We are just days out from the federal election but a generation away from closing the gender equality in superannuation savings, writes Bianca Hartge-Hazelman from the Financy Women’s Index.
The pay and superannuation gender gaps both require action. Not just from women, but the entire Australian population.
For the most part, I want the super gap to close to enjoy retirement equality with my husband and for women to experience greater economic security. But the task at hand feels so gargantuan that fronting up to the voting gates and facing an avalanche of how to vote cards, feels like an easier option.
This progress is a highlight of our latest quarterly index measuring financial progress for women in Australia, but it wasn’t enough to avert a drop in the headline gender equality score which declined by 1.6% to 72.2 points during the quarter.
The result was weighed down by a deterioration in the FWX Underemployment sub-index, which measures the gender gap in the underemployment rate. It declined to 63 points from 71 points, as progress in the male underemployment rate improved faster than for female unemployment.
Overall, the report reveal we’ll be waiting 59 years before achieving gender equality, the same as the previous quarter.
But back to superannuation and closing that gender gap, what can be done?
I believe we need to work smarter and use more creative ideas that extend beyond the workforce to fast-track progress. These ideas could include tax deductions that boost your super, as well as paying superannuation during parental leave.
As it stands, the median lifetime fund balance for women is $50,000 compared to $67,000 for men, based on figures from the Australian Bureau of Statistics. This is so far short of the $500,000 needed to retire comfortably, according to the Association of Superannuation Funds Australia (ASFA.)
The superannuation gender gap is often attributed to several factors: firstly, women earning less than men, and participating in the workforce to a lesser extent due to family and unpaid work commitments.
During the period where the superannuation gender gap improved, the gender pay gap narrowed from 13.9% in November 2019 to 13.4% in November 2020 – a decade low. That said, it’s now back at 13.8% as of the March quarter.
The unpaid work gender gap also narrowed to 67% in 2020, from 65% in 2019, as men’s time spent in unpaid work increased. What also appears to have had an impact has been the unprecedented COVID-19 withdrawals under the Federal Liberal government’s Early Release Scheme in 2020.
Figures from the Australian Tax Office show that men were more likely than women to request withdrawal of up to $10,000 of their savings in the period between 20 April – 31 December 2020. Indeed, men accounted for 56% of the 5.5 million applicants compared to 44% who were women. The total sum of requested withdrawals for this period was $20.6 billion in existing superannuation balances.
Without question, we are heading in the right direction in many areas when it comes to women’s economic equality in Australia. But we need to work smarter, not necessarily harder, if we are to accelerate critical gender disparities this lifetime.