Treasurer Josh Frydenberg’s Federal Budget speech may have mentioned women more than once but it missed the mark on many issues, and one of them was superannuation.
In what was a fairly typical Liberal Budget speech, one where the Treasurer was boastful of a $7 billion surplus and the government’s economic credentials, there was one standout difference, it actually mentioned women – four times.
In covering the Budget for women over many years, it was perhaps the first time that the words “women” and “girls” actually stood out to me.
But this does not mean this was a Budget for women. It was not, and nor are we saying it should be. Rather it needed to go further to address many of the economic inequalities faced by Australian women on a daily basis.
We see these issues across pay – with a gender pay gap of 14.1 per cent, leadership, with just over 30 per cent of senior leadership positions held by women, and in superannuation, where a gender gap persists of between 30- 40 per cent.
There were hopes that the government would mandate employer superannuation payments on parental leave in what would be an acknowledgement of the gender gap that many Australian women face due to career breaks caring for loved ones. This of course didn’t happen.
Dante De Gori the CEO of the Financial Planning Association said while the budget provided some superannuation changes to help older Australia’s it failed to address how to close the persistent gender gap in retirement savings.
“The FPA notes Australian women are still at an enormous disadvantage when it comes to superannuation, and we’re disappointed not to see more measures to address the gender retirement gap in this Budget than increasing the spouse contribution age limit. In 2019, women still have a substantially different experience of retirement than Australian men. The retirement framework should be equitable for all Australians,” said Mr De Gori.
But enough on what women didn’t get, here’s what they did receive.
Personal tax cuts
In promising to put a “speed limit on taxes” while the Opposition “puts a speed limit on the economy,” Treasurer Josh Frydenberg announced personal income tax cuts, and a doubling of the low to middle income tax offsets, which predominantly affects women who tend to earn less than men on average.
The average full-time working woman earned $1455.80 a week ($75,701 a year) as of November last year, compared to $1695.60 ($88,171 a year) for men.
The higher number of women in low to middle income roles is influenced by there being less women in full-time work (3.23 million women v 5.51 million men and more in part-time roles (2.75 million women v 1.26 million men.)
Speaking on those personal tax cuts, the Treasurer noted the benefits of this will flow through to tradies, nurses and teachers.
The details are:
- Immediate tax relief from July 2019 for low and middle‑income earners of up to $1,080 for singles or up to $2,160 for dual income families to ease the cost of living.
- It means: Individuals with taxable incomes up to $37,000 will have their tax reduced by up to $255. This will increase incrementally for those earning between $37,000 and $48,000. The maximum offset of $1,080 will be available to taxpayers with taxable incomes between $48,000 and $90,000. The offset then gradually reduces to zero at a taxable income of $126,000. The offset will be received as a lump sum on assessment after individuals lodge their tax returns.
- Lowering the 32.5 per cent tax rate to 30 per cent in 2024-25, and benefiting those people earning between $45,000 and $200,000 a year.
Increasing the 19 per cent tax bracket from $41,000 to $45,000 from 1 July 2022 and increasing the low income tax offset from $645 to $700.
Domestic violence and STEM support
There was also continued financial support for much needed but existing programs such as
- Further funding to support programs/campaigns that address violence against women and children. This is part of $328 million in funding for women’s and children’s safety as well as programs to keep children safe online announced last year.
- Further funding to encourage more girls and women into Science, Technology, Engineering and Maths (STEM) courses, which tend to be linked to higher paying career pathways and thus are seen as one way to help narrow the gender pay gap.
For women in business
While it’s not specific to women, there is no doubt that small business relief is going to come as welcome news to many, particularly those just starting out.
The details are:
- Increasing the instant asset write-off threshold to $30,000, from $20,000.
- Expanding the instant asset write-off access to medium‑sized businesses with an annual turnover of less than $50 million to help them reinvest in their business, employ more workers and grow. Around 3.4 million businesses will be eligible to benefit.
- Fast-tracking the company tax rate cut to 25 per cent for small and medium‑sized companies with an annual turnover of less than $50 million and increases to the unincorporated small business tax discount rate.