Call to Delay Retirement Age to 67 Gets Short Shrift, for Now

By Stephanie Peatling, The Sydney Morning Herald 

Australia

October 11, 2007

A recommendation to raise the age of eligibility for the pension by two years has been flatly rejected by both major political parties.

A report by research group the Committee for Economic Development of Australia suggested raising the age of eligibility from 65 to 67 by 2015, arguing it would encourage more people to stay in the workforce and help them increase their retirement savings. But the Treasurer, Peter Costello, dismissed the suggestion, saying improvements to the superannuation system and inducements to keep working after the age of 65 were encouragement enough for people to stay in the workforce.

"We want to do this with carrots, we want to do this with encouragement through the superannuation system rather than with the stick of changing the qualification age for the aged pension," Mr Costello said.

The Leader of the Opposition, Kevin Rudd, said he was also against the recommendation.

Neither did it attract any support from the group representing older Australians, National Seniors. The group's chief executive, Michael O'Neill, said any move to change the age of eligibility would be very unpopular. "Despite record low unemployment rates, mature age unemployment is still an issue. Working longer can actually be a luxury because once you're made redundant in your 50s getting back into the workforce is struggle," Mr O'Neill said.

"It's the stick or the carrot. Rather than making it more difficult for Australians to live life as they choose, we support moves to reward people for staying in the workforce."

However, the committee's chief executive, David Byers, said: "We need to alter the preconception about when you are too old to work. You can still be highly productive at 65. The fact is that Australia needs to encourage more people to stay in the workforce to maintain its economic growth into the middle of this century."

The Federal Government also faces pressure to change the rate of indexation for some pension recipients. The Government has hinted that pension increases are something it will announce during the election campaign.

In an interview last month the Minister for Family and Community Services, Mal Brough, agreed the pension provided people with a "very meagre" income. "When the Prime Minister is ready, what we will do is explain to the Australian public why they will get a better deal out of the Howard Government," he said.

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