When then-prime minister Andrew Fisher and opposition leader Alfred Deakin worked together to pass the Invalid and Old Age Pensions Act through Parliament in 1908, they asked an actuary for advice on what age most workers could be expected to die, as the government could not afford a huge pension payout.
The actuary replied that the vast majority would not make it to 65, and Fisher and Deakin chose 65 for the pension age. Before that, all Australians had no option but to work until they died.
But as Australians are living longer, a recent report from the Productivity Commission suggests we raise the pension age to 70 (it’s currently 65 and slowly rising to 67), and reform access to superannuation.
The life expectancy of Australians has increased by 25 years over the past century. Millions of Australians will live to a very old age, with many suffering from dementia and Alzheimer’s disease. With more and more people kept alive by costly medical intervention, hospital bills and burgeoning pensions will financially cripple the nation.
Superannuation is also a crucial issue. Unless there’s a huge increase in personal and employer contributions, most Australians will have inadequate superannuation, with its poor returns petering out by the time the recipient turns 80.
To address these problems, employers must start hiring seniors into the workforce. Too many of them have a policy of not hiring anyone over 50 and the worst offenders of all are governments, whose public service regulations force employees to retire early and make it almost impossible for anyone of mature years to apply for a position. We need laws that require employers to have seniors making up 10% of their staff — reforming the pension and superannuation age is no good if seniors are forced onto Newstart instead.
This nation needs a positive plan to turn ageing into an asset.
We won’t get far with it if we follow the coverage in the mainstream media, whose use of headlines such as “Work ’til you drop” trivialise the matter. A more accurate headline would have been: “Australia is the most overpaid, under-worked and uncompetitive nation in the world”.
The most positive and pragmatic thing we can do is to commence action now — particularly in squarely facing up to the important decision to raise the retirement age to 70. This must happen far sooner than the Productivity Commission has recommended. Every three years, commencing in 2015, we can raise the retirement age by one year.
Side by side, there must be a huge program of preventative health and tele-health to get the nation’s medical bills down, in tandem with an expansion of recreation and tourism industries where seniors can contribute significantly to economic growth. In addition, we will need a huge attitude change to growing old, as it is a time of life where we can contribute wisdom and experience more than ever before.
Essential to it all will be to diminish our sense of entitlement and acknowledge that Australia owes us nothing. We owe a lot to Australia for the greatest lifestyle in the world.
If we can become a nation of givers rather than getters, the ageing tsunami will lose its sting, and we will lead the world in ensuring that we are a land of opportunity for the vision that comes with greying hair.
*Everald Compton was a founding director of National Seniors Australia in 1976 and was its chairman from 1986 to 2011. Compton, who is 82, was sacked this month by Treasurer Joe Hockey from his role as chairman of the Advisory Panel on Positive Ageing (Hockey scrapped the panel). Compton has agreed to share his views via Crikey instead.