Dr Henry said offsetting some growth in wages with an increase in superannuation payments would benefit savers in retirement.
The federal government has proposed raising the compulsory superannuation guarantee employers pay for their staff incrementally from nine per cent to 12 per cent between 2012/13 and 2019/20.
“It reduces your standard of living now in order to achieve a higher standard of living later,” he told a Senate estimates hearing in Canberra said.
“That is what saving is all about.”
The rate of compulsory superannuation was three per cent when introduced in 1992 and progressively increased to nine per cent by 2002.
Dr Henry said some of the initial increase in the superannuation guarantee was achieved through slower wages growth.
He said the measure compelled Australians to save for some of their retirement instead on full reliance on the aged pension.
“The superannuation guarantee was legislated because there was an acceptance that individuals left to their own devices under-provide for their retirement – the same point is made today,” he said.
Australia’s system of superannuation through legislated savings had been assessed positively overseas, Dr Henry said.
“It has been favourably reviewed by researchers and policymakers globally,” he said.