Superannuation tax concessions are almost as big as the cost of the age pension. They’re also growing at twice the rate of the age pension. While the age pension is means tested to make sure that most of the benefit goes to those who need help with their retirement incomes, most of the superannuation tax concessions go to those that need the least help with their retirement incomes.
Superannuation tax concessions were supposed to help Australians become less reliant on the age pension, but with the rapid increase in the concession they will soon to be more expensive than the age pension. The cure has becoming worse than the disease
- According to the latest Treasury release of the Tax Benchmark and Variations Statement, superannuation tax concessions are expected to reach $41.3 billion in 2019-20 and grow over the next three years to $52.5 billion in 2022-23.
- Superannuation tax concessions are growing rapidly set to rival the aged pension in cost within the next few years; over the next three years these concessions are expected to increase by 25.2%, twice the growth rate of the aged pension (12.6%).
- In comparison, Commonwealth funding for assistance to the aged – which is made up almost entirely by the aged pension – will reach $48.5 billion in 2019-20 and rise to $54.59 billion in 2022-23.
- Women retire with substantially less super than men, the median super balance for women at retirement is $36,000 while for men it is more than three times that at $110,000; 40 percent of older single retired women live in poverty.