Women still being left behind
4 October 2018

Last week the CBA released its Women’s Financial Wellbeing Guide and it makes for an interesting read.  Specifically, the statistics that show just how much inequality still exists between the sexes, despite global improvements (albeit slow) over the last 20 years. Examples include:

14.6% = the average gap between the salaries of Australian men and women

$253.70 = women earn less per week than men on average

73% = superannuation gap between men and women at age 50

$170,000 = the projected superannuation gap between men and women at retirement by 2030

In 2017, Australia was ranked 35th on a global index measuring gender equality, slipping from a high point of 15th in 2006.  While Australia scores very highly in the area of educational attainment, there is still a lot of progress to be made in the areas of economic participation and opportunity and political empowerment.

This is changing somewhat. The number of women on boards of ASX-listed companies grew from 8.3% in 2009 to 26.20% in 2017, largely due to a diversity policy implemented by the ASX Corporate Governance Council in 2010.

Back in 2015, Canada’s Prime Minister Justin Trudeau’s cabinet became the first in Canada’s history to have equal numbers of men and women to global acclaim. A lesson our politicians could take note of, given the allegations of bullying of female members of parliament after the (most) recent leadership spill. In terms of female representation in our Cabinet, the figures are dismal over the last 4 Prime Ministers:

27.3% at most with Mr Turnbull in 2016 (for a grand total of 152 days).

But I digress as I was most alarmed by the superannuation statistics for women versus men.  The disparity is two-fold:

A/ women earning less than men means less employer superannuation contributions.  Australian women are overrepresented as part time workers in low-paid industries and continue to be underrepresented in leadership roles in the private and public sectors (as above).  Unfortunately, the Australian workforce continues to be highly segregated by gender and female dominated industries, like child care, aged care and health and community services, have been historically undervalued.

B/ women leaving the workforce to raise children means zero superannuation contributions (or women reducing their work hours means reduced income and less superannuation).  For a 35 year old woman earning $75K per annum, a two year career break could mean around $33,000 less in super by the time she retires at age 65.  Research has shown that, on average, the longer a woman is out of the paid workforce the bigger the reduction of her future earning capacity.  (Reports actually show that 90% of Australian men and women overwhelmingly believe that men should be as involved in parenting as women, however, men are much more likely than women to have requests such as workplace flexibility denied).

To correct this superannuation gap, it is more important than ever that women ensure their account balances are invested in such a way to provide capital growth over time.  This means exposure to growth assets like shares and property securities.  Whilst this is no guarantee of bridging the financial hurdle that exists between men’s and women’s superannuation balances, it is likely to result in better returns over the longer haul.





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