The Australian Treasury’s latest Intergenerational Report (IGR) estimates that superannuation tax concessions as a portion of the economy will increase from 2% to 2.9% by 2060, and that the cost of super tax concessions will surpass the cost of the aged pension by 2040:
In the future, more Australians will retire having made superannuation contributions while working. This will reduce the call for government support through the Age Pension. However, superannuation attracts favourable tax treatment which reduces government revenues. The projected combined total of Age and Service Pension expenditure and superannuation tax concessions is estimated to grow from around 4.5 per cent of GDP in 2020-21 to 5.0 per cent of GDP in 2060-61…
Over the next 40 years, spending on the Age and Service Pension is projected to fall from around 2.7 per cent of GDP in 2020-21 to 2.1 per cent of GDP in 2060-61, reflecting the maturation of the superannuation system…
