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...current tax concessions on superannuation in Australia are not generous when compared to retirement systems in eight other countries, considered to have the best pension systems in the world (Australia, Canada, Switzerland, Netherlands, Denmark, Sweden, USA and UK).
The report may be downloaded here.
It shows:
- after tax retirement benefits provided to Australians are lower than five of the eight countries for an individual on average earnings, with a 9% employer contribution over 40 years
- Australia is the only country that taxes employer and self-employed contributions, and it is also the only country where employees don't receive a tax deduction for contributions.
- Australia is also one of only three countries that taxes income earned by pension and superannuation funds. The other two are Denmark and Sweden. Australia is, however, one of only two countries that does not tax retirement income. You can read the Fairfax commentary on this here. In Australia contributions and earnings are reduced by taxes over a person's working life and this has a direct impact on the final benefit received by retirees, and in many cases increases the likelihood of people receiving an age pension
- Recent changes to contribution caps leave Australia third last on this measure.
