VOTERS won’t know until May whether federal Treasurer Joe Hockey is fair-dinkum about raising the pension age to 70 or whether Prime Minister Tony Abbott will stick to his pre-election pledges that there would be no change to pensions and no “nasty surprises” in the Coalition’s first term.
However, regardless of what happens on budget night, there is no reason for working Australians to panic, provided the government does some of the heavy lifting Mr Hockey is fond of asking the community to undertake.
The government’s heavy lifting would need to be in the policy area if it is serious about keeping Australians working longer in the future.
While Australia has the debate about raising the pension age it is important to remember a couple of things.
The first is that you can retire whenever you like, the only change could be to raise to 70 the age when you can access the aged pension.
The second is that people who would be affected by this change are not knocking on the door of retirement now, they are in their forties.
These people, and those who come after them, should be much better financially prepared for retirement than many of their parents.
In Australia compulsory employer superannuation contributions began in 1992.
For younger workers with 30 or 40 years of employer contributions (which should be augmented by their own) there should be enough time to achieve financial independence for their retirement.
There will be a transition group who may not have as much super as they’d like and there will also be low-paid workers who will not have the opportunity to accumulate enough super to tide them over until they can access the aged pension.
These people in particular will be vulnerable if they were to lose their job in their 50s or 60s.
Right now there must be tens of thousands of older Australians who are out of work and out of favour with employers.
A future government would have an enormous political and social problem if it did not have the policies in place to ensure Australians could keep working to 70, if they had too.