Why we need a women's budget - Women's Agenda

Why we need a women’s budget

Most government policies these days look gender neutral. But in substance, government policy often has a different impact on women and men, in distributing benefits and burdens of taxes and spending. How can we ensure that taxing and spending supports women’s equality?

The federal budget, expected in early May, is where the rubber hits the road when it comes to taxing and spending. Understanding the gender impact of the budget is also important to ensure that tax, spending and social programs aimed at improving economic growth and our society actually work.

Government policies are less effective, or may not succeed at all, if the different impact on women and men is not taken into account.

Australia was a leader but has fallen behind

Australia was a pioneer in gender budget analysis. From 1983 to 2013, the federal government produced a Women’s Budget Statement, while state and territory governments were also among the first in the world to scrutinise annual budgets for their impact on women and girls.

But in recent years we have fallen behind. In a 2014 OECD study, the Australian Government compared poorly on gender analysis. The study found that, apart from the occasional specific programs, Australia had no systematic process to assess the impact on women and men of taxing, spending or government programs, either before or after the government enacts legislation, appropriates funds or initiates policy.

A decade ago, Julie Bishop, then Minister Assisting the Prime Minister for Women’s Issues, emphasised Australia’s commitment to gender equality including budget analysis; in 2006 the Office for Women released Women ’06: 2006-07 Budget Information. The Tony Abbott-Joe Hockey government stopped this long standing commitment and the government did not release any women’s or gender analysis in either 2014 or 2015 – while at the same time debating crucial policy for women, including paid parental leave and childcare policy.

What would a women’s budget statement do?

The need to understand the impact of public policy on women and men is reasonably well understood for some issues – think of health or family violence. It’s less obvious – but no less important – in other areas of government. Government policies aimed at increasing workforce participation, early childhood development, supporting particular industries or regions, sport, or caring for the disabled or aged, all have gender implications.

A women’s budget statement could be comprehensive, covering all spending and taxing and containing detailed modelling about the distributional, social and economic impact of government policy. Perhaps better for today’s times, it could target an issue that is a current focus of government policy and analyse all aspects of government taxes, spending and programs to understand the impact on that policy goal.

For example, the government has committed to the G20 to significantly increase female labour force participation.

What are the impediments? The gender pay gap is clearly recognised in data. At May 2015, the gender pay gap was 17.9%. On average women earn $284.20 per week less than men. Government wage, employer regulation and discrimination policies are all relevant here but it is not clear that the pay gap is stopping women working – just that it is unfair.

Other policies do seem to affect women’s work choices. While women’s paid work has increased significantly since the 1970s, the chart below shows that this increase is in part-time not full-time work – and trend lines are flat not increasing. Australia’s current combination of tax, family payment and childcare policies means that women face significant costs if they want to increase their work hours.

Source: TTPI, Stocktake Report (2015), Chart 2.4 from ABS (2014) Labour Force Survey, Cat. No. 6202, Canberra., Author provided

A progressive income tax with marginal rates that rise as income rises, is important for women’s equality because women earn less than men. Progressive income tax also supports workforce participation by women because it lessens the cost imposed on women going to work as “second earners” in couple households. Thus, it supports work participation and is positive for economic growth as well as women’s incomes and superannuation savings.

We need to consider taxes and other policies together. The chart below from the Productivity Commission illustrates that for a woman in a couple even earning a good salary, with two children, moving from three to four days of work a week does not bring home much cash after taxes and losing benefits. She faces a 100% effective tax rate – twice that of top earners at 47%.

Productivity Commission Childcare and Early Childhood Education report (2014) Appendix E, Box E4. Productivity Commission Productivity Commission (2014), Appendix E Box E4

The lack of a comprehensive gender analysis leads to conflicting policies. The Government last year announced the intention to extend a Baby Bonus that is tested on joint or family income. This would increase the costs experienced by mothers returning to work and is directly contradictory to the stated workforce policy goals.

External scrutiny is important – but government action needed

When the Women’s Budget Statement was stopped, the National Foundation for Women stepped in and produced a report that placed a “gender lens” over the budget for 2014 and 2015. In the UK, the Women’s Budget Group does gender analysis. It concluded that the UK 2015 Autumn Statement fails to invest in women’s economic security and the cost of care keeps being pushed onto women. This work is important but it cannot replace proper government analysis.

Better gender data

The Australian Bureau of Statistics has released in February 2016 the latest Gender Indicators. The gender indicators making interesting reading – but they need to be better linked into budget processes.

And we need new data especially on how women and men spend time in care and paid work. The last Time Use survey in Australia was in 2006 and the scheduled 2013 survey was cancelled. A decade ago, men spent twice as long as women on paid work activities, while women spent twice as long as men on unpaid work in the home including childcare and house work. How have things changed – if at all? Anecdotal evidence suggests that women “can’t have it all” and hit a wall because of continuing family and home responsibilities.

Renewing gender budget analysis in Australia

The Australian Government states that it “is committed to strengthening the provision of gender analysis, advice and mainstreaming across Government”. I congratulate the Government for moving the Office for Women back into the Department of Prime Minister and Cabinet, where it can connect gender policy across the whole of government. To do this properly, it needs a gender analysis of tax and expenditure budget policy.

A Women’s Budget Statement is not a panacea for gender equality, and statements over the years varied considerably in detail and coverage. But Australian women deserve that public commitment and accountability – and all Australians would benefit.

This article was originally published on The Conversation. Read the original article.

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