Amid the doom and gloom in New Zealand retirement saving rates, there is a certain wistful longing for the system across the Tasman: superannuation in Australia has a contribution of up to 12%, has been around for 20 years, is compulsory, and has generated a massive pool of domestic savings. What’s more, your employer is compelled to pay it!

Of course one’s employer doesn’t really pay it – the employee does. It is part of a wage or salary package employers compulsorily deposit into a fund, and the financial services industry gets to clip the ticket on 9% of all wages and salaries in the country.

None of the above necessarily are reasons to reject a compulsory super scheme; from a political economy perspective, there is a strong historical rationale for it – people won’t save adequately for retirement unless compelled, and politicians will always help out.

However, compulsion walks hand in hand with trust. The government sets predictable tax and saving rules so people can plan for retirement safe in the knowledge that a rapacious administration will not shift the posts.

But post shifting now appears to be happening in Australia. Compulsory super has long enjoyed tax concessions: 15% on super contributions up to A$25,000 per year, and 15% on super interest earnings. Last year, this was summarily increased to 30% for those earning more than $300,000 per year. This year, concessions may be reduced or changed again because of budget considerations.

For those who planned their retirement savings based on current rules, any changes are retrospective. The income of most people over a lifetime is fluid – being a high income earner one decade does not mean being one the next.

In fact, the Australian Treasury and the Gillard government seem to consider tax concessions as unjustifiable ‘tax expenditures’ – government has a right to between 30% and 45% of tax from high earners and is doing them a favour through super. However, for a scheme that was meant to encourage savers, and not be redistributive, changes on this basis will do huge reputational damage.

As talk of compulsory super bubbles away in New Zealand, would-be architects of such a scheme need to seriously tackle the question of what happens when a rogue government tinkers with the system and compromises a whole generation of savers?