The Australian Bankers Association (ABA) on Monday called for the federal government to reduce taxes on superannuation contributions in order to encourage taxpayers to save for retirement.
According to the ABA, people need to contribute at least 12% of their income into a 'super' fund in order to have an income in retirement equivalent to 75-80% of their disposable income.
Although Australian employers' contributions are set to increase from 8% to 9% at the beginning of July, the ABA argues that higher contributions from individuals to the funds are necessary in order to avert a costs crisis at some point in the not too distant future.
The banking group says that taxpayers could be encouraged to make more voluntary payments in several ways, for example via an extended programme of government co-contributions, or by a reduction of the tax on contributions and the introduction of greater incentives for long-term saving.
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