HAPPY INTERNATIONAL WOMEN'S DAY

The recent announcement by the Federal Government to cap the tax concessions on super balances over $3 million is a welcome and important step toward making our superannuation system fairer. But unless those savings are redirected into measures to address the super gender gap, it’s not going to change the fact that a young woman starting out in the workforce today will end up with $200,000 less in her super than her male colleagues.

The reality of our superannuation system is that two things are true at the same time: it has been a huge success, and it is unfair for women and low paid workers. The greatest achievement of superannuation is that it is transformative for millions of Australians, lifting them out of poverty in retirement.

It was unthinkable just one generation ago that blue collar workers today could retire with hundreds of thousands of dollars in savings. Our superannuation system has seen a massive creation of wealth for ordinary working Australians, who through their super fund, are invested in global markets and major infrastructure assets here and abroad. But it’s not truly a world class system, or a system safe from attacks, until it works as intended for everyone – not just for those who work full time for 40 years.

So far, the solutions to the gender super gap have focused on individual actions and personal sacrifice.

Women are encouraged to make up for time out of the workforce by making additional contributions into their super. But not only are such personal financial sacrifices becoming harder and harder, they’re not the long-term solution to an unfair system.

There is also what I see as a worrying focus on female empowerment in this discussion.

We’ve all read the articles on tips for putting more into our super to make up for the gap, or how women can build an investment portfolio through their super. There is absolutely nothing wrong with a woman taking control of her finances and setting herself up for financial wellbeing into the future. But when building a wealth portfolio is presented in the same discussion as the super gender inequities, women hear the message that they’re on their own – when the problem is an unfair super system. It’s understandable then that people will look for solutions at an individual level, but we can’t girl-bossify our way out of structural inequality.

If want to address the fact that women retire with around one third less super than men, we have to do something about the inherent policy failures that perpetuate the gender pay gap. Tackling the unfair distributions of tax concessions at the top is essential but alone won’t fix the gap. It’s a system that is hostile by design for women, because those with inadequate retirement savings – mostly women - get NO or virtually no tax concessions while those with well beyond what is needed for retirement are given excessively generous concessions to build even greater wealth.

This is how we get highly gendered outcomes in retirement.

If we more fairly targeted the $52 billion in super tax concessions each year we could afford to pay superannuation on the paid parental leave scheme. According to HESTA, this would see $7000 per child in a woman’s retirement balance. We could afford to increase the Low Income Tax Offset to ensure the lowest paid workers aren’t shafted. And we could consider other proposals, such as a $1000 annual contribution to the super of low income workers until their balance reaches $100,000.

These and other measures proposed by Women in Super would help make super fairer at a structural level. This would in turn stabilise the system at a time of intense politicisation and the erosion of confidence in a retirement income system that doesn’t deliver equally for everyone.

I look at the persistent super gender gap and the lack of resolve to fix it to date, and I wonder how young women must feel. If you know any Gen Z girls and women, you may have noticed that they’re pretty switched on to inequalities. For them, a system that structurally discriminates against them is simply unacceptable. If we don’t tackle the gender inequity in super, we risk eroding its social licence among young people.

The inequalities in our superannuation system – while unintentional - have compounded as the system has matured through 30 years of the Super Guarantee, and with superannuation assets now at $3.5 trillion.

It’s no longer acceptable or sustainable to not fix them.