The Retirement Income Review panel’s report clearly shows the need to address the significant gender-blind spot at the heart of Australia’s superannuation system.
HESTA CEO Debby Blakey welcomed the release of the Review and its findings that our super system is ‘effective, sound and sustainable’ and is making a significant contribution to lowering future Age Pension costs.
Ms Blakey said the Review is the latest in a long line of reports that have shone a spotlight on the persisting gender inequalities in Australia’s superannuation system.
“Urgent reform to make our super system fairer for women is long overdue,” Ms Blakey said.
“Australia’s working women would be dismayed if the Government did not now take substantial steps to address these long-standing issues, given they now have this latest evidence at their fingertips.”
Ms Blakey said she welcomed the findings of the Retirement Income Review that noted pension systems around the world recognised the different working patterns of women and sought to appropriately value the unpaid caring roles they uniquely perform.
“Australia is out of step with this global trend, leaving women more vulnerable to poverty later in life. The failure to address long-standing gender inequities in super risks consigning the next generation of Australia’s mothers and their daughters to greater financial vulnerability as they age.”
Ms Blakey said it was hard to understand the panel’s view that lifting the Superannuation Guarantee to 12% would ‘deliver an intolerable equity gap between men and women’.
“The super equity gap women experience has long been intolerable. Telling working women that they should have less to retire on because men would have relatively more super simply highlights how much the thinking needs to change if we’re to improve women’s financial outcomes.”
In its submission to the Review, HESTA recommended eight key equity measures that would have a long-term positive impact on the retirement outcomes of women and those earning lower wages.
These included appropriately valuing unpaid caring roles and Ms Blakey said it was encouraging that the Review found a form of ‘caring credits’ could be implemented but with Australian characteristics.
Ms Blakey said the Review revealed it was also women who were doing the heavy lifting to close the gender super gap, making comparatively more voluntary after-tax contributions than men.
“Women shouldn’t have to make up for the shortcomings of the system – and it’s typically only higher-income earners that are able to do this,” Ms Blakey said.
Single women over the age of 55 are the fastest-growing cohort experiencing homelessness. The Review highlighted the challenges single women face to achieve financial security in retirement, with the increased divorce rate later in life highlighting the need to reform super splitting arrangements. Significant numbers of working Australians also struggle to afford rent let alone use home ownership to support retirement income.
“Reform to our system needs to build on the founding principles of super – of universality, fairness and dignity in retirement for all.”