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Tuesday, 2 September 2014
Page: 9392

Budget


Mr BOWEN (McMahon) (14:23): My question is to the Prime Minister. Why is the Prime Minister so determined to make Australians work longer and receive less from the age pension at the same time as making it harder to save for their retirement?


Mr ABBOTT (WarringahPrime Minister) (14:23): I will get to the question that has been asked by the shadow Treasurer, but I would like to begin by acknowledging the gracious words of the Leader of the Opposition a few moments ago. I know the phrase has been criticised but let me use it again—team Australia. We have worked very effectively as a parliament and as a nation to do what we can to help people in the most difficult circumstances imaginable—and that work will go on.

What the government is attempting to do with the budget is ensure that our economy is strong for the future. Yes, it was a tough budget—there is no doubt about that—but it was a necessarily tough budget to address the debt and deficit disaster that we inherited, to ensure that over time there was less spending on short-term consumption and more spending on long-term investment so that we could build our economy for a safe and secure future for our country.

Yes, over time we do want the pension age to increase. Just as the former government raised the pension age, with the support of the then opposition, from 65 to 67, we are proposing to raise the pension age from 67 to 70 by 2035. Let's never forget that, when 65 was proposed as the pension age 100 years ago, the average life expectancy of Australians was 58. Today the average life expectancy of Australians is over 80. A healthy life expectancy has increased even more. That is why we think it is important to increase the pension age appropriately and reasonably over time, building on the work that the former government did.

We all know that, without change, the ratio of working Australians to pension age Australians will decline from five to one now to three to one by 2050. Thanks to the changes that the government is proposing to put in place, it will remain at four to one. This is important if our social security and social service system is to be sustainable over time. As for the superannuation system, we propose to raise the superannuation guarantee levy to 12 per cent.

Mr Bowen: When?

Mr ABBOTT: By 2025—well in time to deal with the increase in the pension age that we are also proposing.