What is the retirement age in Australia

Australia does not plan to retire until the age of 70 - world leader

June 27 (Bloomberg) - If Australia's Treasury Secretary Joe Hockey has his way, the country's residents won't be retiring until they are 70 years old. This would mean that Australia, which wants to relieve the state treasury with the measure, would be the world leader in terms of retirement age.

To miners like Noel Chatterton, the idea sounds like a mockery. “Good luck then,” he says ironically. At 48 he belongs to the first generation who would be affected by the reform plans. “My hands are almost down. My body is in such a state that I have to be lucky to work up to 60 - I don't even want to talk about 70. "

The liberal-national coalition, which has been in power since September, announced in its election manifesto that it would end what Hockey calls the “Age of Claims” and reduce the budget deficit, which is expected to reach 49.9 billion Australian dollars (34 billion euros) in the current fiscal year . With its plans for a higher retirement age, Australia is at the forefront of a number of countries seeking to mitigate the increasing proportion of pensioners versus those paying into pension insurance through a higher retirement age.

In Australia, the ratio of people of working age to over-65s is expected to decrease from 5: 1 in 2010 to 3: 1 in 2050. In Japan the ratio is currently already below 3: 1 and in Germany it is close to this value, as data from the International Labor Organization (ILO) show.

"Australia is the first country to raise the retirement age to 70, but it won't be the last," said Steve Shepherd of the Melbourne recruitment agency Randstad Group. "The world will watch this closely."

The state pension fund in Australia pays around A $ 40 billion annually in pensions, making it the largest item in government spending. Over the next ten years, this sum is expected to grow by 6.2 percent annually, according to a study commissioned by Prime Minister Tony Abbott has calculated. If the expenditures for the pension program are not reduced, the burden on the younger generation through taxes and contributions would have to be increased.

The state pension is the main source of income for 65 percent of retired Australians. Hockey's plan calls for residents born in 1966 and later to work until the age of 70, while the current retirement age is 65.

He does not arouse enthusiasm among the voters. According to a survey carried out by market researcher Galaxy in May, 69 percent of respondents oppose the plan to postpone the retirement age by five years from 2035.

When the government introduced the state pension for men 65 and over in 1909, the average life expectancy for men was 55.2 years. Australians now live to be 80.6 years old on average, and life expectancy is four years higher for women. Government pension payments can go up to A $ 383 per week, depending on marital status, income and wealth.

“It cannot go on as it is,” says Bernard Salt, demography analyst at the auditor KPMG. "When the system was introduced, it was believed that most Australians would die before they could collect their pensions."

The government still needs parliamentary approval for its pension plans. To this end, a law from 2009 that raises the retirement age to 67 from 2023 must be changed. “We think this is right and appropriate,” Prime Minister Abbott told Parliament on Wednesday. "Older people should contribute to the economy." In the House of Lords, approval depends on a group of small independent parties, as the opposition Labor Party has already signaled its rejection.

The age limits for retirement are also being raised in other countries. In Germany and Great Britain, the entry age is expected to increase from 65 to 67 years. In the United States, too, the age at which one can draw a state pension rises to 67. The average of the 34 countries in the Organization for Economic Co-operation and Development, men retire at 65 and women at 63.5 years.

Veronica Sheen, a researcher at the Department of Politics and Social Science at Monash University in Melbourne, doubts that many employers hire employees in their late 60s. "We'll have enough problems getting people up to 67 jobs," said Sheen, who ran a government program for the elderly unemployed. “Middle-aged people tend not to cope with changes in the world of work. In the future, automation and the replacement of labor with technology will play a bigger role. "