Reforming Australia's Superannuation Tax System and the Age Pension to Improve Work and Savings Incentives
Asia & the Pacific Policy Studies, Vol. 4, No. 3, pp. 417–436
20 Pages Posted: 26 Oct 2017
Date Written: September 11, 2017
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.
Keywords: Age Pension, Income Tax, Retirement Saving, Superannuation, Work Incentives
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