The Economic Impact of the Proposed National Superannuation Scheme for Australia*

Employing a framework commonly used in the analysis of Government tax-transfer programmes, an attempt is made to assess the proposed National Superannuation Scheme for Australia. It is argued that the scheme would almost totally relieve poverty amongst pensioners, as well as being likely to reduce income inequality in a more general sense and compensate for fundamental failures in the capital market. However, the scheme does not compensate for a major failure in the insurance market which, if it did, would provide a justification for one important aspect of the scheme, namely earnings related benefits.