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Women and Superannuation

The next instalment of EMILY's Journal, our new platform for long-form pieces by EMILY's List members is Sonja Terpstra MP's thoughts on women and superannuation written for IWD2020:

A necessary blog for International Women’s Day 2020 after reading an excellent article in the Sydney Morning Herald by Eva Cox, titled: “Have women been fighting for the wrong thing all along?” I’m a big fan.  Whilst #IWD2020 will be a celebration of and by many women and women’s groups, there is an elephant in the room.  Have we made progress? 

There are many different aspects to equality, but this post will focus on women’s access to income and in particular – superannuation.   Women over the age of 50 are the fastest growing cohort of people experiencing homelessness.  They don’t have enough superannuation to see them into their retirement – let alone to live a comfortable one. 

Our superannuation system is outdated and structurally unfair.  In 1974, only 32% of the workforce had access to superannuation and most of them were men.  Fast forward to 1990 and super coverage had risen to 64%.  The industrial landscape was lacking in the diversity that it has today.   It didn’t take into account the need for women to work flexible hours or take maternity leave, or parental leave as it is now known.   And most people are aware that when parental leave is taken no superannuation contributions are paid – at all.  Neither does unpaid maternity leave or parental leave count for service.  It doesn’t break continuity of service, but it slowed down your progress towards gaining access to things like long service leave for example. I am, however, happy to say that the Andrews Labor Government’s 2018 Victorian Long Service Leave Act now provides for long service leave to accrue during parental leave.  As far as I am aware, Victoria is the only state in Australia to recognise this.

Some unions fought for and won paid maternity/parental leave schemes to be included in awards and agreements.  But again, no super was paid on it.  Years ago, I am  proud to say that I was part of the campaign to include paid maternity leave in the Local Government Award in NSW.  This campaign saw a paid maternity leave scheme be included in the Local Government State Award in 2001 for the first time that gave access to paid leave at either half or full pay.  This scheme was also available to casual workers who worked on a systematic basis and could be used with other forms of paid leave.  It was the first award outside of the public service in NSW to include such conditions.  But in hindsight, it still wasn’t enough. 

It has been a long time between drinks when you think about the introduction of our superannuation system in Australia to assist workers with retirement savings and the introduction of a government funded paid parental  leave scheme in 2011!  And yet employers are still not required to make superannuation contributions on paid parental leave.

Fundamental to working towards a resolution of this issue is that Federal Governments must recognise the value of care to our economy and place a value on care.  An Access Economics Study in 2010 estimated the value of care to be more than $40billion per year to the Australian economy – and that excluded caring for young children. 

Ten years ago the Henry Tax Review put forward a proposal, which was developed in a report by the Australian Human Rights Commission in 2014 titled Recognising and Valuing Unpaid Care.  The idea was that rather than taxing super contribution on deposit, that those contributions would be taxed at the marginal tax rate on income at the top end. Then, at the end of the financial year, a tax offset at a flat rate of 20%, would be received to encourage savings.  In other words, those at the top of the scale would pay 25% tax on their super contributions, freeing up revenue to fund super contributions for carers.

It was proposed that carers who are out of the workforce would receive an annual government payment into their super accounts of 9.5% rising to 12% of the minimum wage. If they entered the workforce the “carer credit” would fall to zero as their own super contributions increased to 9.5% (rising to 12%) of the minimum wage, so they would not be worse off if they return to work. 

Other countries around the world have introduced this scheme or a similar scheme known as universal credits.  The UK introduced Carer Credits in 2010.

And yet, here we are in 2020, and this idea has progressed no further. If only I could see 15,000 emails in my inbox from people on this issue.  I have to say I’m dismayed that I haven’t.  Yet on duck shooting, that is exactly what I have received.

How much longer do women have to wait until they can have income equality and not have to worry about what retirement might look like for them?

So on this International Women’s Day 2020, it’s a call to arms for the continued agitation for equality for women.  It’s necessary.  It’s important.  And equality makes things better for everyone.  By reducing gendered barriers, we can ensure a much more equal society.  We can reduce violence against women and work towards the removal of gendered barriers and stereotypes – for everyone.


Read more of Sonja Terpstra MP's writings at her blog over here

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