It has taken the Government more than two years to publicly reject recommendations aimed at improving the economic security of women in retirement, including faster increases the Super Guarantee rate and removing the $450 SG threshold.
A Senate committee released its report, ‘A husband is not a retirement plan’, Achieving economic security for women in retirement, in April 2016. The Government released its response last week.
“Inadequate and out of step with reality”: AIST
The Australian Institute of Superannuation Trustees (AIST) said the Government’s “disregard” for the recommendations was “disappointing” and a “setback for the retirement outcomes of Australian women”.
AIST said that the Government had rejected all the key recommendations in the report and had instead pointed to the spouse offset and catch-up contributions policies. AIST CEO Eva Scheerlinck said this was “inadequate and out of step with reality”.
“Extending the spouse offset and allowing higher catch up contributions will do nothing to help ordinary working women who may not have the spare cash to put more into super, nor will it do anything to help divorced and single women who experience some of the poorest outcomes in retirement,” Ms Scheerlinck said
Ms Scheerlinck said it was “disappointing” the Government had taken over two years to respond to the report.
Government ‘notes’ recommendations
Some recommendations were rejected outright – the Government “does not agree” to revise the current schedule for increases to the SG rate, pointing to the lack of a policy on this issue from Labor.
The Government also “does not agree” with amendments to the Sex Discrimination Act proposed by the Australian Human Rights Commission (AHRC).
The Government says it “notes” many of the other recommendations – this appears to be another way of saying ‘rejects’, as the recommendations are not adopted by the Government, which instead points to other policies.
Some of the recommendations ‘noted’ by the Government include:
- Removing the $450 threshold for Super Guarantee
- Abandoning proposed increases to the Age Pension retirement eligibility age
- Expanding the Commonwealth Paid Parental Leave Scheme to allow for 26 weeks paid parental leave
- Paying Super Guarantee on the Commonwealth Paid Parental Leave Scheme
- Re-targeting superannuation tax concessions so they are more equitably distributed
The Government did agree to some of the recommendations, at least in part, including:
- Setting an objective an objective for superannuation in legislation, though the Government seemingly rejects the part of the recommendation that the objective include a reference to women’s retirement incomes.
- Committing to retaining the Low Income Super Contribution (agrees in part, the Government repealed the LISC and replaced it with the near-identical LISTO)
- The Government says it agreed in part to a recommendation to amend the Sex Discrimination Act to make it clear companies can pay higher super contributions to women. The Government wont amend the Act, but the AHRC will prepare guidelines for employers
- Continuing to support the work of the Workplace Gender Equality Agency
“The Australian Government is committed to women’s economic empowerment by ensuring workplace diversity and flexibility, flexible and affordable child care, increasing the incentives for women to work, and getting women into the jobs of the future,” says the Government’s response to the Senate Economics References Committee Report.
“The Government notes that the issue of the gender gap in retirement incomes and savings is complex and not caused by any one factor. One of the most useful ways governments can address inequality in retirement incomes is to support economic growth to generate an increase in employment and incomes.”
This article has been updated with the comments by AIST.