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Pension age rise: Australians to become some of the oldest workers in the world

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Lisa Visentin, Gareth Hutchens

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Budget spending cuts

Labor's Andrew Leigh and Liberal Andrew Laming debate where Joe Hockey can find budget savings, including raising the pension age.

PT0M0S 620 349

Australians will become some of the oldest workers in the world if the government lifts the pension age to 70.

Data from the Organisation for Economic Co-Operation and Development shows if Australia lifts the pension age to 70 – as indicated by Federal Treasurer Joe Hockey on Sunday – it will be doing so years before other countries finish lifting theirs to 67.

Hard truth: Treasurer Joe Hockey has indicated that his generation would have to work for longer.

Hard truth: Treasurer Joe Hockey has indicated that his generation would have to work for longer. Photo: Alex Ellinghausen

Mr Hockey gave his clearest signal yet on Sunday that Australia’s pension age could rise to 70 in the budget, saying his generation would have to work for longer to prevent serious future budgetary stresses from an ageing population.

His plan has been heavily criticised by seniors and the Labor Party, with opposition spokeswoman for families Jenny Macklin saying the legislated rise to 67 had not begun yet, and the government would need to account for serious age discrimination in the workplace before lifting it to 70.

But the Productivity Commission and the Grattan Institute both support lifting the age to 70, saying it is reasonable in the face of an ageing population.

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The data shows if Australia moved to lift its pension age to 70 after 2023, it would be doing so before most other countries had finished lifting their pension age to 67. Canada will finish lifting its pension age to 67 by 2029; Germany will complete the process by 2029, while the US will be done by 2036. China has no plans to lift it above 60.

It is understood that if the pension age was lifted to 70, the rise would be staggered over half a decade or more. 

“If we make it 70 by 2030, we’d certainly be in front of others who have legislated changes,” Grattan Institute chief executive John Daley said. “But all that does is show that we are facing up to this problem a little earlier than others.

Illustration: Ron Tandberg.

Illustration: Ron Tandberg.

“Many people in Europe are not so much worried about the existing debts that European governments have run up as their future pension liabilities, which are just terrifying.

Bernard Salt from KMPG said all countries were moving in the direction of higher pension age and that it was “simply a matter of time” before it happened in Australia.

“By the time this is implemented, assuming it is implemented, other countries will follow,” Mr Salt said. “I think that the Australian people will generally appreciate the logic behind that.

But the government ought to make a provision, when thinking about lifting the age, for people who worked with their bodies, such as farmers and tradespeople, he said.

There are 1.427 million Australians on the full age pension and 943,000 on a partial pension.

384 comments

  • What a bunch of lazy visionless vandals the LNP have turned out to be.

    Removing things like the carbon tax, destroying the NBN, CAIRO, no science minister. ..just lazy slash and burn...

    Commenter
    n720ute
    Date and time
    April 15, 2014, 6:40AM
    • n720ute - before you start on the daily spiel about no vision blah, perhaps you could have a look at the 20 plus year outlook for the budget. Irrespective of the short and medium term issues Hockey's been left, over the longer term there's a significant blow out coming in the aged pension, as the Labor-friendly Grattan Institute acknowledge.

      So we can either kick the can down the road to the kids, as was Swan's choice, or take small steps to address the issue now. Which would you prefer ?

      Commenter
      Hacka
      Location
      Canberra
      Date and time
      April 15, 2014, 7:05AM
    • What namby-pambys - retiring at just 70!!
      Whose thought bubble is this?
      People have barely left kindergarten, and hey presto - they pull up stumps and go on the age pension; basking in the sun at the nation's expense.
      Surely, it's time to make the retirement age 85 - rise up people, one and all. Make this happen.

      Commenter
      Howe Synnott
      Location
      Sydney
      Date and time
      April 15, 2014, 7:16AM
    • Oh grow up, (there is still time) its obvious the whole point superannuation was to relieve the state of the some of burden of people living longer, and as the percentage of older Australians increases the present system becomes increasingly unsustainable.

      Unfortunately the entire nation can't enjoy your luxury of living in the past.

      Commenter
      SteveH.
      Date and time
      April 15, 2014, 7:20AM
    • I bet if The Greens and Labor both have a policy to repeal this, they'll romp it in next time. Makes the price on Carbon impact on people pale into insignificence.
      This will be a millstone. It's ironic that Aboat's own father (as an Englishman) received free UNI then returned to the UK and now would have a GoldCard due to a short stint in the RAAF.
      Seems welfare is OK for some, but not others.
      It's all about an agenda, social engineering.

      Commenter
      A country gal
      Date and time
      April 15, 2014, 7:34AM
    • If the plan is to work most people to aged 70 then the Government is going to have to offer some incentives to businesses to employ older Australians. The age discrimination starts to creep in at about 50. The Government will have to re educate many business leaders.

      Most companies don't employ very many experienced older people because most supervisors prefer to employ juniors who usually remain subservient. In my experience, young middle mangers don't like being told by someone older that there is a more efficient way to do something. They would rather hear it from a highly paid team of consultants.

      Commenter
      Rod
      Location
      the Coast
      Date and time
      April 15, 2014, 7:35AM
    • They know they can get away with the changes because they will never have to work until they're 70 .... unless it's some cushy board or executive appointment like Sinodinos's 40 hours for $200K. Remind me, who voted for this mob of inept clowns again?

      Commenter
      JJ
      Date and time
      April 15, 2014, 7:39AM
    • You forgot to add, 'stealing funds from old age pensioners to give to young mothers' (women who are determined by LNP to ''have calibre'').

      Commenter
      Jump
      Date and time
      April 15, 2014, 7:46AM
    • The LNP have been pretty hamfisted in every area where Tony Abbott has laid a finger, however Joe Hockey should really be applauded for starting to address the huge generational issues this country is facing as it ages.

      If they can follow this up by starting to redress the massive boomer entitlements they've written for themselves by way of Super deductions and the ability to take lump sum payments out and then spend it on lifestyle assets/consumption, at the expense of younger generations, than whatever failings Abbott may generate in his daily bludderings will be forgiven.

      Commenter
      Stewie Griffin
      Date and time
      April 15, 2014, 8:09AM
    • Wow, the LNP sure DO have some clout...how on earth did they manage to single-handedly destroy the capital of Egypt...?!?

      Commenter
      Xolin
      Date and time
      April 15, 2014, 8:15AM

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