Rethinking super tax concessions
Superannuation tax concessions have been the subject of considerable public debate. In Mercer’s latest paper, Senior Partner Dr David Knox (AM) argues that we need to reframe the conversation, suggesting that the current approach doesn’t account for the longer term.
Superannuation tax concessions have been the subject of much public discussion in recent years with many commentators arguing they are too generous, particularly for higher income earners. However, what is often ignored is that the published costs are based on Treasury figures released as part of the annual Tax Expenditure publication and do not represent the revenue gain that would occur if the concessions were removed or the longer-term Age Pension savings to the government. In brief, the published figures do not encourage a sensible and holistic public discussion about the appropriate level of superannuation tax concessions.
This paper takes a longer-term view and shows that for median and average income earners, the cost of the super tax concessions is actually less than the future saving in Age Pension costs arising from superannuation.
Rethinking Super tax concessions
Senior Partner, Senior Actuary