Current system is on track: Coonan
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Tuesday, 30 July, 2002 - 22:00
ASSISTANT Treasurer Helen Coonan has dismissed concerns that Australia’s superannuation system will leave many people with inadequate retirement incomes.
Senator Coonan also rejected calls for an increase in compulsory super contributions from the current 9 per cent.
Many critics had incorrectly assumed retirees would be solely dependent on their super savings, she said.
“Those who judge the superannuation system on the basis of whether or not it will replace the age pension are barking up the wrong tree,” Senator Coonan said.
“The Government is committed to the age pension as a safety net for those people who during their working years have limited opportunity or capacity to save for retirement.
“The age pension will, for many people, be a supplement rather than a replacement.”
Senator Coonan predicted that the number of individuals of age pension age receiving a full-rate pension would fall from 54 per cent presently to one third in 2050.
But the proportion with a part-rate pension is expected to increase from 28 per cent to 40 per cent.
Senator Coonan said most workers could expect a retirement income equal to 60 per cent of their pre-retirement salary.
“Treasury concluded that the [9 per cent] superannuation guarantee, in combination with the age pension, could produce replacement rates in excess of 60 per cent for men working for 25, 30 or 40 years.
“This also holds true for individuals with interrupted working lives, as so often happens with women in the workforce.”
Senator Coonan also rejected calls for an increase in compulsory super contributions from the current 9 per cent.
Many critics had incorrectly assumed retirees would be solely dependent on their super savings, she said.
“Those who judge the superannuation system on the basis of whether or not it will replace the age pension are barking up the wrong tree,” Senator Coonan said.
“The Government is committed to the age pension as a safety net for those people who during their working years have limited opportunity or capacity to save for retirement.
“The age pension will, for many people, be a supplement rather than a replacement.”
Senator Coonan predicted that the number of individuals of age pension age receiving a full-rate pension would fall from 54 per cent presently to one third in 2050.
But the proportion with a part-rate pension is expected to increase from 28 per cent to 40 per cent.
Senator Coonan said most workers could expect a retirement income equal to 60 per cent of their pre-retirement salary.
“Treasury concluded that the [9 per cent] superannuation guarantee, in combination with the age pension, could produce replacement rates in excess of 60 per cent for men working for 25, 30 or 40 years.
“This also holds true for individuals with interrupted working lives, as so often happens with women in the workforce.”