DEMOGRAPHICS / DEPENDENCY RATIO

The Dependency Trap

The arithmetic of aging: why the Commonwealth's primary strategy of importing taxpayers is a temporary patch on a structural deficit.

In 1982, there were 6.6 working-age Australians for every person aged 65 and over. Today, that ratio is 4.0. The Intergenerational Report projects it will fall to 2.7 by 2062.

The Fiscal Squeeze

A falling dependency ratio creates a two-sided fiscal squeeze: income tax receipts grow slower, while age-related expenditure (health, aged care, pension) accelerates.

Tax Burden per Worker Simulator

Adjust the ratio of workers to retirees to see the required tax burden per worker just to fund baseline aged-care and pension costs.

Workers per Retiree Ratio

2.0 (Proj. 2080) 6.6 (1982)

Annual Cost per Retiree ($)

Required Tax Transfer per Worker

Every worker must generate this in surplus tax just to fund the elderly cohort, before roads, defence, or education.

Interactive Tool Requires JavaScript

This calculator requires JavaScript to function. Below is the underlying formula so you can perform the calculation manually:

Tax Burden per Worker = Total Cost per Retiree / Workers per Retiree Ratio

If JS is disabled, you must divide the annual cost per retiree by the dependency ratio to find the per-worker burden.