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Prescriptions for reform of Australia’s superannuation tax concessions


The highly controversial and often politicised issue of Australia’s retirement savings regime featured prominently throughout the two day Federal Government’s October 2011 Tax Forum. Calls for reform of this regime are by no means new. Reform debate over the years has focused on each of the three separate pillars: the age pension, compulsory superannuation, and voluntary saving, as well as the interaction of those three elements. However, recently there has been a significant shift away from reliance on the age pension, with its associated risks falling to the government, to a defined contributions scheme where the associated risks fall to the individual taxpayer.Consequently, Australia’s superannuation regime is predominantly subject to current debate, and, as such, the subject of this article.

This article considers the history of Australia’s retirement savings regime, along with a framework for evaluating the superannuation tax concessions. It then discusses the recommendations of the Australian Future Tax System (AFTS) Review Panel and ensuing debate at the Tax Forum. Finally, it suggests two proposals to achieve the objectives of the AFTS Review in relation to retirement, those objectives being a system which is broad and adequate, acceptable to individuals, robust, simple and approachable, and finally sustainable. The first, whilst potentially requiring some ‘tinkering’, is relatively simple and a blue print has already been provided to the Federal Government – the adoption of Recommendations 18 and 19 of the AFTS Review.

The second is one of management. Superannuation concessions are fundamentally categorised as tax expenditures and the management of these tax expenditures, not just the reporting, should be undertaken.

Author profile

Prof Kerrie Sadiq CTA
Kerrie is a Professor of Taxation in the School of Accountancy at the QUT Business School, Queensland University of Technology. She holds a Bachelor of Commerce (B Com) from The University of Queensland, a Bachelor of Laws (Honours) (LLB Hons) from The University of Queensland, a Master of Laws (LLM) from Queensland University of Technology, and a PhD from Deakin University. Kerrie is a Chartered Tax Adviser as designated by the Taxation Institute of Australia and a Graduate of the Australian Institute of Company Directors. Kerrie primarily researches in international tax, tax expenditures and capital gains tax. She is author of numerous publications in both Australian and International journals and edited books and is a co-author of taxation texts. She is a co-editor of Australian Tax Review, one of Australia’s leading tax journals. Kerrie is often cited in the media in relation to international tax issues and regularly receives invitations to speak on contemporary tax topics. Recent work has been specifically on issues in international tax, such as transfer pricing, the OECD’s approach to base erosion and profit shifting (BEPS), Australia’s role in the G20 and the BEPS project, and automatic exchange of tax information. Kerrie writes balanced articles on BEPS for The Conversation. She has written and presented findings for the Committee for Economic Development of Australia (CEDA) and in 2015 appeared before the Senate Inquiry into Corporate Tax Avoidance. Prior to joining Queensland University of Technology, Kerrie spent 20 years at The University of Queensland, as a member of both their Law School and Business School. - Current at 09 December 2017
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