The existing heavy weighting of tax concessions to high income earners is a key factor behind the gender gap in retirement savings, according to two superannuation bodies.
The Australian Institute of Superannuation Trustees (AIST) and Women in Super (WIS) have urged the Government to prioritise the tax reform of superannuation as the Senate reviews the retirement savings gap for women in its tax inquiry.
AIST chief executive, Tom Garcia, said the inquiry needed to consider fairer distribution of tax concessions in super to improve the outlook for women.
“The reality is, the system as it stands currently is stacked in favour of high income earning, well-off males,” Garcia said.
WIS chair, Cate Wood, said it was ironic that the only super tax change supported by the Government was to increase the tax paid by low income earners by withdrawing the Low Income Super Contribution (LISC).
“Women have longer life expectancies and so need more savings to last longer. Greater equity in super taxation concessions and special measures are required to compensate for women’s diminished savings opportunities due to their workforce experience,” Wood said.
“Despite more than 20 years of compulsory super, we’re still seeing women retiring with just over half the savings of men. There is no silver bullet; this is a complex and multi-layered problem which needs a collaborative, bipartisan effort to address it.”
Also welcoming the inquiry on women’s super was Industry Super Australia (ISA) that said the current 19 per cent pay gap between women and men’s wages translates into a super gap of 47 per cent.
ISA deputy chief executive, Robbie Campo, said even with a fully mature super system 63 per cent of single women could not retire comfortably by 2055 unless something was done now to rebalance the retirement income system.
“The absurdly harsh asset test taper that was recently introduced has the potential to swallow up the benefit of any new measures aimed at improving superannuation savings for women,” she said.
