Federal government makes superannuation inequality even worse for women workers
New analysis of the changes to superannuation legislation announced by the Turnbull federal government has revealed it will create even greater inequity in retirement for women by discouraging their own contributions to the retirement savings.
As reported by The Guardian (26 May 2016), undertaken by the National Centre for Social and Economic Modelling (Natsem), the analysis of the changes shows that “women over 50 – who are earning enough to be affected by the policy changes – will be forced to pay a higher tax on their super contributions, as a proportion of their income, than men”.
The analysis noted that this was because women in this age group “were earning a lower average income than men”.
IEUA-QNT Assistant Secretary Rebecca Sisson said the changes were another sign of the current federal government’s lack of care or concern for Australian working women.
“Women already face a future of reduced retirement savings due to taking time out of the paid workforce or from reducing their working hours for the sake of caregiving responsibilities.
“To put in place changes to superannuation which further disadvantage and discourage women when it comes to their retirement savings is particularly insidious.
“The fact is that even after decades of legislative, industrial and social advancement, women and men are still not equal.
“A majority of Australian women face poverty in retirement, with little or no superannuation behind them,” Ms Sisson said.
Entrenched inequity for working women
A 2015 ANZ Women’s Report states that women retire, on average, with half the amount of superannuation as men and that 37 per cent of women have no personal income upon retirement.
A whopping 90 per cent of women retire without adequate savings to fund a comfortable retirement and one in five women yet to retire has no superannuation.
“Any move which would discourage women from making contributions to their superannuation must be challenged,” Ms Sisson said.
“Members through their campaign to enhance superannuation provisions know that the national employer-funded Super Guarantee (SG) rate of 9.5 per cent superannuation is not enough.
“In fact, the planned increase for the SG rate to reach 12 per cent by 2019 has been deferred by the federal government and the rate will now remain at 9.5 per cent until 30 June 2021.
It will then only increase by 0.5 percent each year until it reaches 12 per cent – further entrenching the challenges facing working women saving for their retirement.
“Voluntary superannuation contributions remain a critical way women can save for a decent retirement income.
“This means the federal government should be supporting and encouraging such contributions, not imposing financial penalties on those seeking a secure financial future,” Ms Sisson said.
Collective action critical to change
Ms Sisson said the federal government changes further highlighted the importance of collective bargaining in delivering opportunities for enhanced financial security in retirement for members in our sector.
“In most Queensland schools, collective bargaining has already delivered enhanced employer contribution to superannuation, on the basis of an employee co-payment,” she said.
“Typically, an employer contribution of 12.75 per cent is payable where an employee chooses to make an additional personal contribution of five per cent to superannuation and an employee’s voluntary superannuation co-payment may also be made before tax, in accordance with the salary packaging provisions in the relevant collective bargaining agreement,” she said.
Such a provision currently applies in all Queensland state schools, as well as in Catholic, Anglican, Lutheran, PMSA and many single-site independent schools.
“These enhanced contributions to employee superannuation result in a very substantial benefit for members’ retirement savings in the longer term,” Ms Sisson said.