Civil Voices
NEWS  | 

Lifting Retirement Age Slammed

Friday, 22nd November 2013 at 4:30 pm
Staff Reporter, Journalist
A report by the Productivity Commission which suggests lifting the retirement age, and raising taxes and other measures to pay for Australia's ageing population has been criticised by Not for Profit advocacy groups.

Friday, 22nd November 2013
at 4:30 pm
Staff Reporter, Journalist



Lifting Retirement Age Slammed
Friday, 22nd November 2013 at 4:30 pm

A report by the Productivity Commission which suggests lifting the retirement age, and raising taxes and other measures to pay for Australia's ageing population has been criticised by Not for Profit advocacy groups.

The Federal Government advisory body's latest research report warns of the rising financial strains of health and aged-care costs.

The report called  An Ageing Australia: Preparing for the Future, found that Australia is facing a major slowdown in its growth in national income per capita and productivity outlook at the same time that ageing will start to make major demands on the budgets of all Australian governments.

The report says lifting the pension age to 70 would provide savings of about $150 billion over 50 years however the  suggestion has already been slammed by a consumer lobby for older Australians.

Not for profit advocacy group, National Seniors Australia  has hit back at Productivity Commission suggestion that the pension age be raised and linked to longevity to counter the costs of population ageing.

National Seniors chief executive Michael O’Neill warned against raising the Age Pension age without first tackling the issue of mature age unemployment.

“It is naïve to suggest that simply raising the pension age will boost productivity,” O’Neill said.

“Currently, older Australians want to work but no one will hire them. Lose your job at 50 and the odds are stacked against you getting another one.

“Raising the pension age without providing jobs will see older Australians merely shifted from one form of welfare to another.

“Population ageing is a reality and seniors welcome the debate but the Productivity Commission is going over old ground.

“Policy responses to population ageing put in crisis terms are largely unhelpful.”

In 2012, the over 55s represented a fifth of those out of work for two years and living off Newstart Allowance. More than half of those on the Disability Support Pension – which is not activity tested – are aged over 50.

The Australian Council of Social Service also opposed any suggestion of lifting the pension until working age payments were adequate and superannuation tax breaks for older people were delayed and reformed.

ACOSS CEO Dr Cassandra Goldie said the real problem was the enormous difference between pensions and allowance payments, the ability of people to take their super at 55 years of age  and an “unfair and wasteful super tax concession system, which is skewed to people on higher incomes”.

“The gap between Newstart Allowance and the Aged Pension, for instance, is now $150 per week and this difference will continue to grow because they are indexed differently. We see this as a necessary first step before we contemplate a further increase in the pension age that would condemn many more people to poverty in their later years,” she said.

“Above all we need major reform of Australia’s retirement system. A fundamental problem is that people can retire on super at 55 or keep working and pay tax at just 15 per cent by churning their wage through super accounts. This is the rort, not the age pension.

“It is not acceptable for a 55-year-old unemployed person with a disability to be forced to live on $35 a day for up to another 3-5 years while their well-off neighbour of the same age can reduce their tax rate from 45 per cent to 15 per cent by churning their wages through their super account.

“We hope the upcoming tax reform process announced by the new Federal Government will allow all these issues to be laid out so we can begin the work of addressing our longer term fiscal challenge.”

Peter Harris, Chairman of the Productivity Commission, said: “The best time to develop policies that address the inescapable implications of demographic change is while the transition is in its infancy. It is a good time to start a debate and to float creative policy options.

“The design of the Age Pension and the broader retirement system discourages an active economic role by older people, notwithstanding their far longer life expectancy. The current arrangements are at best arbitrarily linked to life expectancy.”

The report examined indexing the age at which people might access retirement benefits to longevity. It noted that after completing school, current generations will otherwise spend nearly half their lives not in the labour force, mostly in retirement.

“A policy agenda focused on lifting productivity in the health sector could relieve fiscal pressures, while not reducing service quality,” Harris said.

The Commission projects that unless “luck or appropriate policies intervene”, net national income per capita, the best single measure of national prosperity, may grow by only 1.1 per cent per annum over the next five decades. In the last 20 “boom” years, the yearly growth rate was 2.7 per cent.

Simultaneously, the Commission estimated that population ageing will place pressures on government budgets of 6 per cent of GDP by 2060, and reduce labour supply per capita. It projects that labour force participation rates will fall from 65 to 60 per cent.

Harris also said a 30 per cent saving could come from making pensioners hand the Government half the yearly increase in the value of their home.

The report also suggested that taxes need to rise by about 21 per cent unless policies are in place to pay for Australia's extra health and aged-care costs.

Already reports suggest that the Coalition Government is not in favour of lifting the retirement age to 70.

Staff Reporter  |  Journalist |  @ProBonoNews


Fantastic digital management app for organisations deliverin...


Yes we’re lawyers, but we do a lot more....


HLB Mann Judd is a specialist Accounting and Advisory firm t...

HLB Mann Judd

Prolegis Lawyers work exclusively for charities, other not-f...

Prolegis Lawyers

More Suppliers


Cashless Debit Card Trial to Be Expanded to New Region

Luke Michael

Wednesday, 14th February 2018 at 5:19 pm

ACOSS Says Government Faces ‘Choice’ to Either Fund Services or Cut Taxes

Luke Michael

Tuesday, 13th February 2018 at 2:50 pm

Senate Urged to Reject Welfare Reform Bill

Wendy Williams

Monday, 5th February 2018 at 5:48 pm

Charity Sector Welcomes Gary Johns Comments on Foreign Donations Bill

Luke Michael

Monday, 29th January 2018 at 5:01 pm


Luke Batty Foundation to Close as Rosie Batty Steps Down

Luke Michael

Monday, 19th February 2018 at 5:37 pm

Australians Losing Trust in Charities

Wendy Williams

Wednesday, 7th February 2018 at 5:28 pm

Calls to Remove ‘Blanket Religious Exemptions’ for Faith-Based Charities

Luke Michael

Friday, 16th February 2018 at 2:35 pm

Prisoners with Disability Subject to Harrowing Abuse, Report Finds

Luke Michael

Wednesday, 7th February 2018 at 4:19 pm

Write a Reply or Comment

Your email address will not be published. Required fields are marked *

pba inverse logo
Subscribe Twitter Facebook

The social sector's most essential news coverage. Delivered free to your inbox every Tuesday and Thursday morning.

You have Successfully Subscribed!