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. 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.
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.
“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.