Pension age rise

‘Go slow’ on push to 70

Australia’s pension age will rise to 67 on July 1 this year and needs to increase further, new research has found, but it warns it should be a gradual climb spanning decades.

As France braces for more nationwide protests next week over its planned retirement age rise from 62 to 64, a new report by Macquarie University’s Business School says Australia’s pension system will require a pension age of 70 to be sustainable amid a fastgrowing group of very old retirees.

However, it says the higher pension age of 70 should not be introduced until 2050, following a rise to 68 by 2030 and 69 by 2036.

“As Australians live longer than before, it presents a challenge to the government to fund retirees through a pension scheme,” said Macquarie University statistician Professor Hanlin Shang.

“Raising the pension age is the obvious way to sustain the current pension scheme without collecting more taxes,” he said.

The report’s suggested time frame for pension age increases is much slower than a 2014 Liberal government plan to reach 70 by 2035.

That plan was abandoned in 2018, and Professor Shang said it had faced stiff public opposition and claims it was causing anxiety among older people.

He said raising the pension age to 70 by the mid-2030s would be “exceeding the increase in human life expectancy” and his analysis, conducted with Monash University professors Rob J. Hyndman and Yijun Zeng, found a slower gradual rise would sustain the current system without requiring extra federal government input.

“While it’s great that we are living longer, it may not be good for the government pension system.”