The deal struck on the federal government’s superannuation package opens the door to a wider policy debate about how to deliver more adequate and sustainable retirement incomes, an independent think tank said today.
The Committee for Sustainable Retirement Incomes (CSRI), a non-partisan body that brings together industry, policy, consumer and academic groups to collaborate on holistic policy reform, said the changes announced by Treasurer Scott Morrison preserved the intent of the reforms in ensuring greater fairness and fiscal sustainability.
“The changes announced by the Treasurer preserve the intent of the Budget announcement and will help ensure greater fairness and fiscal sustainability,” said CSRI Executive Director Patricia Pascuzzo.
“This is a welcome first step. However, if Australians are to have adequate income in retirement, the government must now focus beyond the taxation of super to long-term policy settings across all components of the retirement income system.”
While welcoming the new package, Ms Pascuzzo said fiscal sustainability is just one element in holistic reform, which also takes into account adequacy of incomes, flexibility and the intersection between super, the age pension, housing, health and aged care.
“With the population ageing and people living longer in retirement, governments will need to look beyond the taxation of superannuation as a way to solve their budgetary problems,” she said.
This challenge was highlighted last month by Australian Bureau of Statistics data showing most retirees still do not have enough super and continue to rely on government pensions and allowances as their main sources of income.
“Many pensioners are living too frugally because they’re worried about outliving their savings,” Ms Pascuzzo said. “Others are drawing down on their super at an unsustainable pace. The fact is retirees are ill equipped to manage longevity risk.”
The CSRI argues that while Australia has a mature superannuation system, insufficient attention has been given to the post-retirement phase to ensure people have adequate savings and income after leaving the workforce.
“Without changing the focus of reform, governments will continue to shoulder the burden of retirement incomes through the age pension, putting increasing pressure on the Budget and on future generations of taxpayers,” Ms Pascuzzo said.
These and other issues will be addressed at the CSRI’s Leadership Forum in Canberra on 12-13 October. Media are invited to attend.
The forum will feature presentations by Financial Systems Inquiry Head David Murray, Financial Services Minister Kelly O’Dwyer and her opposition counterpart, Senator Katy Gallagher, alongside key industry, academic and community leaders.