The government established the retirement income review in September 2019 to “establish a fact base of the current retirement income system that will improve understanding of its operation and the outcomes it is delivering for Australians.” – (Source: Frydenberg and Hume, Press Release, Canberra, 27 Sept 2019).
In November 2019 the Review panel and Treasury secretariat released a consultation paper.
In response to this paper CA ANZ argued that:
- The Australian retirement income system has seven pillars not the three preferred by the review panel.
- The superannuation system is shockingly complex and is not well integrated with the tax system, social security or age care systems.
- This complexity adds significantly to the cost for all involved but especially individuals who need to employ professionals to safely navigate their way around the system.
- Increasing national savings was one key reason Australia’s compulsory super system was put in place; we believe it is essential to determine if this objective has been met and if it remains relevant.
- The age pension asset test actively discourages savings and inequitably penalises those who do not own their own home.
We also argue that the government has a moral and ethical duty to ensure that individuals have access to unbiased information about how best to interact with the retirement income system. We argue that the government and its agencies have clearly failed in this respect.
We believe that with good solid real economic growth over the long term – to roughly 2060 – it would appear that Australia can financially cope with the ageing of its population from an age pension funding perspective. Whether it can afford the associated increases in health and age care expenditure is another matter.
We have lodged our submission on 3 February 2020.