A response to Jennifer Duke on superannuation

Australia runs a nearly universal superannuation system in which virtually all employees are paid an additional 9.5% over their wage or salary. This money locally called super is put away for retirement with few avenues to access the money before then. This enforced savings has made Australians among the wealthiest people in the world.

Some people though, still aren’t happy. Jennifer Duke has penned a piece in the Sydney Morning Herald discussing how much extra superannuation men have over women. This is a topic we often see mentioned by Australia’s misandric mainstream media, alongside so-called gender wage gap. They claim that 39% of this gender wage gap is a result of discrimination but last year I demonstrated that was a lie.

To see the misandry in full view we need only look at the way Cassie Jaye was treated when we brought her out to Australia for ICMI17. The male host in this video is none other than Andrew O’Keefe. O’Keefe is currently facing charges in relation to an alleged domestic violence incident. The newspaper The Australian has noted:

Ex-Channel 7 star Andrew O’Keefe’s lawyer has indicated the sacked game show host will plead guilty to allegations he assaulted his partner if the charge is not dismissed under mental health.

In any case, Jennifer Duke starts off strong in her article:

Data showing men’s retirement balances are almost twice the size of women’s in some electorates has given ammunition to groups pushing for super contributions to be paid on parental leave.

And by strong I mean weak. What she says may be true but it’s not the whole story. What if we were to look at superannuation balances 10 or 15 years after retirement? If we did that we’d find many of these women had inherited the superannuation funds of their male spouses and were just fine.

Yes, some women didn’t settle down with a man. Others did settle down with a man and then took him to the cleaners. In the end each of us is responsible for our own financial future. If a woman is going it alone then it is incumbent on her to take steps to secure her own financial future.

Duke’s article discussed various federal government divisions in Australia comparing the relative superannuation men have over women. She noted certain divisions have little variation:

“The smallest gap in the state was in Chisholm, at 5 per cent, followed by Scullin at 9 per cent.”

Notably, both are working-class areas full of two-income families. Not a great surprise that the gap would be small then.

Gaps above 33 per cent were recorded in NSW’s Macarthur, Cunningham, Parkes, Dobell, Macquarie, Mackellar, Hume and Bradfield.

And these are wealthier and rural areas. Could it be that in wealthier and rural areas we’re more likely to see one-income families? This would of course result in a superannuation gap.

Overall, the gender gap between men and women’s median balances is 22 per cent in NSW and 23 per cent in Victoria, which Industry Super says translates to tens of thousands of dollars by retirement.

That much is true, I’m sure. And how do we fix it? Empty platitudes and pointlessly complicating of an already complicated system of course!

“Treasury’s Retirement Income Review, released in November, shows paying a median female earner super during an average period of employer-paid parental leave boosts her balance by 0.8 per cent by retirement. This equates to 0.14 per cent more income. Paying super on top of government parental leave pay would provide a 0.17 per cent boost in retirement income at a cost to taxpayers of $200 million a year.”

That’s negligible.

“Removing the $450-a-month threshold would also make a small change in terms
of retirement income but help improve equity, it said.”

The difference won’t be small, it will be insignificant as we saw above.

The money will just come out of wages in the future and further stall wage growth.

Superannuation on parental leave won’t help much either as parental leave is short.

Taking time out to be a mother is often blamed for women’s superannuation woes but the truth is that the average woman in Australia is now having 1.74 children. How long is that really going to keep a woman out of the workforce? I’m being generous if I suggest five years, or perhaps 10. Mothers could have long and well-paid careers if they so chose. A typical Australian man might go into the workforce at age 20 and retire at 60. That’s a 40-year working life. Even if we assume that women take 5-10 years out of full-time work to raise children they should still have plenty of time to accrue superannuation across a 30-35 year working life. If they make the right choices along the way, that is.

If we really want to understand why women retire with less superannuation we need to look at the choices people make. Choices going right back to high school point men and women (on average) in different directions. Choices include but are not limited to:

  • What to study at highschool
  • Whether to consider a trade or some other tertiary alternative to university
  • If going to university, what degree(s) to get
  • Whether to work full-time or part-time
  • Whether to take a higher paying job or a more interesting job
  • Whether to take a higher paying job or a job with a shorter commute

For each of these questions there is a clear gender divide in how people answer. These and many other choices lead to a clear gender divide in superannuation. It’s super obvious really.

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