Modelling by the Parliamentary Budget Office shows what would have happened to the federal government’s budget if superannuation never existed.
When Paul Keating outlined his vision for retirement incomes in 1991, the prime minister warned young Australians they would be on the hook to pay for other people’s retirement without the expansion of a national compulsory superannuation scheme.
That question can now be answered, thanks to modelling by the Parliamentary Budget Office, completed last October at the request of NSW Liberal Senator Andrew Bragg.The PBO modelled a handful scenarios in which superannuation never existed. In most situations, the Commonwealth government would have saved more money if it had never introduced superannuation.
By 2032, an additional 800,000 people access the age pension who would not have otherwise needed government support had superannuation existed, but the government’s budget would still be better off to the tune of 0.1 per cent of gross domestic product, or $2.3 billion.The improvement to the budget bottom line is larger if workers save even more than 30 per cent of their higher wages.
He said the test of a good superannuation scheme was that it saved taxpayers money over the long term and improved the country’s resilience against the cost of an ageing population.
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