Big business floats 73 as new retirement age

Big business says the retirement age may need to be lifted to 73 by 2049 to keep the economy moving in the face of a greying population.

Releasing its wish list to the Federal Government before the May Budget, business groups have again pleaded with Labor to but the brakes on its economic stimulus program.

It also wants the Government cut taxes for big companies in the face of improving economic conditions.

A paper released by the Business Council of Australia has weighed into the debate about Australia's growing, ageing population, warning that that the number of people aged 65 or older will increase from 2.9 million to an estimated 7.4 million by 2049.

The BCA said the growth in the proportion of older people had major implications for the aged pension and for Federal and State budgets if taxation revenues were to shrink.

It said retirement ages would have to be lifted dramatically in the decades to come to ensure the proportion of five people of working age for every one retired was maintained.

The BCA said it was not specifically advocating a jump in the retirement age to 73 "at this stage".

But it warned warned there was no question "difficult decisions" would be required.

During a series of speeches early this year, Prime Minister Kevin Rudd said Australia's population was likely to exceed 35 million by 2049.

He has called for a national discussion on the problem of a greying Australia and has mooted lifting the ages at which people may become eligible for a pension.

Turning to the Budget deficit, the BCA said the Government must wind back its economic stimulus reforms and cut company taxes if it was to hack away at the debt.

The deficit is tipped to come in at $57.7 billion for he 2009-10 financial year, although some have suggest the surprise quick turnaround in the health of the economy could see it come in much lower at about $50 billion.

The BCA said there were some Government economic stimulus programs in which funding still had to be approved under the nation building and jobs program, but that those funds should now be held back because they were no longer needed.

It also warned the Government against increasing resource rent taxes for oil and gas corporations and mining companies as a way of returning the Budget to surplus.