Treasury Secretary outlines Budget challenges
Australia's Treasury secretary, John Fraser has defended the nation's pension regime against Organisation for Economic Cooperation and Development (OECD) suggestions that Australia spends well below the OECD average on pensions.
The Treasury Secretary has also suggested that Australia redistributes more to the poorest 20 per cent of the population than any other OECD country except Denmark.
The OECD analysis gave rise to negative media reporting earlier this year, but in an address to the Sydney Institute last night, Fraser said that when other forms of assistance were included, such as non-cash benefits — for example, subsidised health care, and superannuation tax concessions — Australia compares more favourably.
"Australia's retirement income system also ranks favourably compared with other countries, taking into account the Age Pension, household savings and homeownership," he said. "The Melbourne Mercer Global Pension Index ranked Australia third out of 25 countries overall and first for adequacy."
However, Fraser made clear that Australia was facing a budget challenge and that, for the longer-term, it needed to look for substantial structural savings across the board - including transfer payments.
He said successive downgrades to tax receipts had been the main driver of the deterioration Budget position.
"In total, we now expect to receive around $39 billion less in tax receipts in 2016-17 than we did at the time of the 2013 PEFO," he said. "Income tax receipts are being weighed down by lower than expected working-age population growth and weaker wages growth, as well as declines in commodity prices and weaker equity markets."
"The impacts of successive revenue downgrades have only been partially offset by the Government's structural saving measures. Around $14 billion of these measures are yet to pass the Senate. Further delays will have a negative impact on the fiscal outlook. At the same time, some of the measures that successfully passed were amended in Senate negotiations."
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
