Tax

What’s wrong with super?

In 1992 in an effort to pre-emptively deal with the challenges of an aging population, superannuation was made compulsory in Australia. While our super system may seem like a good idea, it doesn’t function as it should. Nor will it be able to, unless there are some major policy changes.

Recently, former Prime Minister Paul Keating, the man responsible for compulsory super, called for a “national insurance” scheme to support the elderly in retirement. He claimed that only the government had the ability to insure “across the generations”, and that super wouldn’t be enough to support retirees as they now live far longer than they did, on average, in the early 90s.

Keating is wrong for a number of reasons. Firstly, given the attention span of governments, which peculiarly correlates with the electoral cycle, they should not be trusted to develop sustainable long-term policies. This is evidenced by the fact Read the rest

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