Deanne Stewart, chief executive of Aware Super has said she wouldn’t go as far as to say the budget had been an exercise in pinkwashing, but she does believe the government had failed to delve far enough into women’s issues.
“I do think they are beginning to face into and have listened to things like whether it be a first step on childcare, domestic violence, things on the superannuation side, for example, that $450 threshold that stopped so many women that were working casual or part time from getting any superannuation. So, elements like that, I think, have been a really positive step in the budget,” Ms Stewart said, in a media roundtable on Thursday.
“I think the key word… is, are they meaningful to structural difference? I would say that they are really good, but they’re probably an inch deep versus a mile deep to really solve some of these issues.”
The government had declared a number of reforms for superannuation, including the removal of the $450 monthly threshold, which required workers to earn a minimum of $450 in a month before their employer was obliged to pay super contributions.
The scrap was the government’s answer to the problem of the gender retirement gap, with Treasurer Josh Frydenberg stating the move will help almost 200,000 women.
Grattan Institute has estimated the change will see individuals gain around $100 a year in retirement. Nicki Hutley, an independent economist and adviser to Social Outcomes commented axing the threshold is a “step, but it’s a tiny, tiny, tiny step”.
“We need to be doing more to actually say, how do we get women to support themselves more?” Ms Hutley said.
“What are some of the initiatives if women are going to go down the path of being the primary carer and taking time out? Then how do we give them the opportunity to maybe put more into super, before they do that?”
While Aware Super supported cutting the $450 threshold, Ms Stewart agreed that it was “ultimately a drop in the ocean”.
“I think we were really hoping that there would be superannuation paid on parental leave,” she said.
“Both parental leave for male and female and then paying superannuation on that.”
Other changes are needed to close the superannuation divide, including addressing the pay gap and childcare affordability, Ms Stewart said. Suggestions included requiring companies to disclose their gender pay gap for each business unit and each level.
Childcare was another such issue where the government took a first step, but needed to go further, the CEO commented.
“There was clearly a need for childcare… that would have a structural change to productivity to so many families’ lives. And certainly, it was a good step forward, but it didn’t really solve the broader issue of childcare,” Ms Stewart said.
“So that’s a good example for me where they could have gone a lot further.”
Gender inequality embedded across the workforce and in the pay gap is costing Australia’s economy, Ms Hutley added.
She noted a report from Equity Economics, which estimated that using free childcare to match women’s participation rates in the workforce to those of men would raise GDP by around $353 billion a year, adding nearly 8 per cent to GDP over two decades.
The recent childcare package from the federal budget, which will cost $1.7 billion over four years, is projected to produce an additional $1.5 billion in GDP each year under the government’s modelling.
“So your return on investment is a no-brainer,” Ms Hutley said.
“I think there’s a problem with a lot of our policies and government, is we look at the upfront cost without looking at the lifetime benefits of the program. And yes, it’s hard to justify spending money now.
“But if you can put it into forward estimates, look at all these savings that we’re recouping, then why wouldn’t you do it? You get better economic outcomes and better individual social outcomes.”
Productivity losses can arise from other workforce participation roadblocks, Ms Hutley said, with women being more likely to work part-time and from them not having access to childcare and flexible working arrangements once they start having children.
Further, older women are the fastest-growing group exposed to homelessness, which can add to the current costs associated with the issue of homelessness and health outcomes.
“We have to do something to support them and the budget did nothing,” Ms Stewart said.
The CEO revealed she received a letter from a single female member in her 60s, who did not have extra money for her super or retirement.
“The issue is having a roof over their head for the long-term,” Ms Stewart commented.
“And how do you actually do more around things like housing affordability, build-to-rent, where you can actually have a 10-year lease or a 20-year lease that’s actually below market rates, for example. These are the sorts of things we need for that particular demographic together with rental assistance.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].