The Turnbull government's Budget‑time announcement of tax increases applied to superannuation accounts has not only aggrieved Liberal Party supporters, who thought their leaders stood for lower taxes.

The superannuation tax increases, including a $500,000 lifetime cap on non‑concessional contributions backdated to July 1, 2007, have sparked a broader discussion within the community about the efficacy of Australia's unique compulsory superannuation regime.

Mandating all employers to contribute a portion of wages to a superannuation fund, presently 9.5 per cent and expected to incrementally rise to 12 per cent by 2025, compulsory superannuation has undeniably shifted from its inflation‑fighting rationale during the 1980s Accord era.

The defenders of the system these days invariably refer to the need to underwrite a decent income for Australians in retirement, to take fiscal pressure off the age pension and to augment our national savings.

It is probably unreasonable to pin so many public policy ambitions upon one initiative, but when all is said and done the compulsory superannuation regime, now into its 24th year, is, nonetheless, falling short of the numerous hopes set for it.

Of course, it is impossible to appreciate the full extent to which compulsory superannuation equips older Australians with a financially secure retirement, at least until after the full complement of the "baby boom" generation elect to finish working.

But the best actuarial forecasts show that, under compulsory super, many Australians will miss out on being able to retire on an adequate stream of income, replacing between 60 to 80 per cent of their working income.

Lower income earners will, by and large, receive their pension, and high income earners should be able to fund their own retirement, leaving middle income earners (often with large, outstanding mortgages upon retirement age) struggling with retirement income inadequacies.

Making matters worse, successive governments have undermined adequacy by taking it upon themselves to tax superannuation, both at the contribution and accumulation stages, mainly for recurrent spending purposes of questionable value.

There is a myth that the policy progenitors of compulsory superannuation wanted to tear down the Age Pension retirement income pillar, in other words ensuring that superannuation acts as a substitute for the tax‑financed public pension.

But former prime minister Paul Keating originally indicated that compulsory superannuation is actually meant to stand as its own retirement income pillar, alongside the pension.

It was a deliberate policy act that workers lose wages for an eventual superannuation payout yet at the same time, as taxpayers, feel the financial pinch of propping up the pay‑as‑you‑go pension system as the population ages.

The 2015 Intergenerational Report illustrates that without reform, commonwealth spending on the pension is projected to rise from 2.9 per cent of GDP in 2014‑15 to 3.6 per cent in 2054‑55, even in the presence of compulsory super arrangements.

The share of part‑rate pensioners in the Age Pension pool is expected to rise over coming decades but exactly what a part‑pension will look like, and how affordable it would be, as elderly Australians become even more politically influential by mid‑century is an open question.

The $2.046 trillion (roughly 127 per cent of GDP) in assets held by superannuation funds is widely seen as a triumph for the system's capacity to augment our national savings, increasing the pool of funds potentially investable in productive capital.

But one person's augmentation of the national savings pool through financial repression is another person's artificial expansion of the Australian finance sector, reminiscent of a "picking winners" policy diminishing funds competition and impeding financial flows to more productive uses.

Even if we accept that compulsory superannuation improves aggregates savings, it should also be understood this outcome has come at the cost of crowding‑out private, voluntary savings – the third, and final, pillar of retirement income that is all too often ignored.

Australian estimates suggest an additional dollar of money forcibly transferred from pay packets into superannuation accounts has been offset by reduced voluntary savings by between 17 cents and 75 cents, with official estimates settling at 30 cents in the dollar.

Compulsory superannuation distorts other elements of economic choice in important ways.

The current superannuation arrangement reduces the capacities of working individuals and families, particularly those on low and middle incomes, to use their rightfully‑earned income for more consumption, or for additional investment in education and training programs.

The effective liquidity constraints upon consumption, investment, or voluntary savings would most certainly represent significant welfare losses for those affected, as indicated in a 2002 study by academics Ross Guest and Ian McDonald.

Labour market economists have also noted the superannuation guarantee poses as an additional on‑cost associated with employing labour, in turn reducing the demand for labour on the part of employers.

Rather than governments keep making workers lose salary to save more, apparently for their own good, much later in life, and having those forced savings vulnerable to tax grabs, perhaps we should take retirement income policy in a different direction?

The alternative suggested here would be to end compulsory superannuation altogether, ensuring Australians who best know their own circumstances can save as much for their retirement as they see fit.

Instead of increasing the superannuation guarantee rate to 12 per cent, or even 15 per cent as some suggest, in the medium term, the rate should be wound back over time.

This reform wouldn't abolish superannuation but, rather, change the second retirement income pillar to make super contributions voluntary, instead of mandatory, encouraging fund managers to compete for our superannuation dollars.

People with their wages locked up in super accounts against their will should have a right to access at least a part of these funds during their working lives, say, for the purpose of laying down a first house deposit or to finance their higher education expenses.

Reformers should tighten up Age Pension means tests and raise eligibility age to life expectancy to make welfare affordable and well-targeted, and radically cut taxes on saving (including for superannuation) to encourage, but not mandate, thrift.

Australian politicians, deeply afflicted by the short-termism of triennial election battles, lack sufficient knowledge to determine the "optimal" rate of saving for a population, against the background of international financial mobility, in the longer term.

In that vein, we should eschew the political mentality that it is legitimate, even dignified, for governments to paternalistically dictate our most important economic decisions, including when, why and how to save.

Mikayla Novak is senior researcher with the Institute of Public Affairs (www.ipa.org.au). Twitter: @NovakMikayla