For more than a decade, the issue of women’s economic security, or more accurately their lack thereof, has been the subject of much debate. Not so fun facts: women retire with, on average, half the super of men and women over the age of 55 are the fastest growing portion of the homeless population.
Even before the pandemic, this was a crisis in need of action.
But as the disproportionate impacts of COVID-19 on women’s financial position – their ability to earn and their ability to save – bite, we are at a critical crossroads. A difficult issue that politicians and policy makers have been kicking down the road for far too long requires urgent action… before it’s too late.
All eyes are now on the upcoming federal budget, expected on October 6th. And on the follow-up to former Minister for Women Kelly O’Dwyer’s 2018 Women’s Economic Security Statement, which is expected to be released alongside the budget.
Women’s economic security was also a focus of several submissions to the Treasury’s Retirement Income Review. A final report was handed to the federal government in July, but it has not yet been publicly released.
Ahead of that, Women’s Agenda spoke to a number of experts about what they would like to see in the budget, the next iteration of the statement and the review. And we asked them how optimistic they are — given what some have described as “early stumbles” to address the gendered impacts of the pandemic on women’s financial position (aka the “blokecovery” and the controversial early access to super scheme) — that the future proposals will hit the mark.
Women’s economic security greatly imperilled by COVID-19
The last few months has seen a succession of warnings that the COVID crisis risks plunging a generation of women into poverty in their old age.
Kate Jenkins warned earlier this year that it was “laying the groundwork for some pretty serious poverty for women”. Jenkins was joined by Natasha Stott Despoja, who expressed concern about the pandemic’s impacts on women’s economic situation in a recent speech on gender equality as a key driver of domestic violence at the National Press Club.
The grim reality is clear. Women are over-represented among the COVID-19 related job losses, over-represented in the industries most affected, and they are more likely to be in part-time or insecure work. They are also more likely to be working fewer hours as they take on additional unpaid pandemic-related domestic and care work.
Women are also raiding their already significantly smaller super accounts to get by, thanks to the government’s controversial early access scheme that was introduced in the early days of the crisis.
Will those trends drive down women’s workforce participation rates and drive up the “chores gap” between men and women’s share of the unpaid domestic and caring load, thereby driving up the gender pay gap? Yes, they will.
Will those trends also prove devastating for women’s economic security, as Jenkins suggested? Yes, sadly, that’s also true.
“It’s certainly a period of considerable risk as all these issues are conspiring to create an environment where — down the track — women’s poverty will increase,” says Romy Listo of the Equality Rights Alliance (ERA), Australia’s largest network advocating for women’s equality.
“There’s a level of urgency,” she adds. “We know younger women have been clearing out their superannuation, there’s a risk of women becoming permanently locked out of the workforce, particularly if childcare is unavailable or unaffordable; these issues are going to have major implications in the long-term.”
The budget crossroads
As a result, according to a recent report in The Sydney Morning Herald, a group of female ministers, including current Minister For Women Senator Marise Payne and Assistant Minister for Superannuation, Financial Services and Financial Technology Senator Jane Hume, are said to be diligently working on both the upcoming federal budget and the next iteration of the security statement to help ameliorate some of those financial impacts on women.
But will it be enough, and will the proposed solutions aim at the biggest “structural” targets?
Many reports issued over the last ten years – the Equality Rights Alliance’s “Retiring into Poverty” , the Security4Women Alliance’s White Paper on women’s economic security, which was recently updated to take into account the impacts of Covid-19, Senator Jenny McAllister’s “A Husband is Not a Retirement Plan” from the 2016 Senate inquiry – have clearly said the retirement gender gap is a consequence of caring responsibilities, lower rates of pay and gender discrimination in the workplace.
Looking for a bit more than “something”
“The first thing to acknowledge is that it’s a good thing that there is a group of women in the government who are at least considering this issue,” says Emma Dawson, the Executive Director of the Per Capita think tank. “When Kelly O’Dwyer pushed through a Women’s Economic Security Statement in 2018, many were disappointed with what was in it, but it was something, and we hadn’t had much since the Abbott government was elected in 2013.”
“It’s heartening that we know that we are going to have a refreshed statement this year and that’s a really positive sign,” says Listo of the ERA. “Of course, we don’t know what’s going to be included, but it’s a positive step forward.”
“At least it’s something” is a statement that was repeated — to varying degrees — by many Women’s Agenda spoke to.
But in its’ official response to the 2018 statement, the ERA described it as representing “a much needed budgetary and political focus on gendered economic inequality” at a time when there had been “a vacuum around federal gender equality policy”.
And they also noted that while the statement made some important “technical” adjustments that would have an impact, it “sidestepped the bold, import reforms required to restructure our working lives in a more gender-responsive way”.
Suffice it to say, this time around, given the critical crossroads we’re at and the fact that so much is at stake, many are looking for more than “something” – and they are much less likely to be so forgiving of a budget, security statement or retirement income review that skirts the big “structural” issues.
“We’d like to see a response to some of the really structural issues that contribute to women’s poverty and gender inequality in Australia,” says Listo.
“The COVID-19 pandemic presents an important opportunity to acknowledge and address women’s economic interest — I hope the government takes this opportunity,” Senator Jenny Mc Allister, who chaired the 2016 Senate Inquiry into the issue, tells Women’s Agenda. “This needs to be a priority”.
“This crisis is an opportunity for government, business and the community to work together to remove the structural and systemic barriers to women’s workforce participation,” says Jenkins.
Time to tackle the structural issues, particularly childcare
The kinds of things the Security4Women Alliance, a national women’s alliance dedicated to bringing together various individuals and organisations committed to women’s financial wellbeing, is advocating for include: low cost accessible childcare, legislation requiring employers to continue to provide super to staff on parental leave, an additional government funded carer credit in the form of income payments to acknowledge and reward unpaid caring work, and going to the Fair Work Commission to advocate for above average pay increases for female dominated industries in order to address the so-called “undervaluing of women’s work”.
“What is critical now, which was the case pre-COVID and is certainly the case now, is that female workforce participation is one of the things that is absolutely critical to women’s economic and financial security: it was always well below men’s and has dropped further during COVID,” says Stephen Koukoulas, Economist in Residence at Security4Women. “One of the things that comes up time and time again, in any amount of studies, is that access to affordable and plentiful childcare has a strong correlation with women’s workforce participation.”
Koukoulas acknowledges these measures will be expensive, but says the long term benefits outweigh the immediate costs.
Amongst the kinds of temporary stimulus measures the ERA will be looking for is a strong investment in social infrastructure, particularly in social housing and in industries like care, including the female dominated childcare and aged care sectors.
“If there’s anything that’s come out of COVID, it is how important care work is to the economy and to our society more broadly,” says Listo. “We really do need to get that right so we can make sure children are getting the best outcomes in terms of their development, and we maximise women’s participation in the workforce.”
Boosting access to affordable childcare is a critical measure, agrees Jenkins. “Research by KPMG has found that increasing the Child Care Subsidy to 95 per cent of the current hourly rate cap would benefit Australia’s annual GDP by $2.1 billion.”
Early access to super – it’s done now, time to rebuild
Among the measures the experts Women’s Agenda spoke to are keen to see the back of is the controversial early access to super scheme, which allowed eligible individuals to withdraw up to $10,000 from their super to help deal with the adverse economic impacts of the pandemic.
Per Capita’s analysis of the scheme found that before the scheme women aged 25-34 had a gap of about 21 percent less than their male counterparts. The scheme has increased that gap to 45 percent.
“Those under the age of 34 are now as badly off as baby boomers retiring now,” says Dawson of Per Capita. “And they’re entering the child rearing years when they won’t be able to contribute, so it’s condemning them to a greater level of income inequality in retirement than their mothers.”
“Given it’s happened now, it’s all the more important that we focus on how we can support women’s economic security,” says Listo, somewhat fatalistically, in the hopes of putting women in the best possible position to rebuild their super nest eggs.
In the weeks and months ahead, as the Government makes critical decisions that will affect women’s long-term financial interests, many are hoping that the current crisis will also be an opportunity to finally gain ground on a critical issue that has evaded a meaningful response for too long. As the saying goes, “never waste a good crisis”.
Kristine Ziwica is a regular contributor. She tweets @KZiwica
This is part six of a series of pieces Kristine Ziwica is producing on how COVID-19 is impacting women in Australia. The series is supported by the Judith Neilson Institute for Journalism and Ideas.