Cross party support a big step towards closing the gender pay gap and a decent retirement for women
Industry Super Australia welcomes the establishment a parliamentary inquiry - to be backed by all parties - into issues causing a substantial gender gap in super and retirement incomes, and the measures needed to provide women with a decent standard of living after a lifetime of paid and unpaid work.
“We strongly welcome a review of how the super system can better deliver for Australian women,” said Robbie Campo, Deputy Chief Executive of Industry Super Australia.
“Industry Super Australia’s modelling shows that even with super, pension payments and other savings combined, 63% of single women will still not be retiring comfortably by 2055 unless we act now to restructure our retirement income system.
“Superannuation outcomes depend on the level of contributions, compound earnings and government tax concessions. Women currently earn lower average pay than men and their super accumulation is typically disrupted to take time out to have children. This results in lower contributions, lower compound earnings and a poorer standard of retirement,” she said.
“Women are also severely disadvantaged by the current structure of super tax concessions. In addition, the abolition in 2017 of the low income super contribution (LISC) rebate will further reduce average women’s retirement balances by around 10%.”
Industry Super Australia says the following measures could dramatically improve women’s retirement outcomes:
- Re-calibration of superannuation tax concessions, most of which flow to the top income earners who are predominantly men. The lowest paid, mainly women, receive no tax break and suffer a 14% reduction in their superannuation income.
- Raising compulsory super contributions from 9.5% to 12%.
- Re-instatement of the Low Income Superannuation Contribution (LISC) which would boost women’s super-savings and covers 45% of female workers.
“The age pension is also a critical part of the retirement equation and we welcome the inquiry’s consideration of all sources of retirement income for women. Super and pensions are two sides of the same coin for many women. In particular, the recent changes to the asset test taper will impact most heavily on middle to low income women, according to data produced by actuaries Rice Warner and ISA,” said Ms Campo.
“Parliament must adopt an evidence-based and holistic approach to retirement incomes policy and quarantine it from the budget and electoral cycle.”
For further information, please contact Phil Davey 0414 867 188