'A Husband Is Not a Retirement Plan' | Achieving Economic Security
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The Senate Economics References Committee 'A husband is not a retirement plan' Achieving economic security for women in retirement April 2016 © Commonwealth of Australia 2016 ISBN 978-1-76010-417-7 This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License. The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/ Printed by the Senate Printing Unit, Parliament House, Canberra. Senate Economics References Committee Members Senator Chris Ketter (Chair from 22 October 2015) Queensland, ALP Senator Sean Edwards (Deputy Chair) South Australia, LP Senator Sam Dastyari (Chair until 22 October 2015) New South Wales, ALP Senator Matthew Canavan (until 23 February 2016) Queensland, NATS Senator Jenny McAllister New South Wales, ALP Senator Dean Smith Western Australia, LP Senator Nick Xenophon South Australia, IND Senators participating in this inquiry Senator Larissa Waters Queensland, AG Subcommittee For the purposes of this inquiry, the committee resolved to form a subcommittee. Senator Jenny McAllister (Chair) New South Wales, ALP Senator Sean Edwards (Deputy Chair) South Australia, LP Senator Sam Dastyari New South Wales, ALP Senator Chris Ketter Queensland, ALP iii Secretariat Dr Kathleen Dermody, Secretary Ms Penny Bear, Senior Research Officer Dr Sean Turner, Principal Research Officer Ms Ashlee Hill, Administrative Officer (until 24 September 2015) Ms Sarah Batts, Administrative Officer (from 25 September 2015) PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3540 Fax: 02 6277 5719 E-mail: [email protected] Internet: www.aph.gov.au/senate_economics TABLE OF CONTENTS Membership of Committee iii Overview and list of recommendations ............................................................ xi Chapter 1.............................................................................................................. 1 Introduction .............................................................................................................. 1 About the inquiry .................................................................................................... 2 Structure of the Report ........................................................................................... 4 Chapter 2.............................................................................................................. 5 Background ............................................................................................................... 5 Australia's retirement income system ..................................................................... 5 Gender pay gap, gender retirement savings gap, and gender wealth gap .............. 7 Women's working lives ........................................................................................ 11 Women in retirement ............................................................................................ 13 Need for long and short term approaches ............................................................. 15 Chapter 3............................................................................................................ 17 Narrowing the gender pay gap .............................................................................. 17 Equal pay for work of equal value ....................................................................... 17 Narrowing the gender pay gap within organisations ............................................ 21 Chapter 4............................................................................................................ 31 Women's working experience ................................................................................ 31 Women's workforce participation ........................................................................ 31 Flexible work arrangements ................................................................................. 35 Tax transfer system and workforce participation ................................................. 39 Access to affordable childcare.............................................................................. 41 Paid parental leave ................................................................................................ 43 Older women and carers ....................................................................................... 47 v Chapter 5............................................................................................................ 51 Australia's retirement income system .................................................................. 51 Calls for a comprehensive review ........................................................................ 51 Valuing unpaid care .............................................................................................. 60 Chapter 6............................................................................................................ 67 Superannuation ....................................................................................................... 67 Summary of the superannuation savings gap ....................................................... 68 Defining the objective of superannuation ............................................................ 68 Taxation of superannuation .................................................................................. 70 Compulsory superannuation ................................................................................. 73 Other proposed structural changes to the superannuation system ........................ 88 Chapter 7............................................................................................................ 93 Voluntary superannuation contributions, co-contribution schemes and employer schemes ................................................................................................... 93 Concessional contribution caps ............................................................................ 93 Super co-contribution scheme .............................................................................. 99 Employer initiatives—additional super contributions for female employees .... 102 Chapter 8.......................................................................................................... 107 The Age Pension.................................................................................................... 107 The importance of the Age Pension, now and into the future ............................ 107 Access to the Age Pension ................................................................................. 111 The adequacy of the Age Pension ...................................................................... 115 Committee view .................................................................................................. 116 Chapter 9.......................................................................................................... 119 Housing and economic security in retirement ................................................... 119 Women in retirement and housing stress: a troubling trend ............................... 119 Proposed measures to assist renters .................................................................... 122 vi vii Accessing equity in the home ............................................................................. 126 Chapter 10 ....................................................................................................... 129 Financial literacy .................................................................................................. 129 Current levels of financial literacy ..................................................................... 129 Target financial literacy programs...................................................................... 130 Chapter 11 ....................................................................................................... 135 Conclusion ........................................................................................................ 135 Achieving dignity and economic security in retirement ................................... 135 Three pillars of Australia's income system......................................................... 135 Gender pay gap ................................................................................................... 136 Women's workforce participation ...................................................................... 137 Australia's retirement income system ................................................................. 139 Incentives to contribute to superannuation ......................................................... 139 The Age Pension ................................................................................................. 143 Housing and economic security in retirement .................................................... 143 Financial literacy ................................................................................................ 144 Summary ............................................................................................................. 145 Senate Economics References Committee Inquiry: Economic security for women in retirement ....................................................................................... 147 Coalition Senators' additional comments: ......................................................... 147 Inquiry findings