Recent OECD data offer limited support for the proposition that our company tax rate could be cut substantially with little or no loss of tax revenue. Treasury‐type analysis suggests otherwise: our headline rate could be cut to 20 per cent if abolishing dividend imputation were used to finance a cut in the headline rate. But this type of exercise relies on strong assumptions, and imputation mitigates other idiosyncrasies of our tax system. Accordingly, abolition of imputation should await a cut in our top marginal personal rate along with a transition to back‐end taxation of most superannuation accounts.

After declining worldwide since the late 1980s, defined benefits plans will not recover their previous dominance in Australia because they can only be offered by large and stable organisations. Since 1992 Australia has had compulsory superannuation that is mostly privately managed. In addition, several policy measures have unduly weakened defined benefits schemes, especially in the private sector. Rescinding these measures would revitalise defined benefits, and produce a deeper market for privately managed lifetime annuities. An earlier version of this paper was presented to the 2013 Australian Centre for Financial Studies' Melbourne Money and Finance Conference.