MARIE COLEMAN. Fixing the Women problems: Retirement Incomes, Parental Leave, and the Gender Pay Gap.

Sep 27, 2018

With a statement imminent from Minister for Women Kelly O’Dwyer, Labor has announced modest  changes to improve Paid Parental Leave ( $400 million over the out years) and proposed new measures to diminish the gender pay gap. Both measures should contribute to the position of older women in retirement.  The P.M. says he doesn’t oppose the gender pay gap measures while being concerned that revealing one’s wage to a co-worker could provoke bad feelings (!)

Brendan Coates and Owain Emslie of the Grattan Institute accept that many women in retirement live in poverty, but want a different approach to improving the position of women in retirement to that of Labor ( They would prefer to see more investment now  in housing assistance than improvements to Paid Parental Leave. This is one of the eternal issues: help today or in the future– a crust and gruel now, or a future steak sanger. Hint- Labor might want to check closely that there are no unintended consequences in their detail- no low income women getting just enough additional savings to strip them of Government retirement benefits- so no steak in their sanger.

Elsewhere in The Conversation, ( the link between housing policy, baby boomers, and the falling rates of home ownership are explored By Rachel Ong Viforj, Gavin Woodand Melek Cigdem-Bayram. They point out that “the HILDA Survey reveals rates of home ownership have fallen from 72% in 2001 to 66% in 2016. Younger Australians are finding it more difficult to become owner-occupiers, and growing numbers of Australians are dropping out of home-ownerships. Estimates from the ABS Surveys of Income and Housing show that from 1982 to 2013 the home ownership rate fell 7.3 percentage points among the 45-54 age group. It fell by 5.1 percentage points for the 55-64 age group.”….” The divide is especially stark if the home ownership rate falls by 15 percentage points. In this scenario, 27.4% of people aged 55 and over will be private renters by 2031.”

There is no doubt that housing insecurity is an immense issue for many women reaching retirement age (as it is for many young people). Housing policy is something of a shambles. Insufficient investment by Commonwealth and State Governments in appropriate public housing means that sole parents, people with disabilities, general low income households and the ages are all competing for access to ageing housing infrastructure, most of which is ill-designed for the needs of those for affordable, accessible design.

Inadequate attention to policy for the commercial rental market means that Government housing assistance payments are more likely to be absorbed by the private owners increasing rents rather than stimulating more investment in affordable private rental properties.

Labor’s proposal to phase out the $450 a month earnings threshold for employer superannuation contributions should over time significantly increase the retirement outcomes of  part-time earners, the majority of whom are women, and multiple job holders.

The matter of improvement to paid parental leave is related to many concerns beyond improving women’s position in retirement.

Parental leave is a benefit to both the parent and to the infant. Policies need to support healthy pregnancies, opportunity for infant-parent bonding, breast feeding, potentially up to 24 weeks duration. Australia’s Government scheme is fairly minimal by international standards -and the rate certainly not near the ILO Convention 183, which recommends payment at two thirds of previous wage. Labor’s proposals to introduce superannuation payments on paid parental leave are a good start, but there is more to be done about improving parental leave policies, not viewed solely in the light of a modest improvement to retirement savings.

Labor’s proposals on reducing the gender wage gap are likely far more significant in potential to impact retirement savings.

There is more policy work  to be done by both parties on family friendly working time arrangements that carry no implicit or explicit workplace penalties.  Women typically take time out from working to raise children, returning often part-time…this impacts retirement savings as does time out to care for aging family members. Without a rebalancing of male and female roles these disadvantages will continue to adversely impact women’s savings.

However, consider the fact that while employment is looking up, a huge proportion of the recent jobs created are through Federal Government investments in the care industries- child care, aged care, disability care. Women make up the biggest proportion of employees in these sectors. And wages are deplorably low. The newly announced Royal Commission into Aged Care is inevitably going to find that care in residential settings is compromised by high staff turnover, low wages and poor training. If any Government wants to improve women’s retirement incomes it will need to accept that the very low wages in the care sectors– where Government subsidy level is the price putter–will ineluctably result in low retirement savings. Should Government increase its wages contributions or worry about supplementing future retirement incomes ( gruel today or bread and gruel tomorrow)?

Housing policy does need a thorough shake up, especially in developing new approaches to private renters. Better in my view to address the housing problem through housing policy, and continue to take appropriate steps to improve paid parental leave, reduce the inappropriate gender wage gap for equivalent work , develop family friendly workplaces, improve child care…and address low incomes in government funded service sectors.

That’s going to involve a lot of dollars? Priorities?   Maybe start with increasing Newstart- that’ll lift lots of women, men and children out of actual right now in your face poverty.

Who knows what Minister O’Dwyer will announce?    BUT please Minister, include a Time Use Survey- at least we can have better data to enable policy to be refined on the balance of parental responsibilities.

Marie Coleman AO. PSM. DUniv. Is a retired Commonwealth public servant and statutory office-holder, and currently Chairs the Social Policy Committee of the National Foundation for Australian Women, which produces the annual Gender Lens on the Commonwealth Budget.

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