Women in Australia earn $1m less on average over their lifetimes than men and retire with $136,000 less in superannuation, according to research released on International Women’s Day.
The research by the Australia Institute’s Centre for Future Work, released on Wednesday, suggests that the biggest driver of the gap in retirement savings is still the gender pay gap.
It found that women earning the median wage would accumulate about $393,676 in super, $151,000 below the level defined as a “comfortable retirement” by the Association of Superannuation Funds of Australia.
The research adds to growing calls to pay more parental leave to both parents and pay superannuation on paid parental leave, demands being pursued by the Greens including in a Senate work and care committee inquiry to report on Thursday.
The Centre for Future Work report’s other recommendations are for greater family-friendly work practices and access to free or more affordable earlier childhood education and care, because lower participation among women and part-time work to balance work and care also drive lower retirement savings.
Labor’s bill expanding access to PPL and encouraging parents to share care to promote gender equality passed the House of Representatives on Monday, with PPL set to be increased to 20 weeks.
But the government rejected Greens amendments to bring forward the date the entitlement will reach 26 weeks, slated for 2026.
The Centre for Future Work found that the gender gap occurs across all occupations and industries.
Men have higher average salaries than women in 95% of all occupations, including those where women dominate the workforce. For example, women account for 99% of all midwives, and yet are paid on average 19% less.
There are about 80 occupations in which men make up 80% or more of the workforce and that workers receive an average salary above $100,000.
By contrast, no occupations in which women make up 80% or more of the workforce pay an average salary above $100,000.
Eliza Littleton, a senior economist from the Centre for Future Work, said “there’s been a noisy political debate about super in Australia for the past week, but this data shows that based on median income data Australian women will earn $136,000 less than their male counterparts over their working life”.
“When you consider that the average super balance in Australia right now is approximately $150,000, that’s a huge disparity,” she said. “Australian women continue to be paid less than men on average across all industries and occupations, costing us more than $3bn across the economy each week.”
The Association of Superannuation Funds of Australia also called on the government to reinvest some of the revenue generated by the proposed less generous tax concessions on earnings on balances above $3m.
The Asfa senior policy adviser, Helena Gibson, said “as we celebrate International Women’s Day, Asfa is calling for long overdue action to protect the retirement outcomes of women who take time out of the workforce” including super on PPL and a $5,000 bonus payment into a mother’s super account per child.
The federal government paying super on PPL is estimated to cost $200m to the budget. The finance minister, Katy Gallagher, said the measure was still on the table for the May budget, but despite agreeing in principle Labor has never set a timeline for the commitment.
Super fund Hesta released new modelling by Laneway Analytics estimating that Australian mothers have missed out on more than $2.8bn in super savings at retirement from taking time out of the workforce to have children.
The estimate is based on the total benefit at the end of 2022 if super had been paid on PPL since it was introduced in 2011.
The Hesta chief executive, Debby Blakey, said mothers would “keep losing thousands of dollars in retirement savings each year this important equity reform is delayed”.
“Our super system is one of the world’s best but clear, persisting gaps remain where millions of Australians, mainly women, are still falling through the cracks and not getting the full benefits of super.
“For women this means they are still retiring with around a third less super than men.”
