The architect of compulsory superannuation says it has become an ''inequitable'' scheme that should be changed to reduce its bias towards the better off.
Vince FitzGerald, whose advice underpinned federal Labor's dramatic retirement policy overhaul two decades ago, said tax breaks for those wealthy enough to make extra superannuation contributions skewed the system towards higher-income earners.
The superannuation system, set to balloon with the forthcoming increase in compulsory contributions from 9 per cent to 12 per cent, is ''not a terribly wonderful deal'' for people on low incomes, said Dr FitzGerald, a director of the Allen Consulting Group.
They could get few tax concessions by making extra contributions and they had more immediate needs than superannuation, such as paying for housing and their children's necessities, he said.
Mike Rafferty, a senior research fellow at Sydney University's Workplace Research Centre, said superannuation was an extraordinary piece of social engineering which had not attracted the dissent it deserved. ''There are two systems. One for the rich, who make use of the massive tax concessions - and the punters who have 9 per cent taken out whether they like it or not,'' he said.
Critics of the system say the rise in compulsory contributions will also tip the benefits of the scheme even further towards men.
The Australia Institute executive director Richard Denniss said: ''If the objective of the government was to close the gap between women's retirement income and men's, it would be hard to imagine a worse way of doing it than relying simply on a shift from 9 per cent to 12 per cent.''
Australian Council of Social Service chief executive Cassandra Goldie said: ''The superannuation system benefits people who are able to be in full-time paid work on a high income. And who would that be? That would be men.''
Dr FitzGerald said attempts to mitigate the inequity in the system had been only partially successful.
''Women don't do well out of it, but it is not entirely due to the system. If a couple stay together throughout their family-raising life, presumably they share the superannuation if one has more than the other, but that is not the way everybody lives,'' he said.
People earning $100,000 to $150,000 a year ''are not Kerry Packer or his son James, or one of the Murdochs,'' but they had good reasons to save for retirement and could be taxed less generously, he said.
''The high income concession has been pegged back by putting limits on contributions you can make to superannuation and in one way you could say that addresses the issue, because the limits are pretty low for people on any substantial income. But in my opinion, it is the wrong way to go about it,'' Dr FitzGerald said.
''You should tax it properly, rather than put straight out restrictions on it.''
But Dr FitzGerald welcomed the rise in compulsory contributions, to be phased in over seven years from July next year, saying it would mean working people's incomes would not drop as dramatically in retirement as in the past.