Australia. COVID-19 has killed 12% superannuation
For years MacroBusiness has argued that Australia’s superannuation guarantee (SG) should not be raised from the current level of 9.5% to 12%.
Our arguments against lifting the SG centre around four key issues.
First, superannuation concessions are grossly inequitable and favour high income earners. This inequity is illustrated clearly by the below Australian Treasury chart, which shows that the top 1% of earners will receive roughly 14-times the taxpayer contributions to their personal superannuation accounts as the bottom 10% of income earners:
Viewed in this light, Australia’s superannuation system is more of a tax avoidance scheme than a retirement scheme.
Second, lifting the SG would come directly out of workers’ take-home wages, which poses a particular problem for low-income earners already struggling to survive paycheck to paycheck.
Third, superannuation concessions cost the Federal Budget an obscene $43 billion a year. And because they are so poorly targeted and go to where they are not needed (i.e. high income earners), superannuation costs the federal budget far more than it saves in Aged Pension costs, as confirmed by the Henry Tax Review, the Grattan Institute and actuaries Rice Warner.
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