Pension age rise a sensible response to demographic challenges

Media release issued Wednesday, 13 May 2009

The decision in last night's federal budget to raise the pension age to 67 is a sensible response to long-term demographic trends, according to CEDA (the Committee for Economic Development of Australia).

CEDA first proposed a rise in the pension age to 67 in an information paper by Dr David Knox, Pensions for Longer Life: Linking Australia's pension age with life expectancy (2007).

CEDA's chief executive, David Byers said increasing the pension age not only reflected how the world is changing, but will boost the economy, encourage more people in the workforce and ease the tax bill that Australians will have to pay in the years ahead.

"CEDA welcomes this first move towards a system that responds to changing realities and alters the preconception about when you are 'too old' to work."

Report author Dr David Knox, a Worldwide Partner at Mercer, said it was very pleasing to see the government had recognised the need to increase the pension age in light of our increasing life expectancy.

"The pension age of 65 had not changed for 100 years and was no longer sustainable," he said.

"I would also advocate that the pension age needs to be reviewed on a regular basis, as suggested by the Henry Tax Review Panel; we should not wait another 100 years."