Women and Super
E and OE only
STUART BOCKING: A report’s revealed 60 per cent of women are retiring with no superannuation. Just over 70 per cent of all single pensioners are female. Now a superannuation forum today reported the majority of Australian women reaching retirement have no superannuation savings behind them.
Federal MP, Kate Ellis, Minister for Employment Participation and the Status of Women, thinks Australians need to start talking about why so many women are facing retirement with so little money in the bank.
The minister is on the line. Hello. Thanks for your time.
KATE ELLIS: Great to be with you.
STUART BOCKING: Why is it so then?
KATE ELLIS: Well we know that there are a number of reasons why women are at greater risk of having low superannuation and being overly reliant on the aged pension but we also know that what’s alarming is we need to be addressing this for women who are in this situation now but we also need to be ensuring that generations of women coming through don’t find themselves in the same situation.
And that’s what I find alarming, is that a lot of even young women don’t like to think about the fact that everybody’s aging and don’t like to think and talk about money and for the future so we’re not engaging in talk about superannuation, we’re not recognising how important it is and we’re not planning ahead for our retirement so…
STUART BOCKING: So are they – are they still caught up in this romantic idea that somebody, somewhere is going to take care of them?
KATE ELLIS: Well I think that there are – we talked today about some examples of young women who thought this wasn’t a problem for them because they were married and I mean obviously every romantic wants to think that their marriage will last forever but the reality is, is that when a substantial proportion of marriages in Australia are falling down, when they lose what were shared assets, when women are much more likely to come in and out of the workforce as they raise children…
STUART BOCKING: True.
KATE ELLIS: …or care for family members, all of this has an impact that is being felt at a time when people are often at their most vulnerable, at a time when people have worked hard for their whole life and should be thinking about relaxing and trying to be comfortable and instead we’re finding that this is where far too many Australian women are falling into poverty and often even falling into homelessness once they reach retirement age.
STUART BOCKING: The other point about this too I suppose is even though the gap has narrowed women in the main still out love – out live men, don’t they?
KATE ELLIS: Well that’s right and just the fact that women are living longer means that their savings have to go further so that needs to be planned for as well.
So there’s a whole range of issues here but the first step is when people talk about superannuation often we have a tendency to want to stick our fingers in our ears and think that sounds really boring or it sounds complicated…
STUART BOCKING: Well it’s a bit like talking about funeral benefits and other unpleasant things, isn’t it?
KATE ELLIS: Yeah, that’s right. That’s right but – I mean, however unpleasant it may be I think we need to recognise that once we hit retirement age sitting in poverty, being overly reliant on the aged pension…
STUART BOCKING: Yeah.
KATE ELLIS: …not receiving the sort of comfort that we deserve after – after a hard life – now this isn’t only women, there are men that find themselves in these circumstances as well, but the statistics that you outlined at the beginning of our conversation show that it’s overwhelmingly women.
And so this is a women’s issue and it’s something that I’ve been working to try and make sure that we can push within women’s forums, within – and women’s magazines or women’s discussions.
We need to actually get a grasp on some of these concepts and start planning for the future.
STUART BOCKING: Once upon a time way back in the day it was automatic that when you joined the workforce you paid a certain amount of your salary into an assurance policy to look after you in, you know, your non-productive years.
Are we liable to go back to something like that?
KATE ELLIS: Well what we do want to do of course is – we’ve said as part of the minerals resources rent tax that we want to be increasing the superannuation guarantee rate from nine per cent to twelve per cent.
STUART BOCKING: Yeah.
KATE ELLIS: Now that’s important in terms of the impact that that has. It shows that a thirty year old woman today on average wages will have an extra $180, 000 in retirement savings or even if she spends time out of the workforce and works part time will have an extra $78,000.
So that is – that is significant and that’s important but part of the problem here is we’ve also – at the moment we’re dealing with the consequences of policies that show, for example one school principal who I spoke of today, she’s 59 but she knows that she needs to continue to work for many, many years to come because even though she’s been a teacher for forty years when she first got married, as with all female teachers at the time, they were forced to resign from their superannuation fund.
So now at 59 trying to look forward but she knows that she’s got to work for many, many years to come and the other thing that we’re seeing at the moment is that we’re seeing that women in retirement are actually having to go back to work to support themselves and I’m a big advocate of mature-aged employment.
I think that when people have skills, when people have abilities, when they want to contribute to the workforce that’s a very good thing but what we’re seeing is actually a different story because of the people who have returned to the workforce after retiring 42 per cent of the women surveyed said that they returned because they needed to do – they needed to because of financial strains.
STUART BOCKING: Right.
KATE ELLIS: They’ve realised they actually didn’t have the resources to support themselves. So obviously this is pretty alarming and I think we all like to think of hard working Australians when you reach retirement age being if not in luxury at least a level of comfort and at least being looked after by our community in recognition of the contribution you’ve made.
This isn’t happening enough so clearly it needs to change.
STUART BOCKING: And the Government is only going to be able to provide so much by way of the pension. The fact of the matter is we hear all this talk constantly about how we need to increase our immigration numbers, we need more people coming into the workforce at the bottom end of the pyramid.
The reality of that is if you tried it in private enterprise it would be seen as a poncy scheme, wouldn’t it?
KATE ELLIS: Well I think that what we do need to be doing is also acknowledging that particularly when we’re looking at women that women’s participation in the workforce in Australia is comparatively low.
STUART BOCKING: Right.
KATE ELLIS: The World Economic Forum did a survey where we were ranked 44th in the world. So we also need to be looking at policies to encourage more women into the workforce or to increase their rate of participation and we saw – just recently we announced new policies around the increase of the tax free threshold which is a huge motivation for low income workers or people that work part time to be able to increase their rates, increase their hours and not be penalised through the tax system any more through that.
So that’s an important start but we need to continue to look at ways we can do that and obviously we also need to look at short term solutions for women who are facing this at the moment. We need to be ensuring that there is affordable housing, that there is appropriate supports in place, as well as planning for future generations.
STUART BOCKING: There’s a lot of variables in here, aren’t there?
KATE ELLIS: There’s a lot of work to be done but I mean we’ve already announced major changes when it comes to our superannuation system and the truth is that we need to be looking forward to planning to the future.
We know that we’re going to have particularly this year is the first year that we have the first of our baby boomers reaching retirement age. We know that we have a lot of people that are about to move out of the workforce.
So we need to be making sure that we’re planning for when people are retiring, we’re planning to have a strong superannuation system in place and the move from 9 to 12 cent is going to be particularly important in that regard and of course we’ve just seen that the Opposition have said that they will not repeal that move which we’re very proud to be introducing.
STUART BOCKING: Minister, I appreciate your time and comments. Thank you very much for coming on the program
KATE ELLIS: Great to speak with you. Thank you.
STUART BOCKING: Kate Ellis is Minister for Employment Participation and the Status of Women.