AUSTRALIA'S pensionable age could be raised to 70 if key points in a new report are taken on board.
The Productivity Commission has released it's report "An Ageing Australia: Preparing for the Future" which has found 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.
The Commission projects that unless 'luck or appropriate policies intervene', net national income per capita, the best single measure of national prosperity, may grow by only 1.1 per cent per annum over the next five decades. In the last 20 'boom' years, the yearly growth rate was 2.7 per cent.
The report states gradually increasing the pensionable age from 67 to 70 years would yield ongoing fiscal savings of between 0.1 and 0.15 per cent of GDP per annum from 2035.
Increasing the eligibility age for the Age Pension would therefore 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 three areas for policy consideration.
Key Points include:
- The Commission estimates that population ageing will place pressures on government budgets of 6 per cent of GDP by 2060, and reduce labour supply per capita. It projects that labour force participation rates will fall from 65 to 60 per cent.
- The population aged 75 or more years is projected to rise by 4 million from 2012 to 2060.
- In 2012, there were roughly, one centenarian for every 100 babies.
- By 2060, it is estimated that there will be 25 such centenarians. Meanwhile, Australia's population will continue to grow strongly, and is expected to lie between 34 and 42 million people by 2060, with the most likely outcome around 38 million.
Read more here: Productivity Commission report