Increase in the retirement age to 70 is declared likely!

Joe Hockey has overnight signalled plans to raise the retirement age to 70 . They are also planning to introduce tougher income rules for the aged pension and a crackdown on disability support pensions.  But will it be imposed on this generation of boomers or the next?

Joe Hockey said to the Insiders on the ABC over the weekend that  says Australia need to have structural reform to reignite our economy.  He says Australia has no choice but to tackle labour market reform and systemic change, or the ageing population will not be tackled well.

Australia has apparently inherited the fastest growth in Government expenditure in 17 nations, a budget trend that the Labour Government has taken up the challenge to reverse.

We’ve been reporting for weeks here at Starts at Sixty that a rise to the pension age is coming.  On Sunday, Mr Hockey confirmed this, saying his generation will have to work longer because there will be serious budget pressures from the ageing population.

He said that the government notices we have a falling participation rate, and need more Australians who want to work to be able to do so.

This is the most obvious sign yet that the pension age will rise to 70 in the May budget.  Mr Hockey also spoke of our welfare system as a “cargo net” and declared there would be changes to the welfare system, making it more sustainable for the significant demographic challenges we face.   He raised that we need to have a sensible discussion as a nation about our entire quality of life.

When asked if he would raise the retirement age directly he said that his generation will likely have to work for longer because there will be serious future budgetary stresses from an ageing population.

“That’s certainly one of the issues that needs to be addressed,” said Mr Hockey.

“It may be the case that my generation has to work for an extra three years … the fact is that now, as in the United Kingdom.  It’s probably the case in Australia, one in every three children born today will live to 100,” he said.

The Labor government increased the pension age from 65 to 67 between 2017 and 2023.  It sounds clearly like 70 is the next window they’ll attack, for the next generation.

“It is about what we want to be in 5, 10, 20 years’ time and I often ask myself if there’s a drug that’s going to save my child’s life in 10 years’ time and I couldn’t afford it, I would expect the government to help me out,’’ he said.

“Now in 10 years’ time is the government going to have the money to be able to afford that drug? They might have it today but they won’t have it tomorrow unless we actually start fixing the budget now.”

This speech by Mr Hockey is telling a truth that has seemingly been ignored by governments until now.  He openly warns that the number of Australians aged 65 to 84 will double between 2010 and 2050, while the number of people aged over 85 will quadruple.

The people affected by this change are clearly not the readers of Starts at Sixty, but their children, and many of the people in this country aged under 60 today, depending on the year and sliding scale that the legislation is brought in over.  Structural changes like this are rarely done quickly.