Jenny McAllister (NSW, Australian Labor Party) Share this | Hansard source

When Australia came into being as a nation, it was known as a real bed for social innovation. Australia was the place where we pursued a living wage and where we were able to establish a community in which everybody had what they needed. A core part of the origins of our nation was the pursuit of a secure income in retirement and so the pension was one of the very earliest elements of the Australian social wage. It came into play in the early decades of the Australian federation. I was fascinated to find that, when the pension was first introduced, women were able to access it and so from the very beginning the idea that both women and men deserved a secure retirement was built in. I suppose that is my focus, but I am concerned about the overall systemic integrity of our superannuation system. My interest in the last year or year and a half in this place has been to ensure that system works for all Australians—and not just men but women as well.

Much of what I want to contribute this morning relates to the ways in which this bill does or does not deliver a fair retirement outcome for women. For many Australians their superannuation account is the single largest asset that they will have outside their home. Superannuation represents an enormous component of Australians' savings. For those who do not own a home at all their superannuation might be the only real form of savings that they have. In this way it is incredibly important that the system is trusted and is perceived to be fair. It is also important for Australia in a macro-economic sense. There are now over $2.1 trillion in assets under management by superannuation funds, which represents an enormous source of financial stability for Australia, but again it underlines the significance of having a system that has integrity and is perceived to be fair.

I started by talking about the age pension but the development that happens with superannuation is that it comes in as a supplement to the age pension. It is not intended to replace the age pension; it is there to make sure that as many Australians as possible and enjoy a comfortable retirement when they come to the end of their working life. Superannuation is a Labor innovation and it is an innovation that we are very proud of. Again I say for us on this side of the chamber, the integrity of that system is enormously important.

Of course, the problem I have alluded to as I began is that this system at the moment really is not working for women and does not work for some other low-income earners either. We held an inquiry into the economic security for women in retirement, and the trigger there is the vast disparity between men and women's superannuation but the problems extend well beyond that. Women have half the superannuation of men on average when they retire. That is quite a shocking statistic. I think people are aware of the gender pay gap which sits somewhere between 16 and 19 per cent, and that has been fairly static for about 20 years. If we have a gap in pay, then we have a chasm in superannuation. That has real consequences. More than half of all retired women have an income that is less than $30,000 a year and there are more single women over 60 living in poverty than any other category in Australia. What was uncovered during the inquiry into the experience of women in retirement is that this has very real human consequences. We had many women come and tell their stories; and many other women have told their stories to me privately outside the process of the inquiry. We hear stories about people getting rid of their pet because they could not afford to keep a dog. You can imagine that is a very cruel circumstance for somebody who is living a very modest life having to let go of that source of comfort. I have heard stories anecdotally of people in Victoria who turn off their hot water in summer and only put it back on when it starts to get cold again, in an effort to save money.

There are women acknowledging that, if their husband leaves them, they are stuffed, that they are tied financially into their marriage and that the prospect of poverty is a real disincentive for them. In the context where we are absolutely concerned to see women safe and secure in the relationships that they are in, I think that level of financial insecurity for older women ought to be something that we are very, very concerned about.

There are many, many such stories. We ought to be thinking very carefully about what it means to be an older woman who has retired, because the stories that we heard are heartbreaking. My concern is that there is very little on the table from the government at the moment to address this problem.

The reasons for it are quite complex, and they are not simple to address. Nobody comes to this chamber and says, 'Oh, we could fix it overnight, if only we would do this one thing.' In fact, when we undertook our inquiry, we made 19 recommendations. They spread across a very broad range of policy areas. But, at the root of it, the reason that women find themselves in this predicament, with half the superannuation balance of men, overwhelmingly reliant on the age pension in retirement, is partly that women take breaks in their career for caring responsibilities. It is women stepping out of the workforce to look after children, to look after parents, to look after people with a disability. And we know from the work done by the Humans Rights Commission that women overwhelmingly bear the caring responsibilities in this society.

It is also true that the reason women have less superannuation than men is that they are concentrated in low-paying jobs. In fact, women are significantly more likely to be in the bottom two quintiles of income earners. I will come back to tax arrangements shortly, but it means that when we are thinking about tax arrangements, when we are thinking about the rate of tax paid by the most wealthy and the poorest in our society, we must think about gender as well, because women and men in their access to income and their access to wealth are not equal. Women and men have very different economic lives and very different economic experiences. When we are thinking about how we construct a tax system for retirement savings—or for anything else, for that matter—we ought to be paying attention to the very specific impacts that these measures might have on Australian women.

My concern is that that is not the approach that the government have taken in assembling this package. The government have said—they have asserted publicly—that this is a package that helps women and low-income earners. That is their public view. The Assistant Treasurer, for instance, made a point of this in a media release that she put out earlier this month. She said:

Our changes will help women, who may have taken time out of the workforce to raise children or to care for a family member.

But unfortunately I do not believe that that is borne out when you look at the details of this package.

Let us start with the changes to the tax arrangements for high-income earners. Now, I do congratulate the government for taking some action on this. Our super system should not be a tax avoidance system or an estate management tool. But the changes simply do not go far enough. The annual non-concessional cap should be lower. It should be $70,000, not $100,000. It makes a great deal of difference to fairness and, as my colleague Senator Gallagher pointed out, it makes a great deal of difference to the budget bottom line. Similarly, the higher contribution tax for people on very high incomes really should cut in much sooner than $250,000 a year.

It is true that changes to high-income arrangements will certainly go some way to making the system fairer. They will go some way to redressing the situation where the current distribution of tax concessions sees them go two to one to men and women. That is the situation at the moment. Of the tax concessions that are made available under the current arrangements, they overwhelmingly go to men. This package starts to deal with that problem, but it really does not go far enough.

On the second measure, the catch-up concessional superannuation contributions, the government claims that this measure will help women by allowing them to make additional tax-free super contributions when they are working, to make up for the period of time spent out of work. The problem is that most women are not earning enough to contribute an amount capable of making a difference. It is difficult to find extra money to put into your super when, like so many women, after a career break to care for a child or to care for a parent, you probably return to work part time. You probably return to work in a job that is not particularly highly paid. You are probably earning less than the average wage. The idea that a catch-up concessional contribution of, say, $25,000 might be in range for a woman who is returning to work after a period out of the work force for care is simply ludicrous. That is not the experience of ordinary Australian women; it is really not possible to argue that a measure of this kind will assist. Industry Super Australia estimates that this measure will help less than two per cent of women who have superannuation accounts, and it will mostly help people with super balances over $600,000.

The government proposes to improve superannuation balances of low-income spouses by allowing people, by allowing men, to put money into their partner's accounts. The government claims that this measure will help women by providing a tax incentive for more men to make contributions to their partner's super accounts. This proposal says quite a lot about the Liberals' view of gender relations, but it does not do a lot for women who cannot, or do not want to, rely on a partner for their economic security. Indeed, the title of the report produced by the Senate committee was A husband is not a retirement plan. Australian women crave economic independence. Economic independence is a pathway for a broader kind of independence, a broader autonomy for more choices. We all understand that—those are the messages we send our children and that is the approach that we ought to be taking when we are trying to construct reasonable retirement incomes, comfortable retirement outcomes, for Australian women.

The low-income superannuation tax offset is probably the only measure in this package that will have a real impact on the retirement gender gap. Of course, it is essentially a renamed version of a Labor policy that the government has been trying to cut for the last three years. It used to be called the low-income superannuation contribution. This is a program that made sure people earning less than $37, 000 a year did not have to pay more tax on their super than they did on their ordinary wages. The people who have been helped by this program are honest people, working honest jobs. They are teacher's aides, they are security guards, they are cleaners, they are shop assistants—and, for the most part, they are women. This is a measure that overwhelmingly has been accessed by women, and it was extremely important as an element in a package to try to address the gap in women's super. It is quite remarkable that at any point in this process the government sought to remove that measure, which overwhelmingly benefited low-income women.

I am pleased see that the low-income superannuation contribution has been retained, albeit with a new name, and I pay tribute to those people in the community who have fought for this—the superannuation funds, women in super, the women's groups who campaigned so hard. It is quite hard to run a campaign about tax—tax is complex, super is complex. You want to go out and have a public discussion about it and it is very hard to communicate what the implications are of a proposal of this kind. But the women's groups and the super groups went out there and made the case, and they did a very good job. They drew to people's attention that this proposal to remove the low-income superannuation contribution would have real consequences for women, was grossly unfair and represented yet another attack on low-income Australians which really ought not to have been supported.

In the context of a package that is spruiked by the government as supporting women I think it is of real concern that the only measure that really addresses the inequity facing women is a Labor policy. There has not been much creativity on the other side of the chamber in terms of what could be done to address this problem. We do not see very much in this package—we do not see a real attempt to address this glaring inadequacy in the super arrangements. The only measure that really goes anywhere near it is the LISTO, and that is a Labor policy that the government was dragged to kicking and screaming. It is a policy that they did not want to implement but were forced to do so by an excellent community campaign and because, as the conversation wore on, as the community and indeed Labor started talking about the fairness of super, it became clear that cutting the LISC would not be tenable, would not be perceived as fair and was completely unacceptable.

I am pleased that we are having a debate. I am pleased to see a package brought into this chamber so that we can start discussing it. As I said, it is hard to talk about tax and it is hard to talk about super, but it is absolutely critical that we do. We have built a system where Australians can expect a comfortable retirement and we have built that over many decades—in fact, over a century. But that job is never complete and we need to make sure, particularly as the superannuation system matures, that it is fair. It is important that we are able to keep talking about this. There is a lot that could be done to improve the package. Labor colleagues will be moving amendments later in the chamber.

I want to say, though, that whenever we are talking about super we need to think about it in the broader context of retirement income. There is sometimes a temptation to talk about super and super alone. Because of the vast sums of money involved it is very tempting, especially for the professionals involved in it. But we need to remember that super is a component in a broader retirement system that imagines a pension and superannuation, and that is the reality for most Australians. Most Australians are not in a position to save the amount of money that will sustain them independently in retirement. Most Australians rely in some part on the age pension. So, whenever we are talking about retirement incomes, we ought to also think about the age pension and make sure that it is not whittled away, make sure that the amount is enough to keep people comfortable and start to think about what it means for all the single women living on the age pension who do it so tough and whose heartbreaking stories were told to our committee.

We do not want to see the age pension whittled away. We do not want to see the coverage of the age pension whittled away. We do not want to see changes, as were proposed by the government earlier in its life, to the way that we index the pension so that it does not, in fact, keep pace with the cost of living. These are all things that this chamber ought to be concerned about because a comfortable retirement, a retirement that is dignified and a retirement that does not see people living in poverty was an objective in the foundations of the Australian Federation. It is something that we all ought to be deeply committed to. My concern in this debate about superannuation and in future debates about superannuation, the pension and retirement more generally, we are very careful to keep our eye on the impacts that any changes will have on Australian women.