The Ageing of Regional Victoria: Problem or Opportunity?

Note: The views expressed in this paper are those of the author and should not be regarded as representing the views of the Victorian Government.

Introduction

While population ageing is a well known phenomenon, it is perhaps less widely appreciated that the ageing of the population is likely to be a much stronger trend in regional areas than in the major urban areas. This is due almost solely to patterns of intrastate migration which show young adults moving to large urban centres, particularly metropolitan areas, for education and employment, whilst retirement age groups tend to move out of the city into regional areas. In order to assess the nature and outcomes of such migration, this paper uses Victoria as its focus. Recent State Government population forecasts are used to analyse the spatial impact of ageing on Victoria’s future population.

Overview of ageing trends in Victoria

Victoria, like Australia and other western nations, is continuing to experience an increase in the average age of its population. In 1971, 8 per cent of Victoria’s population was over the age of 65 years. By 1996, this figure was 12.5 per cent and, on the basis of Victorian Government projections (DOI 2000), is projected to be nearly 19 per cent by 2021 (refer table 1). Over the same period the proportion of elderly (85+) is projected to increase from the 1971 level of 0.5 per cent to 2 per cent in 2021, representing an absolute increase of 96,364 persons. The proportion of children in Victoria (0-14 years of age) is projected to fall from the 1971 level of 30 per cent to just under 16 per cent in 2021, an absolute decrease of 178,255 persons.

Table 1: Number and proportion of persons in selected age groups, Victoria, 1971, 1996 and 2021

	1971		1996		2021
Age Group	Number	% of total population	Number	% of total population	Number	% of total population
0 to 14 years	1,012,549	28.9	947,358	20.8	834,294	15.6
65 years & over	294,961	8.4	569,484	12.5	997,389	18.6
85 years & over	18,000	0.5	54,019	1.2	114,364	2.1

Note: 1971 data is Enumerated Population, 1996 is Estimated Resident Population (ERP) and 2021 is projected ERP.

Source: ABS Census 1971; DOI 2000

Overall, the changing age structure of the Victorian population from 1971 to 2021 can be seen in figure 1. There are a number of reasons why Victoria’s population is ageing. On average, women are having fewer children than in the past. Many are choosing to have no children at all, while others are having children at a later age, thus reducing the likely number of children born. Fewer children being born means that older age groups will form a larger proportion of the population.

Figure 1: Age structure, Victoria, 1971, 1996 and 2021

Source: ABS Estimated Resident Population; DOI 2000

People are, on average, living longer. In Victoria, as in Australia overall, the life expectancy has increased greatly and this has contributed to the older average age of the population. In Australia in 1971, life expectancy for men was 68 years and for women, 75 years. By 1998 these figures had risen to 76 years for males and 82 years for females (ABS 1999).

In the coming decades, older people will also form a larger group within Victoria in absolute terms because of the large numbers of people born in the decades following the Second World War. These are the so called ‘baby-boomers’ born between 1945 and the late 1960s, and they will be moving from middle age to older age groups during the period covered by the population projections.

There are some differences in age structure at the sub-state level as figure 2 shows. Regional Victoria has higher proportions of 0-17 year olds and 60+ year olds when compared to Victoria, but lower proportions in the young adult age groups of 18 to 35 years. The average age of the population is currently higher in regional Victoria than in metropolitan Melbourne.

Figure 2: Comparative age structure, regional Victoria and Victoria, 1996

Source: ABS CData96

While the ageing trend is evident in both metropolitan and regional areas, there are differences in the rate of change. While regional Victoria has followed state-wide trends in terms of population ageing, its average population age is increasing more strongly than the average age of Melbourne’s population. In 1996, the proportion of people aged 65 years or more was 12 per cent in Melbourne and 14 per cent in regional Victoria. By 2021 these proportions are projected to be 17 per cent in Melbourne and 23 per cent in regional Victoria (refer figure 3).

Figure 3: Proportions aged 65 years and over, regional Victoria and Melbourne, 1996 to 2021

Source: DOI 2000

In absolute terms this represents an increase of 276,384 persons aged 65+ in Melbourne and 151,539 persons in regional Victoria during the 1996 to 2021 period. At the same time there will be a decrease in 0-14 year olds, not only in proportional terms but in absolute terms. (refer figure 4).

Figure 4: Numbers aged 0-14, 65+ and 85+ years in regional Victoria and Melbourne, 1996 to 2021

Source: DOI 2000

The major increase of over 65 year age groups will be in younger retiree ages – 65 to 74 years. This is to be expected given the size of the baby-boomer cohort which is reaching retirement age in the projection period. It is nevertheless interesting to note the increasing numbers of elderly (85 years and over), given that this group is more likely to place demands upon local services (refer figure 4). For regional Victoria, the number of people aged 85 and over is projected to rise from the 1996 level of 16,900 to around 38,100 in 2021. This more than doubles the number in this age group over the period adding 21,200 persons aged 85 years or older to regional Victoria. This increase is expected to occur before the baby boomer cohort reaches these age groups. The main impact of elderly baby boomers is likely to be felt from around 2030 onwards.

Effects of net migration on ageing trends

Net migration is the difference between in and out migration flows. There are distinctive net migration patterns with age and figures 5 and 6 show these for Melbourne and regional Victoria over the two most recent intercensal periods. In both cases, the largest net losses and gains occur in the young adult age groups (20-24 years) with regional Victoria showing a net loss (to Melbourne, interstate and overseas combined), and Melbourne showing a net gain (from regional Victoria, interstate and overseas combined). At the same time regional Victoria has net gains and Melbourne net losses in older age groups. While the strength of these trends can change over time, the general pattern has remained evident.

The out-migration of young adults from regional Victoria is one contributor to the more rapid ageing of regional populations compared to Melbourne. Many school leavers from regional Victoria will leave for Melbourne or the larger regional centres, generally for further education or employment. Regions with relatively low populations are unable to support higher educational institutions. As demand for highly educated and skilled workers increases in the contemporary information economy, education becomes more critical to an individual’s economic success. The attraction of the larger universities and training centres in Melbourne is therefore likely to increase rather than diminish.

Figure 5: Age specific net migration, Melbourne and regional Victoria, 1986 to 1991

Source: unpublished ABS data

Figure 6: Age specific net migration, Melbourne and regional Victoria, 1991 to 1996

Source: unpublished ABS data

Regional economies are not as large and diverse as those in the metropolitan area. So, an individual who may have moved from a regional area to Melbourne for higher education is more likely to find an appropriate and desirable job within the metropolitan area. With a more diverse range of professional career paths being available in cities, it can be difficult to attract many educated young adults to regional areas. Furthermore, the need for ongoing training and professional development in many careers makes city living advantageous. Generally, regional Victoria attracts older adults (30-39 years of age) but the numbers are not sufficient to counter the out-movement of younger adults. As a result, the net migration levels in the 15-24 age groups remain negative in many areas of regional Victoria.

Despite the loss of younger age groups, many parts of regional Victoria attract retirees. This is particularly the case for coastal areas, areas along the Murray River, and some alpine areas. The projected strong growth in retirement age groups over the next 25 years is likely to benefit regional Victoria, however, it will also contribute to an increase in the average age.

By excluding the interstate and overseas components from net migration analysis we can more clearly see age-specific migration relationships between regional and metropolitan areas of Victoria (refer table 2). In the period 1991-1996, Melbourne received a net gain from regional Victoria of 16,404 persons in the 15-29 age group. In all other age groups, regional Victoria experienced a net gain from Melbourne. Highest gains were in the 30-44 year age groups followed by the 55-64 (retirement) age groups.

Table 2: Net migration by age, Melbourne’s loss to/gain from regional Victoria, 1991 to 1996

Age Group	Net Migration
5-14	– 4,434
15-29	+ 16,404
30-44	– 6,350
45-54	– 2,909
55-64	– 4,825
65+	– 2,675

Source: 1996 Census of Population and Housing, ABS

The outcomes of such movement create spatial variation in rates of ageing across Victoria. At the level of Statistical Subdivision it can be seen that, during the 1991-1996 period, regional Victoria experienced no net loss of people aged 65+ (refer figure 7). By contrast, much of the metropolitan area did experience loss of people in these ages groups during the period.

Figure 7: Net Migration by Statistical Subdivision, 1991 to 1996

Source: ABS unpublished data from 1996 Census

These trends are projected to continue over the coming two decades due to the ageing of the population and the continuing importance of Melbourne for education and employment. Figure 8 shows the implications for numbers of younger and older persons at the level of Local Government Area (LGA). There is projected to be a decline in numbers of 0-17 year olds in all but one of the regional LGAs. The one exception is Wodonga which contains much of the new residential development for Albury-Wodonga and which can therefore expect to gain family groups with children. At the older end of the age spectrum, however, there are no exceptions to the general trend of ageing in regional Victoria – all LGAs are projected to experience an increase in numbers of persons aged 70 years and over.

Figure 8: Projected change in numbers of people aged 0-17 years and 70+ years, by Local Government Areas in regional Victoria, 1996 to 2021

Source: DoI 2000

Variations in ageing patterns at the sub-state level

Despite the general pattern of youth out-migration evident in regional Victoria, there is a good deal of variation in the age-specific migration profiles of different areas. Three regions have been chosen for the purpose of showing some of the different ageing patterns across regional Victoria: West Wimmera; Surf Coast, and East Gippsland (refer figure 9). The discussion below is based upon the charts provided in the Appendix to this paper.

Figure 9: Location of case study municipalities, Victoria

West Wimmera is located in the far west of Victoria. It has a small and dispersed population and covers a broad region of dry land farming country. Compared to the Victorian average, West Wimmera has a lower proportion of young adults and a higher proportion of people in the age groups over 50. The age-specific net migration for West Wimmera shows a familiar pattern of out-movement which has been seen across the dry land farming areas of Australia for some time. As well as loss of young adults who are likely to be leaving the district for education and employment opportunities, the region has also experienced a loss of family age groups (adults and children) over the past two decades. Its ability to attract either new residents or returning residents has been low and hence net migration levels are negative across a broad spectrum of age groups.

Surf Coast is located to the south west of Geelong and is popular among tourists, commuters, holiday home owners and retirees. The age profile of Surf Coast differs most noticeably from that of Victoria in the mature family ages – that is, children aged 5 to 17 and adults aged 35-49. Proportions in the 60-84 year age brackets are also slightly higher than the state average, although the proportion of people aged 85 years and over is lower. Surf Coast’s pattern of age-specific migration is in strong contrast to that of West Wimmera and somewhat unusual for regional Victoria given that it is experiencing a net gain in all age groups: young adults, families with children, retirees and elderly persons.

East Gippsland is another popular destination for coastal holiday makers and retirees, although its relative isolation distinguishes it from near-Melbourne coastal resorts such as those in Surf Coast. The proportion of children (aged 0-17) is higher in East Gippsland than in Victoria overall, although proportions of young adults (18-34) are noticeably lower. In the 50 years and over age categories, East Gippsland shows higher proportions than Victoria, although in the oldest category (85+), the proportions are much more in line with the state average. This may suggest a greater need among the oldest age groups to move out of regional areas in order to access appropriate facilities and care. Like many regional areas, East Gippsland has a large net loss of young adults. Given the relative isolation of the district and the loss of many employment opportunities over the past decade (in logging and in public services for example) this is not surprising. Nevertheless, East Gippsland shows a retention of family age groups, unlike the western parts of the state with equivalent relative isolation. Of particular significance however is the importance of retirement migration in the areas population profile. Most of these people move to the coastal centres near Bairnsdale such as Lakes Entrance, Paynesville and Metung.

A summary of the net-migration characteristics for the three municipalities is presented in figure 10. The unusual pattern of Surf Coast is evident with positive net migration in all age groups. West Wimmera shows losses across all age groups, but in absolute terms, its net loss of young adults is not as high as East Gippsland which shows the strongest net loss for young adults (over 600 in the 20-24 year age bracket) but also the strongest net growth in older age groups (347 for the 60-64 year age groups).

Figure 10: Age-specific net migration, West Wimmera, Surf Coast and East Gippsland, 1991 to 1996

Source: ABS unpublished data

In summary, the variation in age-specific net migration profiles for municipalities discussed above are shown in table 3. Two of the three case study areas show strong losses of youth and young adults (West Wimmera and East Gippsland). Surf Coast gains in these age groups. Relatively strong growth in family age groups is evident in both Surf Coast and East Gippsland and these case study areas gain from in-migration and retention of retirees and elderly populations. The only caveat on this final characteristic is that there may be some out-movement of the elderly where health service requirements make it necessary to move to a larger centre.

Table 3: Patterns of net migration gain/loss across selected age groups, West Wimmera, Surf Coast and East Gippsland, 1991 to 1996

	Young Adults	Families	Older	Elderly
West Wimmera	Loss	Loss	Steady	Steady
Surf Coast	Gain	Gain	Gain	Steady
East Gippsland	Loss	Gain	Gain	Steady

Policy implications

One of the key issues arising from geographic variation in age profiles is that of service delivery. This is all the more significant in regional areas which have lost services over recent decades due to restructuring and rationalisation.

Service demands arising from ageing populations are not static. There is likely to be a greater demand for recreational and community services for young retirees who are still active and mobile, especially in coastal parts of Victoria. While certain types of health services will be important for this group (particularly more general health maintenance and monitoring services) elderly age groups are likely to require a range of more intensive services ranging from home care support through to acute nursing home and hospital care. These varying health needs across the older age groups are significant given that regional areas may be unable to offer a full range of such services to the appropriate residents at the appropriate time.

Service delivery solutions developed for metropolitan areas of Australia may not be easily transferable to regional areas. For example, compared to the metropolitan area, populations are more dispersed and access through public transport is limited or non-existent. So the ability to travel to services may be limited, more so for elderly people living outside regional centres (refer figure 11). Other options which may be easily provided in urban areas (eg. meals on wheels or home help) may be much more difficult in regional areas because of the dispersed population, availability of appropriate staff or volunteers, and higher per capita cost of providing such services in areas of dispersed settlement. While many regional areas show a deal of resilience and self reliance in providing services informally, there are nevertheless issues of equity and quality of service when compared to the service availability and range in metropolitan areas.

Transport for medical services is one of the greatest difficulties facing rural and regional communities, especially as general practitioners become harder to attract and retain. Even basic care services can thus become difficult to gain access to without distances being travelled, and this will tend to discourage visits to doctors for ailments which may later prove more serious or difficult to treat. For specialist care, residents of regional Australia are likely to need to travel to regional cities. Australia has very few regional cities compared to other countries of the world, and this feature of its settlement geography is critical to understand when considering policy approaches to service provision. As a result, it is common for Australians in regional areas to travel to capital cities for specialist care. Victoria is no exception in this regard, despite it being smaller and more densely populated than other Australian states.

Figure 11: Population density, Victoria, 1996

Source: ABS CData96

Despite the interest and support for mobile servicing regimes in elderly care, there will still be a need for elderly accommodation facilities and, as the numbers of elderly increase over the coming decades, it can be assumed that the actual numbers requiring such accommodation will increase. Nursing homes form an important feature of even very small regional centres. Many of these are attached to small local hospitals and fulfil an important role in community life, allowing older residents to remain in the township or district in which they have lived.

Nevertheless, the size of many of these facilities represents an economic issue in terms of efficiency. Some regional nursing homes have fewer than 10 beds, well below accepted levels of economic viability and, under recent Commonwealth requirements for nursing home accreditation, many of these small regional facilities may fail to achieve required standards. Whilst the closure of urban-based facilities which do not meet government standards, or which are not economically viable, will cause stress, there are at least alternative facilities available within the wider urban area. For regional areas, the closure of small nursing home facilities may mean that local elderly residents need to be relocated some distance away, in a different or larger larger regional centre. The costs of such relocation may be high for individuals and their families. For some, the low value of their rural assets (ie. the family home) may make it difficult or impossible for them to fund relocation. Regional areas of low housing demand may therefore prove to be a trap for ageing populations who find themselves unable to move to better serviced centres.

Behind these logistical issues lie difficult questions of economic efficiency and viability. For example, while mobile services are seen by many as providing solutions to service delivery to the elderly, a question arises about the degree to which mobile services can operate viably in regional situations – what are the costs, staffing, and resourcing issues?

Clearly there are many issues beyond simple economic efficiency to be considered. Of particular importance is the need to recognise Australia’s settlement geography and to understand that policies suited to metropolitan areas may have quite different outcomes in a regional context.

Conclusion

While the different growth rates of older populations in regional Victoria versus Melbourne are evident, there may be unexpected interactions which determine spatial outcomes and policy issues. The degree to which people either age in place, migrate for retirement or relocate to enter serviced accommodation, can be affected by a range of economic, social and cultural factors: income; service provision, housing maintenance costs; family arrangements and personal choice.

In addition to the demand side of the equation, there are also supply issues relating to the location of suitable housing and the way in which certain areas or housing choices are marketed. For example, changes in urban development in Melbourne over the past decade have created a greater range of housing alternatives. Some have speculated that retirees or ‘empty nesters’ (parents whose children have left home) may choose to relocate within the urban area rather than move out to regional areas. Inner city living opportunities, serviced apartment accommodation, or large apartments on small allotments (reducing garden maintenance) may all appeal to older people. Some of these new housing choices are available throughout a range of suburban areas, thus allowing many to age in proximity to remain close to their former area of residence while adjusting their housing arrangements.

Nevertheless, there is an important difference between metropolitan and regional areas which would seem to favour continued out-movements of retirees and constrain counter-movement of older age groups. Metropolitan land and housing prices are, on average, higher than in regional areas (refer figure 12). Realising urban assets can provide individuals with a range of locational choices, whereas regional assets (ie. small town house allotments) may offer a lower value which may it difficult to move to larger townships or better serviced regions. At the most extreme level, there may be some more remote regional areas where residential land owners are unable to even sell their property because demand is very low or populations are declining. Nevertheless, the economics of rural, regional and urban property markets cannot be considered exclusive of individual choices and decisions. Further research in this area would better inform our understanding of the desires, choices, opportunities and constraints facing regional and urban dwellers as they age.

Figure 12: Median house prices, Melbourne, regional Victoria and selected municipalities, 1987 to 1997

Source: Valuer-General, 1998

Finally, it is worth recognising that various issues and conclusions presented in this paper may be affected by as-yet-unknown elements or uncertainties.

While ageing in regional areas may create various lower-skilled service based jobs, it is also likely to create a need for professional skills (medical, legal, etc.) for which regional areas are at a competitive disadvantage when compared to Melbourne. More detailed analysis of regional labour force needs and potential skill shortages would be of great assistance in unravelling some of the more complex features of demand/supply relationships for particular services affecting older populations.

Even with lower skill service jobs there is still a question of whether younger people will move to where the service jobs growth is occurring. ie. will they follow the retirees? From the data which this paper provided on the municipality of Surf Coast one could argue that it is indeed happening, although the location of the municipality would also suggest the importance of commuter attraction for Geelong residents. Perhaps more instructive is the case of East Gippsland where, despite the loss of younger adults, there is still retention of families.

One could speculate that the physical assets of these regions which prove attractive to retirees also have potential for the attraction of other age groups, given the availability of employment. The ability for a municipality such as West Wimmera to attract either retirees or younger workers would seem more limited. In these cases, the ageing of the population, created more by loss of younger people than by gain of retirees, would seem likely to occur in the face of continued problems of ensuring adequate service delivery.

Another uncertainty relates to political environments. At both national and state levels there is an increasing profile being given to regional issues. In Victoria these issues had a direct effect on the outcomes of the last election with regional demands for recognition and service equity resulting in a parliamentary situation where three regional independents – from East Gippsland, West Gippsland and Mildura – holding the balance of power. The impact of such changes are still emerging.

In addition to some of the uncertainties outlined above, there are also some important factors which may limit the range of future scenarios that might occur.

In demographic terms the size and impact of the baby boomer cohort reaching retirement age means that a small proportional change in retirement location preferences can have a large impact in absolute terms. So even if only a small proportion of these new retirees opt for an alternative style of retirement location the impacts on the destination area, be that regional or urban, may well be large.

The ageing of regional Victoria is not due solely to the migration decisions of older age groups. Part of the ageing phenomenon is due to the loss of young people to Melbourne and, perhaps more significantly, by the difficulties in attracting them back. Difficulties in retaining or attracting young adults in regional areas is not simply a case of lack of jobs - it is often also due to more restricted career paths, professional employment opportunities and professional development.

The trends and issues surrounding ageing in regional areas are not confined to Victoria alone. This paper has aimed to provide insights into issues of ageing in regional areas which can be applied to situations across Australia. Such information can help us understand the changing dynamics and future characteristics of Australia’s country towns and regions.

References

Australian Bureau of Statistics (ABS), 1999, Deaths Australia 1998, ABS cat. no. 3302.0

Australian Bureau of Statistics (ABS), CData96

Department of Infrastructure (DOI), 2000, Victoria in Future, Overview, the Victorian Government’s population projections 1996-2021.

Foskey, R. 1998, “Ageing in small rural communities”, paper presented at the 6^th Australian Institute of Family Studies Conference, Melbourne 25-27 Nov. 1998. Paper downloaded from AIFS web site on 19/10/99, <http://www.aifs.org.au/external/institute/afrc6papers/foskey.html>

Productivity Commission and Melbourne Institute of Applied Economic and Social Research, 1999, Policy Implications of the Ageing of Australia’s Population, conference proceedings, Melbourne, 18-19 March, 1999

Valuer-General, 1998, A Guide to Property Values, Victoria, Department of Natural Resources and Environment, Melbourne.

APPENDIX: Population and migration charts

• West Wimmera
• Surf Coast
• East Gippsland

West Wimmera

Population Profile, West Wimmera and Victoria 1996 Population change by 5-year age groups, West Wimmera, 1996 to 2021

Age-specific migration flows, West Wimmera, 1991 to 1996 Age-specific net migration, West Wimmera, 1991 to 1996

Source: ABS Census

Surf Coast

Population profile, Surf Coast and Victoria, 1996 Population change by 5-year age groups, Surf Coast, 1996 to 2021

Age-specific migration flows, Surf Coast, 1991 to 1996 Age-specific net migration, Surf Coast, 1991 to 1996

Source: ABS Census

East Gippsland

Population profile, East Gippsland and Victoria, 1996 Population change by 5-year age groups, East Gippsland, 1996 to 2021

Age-specific migration flows, East Gippsland, 1991 to 1996 Age-specific net migration, East Gippsland, 1991 to 1996

Source: ABS Census