Scott Morrison has confirmed Australia’s retirement age will no longer be raised to 70 in a surprise announcement live on TV.
In one of his first major announcements as the country’s new prime minister, Morrison said he had chosen to reverse the previous budget decision, instead keeping it at 67.
“Look, I was going to say this next week but I might as well say it here,” he told host Karl Stefanovic.
“I have already consulted my colleagues on that. 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.”
The proposal to increase the pension age to 70 was introduced by then-treasurer Joe Hockey in 2014 but the government has not since tried to introduce it to parliament. The Department of Human Services webpage that explains the change notes that “this measure is subject to the passage of legislation”. Under the proposal, the age at which Australians would qualify for the Age Pension will increase to 67 by July 2023, then was due to rise further to 70 by 2035, impacting every Australian born after June 30, 1958. Those born after 1965 would have had to work until they were 70 to get the pension.
Hockey said at the time that the pension age needed to change to make continuing to supply the Age Pension affordable given Australians’ increasing longevity. The pension is the government’s largest single item of expenditure, and raising the pension age will save $3.6 billion between 2025-2029 alone, according to its calculations.
But Labor leader Bill Shorten had campaigned heavily against the rise in the pension eligibility age, launching a social media campaign in April that labelled the “zombie policy” unfair to lower-income workers who will live shorter lives than their wealthier countrymen, and thus enjoy shorter retirements. Labor argued that for workers in hard physical jobs – who are often on lower incomes – waiting until later in life to be able to retire was simply untenable.
Labor has claimed in the past that Australia would have the world’s highest pension age if Aussies were forced to wait until they were 70. The Conversation website fact-checked this claim and found it to be true, although it qualified its findings by saying that as life expectancy around the developed world continued to increase, it was likely that retirees elsewhere would also find their access to pensions pushed back to later in life.
The pension age first started rising on July 1, 2017, when it increased from 65 to 65.5, where it currently sits.