The way men and women relate to one another has changed over the years, but our social, economic and political systems haven’t kept pace, as a result true gender equality has proved to be elusive.
The economic security of women in retirement is important and action needs to be taken to protect it.
I believe that it’s time for us re-examine our existing systems and introduce change that will give both men and women equal opportunities for success.
This year ANZ released a report Barriers to achieving financial gender equity that examines the financial lifecycle of Australians. The report acknowledges that enormous improvements have been made to the workplace, legal and social systems that have previously restricted the role of women in the economy. However, many inequalities of the past remain.
The report follows the economic journey of Australian women from school to retirement and tells us there are three key barriers to achieve true financial equity:
- Fields of study, career choices and their relationship with the gender pay gap
Women are over-represented in lower-paid sectors of the economy, which has implications for their financial security, independence and vulnerability. The inter-relationship between occupation and pay-gap is hard to ignore and goes to the heart of financial gender inequity in Australia.
- Gendered nature of caring responsibilities
Men spend more time in the paid workforce while women spend more time in unpaid work. For women who remain out of the paid workforce, the disadvantages they incur significantly jeopardise their ability to recover earnings over the long term and their ability to prepare for retirement.
- Discrimination and structural bias
The single most important reason women in Australia continue to earn less than men is because of their gender. The pay gap begins as soon as they enter the workforce, at 4 per cent, and widens in senior leadership positions. Discrimination still exists for mothers and carers and against both women and men who take parental leave or seek flexible work arrangements.
These factors combine to prevent women from growing their superannuation savings in the same way as men – which means they retire with around half as much.
Around 90 per cent of Australian women have inadequate savings in retirement, and it is forecast that at every decade of life women will significantly outlive what they have saved in super. This will add strain on the public pension system.
Currently eighty per cent of retired Australians are on full- or part-pension, costing taxpayers 44 billion dollars a year.
If we can reduce the percentage of Australians relying on the Age Pension this would save billions of dollars of public spending. This can be achieved, in part, by addressing the superannuation gender gap.
If we’re going to get serious about addressing the retirement savings gap for women we need to tackle the cultural norms which continue to drive these outcomes.
By creating conditions that allow both women and men to succeed we can remove those barriers that stop women from retiring with adequate savings.
The five measures that I believe will help address this are:
- Allowing couples to have a single superannuation account
- Extending the government-funded Low Income Superannuation Contribution past 2017
- Giving employees the right to salary sacrifice into superannuation to encourage voluntary savings
- Removing the super guarantee contributions threshold
- Amending the Sex Discrimination Act to clearly allow employers to pay additional superannuation contributions to their female employees.
Collectively, these five measures could make the superannuation system more relevant to women’s lives and improve their financial security. It is by no means an exhaustive list and not intended to solve the underlying behavioural and cultural biases relating to gender roles, but they are guided by a desire to create a retirement saving system that is simple, fair and progressive.
I recognise that the economic security of women is a complex matter, but we need to take a holistic and analytical approach to ensure the retirement incomes framework– and the systems that support them – are designed for both men and women to succeed for an #equalfuture