Since Saturday, Australians have been required to wait until they turn 67 to be eligible for an old-age pension.
The original so-called “retirement age” of 65 for men dates back to 2015. 1909.
From 1995 to 1995, the pensionable age for women was raised from 60 to 65. 2013. All Australians were then phased out from July 2017, with the process ending in July 2017. July 1, 2023.
This happened with little protest. It stands in stark contrast to the demonstrations and riots that rocked France earlier this year when President Emmanuel Macron proposed and passed a bill to raise France’s pension age from 62 to 64.
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What is so special about French pensions?
Strikes and demonstrations over retirement age in France are nothing new.
When France raised the retirement age from 60 to 62 in 2016, nationwide protests erupted. 2010,before that 2003,and 1995When France tried to raise the pension age for civil servants.
Almost everything you want to know about public pension systems in high-income countries, OECD report Pension overviewpublished every two years, most recently in 2021.
public pension expenditure France 13.6 percent of GDP, whereas Australia.
This is partly because France’s population is older than Australia’s, but also because French pensions are more generous than Australia’s old-age pensions and superannuation assistance combined.
The OECD findings that Australia offers about 40 per cent replacement rates and France about 74 per cent are based on estimates of the average income of workers under the applicable system in 2014. It is “future-proof”. In 2020, if you work from the age of 22 to the normal retirement age in your country.
For low-wage workers, Australia’s means-tested old-age pensions are almost as generous as in France.
According to another 2018 OECD calculation, the average after-tax income of a French household headed by a person over the age of 65 is: 99.8 percent Of the median income of all French households.
In contrast, the average after-tax income of Australian households headed by a person of that age was 75% of the average after-tax income of all households.
Given that French households receive roughly the same disposable income in retirement as they do in work, it’s easy to see why they would want to retire.
And with so much tax to pay to cover your retirement income, there’s little opportunity for personal savings while working.
The median level of Australian personal wealth (converted at prevailing exchange rates) is approximately Two degrees it’s in france.
But France’s public pension wealth is substantial. Using life expectancy to calculate the value of future pension income sources, the net pension wealth of French retirees is equivalent to 14 years of median earnings, compared to just over 7 years in Australia.
Since the value of these sources of income is strongly influenced by the duration of the pension, raising the French pension age by two years would reduce the value of French pension assets by about 8 percent.
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Why was deferring pensions so easy in Australia?
The fact that Australia’s changes were phased in after 2017 means that retirement income for Australian workers will not be affected until many years after the changes were first announced, and already There was no impact on the income of retired workers.
And Australia’s changes, enacted in 2009, broader program of reforms, including the biggest singles Increases in age, disability pensions and caregiver payments in Australian history.
Still, there will be losers. Those who suffer the most losses will be those with the shortest life expectancy.Indigenous male life expectancy is nearly Nine one year lower than non-Indigenous men and nearly eight years lower than Indigenous women.
Which Australian will pay the highest price?
And the change has pushed a significant number of Australians aged 65 and over who used to be pensioners into pensioners. much lower Unemployment benefits for job seekers.
The number of people over 65 who receive JobSeeker has increased from zero in 2017 to 40,300 By May of this year, it will rise further due to this month’s changes.
Older unemployed people will be at a severe disadvantage from this change, as their benefits are more than $300 per two weeks lower than their old-age pensions, a marginal difference due to the increases announced in the latest federal budget. It just shrinks to .
Relatively little attention has been paid to these people, and because of their low wages they are among the poorest members of the Australian population, with very limited prospects for improving their situation.
In contrast, the idea of raising the tax on the income of superannuation balances ever higher $3 million Attracted extensive criticism.
The vastly different institutional environments in Australia and France have resulted in the emergence of different lobby groups with different interests to defend.
Peter Whiteford is Professor at the Crawford School of Public Policy, Australian National University. This work first appeared in conversation.
