We propose an investigation into the complex relationships between population ageing, health status, incidence of major chronic illnesses, labour market status, and health service utilisation using several Australian survey data sources. A range of static and dynamic econometric models are used to quantify the impacts of ageing and health conditions on labour market status and uses of several types of health services of older Australians. A microsimulation model is built to forecast the effects of ageing and prevalence of chronic diseases using econometric estimates and age-gender specific population forecasting. These models will provide powerful tools for simulating various policy interventions.