There’s a significant divide between the superannuation savings of men and women, a problem that contributes to the fact Australian women retire with an average $92,000 less than men.
It’s the endpoint of a pay gap that starts as young as when we’re receiving pocket money according to the ACTU, and continues to grow – especially if you take career breaks to have children.
Recently a report by Westpac found that a maternity leave break sees women slapped with an average 12% drop in pay. Add to that the fact very few women receive superannuation while taking time out of the workforce, and you can see how the problem builds.
According to a Senate committee report released last week – with the apt title A husband is not a retirement plan: Achieving economic security for women in retirement – Australia needs to “redouble its efforts to achieve equality at work – paying women equally, offering access to career development and leadership opportunities, and accommodating rather than penalising those who care for others.”
We couldn’t agree more, and we hope to see more such efforts unveiled in Tuesday night’s Federal budget.
Already, the Australian Financial Review reports the Budget will see new measures for boosting the superannuation balances of low income earners, particularly women. Such measures could include direct superannuation top-ups, allowances for those who’ve had career breaks to make their own top-up payments, and the continuation of a version of the Low Income Super Contribution scheme – which the government had previously planned to abolish.
Treasurer Scott Morrison says super reform will be undertaken to “better suit the needs of the modern economy and how people work.” He told the Financial Review the focus will be to target “high-end concessions” and use the proceeds to help those with “broken work patterns”.
These are positive steps forward, but the government can do more.
The Senate committee report outlined a wide range of recommendations it says can help close the superannuation gap, including a review of the Fair Work Act in relation to equal pay, amendments to the Sex Discrimination Act to enable employers to maker higher super payments to women, a Superannuation Guarantee levy for Paid Parental Leave, abandoning plans to increase the pension age to 70 and introducing programs to help end age discrimination.
With 40% of single women retiring into poverty, and 60% of women aged 65 to 69 having no superannuation, this problem is dire and likely to get much worse.
We wait to see more on what the Government plans to do in the full Budget released tomorrow.