Tokenism will do nothing for women’s superannuation

This week Australian Greens deputy leader Adam Bandt introduced a bill that would allow employers to make larger superannuation contributions to female employees than to their male counterparts.

The Greens argue that their amendment to Sex Discrimination Amendment (Boosting Superannuation for Women) Bill 2014 will help close the gender gap in super balances which, according to the latest ABS statistics, was in the order of $38,000 in 2011-12.

To be clear, the Greens are saying we need to increase women’s super by reducing their take-home pay and that this is a win for gender equity. It is little wonder the Sexual Discrimination Act (1984) does not allow this – though somewhat perplexing that it currently allows employers to make appeals.Contrary to widely held misconceptions, the `employer contribution’ that employers make into their employee’s superannuation accounts come out of the employee’s gross wages. They are not a gift from the employer.

Thankfully the extra employer contributions made under the Greens policy would be voluntary, unlike the proposed increase in the Superannuation Guarantee (SG) rate.

Female employees will retain the right to keep their super contributions as-is. However, there is the risk that some women with a less sophisticated understanding of super might not understand that they have a choice – and end up with less in their pockets.

In any case, the Greens’ amendment is a waste of the parliament’s time. If women want to put more money into their super, and reap the associated tax concessions, there is nothing to stop them from doing that right now. Current policy allows anyone to salary sacrifice super contributions up to an annual cap of $30,000 including the 9.5% compulsory contribution. For those over 50 the cap is $35,000.

One might think that the Greens’ proposal is well intentioned. Perhaps the Greens fail to grasp the fact that super contributions are delayed wages and not a pay increase – but wait.
In their minority report on the Senate Standing Committee on Economics inquiry into the introduction of the Mineral Resources Rent Tax Bill (2012) the Greens wrote “…the ultimate incidence of the increased [superannuation] guarantee will be on workers, in the form of slower growth in wages, rather than on employers, and this view was confirmed at the hearings… the SG increase will be largely borne by wages.” This is true of all `employer contributions’ not just those mandated by the SG rate; so it would seem the Greens cannot plead ignorance of the impact of their policy on women’s pay packets.

A genuine improvement in the living standards of women in retirement seems not to be the focus of the Greens, who seem more interested in making a pitch to win the votes of female voters, whom they assume to have a less sophisticated understanding of superannuation.

At the Centre for Independent Studies we have every confidence in the ability of the women of Australia to see right through such a disingenuous political ploy.

Matthew Taylor is a Research Fellow at the Centre for Independent Studies.