Pay transparency looks set to be one of the more positive things to come in 2024 for women’s economic security and empowerment.
That transparency will come in late February when the gender pay gaps of employers in Australia with 100 or more team members are made public.
The result will be scrutiny of employers by their team members, questioning what they will do to close such gaps and how quickly they can make it happen. Further external scrutiny will come from potential new hires, an employer’s wider industry, their clients, competitors, and the media.
It’s a shame, then, that some of the progress pay transparency could provide for closing the gender pay gap could then be undermined by tax changes that are set to favour men over women.
Those tax changes are coming via the Stage 3 Tax cuts due to start in July.
At first glance, the demand for equal pay from larger employers could seem like the perfect opportunity to address the gender imbalance of who will benefit from these tax cuts, should women receive salary increases that push them up higher income brackets.
But there is no way advancements on equal pay can keep pace with how fast these tax cuts will be distributed. This equal pay won’t just happen, it will require a significant fight. And the coming pay transparency work will, unfortunately, do little to make up for how the female-dominated care sectors like early childhood education continue to be undervalued.
As such, these tax changes remain one of several elephants in the room of the Albanese Government’s push to address women’s economic security. A push that has included a number of positive initiatives, including reform of the Workplace Gender Equality Agency to give it the power to publish employer gender pay gaps, as well as last year’s pay rise for aged care workers, the appointment of the Women’s Economic Equality Taskforce and raising the age limit for single parenting payments. But a push that is seeing positives undermined by a fear of tweaking or moving on from commitments made by a different government and during a very different time (to be fair, the Coalition are already clearly preparing their ‘broken promise’ talking points)
As the legislated tax cuts currently stand, no tax cut is coming for those earning less than $45,000. Rather, the changes favour high-income earners, raising the top tax bracket to $200,000 and taxing all incomes between $45,000 and $200,000 at the same rate of 30 per cent. This will mean those earning $200,000 a year will receive a tax reduction of $9075 a year compared to a $125 a year reduction for those on $50,000. (Check out our recent explainer here)
Men are set to take 67 per cent of the savings from these tax cuts compared to 33 per cent for women, according to analysis by the Australia Institute.
Updated Parliamentary Budget Office estimates released by The Greens and published in The Guardian today reiterate the inequity in the figures to come, with the cost of the cuts now estimated to be $323.6 billion over the next decade. The figures reveal that the lowest-earning 40 per cent of households will get nothing during the first year of the cuts, while the next 20 per cent will share in $1.2 billion, and the top 40 per cent will receive up to $15.9 billion. The Greens say the changes will deliver 77 per cent of the tax cuts to the wealthiest 20 per cent of society over the next financial year. The Greens say these tax cuts “give $2 to men for every $1 to women.”
Elderly single women, as well as female sole parents, are overrepresented when it comes to those on low incomes. Sixty-one per cent of mothers are raising children on less than $60,000 a year, according to a 2023 study by the Council of Single Mothers and their Children. Eighty-seven per cent say they are concerned about their long-term financial wellbeing.
Acting Greens leader Merheen Faruqi says she and Nick McKim have written to the Treasurer, urging him to scrap the Stage 3 tax cuts.
“Labor’s tax cuts for the rich are getting bigger by the day, and will turbocharge inequality and inflation,” she shared on social media.
The prime minister is set to address the National Press Club this coming Thursday, where he will outline new cost-of-living measures that will “put extra” dollars in low- and middle-income earners’ pockets.
On Tuesday morning, Albanese hinted that rather than scrapping the tax cuts, they could be expanded to include lower-income earners with a promise on KIIS FM radio that “everyone” would get a tax cut in the next financial year
Such a move would be a welcome and necessary tweak to the legislated stage 3 tax cuts package. But it’s unlikely to dramatically remove the full extent of gender inequity these tax cuts are set to provide.