Report into women's economic equality and security ignored by government

Four years ago the report on securing economic security for women in retirement was published by the Senate Economics Reference Committee. The main findings were that men and women experience work differently, with women more likely to be in lower-paid roles and industries, to leave the workforce to care for children or parents, and have periods of part-time or casual work. Women are also paid less than men for the same work.

There were 19 recommendations made in the report, most of which have been ignored by the government.

The Retirement Income Review examined the issue and made a summary of its findings in the Equity pages of the report, confirming the biggest contributor to the retirement income gap was total earnings across someone’s working life. The current gap is about 17 per cent for full-time workers, but 33 per cent if we include all part-time workers.

The Age Pension equalises the gap, reducing the average annual income gap between men and women to less than 10 per cent for income in retirement, though the report says this is more alleviating poverty than having people in a comfortable retirement.

Single women (separated or divorced) and those renting in retirement have much worse retirement outcomes than other Australians. As time marches on for each of us, more women survive, with those renting at risk of poverty.

The most efficient way to close the retirement gender gap is to increase the Age Pension and rental assistance, however, this will be costly. Other options include increasing the Superannuation Guarantee (SG) to full-time carers (with the minimum wage as a possible proxy). Means testing could ensure suitable targeting.

Many younger women benefit from the SG and will be self-sufficient in retirement, with home-ownership increasing security in retirement. Utilising home equity in retirement would increase comfort.

The root cause of the gender gap in retirement is not the superannuation system itself, it is the structural issue of lifetime earnings inequality. Superannuation, however, can help address the problems by increasing efforts to increase female wages relative to males and to set aside enough for retirement, while also increasing women’s contributions to superannuation.

Options for the latter include paying the SG while a parent is on parental leave, ideally for longer than the statutory 18 weeks, with employers and government sharing the cost, while also paying additional SG contributions for younger women, say another two per cent, up to the age of 30, to increase overall savings by retirement.

Anyone falling behind can be supported with social housing and/or rent assistance top-ups.