While AIST recognises that there will of course be many older Australians who will not be able to make large topups to their super, we believe that the Government needs help those who can, up to a reasonable limit. One way to do this would be to introduce a higher $50,000 cap for older members with low balances, thus putting a ceiling on the ‘cost’ of tax concessions and ensuring that such concessions helps those most in need. Linking eligibility for a higher cap to low balances also recognises that those with higher incomes have already benefited from generous tax concessions through the 15 per cent contributions tax, while those on lower incomes have not received the same benefits. Such a two-tiered, targeted approach to contribution caps would ideally see the Government adopt an official definition/ benchmark of an adequate retirement income.

As outlined in our joint submission with Industry Super Network to the Henry Review, such a definition would put a floor and a ceiling on government responsibility for retirement income. It would also give working Australians a better idea about what is regarded as an ‘adequate’ retirement nest egg. One of the strengths of our three pillar retirement income system is the joint and overlapping responsibility between the individual and the government for achieving an adequate retirement income. For the third “voluntary savings” pillar to pull its weight, there must be adequate support and encouragement by government through targeted tax concessions for older workers.