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Target tax breaks to women
The better targeting of superannuation tax breaks sits at the core of helping women close the gap on retirement incomes adequacy, according to the Grattan Institute.
In a submission to the Senate Economics Committee inquiry into Economic Security for Women in Retirement filed just before the Christmas break, the Grattan Institute has made clear that the tax concessions currently favour mostly male higher income earners who least need them.
It cited two policy measures that might be pursued by the Government — the better targeting of super tax breaks and the better targeting of the Age Pension for retirees who do not own their own home.
"…. better targeting super tax breaks to the purposes of superannuation would reduce the gender gap in superannuation savings," the submission said citing a recent Grattan institute research that showed "super tax breaks provide the greatest boost to high-income earners that don't need them".
"Most of these high income earners are men," it said.
"Better targeting of super tax breaks could free up revenue to provide more targeted support for retirement incomes for those that need it most, and to reduce marginal effective tax rates for low- and middle-income earners to encourage greater female workforce participation."
The submission said the second policy initiative that could be pursued was a targeted boost to the Age Pension for retirees that do not own their own home, possibly delivered as higher Commonwealth Rent Assistance.
It said this would do the most to alleviate poverty in retirement.
"Single women who are retired and do not own their own homes are the group most likely to rely almost solely on the Age Pension, and are at the greatest risk of experiencing poverty in retirement," the submission said.
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