Speaker 1: Already and this is the Daily os.
Speaker 2: Oh, now it makes sense.
Speaker 3: Good morning and welcome to the Daily Ours. It's Monday,
Speaker 3: the eighth of September.
Speaker 2: I'm Emma Gillespie, I'm Sam Kluski.
Speaker 3: Australian men and women are retiring on average with substantially
Speaker 3: different superannuation balances. Now there's a push in Canberra to
Speaker 3: tackle what's known as the gender super gap.
Speaker 2: Last week, Liberal Senator Jane Hume introduced a bill.
Speaker 3: That would allow couples to split their super without facing
Speaker 3: additional taxes, with the goal of improving financial outcomes for
Speaker 3: women and gender.
Speaker 2: Equity among aging Australians.
Speaker 3: In today's deep Dive, we'll give you a snapshot of
Speaker 3: where Australia's supergap is at and explain everything you need
Speaker 3: to know about this proposed legislation. We'll get into that
Speaker 3: right after a quick message from today's sponsor.
Speaker 1: What an interesting topic to discuss. I feel like superannuation.
Speaker 1: It's one of those things that we know is coming many,
Speaker 1: many decades away for most of us and for most
Speaker 1: of us listening. But the decisions that are made on
Speaker 1: how it works now will really make an impact in
Speaker 1: our later years. So why don't we start right at
Speaker 1: the basics, give me the elevator pitch for superannuation in Australia.
Speaker 3: Yes, So super is money set aside for retirement from
Speaker 3: your pay. Basically, your employer has to make mandatory contributions
Speaker 3: out of your salary. But in most cases this is
Speaker 3: not money that you can just access willy nilly. Most
Speaker 3: of us won't be able to get.
Speaker 2: This money until we turn sixty.
Speaker 3: Every employer in Australia, like I said, is legally required.
Speaker 2: To make super contributions for their staff.
Speaker 3: Case in point, you Sam, as a co founder, you
Speaker 3: would be all over this. The whole system basically is
Speaker 3: designed so that when Ossie's retire we can support ourselves
Speaker 3: without putting too much strain on welfare payments and the
Speaker 3: welfare system so things like the aged pension. But the
Speaker 3: gender gap when it comes to super is significant. So
Speaker 3: in the years approaching retirement age, the gender supergap can
Speaker 3: be anywhere between twenty two and thirty five percent. But
Speaker 3: on average, women in Australia right now are retiring with
Speaker 3: about twenty five percent less super annuation than men, and
Speaker 3: that translates to an estimated fifty two thousand dollars less
Speaker 3: on average for women entering retirement. So the median superbalance
Speaker 3: for men aged sixty to sixty four is over two
Speaker 3: hundred and four thousand dollars, whereas for women in that
Speaker 3: same group it's about one hundred and forty seven thousand dollars.
Speaker 1: That's a pretty significant gap. It's definitely one that surprised
Speaker 1: me when you've rolled out those numbers. Why exactly is
Speaker 1: that gap there?
Speaker 3: Look, there are many reasons and they're all quite interconnected,
Speaker 3: but the biggest factor for Australia's supergap really comes down
Speaker 3: to the fact that women are more likely to take
Speaker 3: time out of the workforce to be the primary care
Speaker 3: for young children. So that can include long stretches that
Speaker 3: are career breaks, that can include maternity leave, and basically
Speaker 3: there's this compounding effect created by that where not only
Speaker 3: women are missing out on super contributions during their time
Speaker 3: away from work, but they're also missing out on the
Speaker 3: investment returns on those contributions over several decades. So there
Speaker 3: are kind of many revenue streams that are impacted by this.
Speaker 1: And the point there is that a dollar now into
Speaker 1: your superannuation account that gets invested by superfund, and that
Speaker 1: dollar probably could be four or five dollars when you retire.
Speaker 2: Exactly, got it.
Speaker 3: Women are also more likely to work part time than men,
Speaker 3: so that impacts their earning power, which impacts their super
Speaker 3: earning power. And they're also more likely to take more
Speaker 3: time out of paid work than men to care for
Speaker 3: elderly relatives. So there is this kind of gender care
Speaker 3: gap as well. But you know, when we're talking super
Speaker 3: pay gaps, it has to come from as well, a
Speaker 3: broader gender pay gap to consider. So, on average, women
Speaker 3: earn nearly twenty three percent less than men and are
Speaker 3: generally underrepresented in management. So women have this pay gap.
Speaker 3: They also have more limits on their opportunities to make
Speaker 3: biggert salaries. And I guess what you need to know
Speaker 3: is that in Australia, for every dollar on average that
Speaker 3: a man makes, women earn seventy eight cents. And since
Speaker 3: SUPER is calculated as a percentage of your salary, lower
Speaker 3: wages mean proportionally smaller SUPER contributions over a working lifetime.
Speaker 1: And so we talk a lot about closing that gender
Speaker 1: pay gap and the various initiatives that are attempting over
Speaker 1: the last kind of I'd say thirty forty years trying
Speaker 1: to close that gap. Ye, but what then are the
Speaker 1: longer term impacts of the gender super gap.
Speaker 3: Yeah, So, apart from the obvious kind of gender equity
Speaker 3: argument here, you know what is right and fair, how
Speaker 3: do we improve outcomes for all Australians, including women, to
Speaker 3: make things better and fairer. There's also an important financial
Speaker 3: and welfare strain that comes from a super gap. So
Speaker 3: individuals with low superbalancers are more likely to need the
Speaker 3: age pension in retirement. So if you don't have a
Speaker 3: healthy super you're going to need welfare assistance that is
Speaker 3: at a cost to the government and the taxpayer. And
Speaker 3: I guess it's not really a surprise then to know
Speaker 3: that women make up around fifty five to fifty six
Speaker 3: percent of aged pension recipients, so we have an aged
Speaker 3: pension gender gap. Plus women live longer than men, that
Speaker 3: is a fact. On average, women do live longer, so
Speaker 3: you could argue that means, you know, women need even
Speaker 3: more cash when they retire, if not equal to men,
Speaker 3: but more superman men to ensure that they can actually
Speaker 3: support themselves for the rest of their lives.
Speaker 1: And so we're talking about this on the pod today
Speaker 1: because liberal sentencor Jane Hume has put forward a solution.
Speaker 1: She's come up with an idea to try and narrow
Speaker 1: this gender super gap talk me through it.
Speaker 3: So, Jane Hume has put forward this bill that would
Speaker 3: allow couples to split their superannuation savings with no additional
Speaker 3: tax penalties.
Speaker 2: Now, under this.
Speaker 3: Proposal, the partner with the most super could transfer up
Speaker 3: to two million dollars from their fund to their partners
Speaker 3: right now. Currently there are pretty significant tax implications for
Speaker 3: most super transfers, so this would get rid of that
Speaker 3: make it easier, cheaper, faster to transfer between funds. Jane
Speaker 3: Hume calls it a simple and voluntary mechanism for fairness
Speaker 3: to tackle one of the most persistent and unfair challenges
Speaker 3: in our super annuation system.
Speaker 2: This would probably.
Speaker 3: Be most helpful or particularly helpful for a traditional family
Speaker 3: set up where we've got a partner who's worked full
Speaker 3: time for their whole careers while another partner has been
Speaker 3: a primary career for their children or for elderly relatives
Speaker 3: and have missed out on super there So, under this plan,
Speaker 3: both partners in this instance would enter retirement with more
Speaker 3: balanced savings improving financial security for the lower earning partner.
Speaker 3: But it's not a perfect plan. Critics have noted that
Speaker 3: this proposal doesn't include any plans to overhaul workplace inequalities
Speaker 3: or equalize caring responsibilities. Interesting, and the legislation really is
Speaker 3: specifically designed for married or de facto couples, So you
Speaker 3: could argue when those couples retire, they're going to be
Speaker 3: sharing in the same super anyway, And it leaves out
Speaker 3: single women.
Speaker 2: We know single women retire.
Speaker 3: With less super than men, and this legislation doesn't really
Speaker 3: do anything for that group.
Speaker 1: I noticed when you were introducing this to us you
Speaker 1: are very careful to say Jane Hume's policy, not the
Speaker 1: coalition's policy. Is there a reason for that choice of language.
Speaker 1: And is Hume now pushing this independently?
Speaker 2: Yes, so this is actually a private bill.
Speaker 3: This is a proposal from Jane Hume, a Liberal senator,
Speaker 3: but that doesn't mean it is an official policy position
Speaker 3: being put forward by the coalition. So she is pressing
Speaker 3: ahead with this agenda independently, as you suggested, Sam, But
Speaker 3: she has said that she's raised the policy in the
Speaker 3: Nationals party room and that she does have some support
Speaker 3: from MPs and senators. They've not been named, though. Hume
Speaker 3: has conceded that she's not really expecting this issue to
Speaker 3: be high on the agenda at the upcoming federal election,
Speaker 3: but she would advocate for the policy if the coalition
Speaker 3: wins government. So to be very clear, that doesn't mean
Speaker 3: the coalition would automatically adopt this policy. It's just something
Speaker 3: that Hume would push for.
Speaker 1: And she's planted that seed pretty early because the next
Speaker 1: federal election is still kind of what two and a
Speaker 1: half years away exactly, giving her a long runway into
Speaker 1: turning this into a discussion for the country. Does it
Speaker 1: have any opposition as an idea? Are there other ideas
Speaker 1: on the table when it comes to leveling out this
Speaker 1: super gap? Yeah.
Speaker 3: The Albanezy government has taken a different approach to try
Speaker 3: to resolve this gap, and one of the big policy
Speaker 3: areas is relating to changes to paid parental leave. So
Speaker 3: this year we saw superannuation added to paid parental leave.
Speaker 3: So for the first time, if you receive paid parental
Speaker 3: leave entitlements, twelve percent super will be paid on top
Speaker 3: of that. So that came in from one July this year.
Speaker 1: And if you think about the core reasons that you
Speaker 1: gave earlier in terms of why that gap exists and
Speaker 1: the time off work and some of those reasons. That's
Speaker 1: kind of countering that head on.
Speaker 3: Yeah, and Labour says essentially that this is going to
Speaker 3: boost the superbalances of around one hundred and eighty families
Speaker 3: each year. Paid parental leave does go up to twenty
Speaker 3: six weeks next year and from that point these super
Speaker 3: contributions will be worth more than three thousand dollars per person.
Speaker 3: The government has also legislated the publication of gender pay
Speaker 3: gaps for large companies, so the Workplace Gender Equality Agency
Speaker 3: now reports very transparently on pay gaps. There are mandatory
Speaker 3: reporting standards for all employers that give us us a
Speaker 3: better sense of where the pay gap is at and
Speaker 3: you know, put more pressure on employers to address disparities.
Speaker 1: So it's kind of a bit of a multi pronged
Speaker 1: attack from both the government and the opposition. It's clear
Speaker 1: that both sides of the aisle are thinking about this
Speaker 1: as a core issue. That's the political response. I'd like
Speaker 1: to quickly turn to the industry response. The superannuation industry
Speaker 1: itself is very powerful and has a lot of say
Speaker 1: in how these types of programs roll out. Have we
Speaker 1: heard from industry groups.
Speaker 3: Yeah, so there are a couple of other ideas being
Speaker 3: put forward. As you mentioned, this is a multi kind
Speaker 3: of pronged approach. But the Association of Superannuation Funds of
Speaker 3: Australia was in support of compulsory on paid parental leave.
Speaker 3: They advocated for that before those reforms came in a
Speaker 3: couple of months ago. And separately, the Association of super
Speaker 3: Funds has proposed a super baby bonus. So this would
Speaker 3: involve the government depositing five thousand dollars into the super
Speaker 3: accounts of women and they give birth to a child.
Speaker 3: So that's a really interesting conversation that's going on now.
Speaker 2: From the business.
Speaker 3: World, we have KPMG who has proposed catch up super
Speaker 3: concessions for carers.
Speaker 2: So these would allow people.
Speaker 3: Who've taken time out of the workforce for caring responsibilities,
Speaker 3: as we've discussed, to make higher contributions later when they
Speaker 3: returned to work. So a couple of interesting conversations I
Speaker 3: suppose ongoing.
Speaker 1: And so give me a sense of what happens from here.
Speaker 1: We have one member of the Opposition coming forward with
Speaker 1: this private bill that's Jane Hume, is it likely to
Speaker 1: become a thing?
Speaker 3: Look, it is unlikely, as with many private bills, for
Speaker 3: this to become law, it would need the support of
Speaker 3: the government, and that seems unlikely at this stage given
Speaker 3: how recently they introduced SUPER on paid parental leave, and
Speaker 3: also given how recently SUPER contributions increased. So Labour has
Speaker 3: its own approach clearly on this and they might see
Speaker 3: that as sufficient for now. So I don't think Jane
Speaker 3: Hume is going to get this one over the line immediately,
Speaker 3: but there's certainly an ongoing discussion around what we can
Speaker 3: do to improve outcomes for women when they retire.
Speaker 1: I think these topics are good when they don't necessarily
Speaker 1: correlate directly to a law that's here and now, but
Speaker 1: keeps conversations moving, keeps us thinking of options that are
Speaker 1: out there on the table, and I think it's probably
Speaker 1: a case of politics working well, which is quite rare.
Speaker 1: Fancy that and that's all we've got for you on
Speaker 1: today's episode of The Daily Os. We're going to be
Speaker 1: back in the afternoon with your headlines. Until then, have
Speaker 1: a great start to the week. My name is Lily
Speaker 1: Maddon and I'm a proud Arunda Bungelung Kalguttin woman from
Speaker 1: Gadighl country. The Daily oz acknowledges that this podcast is
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