I am not at all surprised by the Federal Government’s decision to ratchet up the age at which Australians become eligible for the Age Pension. Several Western European nations have already done the same thing. In the
Whenever something like that happens “over there” it’s really only a matter of time before it surfaces here: after all, from a politician’s point of view the precedent has been set. And you can sort of see their eyes light up at the thought of getting their hands on more tax dollars. More people in the workforce for longer is good news for governments. Not only is there the bonus of a delayed draw on the Age Pension but there’s also more tax paid. And, let’s be frank here, not only will workers work and pay tax for two extra years but there’s also the delicious possibility that some will drop dead within that time frame: more tax in; less pension out.
The counter argument to extending the working life is that baby boomers have been in the workforce paying taxes for 40 years; the premiums have already been paid; now it’s pay-back time. The problem is that much of the tax paid by boomers since they entered the workforce in the 1970s has been spent. Future retirees must rely on current workers to fund their lifestyle. This system worked well enough for 40 years because the worker base was always expanding. But from 2011 onwards the rate of growth in the working age population of Australians slows: more boomers exit at 65 than Gen Ys enter at 15.
The year 2011 is critical because it is in that year that the first baby boomer ever invented will turn 65. Not that the first boomers (born in the late 40s) are much of a problem; there’s not so many of them. The real demographic trouble-makers are those pesky boomers born in the 1950s. And that’s the group that is targeted in the planned postponement of pensionable age. I agree with the policy; it’s the right thing to do. However I think there will be issues in extending the working life for some sections of the workforce.
Pen-pushing white-collar workers can easily extend their work commitments. This is a more difficult proposition for labourers. Consider the plight of say a boilermaker who has been hard at work with his body all day every day since the age of 15. By his mid 50s this bloke’s body is buggered. There needs to be some consideration for the circumstances of those whose work can be described as hard labouring.
The other issue here is the way in which older workers will be used in the workforce. Even without this new policy the number of older workers (say 60-64) is rising because of the boomer push.
There’s now a need for employers to find meaningful work that is tailored to older worker’s capabilities. They aren’t all going to end up sitting on boards pontificating about matters of importance; many will end up in mundane “old jobs” cordoned off from the main cut and thrust of business. Or at least that’s one possibility.
Finally the fact that there will be more old people working, and drawing a commercial income, means more discretionary spending will be injected into the 60-something stage in the life cycle. In the 20s this “me money” ends up in cafes, bars, restaurants or is spent on clothes, travel and electronic gadgets including phones.
What do you think older workers will spend their money on? And don’t say Generation Y because by then the Ys will be in their late 30s with families and commitments and a life of their own. I think the boomers will spend their money in areas not traditionally associated with this market such as fashion clothing. Show me a fashion label that packages and presents clothing styles for the over 60s that is not “grandma daggy”.
There is also the distinct possibility that the pensionable age will be pushed beyond 67 at a later stage. But