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Scott Morrison scraps Government plans to raise pension age to 70

| 05.09,18. 04:53 PM |





Scott Morrison scraps Government plans to raise pension age to 70




Morrison scraps plan to raise pension age (ABC News)

Prime Minister Scott Morrison has dumped the plan to raise the pension age to 70, announcing the decision on breakfast television even before Cabinet has formally agreed to it.


It was one of the issues on which Labor had repeatedly attacked the Government, especially highlighting the impact for people with physically difficult jobs.


Former treasurer Joe Hockey announced the plan to lift the pension age from 67 to 70 in his controversial 2014 budget in a bid to help fund the cost of the ageing population.


The Senate has refused to ever agree to legislation to formalise the change, but until today the Government had stuck to the policy.


Mr Morrison told Channel Nine he did not think the measure was needed anymore.


"It is one of the things I will be changing pretty quickly," Mr Morrison told Channel Nine this morning after facing a question on it from a viewer about why he thought it was a good idea to have everybody working until they are 70.


He said he had been contemplating the change for some time.


But the Opposition has labelled it panic and a sign of desperation.


Labor leader Bill Shorten noted that the Coalition had argued for the policy since 2014.


"Mr Morrison for years has wanted Australians to work to the age of 70. As recently as July this year he said that was his commitment," Mr Shorten said.


"Now he wants to drop it because he is worried about losing his day job."


New South Wales MP Stephen Jones joined the Opposition Leader in pointing out this had been Labor's position for years.


70 was a step too far, Deputy PM says


Deputy Prime Minister Michael McCormack said overturning the previous policy it was a "pragmatic, sensible move".


"I think if you are a tradie, or a brickie or a shearer in rural and regional Australia you don't want some suit in Canberra telling you you are going to have to work until you're 70," Mr McCormack told Sky.


"It's hard, back-breaking work what a lot of our people do and I think being told that they are going to have to work until 70 I think was probably a step too far."


It is the first major policy backdown Mr Morrison has made since becoming PM.


"I was going to say this next week, but I may as well say it here, I have already consulted my colleagues on that and next week Cabinet will be ratifying a decision to reverse taking the retirement age to 70," he said.


It will remain at 67, which is what Labor increased it to.


"The pension age going to 70, gone," Mr Morrison said.


Liberal Democrats senator David Leyonhjelm slammed the decision and argued the age pension age should be gradually lifted.


He said "with increasing health and life expectancy, thousands of older Australians are set to spend many years on welfare despite still being able to work and pay their own way".


Senator Leyonhjelm said the move was a sign the Government does not take budget repair seriously.


"This is not how the grandparents of Australia should be looking after their grandchildren," he said.


Deloitte Access Economics economist Chris Richardson called it a policy mistake to reverse the increase in the pension age.


"I would put it down very much to politics," Mr Richardson said, noting that the new PM was trying to get rid of an unpopular policy in the face of bad opinion polls.


"It is a mistake and it does overturn a courageous decision.


"With politics as populist as it is at the moment and with a government behind in the polls it is entirely understandable that the Government is going to dump things that are unpopular.


"But just because something is unpopular doesn't mean it wasn't the right call in the first place."


Jobs not pensions says Council on the Ageing


The Council on the ageing welcomed the move, saying there is no point raising the pension age further because people who want to work longer are often locked out of even being considered for jobs because of age discrimination.


COTA Chief Executive Ian Yates said the Government should instead focus on lifting the workforce participation rate for people over 55 and supporting people who want to work into their 70s.


He said that would contribute more to the budget than raising the pension age further could ever save, "and it will result in better retirement incomes for many retirees, again saving the budget".


The pension age has already started going up from 65.


The plan to lift the pension age in the 2014 budget was based on a recommendation of the National Commission of Audit, which said it should be linked to rising life expectancy.


"Not only are people now experiencing longer retirements, but changes in the nature of work and improvements to medical technology have meant that many (though not necessarily all) people are also experiencing healthier and more active retirements," the report said.


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