The government is working to ensure Australia’s superannuation system can meet the ageing population issues and fiscal challenges of the future, Minister for Financial Services and Superannuation Bill Shorten said.
“The demographic and related fiscal challenges that we all face are pretty well known. In many countries around the world, the number of older people is expected to grow more rapidly than the working age population,” he told delegates at a global pension forum this week.
“Here in Australia, we have to face up to some tough realities. By 2050 there will only be 27 working aged people for every 10 of our citizens aged 65 and over. This compares to 50 workers for every 10 retirees today.”
For the government, the key challenge is the adequacy of Australians’ retirement savings, Shorten said.
“Put simply, we do not think that saving 9 per cent of wages will provide most Australians with adequate retirement savings,” he said.
“Our long-term superannuation reforms, announced on 2 May this year, will deliver substantial improvements in retirement savings adequacy.”
The increase of the superannuation guarantee (SG) rate from 9 to 12 per cent would address the challenges of Australia’s ageing population and increase private and national savings, Shorten said.
“The increase in the SG will be gradual, commencing on 1 July 2013 and reaching 12 per cent by 1 July 2019,” he said.
“This will boost the long-term adequacy of retirement savings for around 8.4 million people and bring broader benefits to the community and the nation.”
He said future wage productivity increases are expected to be sufficient to ensure that real wages continue to grow.
“An average full-time worker now aged 30 can be expected to have an additional $108,000 in superannuation at retirement as a result of our reforms,” he said.
