The Economy, Stupid Superannuation: Are We Saving More Than We Need?
Dec 18, 2025
Join retirement income specialist Susan Thorpe and Brendan Coates, a public policy analyst, as they dissect the quirks of Australia's superannuation system. They delve into the origins of compulsory super and its surprising impact on young and low-income households. Discover how tax concessions disproportionately benefit the wealthy, while many retirees cling to their savings out of uncertainty. Plus, they explore the reforms needed to enhance the system’s fairness and efficiency, and how housing status complicates retirement planning.
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Super Started As A Wage Compromise
- Compulsory super began as a political fix in the 1980s to convert a wage rise into retirement savings rather than raise current pay.
- This origin shaped super as an enforced saving mechanism rather than a carefully designed retirement policy.
Behaviour And Incentives Justified Compulsion
- Behavioural biases and policy incentives drove the case for compulsory saving, not just pure economics.
- The age pension safety net and tax settings reduced private saving incentives, prompting mandatory contributions.
Compulsion Raises Saving, Unevenly
- Compulsory super increases overall saving on average but not fully; about $0.70 of each forced dollar is net new saving.
- The burden falls disproportionately on younger and lower-income workers who have less capacity to absorb it.