22 Feb 2014

Australian govt moots pension age rise

7:20 am on 22 February 2014

The Australian government has raised the possibility of raising the retirement age to 70.

Australians can currently retire at 65, but under changes put in place by the former Labor government, the pension age is set to rise to 67 in 2023.

Australian treasurer, Joe Hockey.

Australian treasurer, Joe Hockey. Photo: AAP

The Productivity Commission recommended in November increasing the pension age to 70 but at the time the government said such a plan wasn't on the table.

But now as he tries to get the budget under control, treasurer Joe Hockey has given a strong indication an older pension age is in his sights.

He says he's worried the government may not have the funds to pay pensions sufficient to allow retirees to live with dignity.

Mr Hockey says Australia's ageing population makes that task more difficult.

The Productivity Commission projects Australia's population will grow from about 23 million in 2012 to about 38 million by 2060, with a substantial increase in the number of retirees as people live longer.

The commission says taxes will need to rise 21%, unless steps are taken to pay for Australia's extra health and aged care costs.

The Treasury in New Zealand has suggested raising the age at which people qualify for government superannuation but Prime Minister John Key has said raising the age is not necessary.