54% 147,100 101% 199,100-7% 159,800 16% 120,500 42% 104,100 40% 92,300 26% 106,500 1% Top 10 ethnicities in Australia at the 2011 and 2006 Censuses
New acronyms for the new tribes of Australia PUMCINS. Professional Urban Middle Class In Nice Suburbs NETTELs Not Enough Time To Enjoy Life KIPPERS Kids In Parents Pockets Eroding Retirement Savings LOMBARDs Lots Of Money But A Real Dickhead Source: KPMG Demographics
It is lifestyle, resources and commuting that drives population growth 10.0 Ellenbrook 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 Broome Karratha Perth Darwin Melbourne Brisbane Sydney Canberra Adelaide Hobart Moe-Newborough Burnie-Wynyard Parkes 1.0 0.0-1.0 Ellenbrook Broome Karratha Melton Torquay Bacchus Marsh Emerald Busselton Gladstone - Tannum Sands Perth Bunbury Geraldton Highfields Yeppoon Darwin Cessnock Townsville Mackay Warragul - Drouin Port Hedland Kalgoorlie - Boulder Melbourne Albany Warwick Rockhampton Brisbane Gold Coast - Tweed Heads Sunshine Coast Cairns Bathurst Ocean Grove - Point Lonsdale Morisset - Cooranbong Sydney Ballarat Orange Bendigo Murray Bridge St Georges Basin - Sanctuary Point Drysdale - Clifton Springs Canberra - Queanbeyan Mount Isa Toowoomba Albury - Wodonga Tamworth Gympie Gisborne - Macedon Geelong Nelson Bay - Corlette Victor Harbor - Goolwa Goulburn Hervey Bay Bowral - Mittagong Newcastle - Maitland Wollongong Mildura - Wentworth Dubbo Echuca - Moama Adelaide Coffs Harbour Wagga Wagga Maryborough Ballina Port Augusta Shepparton - Mooroopna Port Macquarie Warrnambool Forster - Tuncurry Kurri Kurri - Weston Central Coast Port Lincoln Sale Muswellbrook Bundaberg Mount Gambier Armidale Griffith Batemans Bay Lithgow Hobart Alice Springs Taree Wangaratta Horsham Bairnsdale Lismore Ulladulla Port Pirie Launceston Nowra - Bomaderry Ulverstone Colac Traralgon - Morwell Devonport Singleton Whyalla Broken Hill Camden Haven Parkes Burnie - Wynyard Moe - Newborough Percentage growth in population over 12 months to June 2013 for the 100 largest significant urban areas (SUA) in Australia
The next decade is all about active retirement boomers will redefine the 70-something time in life 2003-2013: 3.4 million (19.7m to 23.1m) 2013-2023: 4.2 million (23.1m to 27.3m) 500,000 450,000 400,000 350,000 300,000 Kids & teenagers Suburbia Schools Young adults Household formation Mortgage Mature adults Sandwich generation Work-life balance Active retirees Socially active Travel 250,000 200,000 150,000 100,000 50,000-0 - 4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85+ 2003-13 2013-23 Net change in Australian population by 5-year age group over 10 years to 2013 and 10 years to 2023
Boomers need to plan for a very long retirement The Boomer Trajectory 92 Child Adolescence Adult Lifestyle Retired Old 2014 82 Child Teen Adult Old 1974 71 Child Adult Old 1934 63 0 10 20 30 40 50 60 70 80 90 Change in life expectancy over 80 years in Australia
Baby Boomers in their 50s are the first Sandwich Generation! Born 1946 1964 Today 50 68 Hierarchical Indulged their children Raised by Depression parents Sandwich generation Born 1965 1982 Today 32 49 Forgotten generation Wrong place at the wrong time No workplace guilt Angsty about Ys Born 1983 2000 Today 14 31 Special bubble-wrap Chaotic connection Entrepreneurials and dreamers Disappointed generation? Born 1928 1945 Today 69 86 Command and control Spiritual Anglo Grey nomads Want the pension
There has been a shift in the Australian economy away from manufacturing and towards healthcare and social assistance 300,000 250,000 200,000 150,000 100,000 50,000 Healthcare Professionals Education & Training Mining 5 years February 2004 up 1.4m (9.4m 10.8m) 5 years February 2014 up 700k (10.8m 11.5m) 0-50,000-100,000 Manufacturing, Agriculture, Info Media & Telecoms 2004-2009 2009-2014 Net change in total jobs in Australia over two successive five-year periods, February 2004 February 2014
Australia is growing jobs in caring, selling, servicing, managing and doing Change 2006-2011 No. 1. Aged or Disabled Carer 30,800 2. General Clerk 30,100 3. Child Care Worker 21,000 4. Electrician (General) 20,100 5. Checkout Operator 20,000 6. Accounts Clerk 17,600 7. Program or Project Administrator 16,000 8. Office Manager 16,000 9. Truck Driver (General) 14,400 10. Sales Assistant (General) 14,000 Change 2006-2011 No. 11. Teachers' Aide 13,900 12. Miner 13,600 13. Barista 13,400 14. Chef 13,100 15. Accountant (General) 13,000 16. Carpenter 11,500 17. ICT Project Manager 11,500 18. Solicitor 11,400 19. Primary School Teacher 11,400 20. Fitter (General) 10,700 Net change in employment by occupation in Australia over 5 years to 2011
but is contracting jobs in typing, assembling, farming, machining and filling Change 2006-2011 No. 1. Secretary (General) -28,700 2. Corporate Services Manager -14,400 3. Product Assembler -7,800 4. Mixed Crop & Livestock Farmer -6,600 5. Shelf Filler -6,400 6. Medical Laboratory Technician -5,500 7. Office Cashier -4,700 8. Metal Engineering Process Worker -4,500 9. Real Estate Representative -3,500 10. Vineyard Worker -3,100 Change 2006-2011 No. 11. Dairy Cattle Farmer -3,000 12. Sewing Machinist -2,600 13. Safety Inspector -2,500 14. Switchboard Operator -2,500 15. Mixed Livestock Farmer -2,400 16. Credit or Loans Officer -2,200 17. Residential Care Officer -2,200 18. Analyst Programmer -2,100 19. Integration Aide -2,000 20. Telecommunications Technician -1,900 Net change in employment by occupation in Australia over 5 years to 2011
New relationships will change the way we live and work PAST Male Work FUTURE Restaurant Precinct Shops 60 minutes Extended Family HOME Shops Male Work HOME Female Work School School 30 minutes Source: KPMG Demographics
There are triggers to financial decision-making at each stage of the lifecycle Divorce Divorce Retirement Grandchildren Power of Attorney Spiritual focus Teenagers Kids leave home Children marry Children divorce Institutional care Work peak Health scare Death of friend Death of partner Work frustration Inheritance Seachange Source: KPMG Demographics
Everyone needs to think differently about life s later years Portfolio Lifestyle Baby Boomers Active Retired Superannuation War babies Going Solo Educated Consumerist Work-life KIPPERS Re-partnering Succession planning 2010 s growth area Aged pension Volunteers Grey Nomads Frugals Family support Power of Attorney Independent living Devout Frail Old Age Institutionalised Acute health Aged children Source: KPMG Demographics
Boomers set to tip beyond work and into the lifestyle stage of the lifecycle 1950 2000 2050 160,000 150,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000-1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Net growth in population aged 65+ over 100 years in Australia (based on 2013 projections)
Common themes in the corporate world and in the community Corporate 1. More for Less customers want you to deliver more and to pay you less 2. Competition from left field often associated with new technology 3. Globalisation new players discovering Australia Community 1. Celebration of the individual rights, entitlements minorities 2. Loss of faith in institutions church, unions, big business, politicians, not sure about public sector 3. Consequential rise of the need for transparency, accountability, apology and regulation Source: KPMG Demographics
Connect www.bernardsalt.com.au +61 3 9288 5047 bsalt@kpmg.com.au #bernardsalt Bernard Salt Demographer linkedin.com/in/bernardsalt @bernardsalt