AN INCREASE to the age at which Australians can access their superannuation is inevitable, Treasury Secretary Martin Parkinson says.
The Abbott government on Tuesday said it would not be making any adverse changes to superannuation in its first term. That was after Treasurer Joe Hockey sparked a debate over super by indicating that the government could change the age at which people can access their retirement savings.
The age at which people can access their super — known as the preservation age — depends on their date of birth. For those born after June 30 1964, it’s 60. But Dr Parkinson said change was inevitable. “I think it is inevitable that pressure will build for changes in that area,” Dr Parkinson told a business lunch in Sydney on Tuesday.
“We have to get a bit more sensible about the way we talk about and think about retirement incomes.” There also needed to be community discussion about retirement, given that the retirement age will be raised to 70 from 2035, Dr Parkinson said.
“It is unrealistic to imply that someone who is doing heavy manual labour can necessarily work through to age 70,” he said. “What that leads us to is the need to start to think more seriously about how people manage different careers throughout their life and how we manage the transition.
“We can’t realistically expect a brick layer to become a brain surgeon. “As a society were going to have to start thinking about that. That’s unfinished business for us.” Dr Parkinson said there also needed to be a conversation about whether the existing super system was creating incentives for people to manage their retirement incomes, or whether it was being used as a wealth creation tool.
“If it’s a wealth creation tool, who is it that is ultimately benefiting from this?”