The Budget has increased women’s savings by billions by not messing with the legislated women’s super increase and mandating that super is paid to all part-time workers. But in a post Mother’s Day sting the government has refused to pay super on Commonwealth paid parental leave – more than 90% of which would be paid to women.
Women retire with a third less super than men, a big driver is the time women take out of the paid workforce for unpaid caring – if the government was serious about closing the gender super gap they would get super paid on every dollar earnt, including parental leave.
The Super Guarantee rate will lift to 12% by 2025 as legislated – the increases will allow millions more families to save enough for retirement than if the rate was frozen at 9.5%.
Women on low to middle-incomes will get the super rate increase in the greatest numbers so lifting the rate is also an important step to bridging the gender savings gap. The $85,000 savings boost the typical 30-year-old woman will get from the super rate increase is an important step to ensure fewer women face economic insecurity at retirement.
The Super Guarantee will not only lift Australia’s retirement savings it will provide billions in additional investment to grow the Australian economy, creating jobs and higher wages.
Abolishing the outdated $450 threshold, which means super was not paid if you earned less than that figure a month, will see 200,000 lower-income women savings get a much-needed rise.
Further help for women needed
To further help women the government should also move the Low-Income Superannuation Tax Offset (LISTO) so it better aligns with the income tax brackets, a tax cut that would benefit more than 700,000 women on low incomes.
Other super Budget measures to allow first home buyers to contribute more voluntary super contributions towards a deposit will make no difference to housing affordability, it could lead to higher property prices. Increasing the amount retirees can contribute to their super after downsizing their home needs to be examined in further detail, with wealthy self-funded retirees most likely to benefit.
Boosting housing supply, winding back property investor tax incentives and removing stamp duty taxes are better ways to tackle housing affordability. Industry Super Australia would take strong action to protect members interests if the government moved to change laws to enable super to be used for house deposits, which evidence shows would inflate property prices, leave retirees worse off and tax payers slugged.