AUSTRALIA - The Australian government will mull increasing the mandatory contribution rate from the current level of 9%.
In a series of interviews and speeches, minister for financial services, superannuation and corporate law Chris Bowen said a larger contribution rate, coupled with tax changes, may be necessary in order to move beyond mere "adequate" retirement income.
Bowen said: "We can do better than adequate. There's an argument about whether 9% contributions are adequate or not. I thought, well, let's try and do better than adequate. Let's try and get to a situation where we have more comfortable retirement incomes and there's more savings, a national pool of savings at the disposal of the economy."
When the superannuation system was created, a 15% contribution rate was originally discussed, but Bowen declined to say if he would back a six percentage point jump.
He also downplayed concerns that higher contribution rates would put too much stress on employers.
Bowen said: "These arguments were around when superannuation was introduced and many people opposed superannuation when it was introduced on that basis. They said it would be a tax on employment and unemployment would be the result. And that hasn't been the case because it gets built in. If you do it gradually enough, it gets built into people's calculations and when an employer sits down to do their wage negotiations."
The superannuation system is currently undergoing two reviews - the Henry Tax review due out at the end of the year, and the Cooper Review which is looking into the efficiency of the system.
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