SYDNEY May 2 Australian Treasurer Joe Hockey
said on Friday that his government would seek to raise the
retirement age to 70 by the year 2035 as part of reforms aimed
at stemming what they warn is a looming "fiscal crisis."
The announcement came one day after an audit of the
Australian economy recommended broad structural changes and a
tight rein on costs, setting the stage for what is expected to
be a tough national budget later this month.
"In 21 years' time, that is when you will be entitled to the
pension, when you turn 70," Hockey said in an interview with 2GB
Radio in Sydney.
Australia's A$1.5 trillion ($1.39 trillion) economy sailed
through the global financial crisis, but a slump in mining
investment and a sluggish response to record low interest rates
has hit government tax income as expenditure continues to grow.
Australian Prime Minister Tony Abbott and Hockey have been
girding voters for hefty spending cuts and other measures in the
May 13 budget to tackle deficits forecast at A$47 billion this
year and totalling A$123 billion over the next four years.
The previous government had already announced plans to
increase the retirement age from 65 today up to 67 by 2023, but
the announcement is likely to prove politically thorny for
On Tuesday, Abbott flagged the prospect of a temporary
income tax levy on higher income workers to help tackle the
deficit, a proposal that was met with criticism from opponents
and a cool response from business groups.
Although debt is expected to peak above A$400 billion, that
would be less than 30 percent of Australia's annual gross
In the United States and the euro area of 15 countries,
government debt accounts for more than 100 percent of GDP,
figures from the Organisation for Economic Co-operation and
Australia remains one of only a handful of countries that
still boasts a triple A credit rating, making its debt
especially attractive to foreign central banks and sovereign
($1 = 1.0785 Australian Dollars)
(Reporting by Matt Siegel; Editing by Michael Perry)