In a sudden decision pre-empting formal approval by cabinet, Australia’s new Prime Minister Scott Morrison scraped the Abbott government plan to increase the age of retirement to 70.
The 2014 treasurer Joe Hockey had announced an increase in the pension age to 70 by 2035, saying that we should “celebrate the fact that Australians are living longer but we must prepare for the adjustments in our society”.
Because the proposed increase in the pension age was almost a decade into the future, there was no indication of its net effect on the bottom line in the forward estimates. Moreover, it had never properly received the seal of the senate to be legislated, yet it remained official government policy up to this point.
“I don’t think we need that measure any longer when it comes to raising the pension age,” Mr Morrison told Nine Network on Wednesday, responding to a question from a member of the audience.
“I was going to say this next week but I may as well say it here … I’ve already consulted my colleagues on that. And next week, cabinet will be ratifying a decision to reverse taking the [pension] age to 70. It will remain at 67,” he said.
Delving into the PM’s announcement who was seen by the Opposition as a desperate cry for approval leading up to the national election next year.
“Mr Morrison for years has wanted Australians to work to the age of 70. As recently as July this year he said that was his commitment,” Labor leader Bill Shorten noted, stressing that the Coalition had argued for the policy since 2014.
“Now he wants to drop it because he is worried about losing his day job.”
Deputy Prime Minister Michael McCormack told Sky News that he find’s Mr Morrison’s thinking to be “pragmatic and rational” as the Government is also avoiding a budget crisis by foregoing saving that won’t affect crucial decisions.
“If you are a tradie, or a brickie or a shearer in rural and regional Australia, you don’t want some suit in Canberra telling you you are going to have to work until you’re 70,” he said.
Meanwhile, the Council on the ageing (COTA) welcomed the move, while Chief Executive Ian Yates suggested the Government instead focus on lifting the workforce participation rate for people over 55 and supporting people who want to work into their 70s.
“That would contribute more to the budget than raising the pension age further could ever save, and it will result in better retirement incomes for many retirees, again saving the budget,” he said.
The pension age has already started going up from 65 with those turning 66 in the first half of 2019 having to wait till July before they apply for a pension. The next age increase will be launched in 2021 when to be eligible for a pension, applicants should be over 65 years of age and six months.