One area we do not want to follow the United States

With so much of what happens in the United States finding its way to Australia, one statistic worries me and should be of concern to government in that country. That is the life expectancy in the US has fallen every year for the last 3 years. Only Mexico has this decline with the rest of the world enjoying increasing life expectancy.

I was not aware of this until I attended the launch of the Melbourne Mercer Global Pension Index yesterday. It was very well presented thanks to the ongoing support of the Victorian Government and Monash University. I return to the disturbing reasons for the decline in the US shortly.

Australia rated 3rd overall with a rating of B+ behind the Netherlands and Denmark both countries rated A.

One of the areas that Australia needs to improve is in the adequacy of our funds. With an ageing population and low investment return the push is to implement the 12% superannuation contribution along faster. This to me is a very difficult issue. Australia already has the highest cost of labour in the world and as so many small and medium businesses have not had any price increases for many years and yet costs they cannot control such as government taxes and levies, insurance, electricity and fuel continue to rise. How do they fund a 2.5% increase in the cost of labour which flows through to WorkCover and Payroll tax?

It is not just small business that is effected. In the insurance industry we have seen many insurers off shore jobs for parts of the business with mixed success.

I ask the question, will any move to bring forward the higher contribution rate mean more retrenchments of older more expensive workers not to be replaced or replaced with machines/computers or less experienced and cheaper staff?
This will only counter the second area of change and that is to have people work longer. Studies show that boredom, ie people looking for jobs that are not available to them leads to more use of drugs (illegal or legal opioid) and/or alcohol.

Now back to the first point I was not aware of and that is the falling life expectancy in the United States. The three main reasons are increased drug use, suicide and liver disease which I assume is related to alcohol consumption. I question whether the very high cost of medical treatment also contributes. I know that despite this President Trump has cut funding to mental health. A lot of which, not all, can be linked back to drug use.

Interestingly, Russia whose average life expectancy has increased with a push on reducing alcohol consumption.

This was supposed to be a short post but it leads in so many areas. For example while I understand and value the benefits of Cannabidiol (CBD) in marijuana, I do not believe that in the legalisation of marijuana as has occurred in the Australian Capital Territory without the removal of the  delta-9-tetrahydrocannabinol (THC).

From my studies and speaking with experts in the field I believe there is a strong relation between cannabis use and the risk of psychosis. On the other side of the coin, smoking cigarettes is more likely to lead to the use of illegal drugs than cannabis.

I also worry about the use of the drug before people drive or use machinery. Where does this leave the employer?

I am not sure what the solution is for all of this but we would be foolish in the extreme if we did not learn from the US declining life expectancy rate.

For those interested, I have attached a copy of the Melbourne Mercer Global Pension Report Highlights. I thank Mercer for their kind invitation to attend.

One final comment. Mental health is something that LMI and I take very seriously, as do many in the insurance industry. With the delay, deny, defend approach to claims by some insurers and their claims agents, we have seen a significant increase in the number of Insureds suffering nervous breakdowns. One forensic accountant appointed by insurers has had the last 3 Insured’s he has dealt with have such a breakdown and a fourth come very close. When we pointed this out to the individual concerned his response was that he is just doing his job.

It is for this reason that LMI have engaged a full time Doctor of Clinical Psychology as part of our team to help our clients. To me insurance is about helping through their darkest hours not adding to the woes.