There are major flaws in our tax system, including that super investments are completely tax free but any other earnings on savings invested outside of the superannuation environment – such as those on bank deposits – are subject to income tax.

"Put yourself in the shoes of a 65-year-old retiree", says Assistant Treasurer Josh Frydenberg.

Well, their shoes are looking pretty good, aren't they? No tax on lump-sum super payouts after 60. And no tax on their super earnings. The government should be looking to address this flaw.

Speaking at the Committee for Sustainable Retirement Incomes conference in Canberra on Wednesday, Frydenberg said there might be some discussion about superannuation tax concessions in the tax white paper, but any changes would be taken to the next election.

He also indicated  the Coalition was keen to support the push from some financial-sector players for Australians to take up annuity products by ensuring these products also get concessional treatment.

"The current rules mean that such a product would not qualify for the concessional tax treatment during the deferral period, that is, between age 65 and age 80," Frydenberg said.

People who run businesses out of selling annuities, like Challenger's Jeremy Cooper, have been calling for changes.

To date annuities – which involve exchanging a lump sum for a guaranteed monthly payment for a set number of years or for life – have been a relatively small part of Australia's retirement-income market. Unlike account-based pensions, their returns are not tied to movements in investment markets.

They are locked in from the beginning, with the objective being to protect retirees if there's a market crash, or if they outlive their money. (Opponents say the price is lower returns, not being able to take your money out as a lump sum, or being able to transfer to an account-based pension at some point in the future if you want to).

While it's fair to ensure that one product isn't advantaged over the other, the government should not be offering tax advantages that don't make sense in the first place.

Frydenberg said he agrees with "stakeholders" that the existing rules governing retirement-income products are "too inflexible" and "impede the development of alternatives to account‑based pension products such as deferred lifetime annuities".

In the background, the Financial Services Council and the self-managed superannuation fund industry have been lobbying for more than a year for the government to change the mandatory withdrawal rate for account-based pensions. This means that retirees – including those who are wealthy – may not have to withdraw as much money from their ­private pension.

It's marketed by these lobbies as a good idea because it means when asset values fall during downturns - as  they did during the GFC – people don't run out of money by having to drawdown too much. Things had got so bad in 2008-09 that the former Labor government responded by halving the minimum withdrawal amount for the year.

The problem with tinkering with drawdown rates is that it could become yet another tax scheme whereby the rich get bigger tax benefits, and also get to preserve tax-free superannuation for their heirs.

Frydenberg said there would not be changes to rates. At present there are forced-withdrawal rates, depending on how old you are, that range from 4 to 14 per cent. It starts at a minimum drawdown rate of 4 per cent of the capital value a year, for under 65s. The rate increases as you age, hitting 14 per cent, once you are over 95.

There are some groups – sitting on the other side of the FSC – such as the Grattan Institute, that argue the rich should either be taxed more heavily on contributions made to super, or should be hit with a higher minimum drawdown rate.

But Frydenberg has ruled that out: "We are not considering increasing the current rates, but rather making sure the system allows for innovative retirement products to be developed."

One can only hope that the tax white paper looks at the tax-free nature of super more closely, and the fact that it benefits primarily the wealthy.

This cannot be done without looking at other tax breaks for property or shares, otherwise, as ASFA has noted, it just means the wealthy move savings from one area to another.