Coalition won't retire its policy to lift pension age to 70
Sydney Morning Herald
June 21 2017
It's the "zombie" policy the Turnbull Government refuses to kill off. When then treasurer Joe Hockey delivered the 2014 "lifters and leaners" budget he announced the pension age would rise to age 70.
It was greeted by cries of derision by the opposition at the time and the policy continues to be opposed by Labor, the Greens and unions representing blue-collar workers.
Although it has remained Coalition policy, it has been soft-pedalled, probably because the Government does not have the numbers in Parliament.
However, recently the minister for social services, Christian Porter, reaffirmed it remains Coalition policy, sparking another round of protests from those opposed to the measure.
The former Labor government had already raised it to 67 for anyone born after January 1,1957.
The National Commission of Audit, which was established by the Abbott government and reported in 2014, found that, without policy change, the cost to taxpayers of the age pension would rise from $39.5 billion in 2013-14 to $72.3 billion in 2023-24.
Porter says by 2054-55, the number of Australians aged over 65 would more than double to 8.9 million, representing about one in five of the expected total population.
"Clearly, sensible, measured reform is needed to ensure a sustainable age pension system that provides a safety net for those that require it," he says.
Coalition policy is to progressively increase the age pension to age 70, over 10 years, from 2025 to 2035.
Developed countries throughout the world are lifting their pension ages. The United States and Germany are moving towards retirement ages of 67. Britain is increasing its pension age to 68.
But if Australia's pension age was increased to 70 it would very likely be the highest in the developed world by 2035, according to analysis by Rafal Chomik, senior research fellow at the University of NSW.
Modest retirement
The human cost is older workers who feel incapable of working so long but don't have enough superannuation to retire without the age pension.
Shirley O'Riley, 58, works as ward assistant in a Sydney hospital. She will not be caught if the government increases the pension age to 70, but is annoyed she has to wait until she is 67.
O'Riley finds work hard now because of the wear and tear on her body and she can't see herself lasting another 10 years.
"It's all right if you have a desk job but my job is very physical," she says. "And it's not just me, what about the construction workers?"
O'Riley doesn't have much money in super because when she started working there was no compulsory super.
It's a similar story for Ron Pike, 53, who used to work as a security guard at a hospital in Sydney.
"There was a lot of physical restraining of aggressive patients, those on drugs like ice and mental health patients," he says.
After he intervened in a brawl at the hospital in 2015 he was left with a serious back injury that required surgery.
He can no longer work as a security guard, but has light duties at the hospital. For Pike, waiting until 67 for the age pension is bad enough, and unlikely given his health and the tenuous nature of his employment.
He and his wife, who have two grown-up daughters, paid off their mortgage last year but don't have much in super.
Cynical policy
Combined Pensioners and Superannuants Association policy co-ordinator Paul Versteege says the push to 70 is a cynical money-saving policy that would throw tens of thousands of people onto unemployment benefits.
"Proposing raising the pension age to 70 without worrying how people will maintain employment until they reach that age would be the act of an irresponsible government," he says.
Versteege says blue-collar workers and those people in disrupted industries who don't make it to 70 in their jobs, might face more than a decade on unemployment benefits, which is 40 per cent lower than the age pension for singles and 22 per cent lower for couples.
Labor will continue to oppose this measure. Jenny Macklin, the shadow minister for families and social services, says it is not reasonable to expect construction workers, miners, nurses and farmers to work until they're 70.
"Malcolm Turnbull likes to pretend that he's gotten rid of unfair cuts from the 2014 Budget but some of them are still lurking on the books, including the plan to increase the pension age to 70," Macklin says.
NSW Health Services Union secretary Gerard Hayes says physical and mental stress manifests as the years pass.
"The idea that modestly paid health and hospital workers will be forced to work until they are 70 is repugnant and unfair," he says. "What's the point of Australia breaking economic growth records if it can't provide a dignified retirement for working people?"
Policy challenges
Porter points out that the disability support pension, the same rate as the age pension, is available to those who cannot work and who have a disability.
Australia's relatively high immigration levels have somewhat counteracted the decline in fertility rates and increases in longevity.
Australia's position is relatively better than most other rich countries. However, the demographic drivers of population ageing are still very much in evidence.