This morning the Prime Minister announced the government will abandon its longstanding plan to increase the retirement age from 67 to 70.
The announcement will no doubt be good news to many Australians who are approaching retirement age and, after many years of hard work, are looking forward to receiving the government’s aged pension.
Those who work in physically challenging roles are likely to be especially pleased, as for this hard-working group, working until the age of 70 might have loomed on the horizon as seeming almost impossible.
Policy backflip announced on breakfast television
News of the policy backflip came during a Q&A on Channel Nine’s Today show, when a viewer asked Mr Morrison about the government’s long-standing policy to increase the pension age to 70.
“Why, Prime Minister, do you think it’s a good idea to have everybody working until they’re 70?” the viewer asked.
— The Today Show (@TheTodayShow) September 4, 2018
Mr Morrison responded by saying, “Well I no longer think it is. I was going to say this next week, but I may as well say it here.
“I have consulted my colleagues on that, and next week Cabinet will be ratifying a decision to reverse taking the retirement age to 70. It will remain at 67, which is what Labor increased it to,” he said.
“In this year’s budget I announced a whole package of measures to help Australians live a longer, healthier more active life. And that included things like the pension work bonus and supporting people, and helping people who are older, getting access to the pension when they’re running a business. And i think those measure are positive measures. I don’t think we need that measure any longer, when it comes to raising the pension age.
“It’s one of the things I’ll be changing pretty quickly,” he said.
“Australia needs to invest in its older population”
Ian Yates AM, Chief Executive of COTA Australia, told HelloCare he was surprised by the timing of the announcement, but not surprised by the change of policy.
He said encouraging Australians to work for longer was a better approach than forcing them into it, and the government’s More Choices for longer Life package, which was revealed in the latest Federal Budget, contained good measures aimed at lifting workforce participation among seniors.
Lifting workforce participation will contribute much more money to the Federal 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.
My Yates said there are still large numbers of mature age workers receiving Newstart unemployment benefits, and pushing that out until they were 70 didn’t gain much.
“Forcing older jobseekers to wait another three years struggling on Newstart before accessing the aged pension… is not fair or sensible,” he said.
Mr Yates said COTA would like to see a comprehensive review of the retirement income system – including reviews of taxes, pensions, superannuation and other retirement income – to ensure Australia’s ageing population is supported fairly.
He said he would also like to see more age discrimination legislation to support mature age workers.
“Australia needs to invest in its older population who contribute enormously to the economy and society but could add even more substantially to economic growth and social cohesion if properly supported,” he said.
Change will be appreciated by those with physical jobs
Deputy Prime Minister Michael McCormack told Sky News the move will be appreciated by those who have physical jobs.
“I think if you’re 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.
He said the policy backflip was “pragmatic” and “sensible”, and that increasing the pension age to 70 was probably “a step too far”.
Leader of the Opposition Bill Shorten said, “Scott Morrison voted seven times to increase the pension age to 70. Now he says he was wrong. How do we know he won’t try it again?”
The Liberal government revealed the plan to increase the pension age from 67 to 70 in the 2014 budget under former treasurer, Joe Hockey. The measure was one of a number of controversial budget moves by the then Abbott government, including the GP co-payment and the paid parental leave scheme.
Though legislation was never passed to execute the plan to increase the retirement age, the Liberal party retained the change as one of its policies.
What is the retirement age in Australia?
The age at which Australians can receive the pension is currently 65 years and six months, and it will increase by six month every two years, until it reaches 67 years on 1 July 2023.