Govt warned not to be hasty on pension age

SENIORS, welfare groups and unions want age discrimination and adequate superannuation to be addressed before any increase in the pension age is considered.

A Productivity Commission report has suggested lifting the pension age from 65 to 70 to help Australia cope with an ageing population.

But Treasurer Joe Hockey was quick to deny the government was considering the move.

“We have no plans to change the age,” a spokeswoman for the treasurer told AAP.

Commission chairman Peter Harris says population growth and ageing will affect labour supply, economic output, infrastructure requirements and governments’ budgets.

“The best time to develop policies that address the inescapable implications of demographic change is while the transition is in its infancy,” he said in the report released on Friday.

The report estimates a pension age of 70 would save $150 billion between 2025/26 to 2059/60 in today’s dollars.

But National Seniors chief executive Michael O’Neill says it is naive to believe simply raising the pension age will boost productivity.

“Older Australians want to work but no one will hire them,” he said in a statement.

“Lose your job at 50 and the odds are stacked against you getting another one.”

Age Discrimination Commissioner Susan Ryan agreed, saying lifting the pension age would serve no social or economic purpose if people were forced onto unemployment queues.

“Such a change should only be considered when we have eliminated age discrimination from the workplace,” she said, adding that about two million Australians over 55 were willing to work but could not find employment.

Australian Council of Trade Unions president Ged Kearney said if the government wanted to reduce budget pressures as the population aged, it should strengthen the superannuation system.

“A strong superannuation system lets ordinary workers retire with security and quality of life and takes pressure off the pension system.”

The Australian Greens said the government should be ensuring big business and the mining sector were paying their fair share to help care for all Australians as they aged.

“Raising the pension age again without proper examination would be a knee-jerk reaction,” Greens Senator Rachel Siewert said.

But business believes the commission’s proposal is a sensible response to increased life expectancies.

“As major contributors to taxation revenue, businesses have an interest in containing the growth of government spending associated with the ageing population,” Australian Industry Group chief executive Innes Willox said.

The commission also proposed an “equity release scheme” for older Australians who own their own homes, to help pay for health and aged-care services.

The scheme would mean those who own their homes contribute half of the annual real increased house value to the government, which would help cut government spending by about 30 per cent.

Retirement Living Council executive director Mary Wood said the recommendation had “significant merit” as accommodation requirements changed with age.

“Downsizing to retirement villages in particular should be encouraged, not penalised,” she said.

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