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Mercer defends tax concessions
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| David Knox
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Mercer has released new research that it claims puts the myth to suggestions that superannuation tax concessions have led to high-income earners receiving the lion’s share of government support for retirement income.
Instead, Mercer said its research suggested that, taking into account both the super tax concessions and the aged pension, total government support for retirement income is remarkably equal across a variety of income levels.
Commenting on the research, Mercer partner for retirement, risk and finance David Knox said it cast new light on the debate around the cost and equity of superannuation tax concessions.
“Much of the criticism of tax concessions fails to take into account the direct link between the level of retirement and savings and reliance on the age pension,” he said. “When considering the cost of superannuation tax concessions, looking at the tax concessions only tells half the story.”
Knox said that while the research confirmed that those with higher incomes or receiving higher salary increases did receive a higher level of superannuation tax concessions, they were also likely to receive a lower level of government-funded aged pension.
“What is interesting is the overall cost to the Government is roughly the same regardless of whether the funding is weighted towards tax concessions for a higher income earner or providing the age pension to a person who needs to top up their income in retirement,” he said.
AUTHOR
Mike Taylor
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