Vic Government Calls For Super Changes To Help Women’s Retirement Balances
Proposals to help those on parental leave and casual workers.
Women such as Monica Harte are why the Victorian government is pushing for reforms to Australia's "outdated" superannuation system.
The government wants workers to eventually be paid super at 15 per cent.
As the 62-year-old casual community services worker approaches retirement age, Ms Harte's superannuation balance and the life she might have when she steps back from work weigh on her mind.
"It's a very foreboding thought," she told reporters in Melbourne on Wednesday.
"Every dollar makes a difference.... To think it doesn't is a lot of arrogance."
32 per cent of Australian women have zero superannuation, and figures from the 2015-16 financial year showed that women retired with an average super balance of $157,050, while the average super balance for retiring men was $270,710, a "superannuation gap" of 42 per cent.
In a submission to the federal government's inquiry into retirement incomes, the Andrews government argues that under Australia's "outdated" superannuation system, women are penalised for taking time out of the workforce to have children, as they do not earn super on the Commonwealth's paid parental leave scheme.
The Victorian government wants to see superannuation paid to couples who access the Commonwealth paid parental leave scheme and for super funds to stop charging fees to members on parental leave.
Other recommendations include joint superannuation accounts for couples, including same-sex couples, and changes to the Sex Discrimination Act to allow employers to offer higher superannuation payments for female employees.
The submission also suggests carers on Commonwealth payments be paid super and the $450 monthly earnings threshold be scrapped as it "disadvantages part-time or casual workers who work more than one job".
The federal government is holding the first major review of the retirement savings system in 30 years ahead of scheduled rises in the superannuation guarantee in 2021 and 2025.
This schedule was already delayed several years by former treasurer Joe Hockey from an original proposal by Labor.
The Victorian government’s submission asks for no delay to a planned requirement that businesses pay 12 per cent superannuation from 2025. It also wants a pathway for super to be lifted to 15 per cent.
Victorian Treasurer Tim Pallas disagrees that increasing the superannuation guarantee could put undue pressure on businesses.
"Anybody who says this is just an impost on business needs to be very clear that if these payments are not made in the time frames they were committed to by legislation, then we will see of course increasing pressure on the welfare system as we create a higher level of, essentially, the retired poor," he told reporters.
He also argues there is no correlation between businesses paying more super and slower wage growth.
If the federal government does not honour its legislated commitment to a 12 per cent superannuation guarantee, the Victorian government will discuss the benchmark with its own public servants.
"Make no mistake, we're serious about this," Mr Pallas said.
But the Community and Public Sector Union today said that the government had knocked back such an increase for its own employees.
"We asked for an increase in super to 12 per cent over the life of the next agreement but the request was rejected outright," union secretary Karen Batt told The Age.
"The government of hyperbole and hubris just shows the disconnect inside."
Mr Pallas responded that it was the Commonwealth’s responsibility for legislating around superannuation.