Open AccessReforming Australia's Superannuation Tax System and the Age Pension to Improve Work and Savings Incentives
Author(s) -
Ingles David,
Stewart Miranda
Publication year - 2017
Publication title -
asia and the pacific policy studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.529
H-Index - 14
ISSN - 2050-2680
DOI - 10.1002/app5.184
Subject(s) - earnings , incentive , work (physics) , labour economics , pension , business , economics , public economics , finance , market economy , mechanical engineering , engineering
Australia's retirement income system combines private and public provision for old age. Retirees rely on private (but highly regulated) superannuation saving that attracts large tax concessions; a public, means‐tested age pension; home ownership; and other private savings. Despite recent changes intended to make the system fairer and more fiscally sustainable, Australia's retirement income system still lacks coherence, produces inequitable outcomes and creates high effective tax rates on work and saving. This article proposes a more coherent approach to address fairness, reduce the effective tax rates on work and saving and provide adequate earnings replacement rates with greater fiscal sustainability than is delivered in the recent reforms.