Home' Policy Magazine : Policy Vol 32 - No 3 Contents 26 POLICY • Vol. 32 No. 3 • Spring 2016
BUILDING A BETTER SUPER SYSTEM
This scheme should be combined with another
pension eligibility reform: including the family
home in the pension means test. The savings
from this reform (which we have estimated at
nearly $15 billion a year) could be channelled into
superannuation reforms such as the ones above.
This would effectively encourage retirees to hold
more cash in superannuation (which generates an
income) and less in their home. These twin reform
streams should mean that many more people would
enjoy higher living standards in retirement, while
ensuring that the pension is a sustainable safety
net for those who can’t take care of themselves.
The debate over superannuation has focused
far too much on the tax and revenue implications
of superannuation policy at the expense of
the primary purpose of the system: income in
retirement. Both sides of politics should reassess
their superannuation reforms with this in mind.
This would result in a very different set of reforms
than those being debated right now.
1 Productivity Commission, Superannuation Policy for
Post-Retirement, Commission Research Paper (Canberra,
2 For example see Ken Henry, Australia’s Future Tax
System—The Retirement Income System: Report on Strategic
Issues (May 2009). See also Simon Cowan and Matthew
Taylor, The Age Old Problem of Old Age: Fixing the Pension,
Research Report 3 (Sydney: The Centre for Independent
Studies, May 2015) and Christine Brownfield, The Fourth
Pillar: The Role of Home Equity Release in Retirement
Funding, Paper presented to the Actuaries Institute
Financial Services Forum (5-6 May 2014).
3 Richard Finlay and Fiona Price, Household Savings in
Australia, Research Discussion Paper 2014-03 (Reserve
Bank of Australia, Economic Analysis Department,
4 As above.
5 As above.
6 Economics Reference Committee, A Husband Is Not A
Retirement Plan: Achieving Economic Security for Women
in Retirement (Canberra: Commonwealth of Australia,
The Senate, April 2016).
7 Finlay and Price, Household Savings in Australia.
8 Ellis Connolly and Marion Kohler, The Impact of
Superannuation on Household Savings, Research
Discussion Paper 2004-01 (Reserve Bank of Australia,
Economic Research Department, March 2004).
9 Ellis Connolly and Marion Kohler, The Effect of the
Australian Superannuation Guarantee on Household
Saving Behaviour, Research Discussion Paper 2007-
08 (Reserve Bank of Australia, Economic Analysis
Department, August 2007).
10 Calculated via www.centrelink.gov.au, ‘Family Assistance
Estimator’, assuming one child aged 6 and one aged 11.
11 Treasury, Tax Expenditures Statement 2015 (Canberra:
The Australian Government the Treasury, January 2016).
12 Treasury, Tax Expenditures Statement 2013, (Canberra:
The Australian Government the Treasury, January 2014).
13 Paul Keating, The Story of Modern Superannuation, speech
delivered to the Australian Pensions and Investment
Summit (Queensland, Sanctuary Cove: 31 October 2007).
14 Self-Managed Superannuation Fund Association,
Superannuation Tax Concession Fact Sheet (2 March 2015),
accessed 5 July 2016.
15 See for example the summary by Ross Guest, Comparison
of the New Zealand and Australian Retirement Income
Systems (Commission for Financial Literacy and Retirement
16 Todd Zywicki, Do Americans Really Save Too Little and
Should We Nudge Them to Save More?: The Ethics of Nudging
Retirement Savings (George Mason University School of
17 Cowan and Taylor, The Age Old Problem of Old Age
(see note 2).
18 Dr Jeff Harmer—Pension Review Taskforce, Pension Review
Report (Canberra: Department of Families, Housing,
Community Services and Indigenous Affairs, 2009).
19 Treasury, 2015 Intergenerational Report: Australia to 2055
(The Commonwealth of Australia, March 2015).
20 Jie Ding, Superannuation Policies and Behavioural Effects:
How Much Age Pension? (Sydney: Macquarie University,
6 February 2013).
21 As above.
22 Australian Bureau of Statistics, Year Book Australia,
Category 1301 (1988, 1992, 1997, 2002, 2007 and 2012).
23 Department of Human Services, ‘Age Pension’, http://
age-pension, accessed 16 February 2016, and Australian
Bureau of Statistics, Year Book Australia, Category 1301
(1912), Section 34.
24 For more information on deeming see the Department
of Human Services, https://www.humanservices.gov.au/
customer/enablers/deeming, accessed 5 July 2016.
25 Author’s calculations using 2011 Australian Bureau of
Statistics census data and Department of Social Services,
Statistical Paper No. 10 Income Support Customers:
A Statistical Overview 2011 (Canberra: Commonwealth
of Australia, 2012).
26 As above.
27 Australian Institute of Superannuation Trustees and
Vidler Policy and Research, Super Reality Check: Busting
the $1 Million Retirement Myth (August 2015).
28 Cowan and Taylor, The Age Old Problem of Old Age
(see note 2).
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