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10 Austl. Tax F. 39 (1993)
Taxing Superannuation in Australia: The Costs and Benefits of the Alternatives

handle is hein.journals/austraxrum10 and id is 41 raw text is: Taxing Superannuation in Australia: The Costs and Benefits of the Alternatives David M Knox * The taxation of superannuation has been subject to significant changes during the last decade. The Federal Opposition in its Fightback! document proposed a radical reform of the existing arrangements. This paper compares these two systems of taxation with a taxed savings benchmark to assess the cost to the Government of providing this taxation support to occupational superannuation. The cost figures, which also allow for any age pension saving, are expressed both as a percentage of the full age pension cost and as a series of cash flows. In addition, the individual member's post-retirement income position is analysed under the three alternatives. The paper concludes that tax supported superannuation can be a very cost effective method for the government to assist with the provision of retirement income for Australians provided that it is funded over the long term, with a significant level of contributions and with restricted lump sum payments. In addition, the paper highlights the need for * Professor ofActuarial Studies, Faculty ofEconomics and Financial Studies, University of Melbourne. The author wishes to express his sincere thanks to Eduard Siauw who prepared the software used to produce the figures and graphs in this paper and was always willing to modify the program as the changes in policies kept on coming! Without such a willing supporter, this research would never have been completed.