In its Pre-Budget Submission for the October 2022 Federal Budget, the Association of Superannuation Funds of Australia (ASFA) has called for measures which will ensure the maturing system will work better for women and support the long-term sustainability of the system.
"While the aggregates of the system are strong, two key challenges remain – closing the gender gap and addressing the long-term sustainability of a retirement system characterised by increasing capacity for self-reliance in retirement, but a growing ageing population. ASFA’s Pre-Budget Submission seeks to address both areas,” said ASFA CEO, Dr Martin Fahy.
The introduction of superannuation contributions on paid parental leave and/or a $5,000 Super Baby Bonus, payable directly into people’s superannuation following the birth or adoption of a child, would go some way towards delivering better retirement outcomes for women.
The submission also proposes that the Low Income Superannuation Tax Offset (LISTO) should be made more generous by aligning the upper threshold for its receipt with recent changes to personal income tax rates. Women are around twice as likely as men to qualify for the LISTO.
“While the superannuation system is well-designed and working for the majority of Australians, the latest Australian Taxation Office figures show a significant gap of 23.1 per cent in superannuation balances between men and women as they approach retirement,” said Dr Fahy.
“A consumer survey undertaken for ASFA earlier this year found more than 80 per cent of respondents believed the Government should take measures to boost the super balances of women who take time out of the workforce to have children.”
A $5,000 superannuation baby bonus paid into the person’s superannuation account would be equivalent to the amount that a person would receive from Super Guarantee (SG) contributions on a $60,000 wage for one year.
“Rising inflation, broken work patterns, COVID-19, and the early release of superannuation have all eroded the retirement savings of low-income earners and women in particular,” said Dr Fahy.
The long-term sustainability of our superannuation public policy is also important. Accordingly, ASFA proposes to fund the proposed measures for women and low-income earners by reducing the superannuation tax concessions of high-income earners and from investment earnings of individuals with high account balances.
“With the aggregates of the system largely assured, this is the appropriate time to look to the long term equity and sustainability of the superannuation system,” said Dr Fahy.
The Submission also points to the need for more regular payment of compulsory superannuation payments and the need for better arrangements to be in place when superannuation contributions go unpaid due to the insolvency of an employer.
For further information, please contact:
ASFA Media team, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.
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