Age Pension and rent assistance beats super
The Age Pension and rent assistance represent better tools than superannuation to provide an adequate retirement for those on low incomes, according to the Grattan Institute.
In a submission to the Senate Standing Committee on Economics review of the objective of superannuation, the Grattan Institute has strongly disagreed with the views of the superannuation industry that the Government needs to lift the bar on the objective of superannuation.
It said the Committee should "reject the view that superannuation's objective is to provide an adequate, or ‘comfortable' retirement income for all Australians".
The Grattan Institute said this view could lead policymakers to force people to save under the Super Guarantee so that their incomes while working were less than their incomes in retirement.
"This view misleads, because the Age Pension and Rent Assistance are better tools than super to provide an adequate retirement for those on low incomes," the submission said. "And this view would support maintaining generous tax breaks, at substantial budgetary cost, for those whose retirement will be comfortable without them."
The submission said the Committee should also reject suggestions to use the ASFA ‘comfortable' retirement standard as a benchmark for the system.
"This standard supports an affluent lifestyle more luxurious than most households experience during their working lives. The average household can only reach the ‘comfortable' benchmark in retirement by being less than ‘comfortable' beforehand," the Grattan Institute said.
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