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System failing women: Government urged to cut contribution taxes
Australia’s superannuation system is continuing to fail women, with the latest SuperPartners Newspoll survey revealing women are 60 per cent more likely to rely on the aged pension as their main source of retirement income.
The survey results, released just a week out from the Federal Budget, provided an opportunity for chief executive to call on the Government to give serious consideration to removing the 15 per cent contribution tax applying to female employee superannuation savings.
Gullone said removal of the 15 per cent tax applying to women would act to compensate them for a lifetime of lower earnings and lower retirement savings.
“The Newspoll survey has revealed the plight of women in the workforce, who earn, on average, just 84 per cent of the male wage for the same job and who are, for the most part, denied employer superannuation contributions in the early years of their working life and during childbearing years,” he said.
Gullone said that while had made it clear the Government would not be removing the 15 per cent contributions tax from all superannuation, it was not unreasonable for him to consider removing it with respect to women.
“This would have less of an impact on Treasury and would redress the imbalance in women’s retirement savings,” he said.
Gullone said the survey had found that:
* women are half as likely as men to expect superannuation to provide all or most of their retirement income (6 per cent versus 12 per cent);
* the incidence of women expecting investments to be the main source of their retirement income is one-third of the number of men (16 per cent versus 24 per cent); and
* 60 per cent more women expect to rely on the aged pension as their main source of retirement income (15 per cent versus 9 per cent).
“The only conclusion from these findings is that the current superannuation regime does not offer women the same level of security as it does men, which has implications for women’s standards of living in retirement by comparison to men,” Gullone said.
He said the findings reflected the broken working patterns, predominance of casual and part-time work and generally lower salary levels experienced by women.
“This can be seen to challenge the effectiveness of the current superannuation system for providing women with financial security and its accompanying dignity in their old age,” Gullone said.
“Recent measures such as ‘spouse splitting’, which only seem to benefit high income families and are not applicable to unmarried women, do not address this gender inequality,” Gullone said.
“The fairest and most administratively simple method by which the Federal Government could address this gender inequality in retirement savings would be to remove the 15 per cent contributions tax on women’s superannuation,” he said.
This measure would be relatively simple to administer by both funds and the tax office,” he said.
AUTHOR
Mike Taylor
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