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The Hendy-Warburton report data is too limited for the Australian public to know whether or not they are getting a ‘raw deal’ in the taxation of their hard earned retirement savings, Deloitte Tax Partner John Randall said.
"In comparing taxation of OECD countries’ retirement savings regimes the report supplies limited data making it impossible to draw any real conclusions on how successfully the Government is setting our retirement savings policy," Mr Randall said.
"There are varying taxation models adopted for taxing retirement savings. Australia taxes contributions, earnings and benefits. Other countries only tax benefits, others only contributions and earnings.
"While the report suggests that there are eight theoretical pension tax models, it only comments on four, of which the Australian tax model is not included."
Mr Randall said the report also relies on just two studies on the taxation arrangements for private retirement savings – one by the World Bank in Washington in 1999 and the other by the OECD in 2004.
"The retirement savings landscape is constantly changing and we can’t rely on studies performed six years ago or, even two years ago, to show us how we are performing today.
"The report is in no way conclusive as to how Australia’s retirement savings taxation compares to the various OECD countries.
"Considering the dollar value of Australian’s retirement savings, it is ridiculous we can not make comparisons of performance to other jurisdictions.
"It is clear that more work needs to be done to show us that tax on retirement savings is ‘concessional’ as we are constantly told it is by the Government," Mr Randall said.
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Page Last Updated: 18 April 2006
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Source: Deloitte Touche Tohmatsu - Australia (English)
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