There are problems with Australia's current and proposed superannuation policy in its treatment of savings, the ageing population and the employment of persons over the age of 55. This thesis will examine the economics of superannuation, savings, retirement and employment, in order to provide recommendations on improving government superannuation policy in Australia.
The ageing population is a major issue facing the future of Australia, as well as the majority of OECD countries. Under current superannuation policy, the fiscal pressure placed on the federal government, and ultimately the taxpayer, will be significant. The increase in taxes expected, to meet rising age pension and health payments, has been estimated at five per cent of GDP by the year 2042 (Intergenerational Report, 2002-2003). Whilst this problem is not expected to have an impact for at least 10 years, it is important to put policy in place now, whilst baby-boomers are still in the workforce, to help reduce the tax burden on the next generation.
This thesis focuses on important areas such as savings and employment, to attempt to answer the question, should superannuation be compulsory? Following from this, the thesis will examine proposed policies by the Australian Liberal and Labor Party's, economists and this author, in order to analyse ways to improve current superannuation policy.