Once upon a time, there was a Women’s Budget Statement, started under Bob Hawke in 1983 but stopped in 2013. Were it still extant, it would have little to say.
Despite some puffery, the 2016 budget has done very little to remedy women’s structural disadvantages that derive from gender inequities. These arise when women earn less for full-time work (17%), do fewer paid hours, and do more of the unpaid care of others.
These inequities need policies that can ensure women are not financially punished because of their unpaid contributions. The 2016 budget dealt with a related issue in superannuation, in which it tried to take credit for remedying an earlier error. It has basically reintroduced a compensation to low-income earners for excessive taxing of their contributions.
This may sound like a gain for women, but it is really only avoiding an expected loss.
The Treasury Summary states:
A range of other caps and reductions in concessions aimed at high-income earners will deliver the government revenue to extend the low income super tax offset. This will allow those on incomes of $37,000 or less to receive a refund of tax paid on concessional contributions up to $500.
The problem was caused by a 15% tax “concession” set in place when compulsory super was introduced. It adds to leaving women’s lump sums well behind men’s. This concession is most valuable for those on highest incomes and has grossly overtaxed those earning too little to pay any tax. So, lower lump sums are affected by tax rates as well reflecting women’s lower pay rates and less time in paid work.
Labor finally tried to fix this by introducing the Low Income Superannuation Contribution (LISC) rebate in its last term. However, the Coalition tried to abolish it, as unfunded, but was blocked by the Senate – which voted to extend the payment until 2017.
Therefore, the refund would have lapsed next year. Low-income workers – mainly women – would have again been overtaxed, except for a mind change and minor name change by the government in this budget.
Therefore this is no real change, and too little retirement income is still a serious issue for many women. A recent Senate inquiry made 19 recommendations intended to help women increase their participation in the workforce and improve their superannuation savings as a means of achieving dignity and economic security in retirement.
Despite a wide range of changes that the government could make to improve both women’s workforce participation and increase their contributions, only one has been implemented. It is funded by changes to some excessive tax concessions.
The committee recommends that the concessional superannuation contributions of lower income earners are not taxed at a higher rate than their ordinary income, and that the Australian government commit to retaining the Low Income Superannuation Contribution beyond June 30, 2017.
The government has done this but there is much more needed.
There are some other small changes to superannuation. One is that workers will be allowed to contribute more into their spouse’s super. The government will also introduce “catch-up super contributions” that will allow unused concessional contributions to be carried forward for up to five years for those with super balances of A$500,000 or less. However, these measures don’t help those who cannot afford to make any extra contributions.
There is little else for women in the budget. Other areas seem to have been sold short. The highly touted changes to childcare funding have been delayed a year, because the cuts to Family Tax Benefits that are designed to fund the extra subsidies are stuck in the Senate.
Interestingly, higher-income tax cuts don’t need to delayed while their recipients give up something else. So higher fees and confusion will continue. At least those children of unemployed parents get another year of children’s services before being excluded from subsidies.
Despite lots of apparent support for stopping domestic violence, there is little real movement. The media release said:
This year’s budget will also provide $100 million in new funding over three years to reduce violence against women and their children. The measure will focus on initiatives to empower women and their children, and provide targeted assistance for Indigenous and culturally and linguistically diverse women and their children.
Yet refuges and legal services are set to close down as cuts are made to funding for homelessness programs and legal services. Not-for-profit advocacy organisation Fair Agenda has warned:
The government has left thousands of women without the service support they need to be safe.
The 2016 budget does not reverse the looming funding cuts or include any additional investment in legal assistance service, including Community Legal Centres, Aboriginal and Torres Strait Islander Legal Services, Family Violence Prevention Legal Services, or Legal Aid Commissions.
The above examples show why the government may be pleased that there is no longer a Women’s Budget Statement. Ministers may well have found it very difficult to find enough positive examples to fill even a couple of pages. The examples suggest this budget is overly focused on “jobs and growth” and fails dismally to tackle the social and communal needs that underpin social wellbeing and economic security.
Eva will be on hand for an Author Q&A between 3 and 4pm AEST on Thursday, May 4, 2016. Post any questions you have in the comment section below.