An Australian government advisory body says there is a case for raising the pension age 70 to help pay for the country's ageing population.
The Productivity Commission projects Australia's population will grow from about 23 million in 2012 to about 38 million by 2060, with a substantial increase in the number of retirees as people live longer.
In a paper titled "An Ageing Australia: Preparing for the Future", it said that will mean lower overall participation in the workforce and more pressures on governments to pay for higher health, aged care and pension costs.
The report, released on Friday, projected Australia would have four million more people aged 75 years or older by 2060, with 25 centenarians for every 100 newborns, compared with one centenarian for every newborn in 2012.
The pension age is set to gradually increase from 65 to 67 by 2023. The Productivity Commission said there was a case to increase the pension age to 70, as people were living longer into retirement.
The commission also proposed an "equity release scheme" for older Australians who own their own homes, to help pay for health and aged-care services.
The scheme would mean those who own their homes contribute half of the annual real increased house value to the government, which would then help cut government spending by about 30%.
The commission says taxes will need to rise 21%, unless steps are taken to pay for Australia's extra health and aged care costs. Chairperson Peter Harris argues that workforce participation would jump by up to 10% and provide savings of around $A150 billion.
