Living longer but forget early retirement

Treasurer Joe Hockey (pic) hopes his intergenerational report will spark a national conversation. (AAP)

The next 40 years will see Australians living longer, but probably having an extended working life rather than enjoying extra leisure time.

The good news is we are going to live longer and be healthier over the next 40 years.

We might even get an income tax cut within five years.

But for most of us the idea of an early retirement will be a dream because there just won't be enough people working and paying taxes to fund the things we take for granted today.

Treasurer Joe Hockey warns if nothing is done to counter the impact of an ageing population, it will hurt economic growth and prosperity.

"Doing nothing is not an option," he while releasing the federal government's 2015 intergenerational report on Thursday.

The five-yearly review provides three basic scenarios for the direction of the budget bottom line up to 2055.

There are projections under government legislation that has cleared parliament, and others if measures from the 2014 budget also become law.

Provocatively, it also shows what would have happened under the previous Labor government, prompting shadow treasurer Chris Bowen to dismiss the report as a "highly political document".

Mr Bowen rejects the government's plan to raise the pension age to 70, which would mean Australians having the longest working life of any OECD country.

"Why should Australian bricklayers, carpenters, policeman, nurses, soldiers have to work until they're 70?"

National Seniors chief Michael O'Neil says if Australians in their 50s are struggling to find work then raising the pension age to 70 is "off in dream land".

Australian Chamber of Commerce and Industry boss Kate Carnell believes the report shows Australia needs to make some serious changes to keep the economy strong and encourage jobs.

"We must break through the legislative gridlock," she says of the government measures stymied by the Senate.

As it stands now, the budget deficit will be six per cent of GDP in 2054/55 - as opposed to the 12 per cent estimated to be under Labor - compared with the 3.1 per cent in 2013/14.

If outstanding budget measures cleared the Senate the report predicts there would be a sustained surplus from 2019/20.

It's at the stage income tax cuts could be a possibility.

Not addressing what's known as bracket creep - where wage inflation pushes the average worker through the second-highest tax threshold of $80,000 - would harm the economy and individual wealth.

Economist Chris Richardson believes a sustainable budget can be achieved, but says nobody should underestimate the challenge of getting there.

"It is genuinely massive and for the politicians to achieve - even if we had bipartisanship - this would be hard," he told ABC Television.

The Australian Greens and climate change groups are furious about the government's "woefully inadequate" attempt to deal with climate change in the report.

"This is a junk document and should be tossed away," Greens leader Christine Milne said.

The report fails to detail any post-2020 emission reduction goals or the long-term costs of climate change.

Source AAP

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