The submission noted that taxpayers are concerned that the current contributions cap restricts them from saving for their retirement during their later years of working, when saving is financially affordable for them.

“Whilst many taxpayers save for their retirement progressively during the years that they are earning income, it is simply not affordable for the vast majority of the taxpaying community to do so,” the submission explained.

“With the costs of rent and mortgages, raising and educating children taking almost all of most taxpayer’s funds during their early and middle income producing years, most of them do not have the extra funds to put into retirement savings until towards the end of their working lives.”

The submission noted that in the past 10 years, the concessional contribution cap for older workers has reduced by three-quarters from $100,000 to $25,000.

“The government’s Retirement Income Review indicated that there are a small number of retirees that were able to build up substantial balances in their superannuation accounts during the previous years when there were no or substantially higher contribution caps,” the submission stated.

“There is a perception that the reduction of the contribution caps is in some way rectifying this anomaly. However, the cutting of the contribution caps to such low levels now does nothing to mitigate the possible policy defects that allowed the small number of retires to take inappropriate advantage of the superannuation system.”

BDO submitted in its submission that the level at which the concessional contribution cap is set should be reviewed with regard to the effect of capping on the current population of workers, rather than those who obtained a distortional advantage based on previous rules.

“As an alternative, the annual contribution cap process could be replaced with lifetime concessional contribution cap including appropriate transitional arrangements,” it said.

“The lifetime cap number should be meaningful to allow a person and their family to be self-sufficient in retirement.”

The submission also called for a holistic review of the Australian tax system.

“The Australian tax reform process needs to be reignited beginning with a holistic review of all the taxes in both the federal and state tax systems,” it said.

“The government should also establish an independent Tax Reform Commission that has an ongoing role to develop tax reforms recommendation for the government. This tax reform process should start with a fundamental review of the interactions between the various taxes and the rest of the economic and social policies of the country.”