Treasurer Joe Hockey has really ramped up speculation the pension system is in for some changes, using a speech in Washington to warn of a “major demographic bulge” confronting Australia’s budget.
“Achieving long-run fiscal sustainability will require winding back some spending that our population have come to take for granted,” he said.
Hockey’s speech, which follows remarks from his department head Martin Parkinson and central banker Glenn Stevens — who both said Australia needed to consider serious budget measures — alluded to an increase in the retirement age, or a tightening of eligibility for the Age Pension.
The previous Labor government already legislated an increase in the pension age to 67, which kicks in from 2023 — much sooner than other developed countries such as The United Kingdom and Canada, who will do the same from 2028 and 2029 respectively.
“Those members of the community that are able to do so must make appropriate contributions to the cost of government services,” Hockey said.
“And all members of our community must be encouraged and assisted to enter and stay in the workforce.
“We must not assume that age, disability or language are automatic impediments to workforce participation.”
The government is expected to unveil some tough measures in May when its budget is released, with changes to the GST also foreshadowed. To achieve its target of a surplus by 2023-24 the Abbott government will need to find $60 billion worth of budget savings a year, around the same amount as the total federal spend on education and defence, according to the Commission of Audit.
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