Two wrongs make a right

Already a common topic of discussion among the baby boomer generation is whether they have accumulated enough super or will be forced to rely on the pension in retirement. This is as it should be. The age pension, while modest, whittles away at the natural incentives to save for retirement. As such, it is important that only those who absolutely need it are eligible.

Using our system of compulsory savings accounts to achieve independence from taxpayers makes sense. But for those in their twenties and thirties, saving for a distant retirement is not a high priority. Using the funds to cover health expenses is far more relevant.

Of course this would require a phase-in period. Compulsory superannuation, which began in 1992, is only now starting to make a real difference. Funds managers should also compete more transparently on cost and performance than they do now, so account holders can choose a fund that suits them. Earnings in the savings accounts should ideally be tax free, and insurance should play a part for those who have not accumulated a high balance.

But if it is wrong to force people to save, it is also wrong that others pay for the health and retirement of those who refuse to save. Two wrongs can make a right.