Bill Shorten to announce $400 million pitch to women on superannuation



This was published 2 years ago

Bill Shorten to announce $400 million pitch to women on superannuation

By David Crowe

Labor will pledge a financial boost for more than 160,000 women in a new policy that aims to narrow the gap between women's and men's superannuation savings for retirement.

Opposition Leader Bill Shorten will outline the $400 million plan on Wednesday with a vow to make economic security for women one of his priorities at the next federal election.

The Labor scheme would deliver a top-up payment for thousands of super accounts every year for those on parental leave, addressing one of the factors that leaves women with about 60 per cent of the retirement savings of men.

Labor leader Bill Shorten surrounded by female members of his frontbench on Tuesday.

Labor leader Bill Shorten surrounded by female members of his frontbench on Tuesday. Credit:Alex Ellinghausen

Mr Shorten told Fairfax Media the measure to improve economic security "should be an election priority" because of the gap in the average super balances between men and women at their retirement.

The move comes as Prime Minister Scott Morrison tries to contain a Liberal Party row over the number of women in Parliament and concerns about intimidation of MPs during the leadership spill that toppled Malcolm Turnbull.

Mr Shorten is expected to announce the new policy alongside Labor shadow treasurer Chris Bowen on Wednesday, in their first major policy initiative since the leadership turmoil at the top of the government.

Many women are forced to halt contributions to their superannuation accounts when they have children, with the federal government’s parental leave scheme paying $719.35 a week but not offering anything towards super.

A Labor government would add a super contribution to be paid directly to the recipient’s super fund or paid to an employer who would make the contribution.


Mr Shorten said that every day a woman looked after a child under the federal scheme was a day her super balance was on hold.

"This isn't fair and it's contributing to the growing superannuation gap between men and women," he said.

"Superannuation paid on parental leave is an investment in a better and fairer retirement for Australian women."

The payments would go to about 167,000 recipients of the Commonwealth paid parental leave scheme and another 80,000 recipients of the "dad and partner payments" scheme.

The new payments would be targeted at the same parents who qualify for the Commonwealth's paid parental leave scheme, which offers $719.35 a week for 18 weeks for those who meet a work test and earn less than $150,000 a year.

While women are expected to be the main beneficiaries, the policy will also help men who choose to take parental leave.

Women have super fund balances of about $157,000 upon retirement on average, compared with $270,000 for men.

"There are inequities in our super system which disadvantage women," Mr Bowen said.

"Labor’s changes will see thousands of women benefit from tens of thousands of dollars more in retirement income."

The average addition to a single super fund could be about $400 a year, enough to add significantly more over time as a result of fund earnings.

The Labor scheme would start in July 2020 if Mr Shorten wins the next election and would be accompanied by other measures including an annual "women’s budget statement" to make gender equity a factor in all policy decisions.

In a significant move for employers, Labor would also phase out a rule that means people earning less than $450 a month do not get any super guarantee levy.

The threshold will fall by $100 every year and cease to exist by 2024, which would gradually add 400,000 people to the ranks of millions of workers who get the super guarantee levy paid by their employers.

The levy is currently 9.5 per cent of salaries and is scheduled to rise to 12 per cent.

Labor calculates that a woman who is 26 and earning about $46,000 a year would be able to build a super balance about 4.6 per cent bigger by the time she retired at the age of 66 with the help of the top-up payments. This assumes she had two children by the age of 30.

Under the existing scheme, the woman would gain a super balance of about $525,000 upon retirement at 66. That would rise to almost $550,000 under the Labor policy, an addition of about $25,000.

Most Viewed in Politics