Prime Minister Scott Morrison has scrapped Liberal party plans to raise the retirement age to 70.
Mr Morrison made the announcement he had dumped the commitment on Wednesday, even though the party had been trying to raise the pension age from 67.
“Next week, cabinet will be ratifying a decision to reverse taking the pension – the retirement age – to 70. It will remain at 67.” he told the Nine Network.
“It will remain at 67.”
Former treasurer Joe Hockey had revealed the plan to lift the pension age in the 2014 budget to help fund the cost of the ageing population.
The proposal involved increasing the qualifying age for the pension by six months every two years until reaching 70 years in 2035.
It was expected to save the budget about $3.6 billion over four years.
The Senate had not agreed to formalise the change, but the government had stuck to the policy until now.
He said he had been considering the change.
“I don’t think we need that measure any longer when it comes to raising the pension age, and that’s one of the things I’ll be changing pretty quickly,” Mr Morrison said.
Mr Morrison said the decision would be happening soon.
“I was going to say this next week, but I may as well say it here, I have already consulted my colleagues on that and next week Cabinet will be ratifying a decision to reverse taking the retirement age to 70.”
The Opposition said the decision was a desperate move by the government.
“Mr Morrison for years has wanted Australians to work to the age of 70,” Labor leader Bill Shorten told reporters in Townsville on Wednesday.
“As recently as July this year, he said that was his commitment.”
“Now he wants to drop it because he is worried about losing his day job.”
However, Deputy Prime Minister Michael McCormack deciding to not change the retirement age was a “sensible move”.
“I think if you are a tradie, or a brickie or a shearer in rural and regional Australia, you don’t want some suit in Canberra telling you that you’ve got to work until you’re 70,” Mr McCormack told Sky News.
“It’s hard, back-breaking work what a lot of our people do, and I think being told they’re going to have to work until they’re 70, I think, was probably a step too far.”
However, Liberal Democrats senator David Leyonhjelm criticised the decision.
He believed the pension age should be raised gradually.
“With increasing health and life expectancy, thousands of older Australians are set to spend many years on welfare despite still being able to work and pay their own way,” Senator Leyonhjelm said.
Deloitte Access Economics economist Chris Richardson said the backflip was a political decision.
“It is a mistake and it does overturn a courageous decision,” Mr Richardson said.
“With politics as populist as it is at the moment and with a government behind in the polls it is entirely understandable that the Government is going to dump things that are unpopular.”
“But just because something is unpopular doesn’t mean it wasn’t the right call in the first place.”