Fed: Karma for the baby boomers
By Kate Hannon, National Political Editor12 May 2009 8:56 PM
EDS: REISSUING, correcting to 3.3 million pensioners in 10th par
CANBERRA, May 12 AAP - Some would say it's Karma.
Baby boomers, the post-war generation who grew up in the suburban safety of the 1950s, who led the social change of the 1960s and who expected their Depression-raised parents to leave them their homes are about to get their come-uppance.
Wayne Swan, a baby boomer himself, born in 1954, has officially lowered the boom on the unbridled one-upmanship of the generation that characterised a prosperous and peaceful post-war Australia.
Those born from 1952 onwards will have to work longer before they can qualify for the age pension.
The government will increase the qualifying age by two years in six monthly increments between 2017 and 2023 to 67 years.
Treasurer Swan, a former Opposition spokesman for social security for many years during the Howard government, has eyed the problem for some years.
Mr Swan's predecessor commissioned two intergenerational reports on Australia's ageing population during the past decade and was warned comprehensively in both of the danger ahead in supporting the population bulge of baby boomers as they began to reach the official retirement age from 2011.
The decision announced in Tuesday night's budget, Labor's second, to raise the pension age is the first major reform to Australia's pension system in 100 years when the original pension age was set at a time when average male life expectancy was 55 years.
Describing to reporters what he called a "demographic timbebomb" during his budget lockup press conference, Mr Swan pointed out that the current 5:1 ratio of working age people aged 65 and over would halve to 2.4:1 by 2047.
With 3.3 billion pensioners, most of them over 65, the long-awaited increase announced in the budget in their payments will cost the government $14.2 billion over two years with a warning that costs to maintain the system will continue to be substantial.
Politically, Labor will be able to point with some satisfaction to a necessary, major reform of the pension system but it is unlikely to stop the Opposition its mantra that the more than $20 billion in "cash splash" handouts since October would have been better spent on infrastructure.
The immediate difficulty for the government will be to push tighter family payment means testing, cuts to super benefits and to the private health insurance rebate through the senate by the end of June.
In the meantime we can all be grateful the baby boomers will take the first hit on behalf of the rest of us.
AAP keh/jlw
