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Knowing When to Leave

The stage show 'Promises Promises' seems a fitting reference point for allegories about politicians. One of the show's hits songs opens with the lines 'Go while the going is good, Knowing when to leave may be the smartest thing anyone can learn. Go!'. Rupert Murdoch, the 75 year old head of News Corp and only likely to leave his post by death, gave some gratuitous advice to Australian Prime Minister John Howard this week in Washington, to go now while he's on top of his game. John Howard turns 67 this year on 26th July.

Few prime ministers have been able to choose a convenient timing of retirement. On the Liberal side only Bob Menzies managed this (Joseph Lyons died in office). On the Labor side none have retired voluntarily (John Curtin died in office). FinDem is currently doing research on the incidence on birth of first grandchild and timing of retirement of 'grandparents'. The Howard's daughter Melanie married in 2003 and turns 31 this July. His decision to retire could be as simple as wanting to spend time with grandchildren (if they come along). We predict media camped on Kirribilli lawns in July!

A fixed notion of retirement age of 65 has prevailed over 100 years in Australia and elsewhere, although life expectancy has increased radically. In 1900, men could be expected to live 11 years after age 65 and women 13 years. On current life expectancies these figures are now 20 years for men and 23 years for women. To spend the same percentage of lifetime in retirement as in 1900 with a retirement age of 65 then, would require current retirement ages to be 73 for men and 75 for women. The lack of recognition of this in governments not adjusting the start age of publicly funded public service pensions (as life expectancy increased) is the reason for having to pay extra taxes now to put into the 'Future Fund'. The irony of this name is that we have it because governments have not thought about 'the future'.

Posted Saturday, 20 May 2006

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