Prime Minister Scott Morrison has abandoned a Liberal Party commitment to raise the retirement age to 70.
The party has for years been trying to raise the pension age from 67 years, but Mr Morrison announced on Wednesday he had dumped it.
“Next week, cabinet will be ratifying a decision to reverse taking the pension – the retirement age – to 70. It will remain at 67,” he told Nine Network.
“I don't think we need that measure any longer when it comes to raising the pension age and that's one of the things I'll be changing pretty quickly.”
But Opposition leader Bill Shorten believes Mr Morrison will put it back on the table if the coalition wins control of the Senate at the next election, after backing the increases during three years as treasurer.
“Now he wants to drop it because he is worried about losing his day job,” Mr Shorten said in Townsville.
“The problem with the Liberals is you can't trust them. When they're on the back foot, they will say whatever you want to hear.”
Deputy Prime Minister and Nationals leader Michael McCormack described the about-face as a sensible and pragmatic move, particularly for manual workers in regional areas.
“I think if you're a tradie or a brickie or a shearer in rural and regional Australia, you don't want some suit in Canberra telling you that you've got to work until you're 70,” Mr McCormack told Sky News.
“It's hard, back-breaking work what a lot of our people do, and I think being told they're going to have to work until they're 70, I think, was probably a step too far.”
Council on the Ageing spokesman said the 70-year target had caused anxiety for older people trying to transition to retirement.
“It was the people who wanted to work, or who needed to work but knew it would be difficult to get a job that this caused anxiety for,” he said.
The pension age plan was first announced by the Abbott government under then-treasurer Joe Hockey in 2014 but was never legislated.
Under the original proposal, the qualifying age for the pension would have increased by six months every two years until reaching 70 in 2035.
It was expected to save the budget about $3.6 billion over four years.
Cabinet minister David Littleproud said he understood the budget impact would be minimal to nil.
The Combined Pensioners and Superannuants Association said many of the 100,000 people aged over 50 who were on the Newstart allowance now would not have to wait an extra three years for the age pension.