Super: Vita Palestrant on closing the gender gap

Tax concessions can help women achieve a better lifestyle in retirement

Covid-19 is in the habit of exposing structural fault lines no matter where they are or how entrenched or “normalised” they are. It’s now apparent the disparity in women’s pay and super has had knock-on effects, leading to what has been dubbed “the pink recession”.

The industries dominated by women were worst hit during the pandemic, leading many workers to access their super through the federal government’s early release scheme.

“The Covid-19 recession has not only had a disproportionate impact on female employment, it has seen many drain their super savings, making the gender super gap even wider,” says Sandra Buckley, CEO of Women in Super, an advocacy group.

She points out the economy is highly gender segregated. “If you look at the industries many women work in, they are all typical of female strengths: childcare, aged care, retail, hospitality, tourism, community services, health and teaching.

“Gender segregation has a large impact because we’re seeing women earning less the whole way through in all of those industries, with men typically still at the top of the ladder.

“When women do get into male-dominated industries, they tend to get paid less there too. The biggest gender pay gap is in financial services. We have large numbers of women working in it, but we still have the biggest gender pay gap there.”

She says the pay gap between men and women has been around 18% on average for the past two decades. At present women retire with 47% less super than men. The disparity can be attributed to a lifetime of lower wages and taking time out of the paid workforce to care for children and others, resulting in fewer and lower super contributions.

Women returning to work often end up taking casual shifts, which could mean they are ineligible for the 9.5% super guarantee (SG). To qualify you must earn at least $450 a month from the one employer.

“If you work through agencies for multiple employers you might not hit that $450 minimum with the one employer. We see that with pharmacists, teachers, aged care workers, nurses and retail,” says Buckley.

She says some employers deliberately game the system to avoid paying these “on-costs”. Around 220,000 women miss

out on $125 million of SG contributions each year because they don’t satisfy the $450 monthly threshold.

Buckley worries about what the future holds for young women who drained their savings. “For anyone who is female and is in a low-pay category, they won’t have the finances to top up their super to get back to where they were,” she says.

Women in Super has called on the federal government to make super fairer for women. It wants the $450 threshold to be removed and the unpaid caring work women perform to be recognised.

The main reason women retire with less super than men is the impact that caring has. They save the economy a huge amount of money by performing this unpaid work, but as Elizabeth Broderick, the former Sex

Discrimination Commissioner, said years ago, “the reward for a lifetime of caring is a lifetime of poverty”.

She says other countries have introduced measures to make their systems more equitable. “What they do is give you caring credits into your super or government pension account. Germany will allow you to take five years out of the workforce during your working life and you get those notional credits. Other countries do it differently.

“The way they look at it is that by you undertaking this work you are saving the country money. You don’t get as much as you would get in paid work, but at least it’s something and your super balance keeps tracking up instead of stalling or, worse, still falling behind. Sweden says if you are the low-income-earning partner, we will top up your contribution to a certain amount. It’s not unlimited thousands, but it compensates people for the time they are caring.”

Women in Super would also like to see super paid on parental leave, like other types of leave; the increase in employer contributions to 12% implemented without delay; and those earning $37,000 or less given $1000 until the worker’s super balance reaches $100,000.

Buckley says there’s an underlying structural unfairness in the system, particularly in the way super tax concessions are distributed. “We haven’t even spoken about the tax concessions, which are costing us $32 billion and predicted to get to $40 billion in a number of years,” she says. “That’s a huge amount of money the government is effectively giving up, none of which goes to the lowest-income decile, where we see women predominantly situated. There is money in the system, it just needs the will to do it.”

Currently men receive two-thirds of the tax concessions.