Gary Johns, the parliamentary secretary to the Deputy Prime Minister, Brian Howe, has suggested reducing the retirement age for men from 65 to 60 to help unemployment. He says, also, that it is inequitable to enable women to get the pension at 60 while men have to wait till they are 65. There is some truth in the latter proposition, by it can be met equally by raising the female pension age to 65 than by reducing the male pension. The former proposition has no merit. It is a costly and inefficient plan. It is likely to cost $725 million a year, and there is no guarantee that for every old person retiring earlier that a young person will get a job. More likely, companies will not replace many of those who leave.
Australia needs skilled labour, so it seems silly to encourage the experienced to leave their job for government support just so a younger person can leave government support for a job.
Mr Johns is right when he says that something must be done in the face of continuing high unemployment. But shuffling dependency on the government from the young to the aged is not the answer. There are other more effective and attractive solutions than taking experienced 60-to-65-year olds out of the workforce. This will only lower industy’s productivity and competitiveness. The government should instead make the employment of youth more attractive by reducing high award wages and conditions, cutting payroll tax and cutting business overheads. It should also cut immigration during the recession.
Mr Johns said, “”I think we might be able to free up a significant number of jobs and at the same time let a lot of tired workers get out of the workforce.” There are 182,000 men aged 60 to 64 in the labour force: 131,000 full time, 28,400 part-time and 22,600 seeking work. If the pension age is reduced, there is no guarantee that all of them are tired enough to take the retirement option, and surely Mr Johns is not going to make it compulsory. Moreover, any reduction in the retirement age will in the long run lead to a greater proportion of the population being out of the workforce. That is hardly an objective for a nation out to make itself more productive and internationally competitive.