Australian population ageing is moderate by Western country standards but there are major issues emerging in national policy debates. The proportions 65+ will double and the proportions 85+ will more than quadruple by 2050. The first concern is the long-term trend to earlier retirement from work along with a nearly universal dependency on publicly funded age pensions rather than on private savings and superannuation. New mandatory superannuation guarantee scheme will ease some of the financial pressure from income dependency. Secondly heart, musculoskeletal, cancers, mental illness and digestive diseases are high cost conditions but musculoskeletal and mental conditions are a higher cost for women than for men. About two thirds of health expenditures are spent on the tenth of the population 65+ which indicates an issue of control of health costs through appropriate servicing. Third severe handicap rates reported in national surveys have stabilised over time to cover the last 3 or 4 years of life. Over two thirds of the remaining years of life at age 65 are currently spent free of handicap. Aged care services have shifted in focus from intensive options like nursing homes to less intensive options like hostel care and home and community care. There is about a two thirds risk of ever entering a nursing home or hostel at age 65. Consequently long-term care financing is one of the most urgent issues in Australian aged care policy.