Industry Super Australia says the Low Income Superannuation Tax Offset (LISTO), announced in the 2016 Budget, must be legislated to help close the gender gap in retirement savings.
Pointing to ABS figures, Industry Super Australia (ISA) says that men retire on average with $322,000 in superannuation, compared to $180,000 on average for women.
“Too many Australian women are continuing to retire with substantially less superannuation than men. Unless we start to close the gap, many will be forced to rely on the pension, well below a comfortable standard of living, despite a lifetime of working hard and caring for family, in paid and unpaid roles,” said ISA Chief Executive, David Whiteley.
“These figures reinforce the importance of legislating reforms to rebalance the superannuation system and put it back on a more sustainable footing,” he said.
“As a priority, the new Parliament must ensure the LISTO (Low Income Super Tax Offset) is legislated so that more than 3 million lower paid workers, mostly women, do not unfairly end up paying more tax on their super than they do on their take home pay.”
The LISTO, if enacted, would effectively reintroduce the Low Income Super Contribution (LISC), which the Government repealed with effect from 1 July 2017.
“We can only do this by reining in and re-directing billions of dollars’ worth of tax concessions to those most in need. At the moment, men receive 65% of tax concessions compared with 35% for women,” said Mr Whiteley.
“These lop-sided tax breaks disproportionately benefit a small number of Australia’s wealthiest, highest income-earning men in no need of government assistance to help save for their retirement.”
“We need to recalibrate tax concessions to ensure the people receiving them are the people who need them most.”
“If we fail to meet this most basic standard of fairness, two thirds of single women retiring between now and 2055 will retire below a comfortable standard, and more than half of women currently aged 25-29 will retire on incomes below a comfortable standard.”
“Not acting to correct the imbalance now will impact heavily on pension outlays, a shrinking number of taxpayers and the overall economy as our population ages.”