Productivity Commission recommends raising the age for pensions; GrainCorp shares fall: Midday Roundup

Australia could be facing a budget crisis if the impact of an ageing population isn’t offset by raising the eligibility age for pensions, the Productivity Commission has warned.

In a report titled An Ageing Australia: Preparing for the Future, the Productivity Commission suggested the federal government raise the pension age to 70. The report also suggested older Australians need to use the growing equity in their homes to help pay for government services.

“Population growth and ageing will affect labour supply, economic output, infrastructure requirements and governments’ budgets,” commission chairman Peter Harris said in a statement.

“It is a good time to start a debate and to float creative policy options.”

The report predicted Australia will have four million more people over the age of 75 by 2060.

GrainCorp shares fall

GrainCorp shares have fallen as investors wait for the government to approve the company’s $3.4 billion takeover by US-based Archer Daniels Midland.

The shares fell from $12.25 to $11.30 this month, suggesting investors are worried about whether Treasurer Joe Hockey will approve the deal. ADM is currently offering $12.20 a share and $1 in dividends.

Last week GrainCorp reported that its profit fell by 31.2% for the 2012-13 financial year, blaming poor conditions in Queensland and northern NSW.

Shares rebound on open

Aussie shares have opened up this morning, following stronger performances overnight from overseas markets.

The S&P/ASX200 benchmark was up 55.9 points to 5344.2 at 12:06pm AEDT.  The Dow Jones closed overnight up 109.17 points, rising 0.69% to 16,009.99.