Australia leads the world in terms of its preparedness to meet the challenges of an ageing population, according to research conducted by the US-based Centre for Strategic and International Studies.
Program director and senior fellow at the Centre, Richard Jackson, told the Metlife Media Symposium in New York this week that the former Hawke/Keating Labor Government’s decision to pursue the superannuation guarantee had paid dividends for Australia in terms of its capacity to handle an ageing population.
“They call it ‘super’ in Australia and it has certainly proven to be super,” he said.
Dr Jackson said that, by comparison, nations such as China, Korea and Taiwan were facing challenges and that there was a risk that China’s rapidly growing economic strength might not be sufficient to meet the challenges of an equally rapidly growing population.
However, he said that Australia was well placed because it had a favourable demographic outlook due to relatively high fertility and net immigration combined with a means-tested public pension system.
“A large, mandatory, portable and fully-funded private pension system increases savings and helps ensure retirement security,” Jackson said.
He pointed to one of the deficits in the Australian system as the current low preservation age for super, which he said encouraged early retirement and the propensity of Australians to make lump sum withdrawals rather than pursuing annuities.