The Women in Super (WIS) Make Super Fair policy is aimed at improving economic security for women in retirement as the current system is not fair, efficient or sustainable:
WIS has developed a five point plan to address these issues and work towards developing a fairer system that sees women and low income earners reach greater economic security in retirement:
Modelling carried out by Rice Warner was central to the development of the Make Super Fair campaign. From the research undertaken it was found that the proposed additional $1,000 contribution would cost just $2.7 billion per year and would be targeted at low income earners, most of whom are women and who need government help to achieve economic security in retirement. It is estimated that the Government spends $30 billion on super tax concessions annually and the majority of current super tax concessions are paid to high income earners, who do not need government help to achieve a comfortable retirement.
An additional $1,000 government super contribution for low income earners would better support those with inadequate retirement savings. It would mean people earning less than $37,000 per annum receive the annual contribution until their balance reaches $100,000 while they fall within the low income bracket. This would see a woman aged 25 with a starting salary of $25,000pa and projected retirement balance of $205,210 reach $235,347 making a $30,137 (+ 14.7%) increase. This 14.7% increase could mean the difference between retiring in poverty or not.
The current 9.5% Superannuation Guarantee (SG) will not enable most women to accrue sufficient savings for a comfortable retirement. It is important for women that the SG is increased to 12% as soon as possible.
An estimated 220,000 women and 145,000 men are missing out on $125 million of superannuation contributions as they do not meet the requirement to earn $450 per month (before tax) from one employer (many women work more than one part-time job).
Many women miss out on thousands of dollars of super and, in fact, their super savings stagnate and begin to fall behind those of men during child rearing years. WIS strongly supports the Australian Government’s Paid Parental Leave Scheme (PPLS), which commenced on 1 January 2011. However, we believe it is essential to include SG payments in this scheme, as recommended by the Productivity Commission, so that all parents – especially mothers – can continue to grow their superannuation while on parental leave.
A number of factors act against women reaching the best possible retirement outcomes, and the impact of tax, economic and social policy can have different consequences for women as opposed to men. As part of our Make Super Fair policy, we recommend that the government measure and publish the super gap each year, and assess the impact that any future legislative changes to super would have on women. WIS has also expressed the need to reinstate the Women’s Budget which would allow proper analysis of the impact of the budget on women, and could help in rectifying the gender super and gender pay gap.