- Raising the retirement age to 70
The Productivity Commission has recently released its report An Ageing Australia: Preparing for the Future which has 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 make major demands on government budgets.
prosperity, may grow by only 1.1% per annum over the next five decades. In the last 20 “boom” years, the annual growth rate was 2.7%.
The report states that gradually increasing the pensionable age from 67 to 70 years would yield ongoing fiscal savings between 0.1% and 0.15%of GDP per annum from 2035. Increasing the eligibility for the Age Pension would also increase the likelihood that older workers would remain in the workforce. However, this impact would not be uniform.
The report makes no recommendations, but raises the three following areas for policy consideration:
- the Commission estimates that population ageing will place pressures on government budgets by 6% of GDP by 2060, and reduce labour supply per capita. It projects that labour force participation rates will fall from 65 to 60%
- the population aged 75 years or more is projected to rise by four million between 2012 and 2060
- in 2012, there was roughly, one centenarian for every 100 babies. By 2060, it is estimated that there will be 25 such centenarians for every 100 babies. Meanwhile, Australia's population will continue to grow strongly, and is expected to lie between 34 and 42 million people by 2060