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SYDNEY, March 12 (Reuters) - Australia's aging population could become a headwind to growth if it reduces the appetite for taking risks, a top central banker warned on Wednesday, though he emphasised the country also had demographic advantages enjoyed by few of its peers.
Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe said evidence suggested younger workers were more likely to set up their own businesses, to adopt new technologies and to be more adventurous in their financial decisions.
"If ageing societies do become inherently more risk averse and less supportive of innovation - as I suspect they might - then we are likely to face a greater challenge than we have to date in generating productivity growth," said Lowe.
The challenge was all the greater as productivity had already slowed in the past decade, he added. Still, Australia was hardly alone in facing an aging populace and, indeed, had some major advantages.
Crucially, population growth in Australia was running faster than almost any other developed nation, thanks largely to a steady flow of migrants.
The number of Australians had swelled by 9 percent over the previous five years, and was projected to expand by a similar amount over the next five. That was more than twice the average pace of growth in the OECD.
The great bulk of migrants were also skilled and on average around 10 years younger than the average Australian.
"This dynamism creates new opportunities and can increase the pay-off from taking a risk," said Lowe.
"And the increasing diversity of our population means that we have a constant influx of people coming to our shores, bringing with them new perspectives, new skills and new ideas."
(Reporting by Wayne Cole; Editing by John Mair)
((Wayne.Cole@thomsonreuters.com)(612 9373 1813)(Reuters Messaging: wayne.cole.thomsonreuters.com@reuters.net))
Keywords: AUSTRALIA RBA/POPULATION