Policy report

Super ideas: securing Australia’s retirement income system

Retirement income Superannuation Australia

Superannuation is central to the Australian way of life. After a lifetime of hard work, all Australians deserve a comfortable retirement. During the early 1990s Australia began to build a system of compulsory superannuation contributions, which has become one of the pillars of our nation’s retirement income system. We have built one of the largest pools of savings in the world in just a quarter of a century. Our superannuation savings pool is Asia’s biggest and the largest per capita in the world. With current total assets worth $2.3 trillion, this savings pool is projected to double to $4 trillion over the next 10 years and hit $7.6 trillion by 2033. That’s a world-beating achievement. Yet our super system must be fit-for-purpose in the twenty-first century.

In this report, Nick Dyrenfurth examines the public policy implications surrounding our super barbeque stopper. We need to renew efforts to increase the Super Guarantee (SG) rate to where it should be, from 9.5 to 12 per cent. He also proposes a way forward that abolishes an arbitrary SG threshold designed for the early 1990s. If not, in its place, he suggests introducing a pro rata model of compulsory employer contributions which acknowledges Australians are working multiple jobs. Without this reform the ‘super gap’ between older and young, disproportionately female workers will grow.

Younger Australians also need to be made better aware of how superannuation works and the importance of it to their financial well-being. This report argues for a dedicated education campaign driven by the commonwealth government and super funds aimed at improving the financial literacy of all Australians, whether in our schools, universities and workplaces, and a zero tolerance regulatory approach to underpayment of compulsory superannuation.

The report is structured into three parts. The first section traces the history of the success story of Australia’s retirement income system from its roots in the incrementally-developed welfare state of the twentieth century to the creation of modern superannuation, stressing the critical role of industry super funds and concerted government action in recent decades. Section two identifies a number of systemic and economy-wide issues which are threatening the integrity of our retirement incomes system, notably the rise of the so-called ‘gig economy’. Section three outlines a number of practical policy solutions to preserve the structural integrity of the superannuation system, enhance the individual super accounts of all Australians and secure the Commonwealth’s budgetary position in coming decades.

Publication Details


John Curtin Research Centre Essay Series no.3, 2018