Super changes needed to overcome inequalities between men and women

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The document, “ Towards a more equal sharing of work ”, finds that Australia performs relatively poorly, compared to other OECD countries, both in terms of female participation rate (10 per cent lower than men) and the proportion of unpaid and caring workers. work done by men compared to women – just over half. This leads to well-established gender pay and pension gaps

The report, the seventh in KPMG’s gender equity series, makes three key recommendations to pension laws:

  • Including Superannuation Guarantee (SG) contributions into the Commonwealth Paid Parental Leave Scheme
  • Allow unused concessional contributions to be paid to recipients of Commonwealth Paid Parental Leave with no time limit
  • Amend the Gender Discrimination Act to ensure that employers can pay higher retirement pensions to their female employees if they wish.

Previous articles in the series have made important proposals on the tax and transfer system, childcare subsidies and the paid parenting system as key mechanisms to assist in a societal shift towards a model of parental equality with more equal responsibility for the work and care of children.

Alison Kitchen, President of KPMG Australia, said: “The gender pay gap is 20%. KPMG estimates that, based on the rate of reduction in the four years leading up to the outbreak of the pandemic, it will be until 2046 for the gender pay gap to be closed, and there are concerns that heads of company pay less attention to this problem when they try. to recover from the COVID crisis. “

“The gender pay and the super gaps come from the fact that in Australia our policy settings are still based on a model where fathers do most of the paid work while mothers do part-time paid work but most of the unpaid work. Indeed, paid work, dominated by men, is valued more than unpaid work, which is mostly carried out by women. If you put a dollar value on unpaid work, as we did in this article, but what orthodox economics does not do, we can see women contributing at least half of the total hours worked. Yet this unpaid work goes unrecognized, leading to gender inequality in pay and super. “

The paper finds that in northern Europe men typically do 75% more unpaid work than women, while in Australia they do just over half. The gap between male and female participation rates in Australia is 10 percent, the 16th highest among OECD countries. While many of the problems lie in the interplay of child care and tax and transfer systems, which create a barrier to returning women to the workforce, KPMG believes its three super recommendations could also play a role. a major role in the fight against financial inequalities between the sexes.

Linda Elkins, KPMG’s National Sector Head for Asset and Wealth Management, said: “The PPL plan does not include Super Guarantee contributions, which as women take most of the parental leave. , simply means that the income and the super gaps are exacerbated. While KPMG recently proposed a major overhaul of the PPL system, the Super Guarantee issue has yet to be resolved even if the current system is maintained. There will be a significant cost, but it is a major obstacle to equality. “

“Second, the concessional contributions paid by employers to employees can be used for up to five years, but then it runs out, putting women who have taken time to raise children at a disadvantage. There is no good political reason that this cannot be changed. “

“Third, employers may wish to make higher contributions to attract and reward talented female employees who took their time, but that would violate the gender discrimination law. The law could be changed at no cost, but with significant benefits. “

The KPMG document points out that since the 1970s, the increase in women’s participation in the labor market has been almost entirely done in part-time work.

Alison Kitchen said: “Tax and transfer systems penalize women who try to return to work. Everything else follows. It is perverse that taxpayers voluntarily subsidize part of the cost of college degrees, which are earned by more women than men, and yet the same tax regime penalizes these women for trying to advance in the paid labor market. Male taxpayers often complain that the top rate of 47 percent discourages work. Yet women attempting to fully re-enter the workforce may face effective rates above 100 percent, given the loss of childcare benefits.

The document, the seventh in KPMG’s series of gender inequalities reports since 2018, follows on from “ Improving Work-Life Balance: A Better Paid Parental Leave System, ” released last month, which proposed a major overhaul of the PPL regime.



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