Some Policy Issues in Providing Retirement Incomes

John Freebairn

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: The paper compares and contrasts the pay-as-you-go system of government provided age pensions funded from recurrent tax revenue with the pre-paid system based on a compulsory superannuation levy funding an actuarially fair retirement income. Under special assumptions, including constant levels of GDP, the two systems are similar. However, given specific details of the current Australian versions of these two systems, the second system is shown to result in a higher level of GDP. Some policy design issues for the superannuation scheme, including the need for compulsion and at what rate, who pays the levy and the congruence of various eligibility ages, and the effects of the 2006 budget changes on the taxation of withdrawals, are assessed.

Pages: 24 pages
Date: 2007-02
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2007n06

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