Australia markets open in 6 hours 48 minutes
  • ALL ORDS

    7,503.50
    -50.50 (-0.67%)
     
  • AUD/USD

    0.6795
    -0.0022 (-0.32%)
     
  • ASX 200

    7,301.50
    -52.90 (-0.72%)
     
  • OIL

    80.34
    -0.88 (-1.08%)
     
  • GOLD

    1,797.30
    -3.80 (-0.21%)
     
  • BTC-AUD

    25,080.46
    -47.06 (-0.19%)
     
  • CMC Crypto 200

    404.33
    +2.91 (+0.72%)
     

7 things Australian women need from the 2021 Budget

Top left - woman carrying child and groceries, Top right - woman using iPad, Bottom Left - woman seated outside on laptop, Bottom right - woman sitting at desktop with baby
Increasing women's economic participation is one of the biggest ways Australia could get its economy growing faster. Here's how the experts think it should happen. (Images: Getty).

Every Budget from 1984 to 2014 had a gender impact statement. And in a year dominated by gender inequality, workplace harassment, domestic violence and sexual assault, the pressure is on Treasurer Josh Frydenberg to bring it back.

The COVID-19 recession disproportionately impacted women: they were the most likely to lose their jobs, less likely to receive Government income support and more likely to take on a greater share of unpaid work.

It’s what the Grattan Institute dubbed a “triple-whammy” in a March analysis paper.

The October 2020 Federal Budget was also met with disappointment, with the $240 million allocated to women’s economic security described as a “slap in the face”.

The Government responded by noting that “women drive on roads”.

However, in the wake of Brittany Higgins’ allegations, Grace Tame’s advocacy, the allegations against Christian Porter, domestic violence stumbles and a focus on Australian women’s financial disadvantage, all eyes are now on the gender impact of Tuesday’s Federal Budget.

This is what Australians want to see for women in the Budget:

Tax reform: Ditch stage three cuts

Thinktank Australia Institute has pushed for a major overhaul of the Government’s $18 billion tax cut packages.

Its analysis concludes the third stage of the tax cuts needs to be ditched entirely, and found that 67 per cent of the benefit will flow to men and further increase the gap in disposable incomes between genders.

Under these tax cuts, scheduled to come into effect in 2023, the top tax rate is lifted from $180,000 to $200,000. That means all Australians earning between $45,000 and $200,000 will be taxed at 30 per cent, effectively ending the 37.5 per cent tax rate.

“Budgets spell out a government’s priorities in the clearest possible terms. Last year’s budget, and every budget before it, has prioritised the preferences of men over the priorities of women,” Matt Grudnoff, senior economist at the Australia Institute, said.

Superannuation: Paid on parental leave, $450 threshold scrapped, concessions revisited

“The gender gap in the Australian superannuation system is a real issue that sees women financially disadvantaged,” Colonial First State general manager Kelly Power told Yahoo Finance.

“Coronavirus has pushed us back even further, creating greater urgency for solutions to the retirement realities challenging Australians, particularly women.”

During 2020, Australians withdrew $36 billion in early release superannuation payments, with women and young Australians the most likely to withdraw cash, Colonial First State Research found.

Power said she would like to see superannuation paid on parental leave as a priority, along with the removal of the $450 per month superannuation threshold.

As it stands, employers are only required to pay superannuation to workers who have earned more than $450 over the course of the month. This policy has been criticised as disproportionately impacting casual and low-income workers, who are also more likely to be women.

“ABS data tells us 68 per cent of part-time workers are females… Many women who do a small amount of paid work, or who work multiple jobs each paying less than $450 per month, are missing out on super guarantee,” Power said.

Additionally, parental leave is the only form of paid leave in Australia that does not require superannuation payments. It’s considered one of the key drivers in the 40 per cent gender gap that exists in retirement savings.

The Australia Institute is also calling for superannuation reform. It said current superannuation tax concessions cost $41 billion but exacerbate the gender superannuation gap, as 72 per cent of these tax concessions flow to men.

“Superannuation tax concessions were initially designed to help Australia become less reliant on the aged pension, but with the rapid increase in the concessions they will soon become even more costly. These tax concessions are big, getting bigger, and plainly unfair,” Grudnoff said.

Instead, these concessions should be channelled into support for women with broken paid work history and lower incomes, the Australia Institute believes.

Childcare: Greater subsidies

Australia currently has the fourth most expensive childcare fees in the OECD, a hurdle that is stopping many women from returning to the workforce.

In fact, a KPMG study from 2018 found that fees were so high that it was more expensive for women to return to the paid workforce for more than three days a week, than it was for them to stay as the primary caregiver.

Childcare advocacy group Thrive by Five has called on Treasurer Josh Frydenberg to funnel significant investment into early learning and childcare.

“We know making early learning and childcare more affordable is one of the most effective ways of growing our economy, creating jobs, empowering women to participate more fully in the workplace and giving children the best start in life,” Thrive by Five CEO Jay Weatherill said.

The advocacy group, together with the Business Council of Australia, the Australian Council of Trade Unions, Chief Executive Women and The Parenthood, is calling for the Government to work towards universal access to quality childcare.

Currently, the maximum childcare subsidy available to families is 85 per cent for those earning less than $80,000. The Business Council of Australia has proposed the subsidy be increased to 95 per cent.

Under this plan, the subsidy would then taper off by 1 percentage point for every $4,000 in additional family income above $80,000. Effectively, that means a family with an $80,000 income would receive 95 per cent of their fees subsidised, while a family earning $84,000 would receive a 94 per cent subsidy.

Additionally, if a family earns more than $190,000 a year, subsidies are capped at $10,560. The Business Council of Australia wants the cap removed to bring more women back to the paid workforce.

"Our child care and paid parental leave systems are a barrier to women who want to get back into work and they don't work for modern families," BCA chief executive Jennifer Westacott said.

The Australian Government earlier this month announced the Budget would contain a $1.7 billion investment in childcare, including confirmation that it would remove the $10,560 cap on childcare.

It also announced it would increase the childcare subsidy to 95 per cent, but only for families with more than one child.

Paid parental leave: Overhaul required, paternity leave increased

University of Sydney professor of gender and employment relations Marian Baird AO said the paid parental leave scheme also must be revisited urgently.

Currently Australian women generally receive 18 weeks paid leave after having a child, while new fathers receive two weeks in ‘Dad and Partner Pay’. Both of these are paid at the minimum wage.

“If we want to get more women into the workforce – which is the overriding narrative that the Government now has… we know that it can’t be done unless there are the appropriate care supports,” she told Yahoo Finance.

“There are two things in that: one is childcare, and one is parental leave.”

The parental leave scheme is working for about 50 per cent of working mothers and only 10 per cent of working fathers, Baird said.

“The big thing that we need to shift is equalise that care distribution between men and women when they have young children.”

The only way to do this is to significantly increase the amount of paid paternity leave available, and Australian men’s take-up of the scheme.

Baird said it’s unsurprising men aren’t taking up the leave: it’s paid at the minimum wage and isn’t as commonly understood.

“If we’re really serious about the parental leave scheme, we have to make it longer.”

She said it should be somewhere between 26 weeks and a year, and the system needs to promote more sharing between mothers and fathers.

KPMG pushed for a similar scheme in a proposal it released in April. Under its plan, the amount of leave available would increase to 26 weeks over the coming six years, with each parent eligible for up to 18 weeks leave.

The consulting firm argued capping it at 18 weeks would prompt the other partner to take up the extra leave.

Parents who split the caring responsibilities more evenly would also be eligible for two extra weeks of leave.

KPMG calculated its plan would deliver an extra $140 billion in national household consumption.

“Almost half of women cite caring for children as the main reason they are either not working at all, or not working more hours,” KPMG Australia chair Alison Kitchen said.

“By contrast, just 3 per cent of men nominate caring for children as a principal barrier to working. This shows the impediments to women’s economic participation, which a revamped paid parental leave system could help to address.”

Parent and carer community The Parenthood’s executive director, Georgie Dent, has welcomed the changes, but warned more needs to be done to address the high costs of childcare in Australia.

Workforce investment: Pay rises needed

Both Baird and Dent noted that investments in childcare and paid parental leave will founder without adequate workforce support measures.

They both called for significantly greater investment in childcare and aged care.

“We need to understand that policies have to interlink, and at the moment we have gaps in our policies. We don’t have a ‘whole of care’ approach, or a ‘whole of work’ approach,” she said.

She said the Government needs to increase wages for workers in the care sector and reconsider the way the private sector receives and manages funds in these industries.

Currently, childcare workers - who require a Certificate 3 to work - are paid $953 a week. Building labourers and concreters make $1,458 and $2,100 a week respectively.

Dent echoed the same calls.

“There’s no point rolling out early education and care if it’s not quality. Quality is very closely linked with workforce retention, and the early childhood education and care workforce is one of the lowest paid workforces in the country,” she said.

Domestic violence: To put it simply, $1 billion is needed

The Budget will reportedly include a doubling in funding for domestic violence prevention, taking spending to $680 million.

It comes after the Government failed to commit any new funding for domestic violence specialist services in the 2020 Budget, and slashed $1.44 million from its Respect Matters school education program.

Women’s Safety NSW has warned the Government has never attempted to make domestic abuse services universally available.

“There are currently many services which are underfunded or simply not available Australia-wide,” Hayley Foster, chief executive of Women’s Safety NSW said.

“We wonder why domestic and sexual violence rates aren’t coming down, but truly, how can we expect women to leave violent and abusive relationships when we’re not ensuring they have access to safety and support? And how can we break the cycle?”

The group found that one in three women and girls seeking accommodation when fleeing a violent relationship are unable to be housed, and women in half of NSW’s local court areas don’t have access to women’s legal services.

Foster said the Government needs to deliver a four-fold increase in its domestic violence funding.

When it comes down to it, real reform

Tinkering around the edges won’t cut it anymore, PwC chief economist Jeremy Thorpe told Yahoo Finance.

Australia is essentially stepping off the bridge of the COVID-19 support measures, and now the Government needs to focus on economic reform that delivers tangible growth.

“Interestingly, female workforce participation is back to pre-COVID levels, but that’s still below male levels,” Thorpe said.

“One of the levers [for growth] is participation, and we know that childcare is one of the greatest levers you can pull to grow the workforce participation.” This measure will simply have to be part of the recovery, he added.

More broadly, Thorpe said the Government needs to apply a stronger gender lens on the 2021 Budget in the name of equality.

“Females have a greater chance of lower superannuation, more chances of poverty in old age, lower incomes throughout their life. They’re more likely to suffer domestic violence from an exponential margin,” he said.

“There’s a whole lot of things that you look at and say, ‘That’s an outcome you just can’t justify.’ It’s just a fundamental human rights view of the world.”

However, he added, focusing on women’s needs and workforce participation is also a sophisticated economic decision.

“You can have your cake and eat it too.”

Will the Government deliver for Australian women? Follow Yahoo Finance’s Federal Budget coverage: Sign up to the newsletter here.

Take control of your money and learn to maximise it with the Women’s Money Movement! Join the club on LinkedIn and follow Yahoo Finance Australia on Facebook, Twitter and Instagram, and subscribe to the free Fully Briefed daily newsletter.

Image: Yahoo Finance
Image: Yahoo Finance