By Peter Lynch, Campaign director
In the lead up to the federal election, industry super fund, HESTA, which represents 900,000 Australians – the majority of whom are women – has added its voice to the bid to make the superannuation system fairer for Australian women.
The giant fund is calling on the government, in their first 100 days, to prioritise paying superannuation on parental leave. They also want the government to introduce a carer’s credit for unpaid parental leave and universally affordable and accessible childcare.
This would mean that anyone receiving the Commonwealth Parental Leave Pay would receive superannuation on that payment and would make a difference is bridging the gap in women’s retirement savings
Hesta has been fighting to win women a fairer super deal since 1987, including retirement payments on parental leave. It plans to continue its efforts through the coming election campaign.
Hesta’s move comes as the total number of super fund members now backing the SupaWomen campaign through their funds totalled 5 million. Almost 7,000 have tuned into our podcast
At the Improving Financial Security for Older Women roundtable, which was attended by Senator Ms Jane Hume, Minister for Women’s Economic Security and Minister for Superannuation, and leading leading women’s, community and business organisations, HESTA CEO Ms Debby Blakey said: “An incoming Government needs to prioritise long-overdue superannuation equity measures and boost women’s workforce participation through improved access to affordable childcare.
“Addressing gender inequity will not only create a better society but has real economic benefits that can help investors like HESTA deliver better outcomes for their members.”
During her address she acknowledged that the government had made significant steps to reduce inequality in the superannuation scheme by abolishing the $450 income threshold but called on the government to take more steps to improve the financial security of women, particularly future generations.
Ms Blakey wants the government to commit to closing the gender superannuation gap by 2030.
At present women retire with 22-35% lower superannuation balances than men according to research from KPMG.
Ms Blakey said the reason for this was that women have lower workforce participation rates and these inequities create a problem for Australia’s economic potential.
She said that it’s time for Australian women to stop being penalised for taking on caring and family responsibilities and that they make a huge contribution to Australia’s society through unpaid work.
Currently, 93.5% of carer’s leave is taken by women.
HESTA research shows that women have a 28.2% lower workforce participation rate when a child is 0-5 years old and 12.2% lower when the youngest child is 6-14 years.
Ms Blakey says: “Modelling shows that paying superannuation on the Commonwealth parental scheme would give a mother of two $14,000 more super at retirement which could be life-changing for low and middle-income earners.”
ASFA modelling shows that a significant percentage of lost savings and earnings power could be neutralised for a woman earning $80,000 and eliminated for a woman earning $60,000 if the government made a superannuation guarantee on paid parental leave and a super baby bonus of $5,000 for each child that is born or adopted in Australia.
Ms Blakey says there is huge potential waiting to be uncovered during the pandemic recovery.
“We have an opportunity, as Australia starts to recover from the pandemic, to create a better normal. Taking substantive action now to address these persisting inequalities will make for a fairer Australia but will also boost productivity and economic growth, which benefits everyone.”
At present, women have lower workforce participation rates and earn on average 14.2% less than men.