Women’s Financial Inequality Is An Election Issue — Here’s What The Major Parties Are Promising

Women on average earn less money in their lifetimes than men. This is not a controversial statement: it’s a fact. 
According to the Workplace Gender Equality Agency (WGEA), women in Australia working full time earn 13.8% less than men; in dollars, this comes to $255.30 less per week. 
But taking into account things like superannuation, bonuses and other additional payments, WGEA says the gender pay gap is 22.8% in the private sector, meaning that men earn effectively $25,792 a year more than women working full time.
With the federal election on May 21 fast approaching and campaigning well and truly underway, political parties have the opportunity to tackle women’s financial inequality in Australia. 
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Refinery29 Australia spoke to some of the women leading the way in economic and social policy about where the problems lie and what our future government can do about it. 

What causes the gender pay gap?

Let’s start by talking about the gender pay gap. There is a misconception that the gender pay gap refers to when a man and a woman in the same job are paid different amounts based on their gender. That’s called unequal pay, and it is illegal. 
As Dr Leonora Risse, an RMIT University economist who specialises in gender equality in the workforce, tells Refinery29, there are a number of factors that contribute to the fact that women, on average, earn less than men. 
It starts when women first enter the workforce. 
According to Risse, some jobs have salary bargaining ranges, meaning that you can negotiate your pay within a certain range. Men are more likely to negotiate their salary and end up with more pay than their female colleagues. 
Men are also more likely to be represented in senior roles and higher paying positions. 
“That’s where discrimination and unconscious biases can really feed into these overall inequities,” Risse says. 
Dr Fiona MacDonald, the Industrial and Social Policy Director at The Australia Institute, says that one of the ways to fix this would be to require workplaces to be transparent about how much they pay employees. 
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The government could also make it illegal for companies to include what’s known as ‘pay gags’ in employee contracts, which prevent workers from telling each other how much they are paid. 
Risse also points out that women tend to be represented in lower income earning industries, such as childcare, aged care, healthcare and teaching. But the reason why these industries are typically lower paid is because they are female-dominated. 
“There is a cultural norm that caring professions or looking after children and looking after elderly people, is women’s work and somehow sort of less serious or valued than working on a mining site or working in construction or, you know, in a finance company,” Risse says.
“There used to be a time when work in data and IT and computing was mainly done by women and it was quite low paid. And then the industry changed and more men got into it, and they realised it could be quite profitable and suddenly pay went up in that industry.
“So there’s also something there about the associations that we make within our culture and in our social attitudes about what is important work and what’s not.” 

Here’s what the major parties have done, or will do, to close the gender pay gap if elected:

The Coalition

— Continue to resource the Workplace Gender Equality Agency.
— Provided $18.5 million in this year’s Budget to boost WGEA’s work with governments and employers, and implement the recommendations of the Review of the Workplace Gender Equality Act 2012. 
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— Provided $38.6 million in the Budget to boost the number of women in non-traditional trades by providing wrap-around support, including mentoring, for women who start in higher-paying trade occupations on the Australian Apprenticeship Priority List.

Labor

— Strengthen the ability and capacity of the Fair Work Commission to order pay increases for workers in low paid, female dominated industries.  
— Legislate that companies with more than 250 employees will have to report their gender pay gap publicly.  
— Prohibit pay gag clauses and give employees the right to disclose their pay if they want to.  
— Take action to address the gender pay gap in the Australian Public Service.  

The Greens

— Lift the minimum wage and guarantee above-average wage increases in women-dominated industries.
— Remove pay gag clauses.
— Increase reporting on gender pay gaps and require employers to take action to close the gap in their workplace.
— Develop a National Gender Equality Strategy.

What is the superannuation pay gap?

Another problem that women face is the superannuation pay gap
According to Christina Hobbs, co-founder and CEO of Verve Super, women approaching retirement have around 37% less superannuation, on average, than men.
There are many causes behind the superannuation pay gap, one of them being the gender pay gap. Because women typically earn less than men, they are paid and accumulate less super over their lifetimes. 
But women also lose super when they take time out of the workforce, which can happen if they choose to have children.
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Here’s where the major parties stand on superannuation:

The Coalition

— Removed a requirement last year that previously meant you had to earn at least $450 a month to get paid superannuation. 

Labor

— No additional policies announced yet in this space. Last week Labor confirmed it had dumped its plan to pay superannuation on paid parental leave. "It’s not a policy we’re taking to this election; it's important we continue to see reform to paid parental leave," Shadow Minister for Women, Tanya Plibersek, told the ABC last week.
"It's Labor that introduced paid parental leave, we want to see improvements in it over time. It isn't possible for us to fix every problem that this government has created, including the problem of the superannuation pay gap, in our first term of government."

The Greens

— Boost superannuation payments for low-income earners caring for children under six years old, or children with disability under 16. 
— Pay superannuation on paid parental leave. 

Paid Parental Leave

Paid Parental Leave made headlines recently after the federal government revealed it was changing the scheme as part of this year’s Budget. 
Previously, women and primary carers were entitled to 18 weeks of government parental leave pay, while dads and partners were entitled to just two weeks of dad and partner pay. 
But Treasurer Josh Frydenberg announced in the Budget that this leave would be rolled into a single 20-week package that parents could choose how to divide up amongst themselves. 
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While it may sound like a good idea to give parents more choice in how much leave they want to take, Georgie Dent, Executive Director of advocacy organisation The Parenthood, warns that not requiring male partners in heterosexual relationships to take a minimum amount of paid parental leave will simply reinforce gender stereotypes and divisions of labour. 
According to Dent, there are two things that make dads in heterosexual relationships take parental leave: if the leave is adequately paid, and if they are required to take some leave — otherwise they risk losing it entirely. 
In Australia, we have neither of these things. Government parental leave is paid at the national minimum wage; $154.51 a day before tax. Parents also aren’t paid any superannuation on this amount. And since men earn more money than women (remember that gender pay gap?), they will be less inclined to take a pay cut to go on parental leave.
Dent says that there are huge consequences to dads taking less or no parental leave. Not only does it mean women spend more time out of the workforce (again, widening that pay gap), it also has consequences for the family and how we see men and women’s roles in society more broadly. 
“The caring pattern that is set in the first year of a child’s leave, continues over the course of a child’s whole life,” she says.
“So you’ve got the expectation and pattern in the first year of a baby’s life that dads might take a week or two off when a baby is born, and mums bear the disproportionate load when it comes to caring and raising children,” she says.
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“Paid parental leave is one of the very few tools available to the government that directly influences how care is shared in a home. We have never attempted to mix that up.”

Here’s what the major parties have done, or are promising on paid parental leave at this election:

The Coalition

— Upped Paid Parental leave to 20 weeks in total, which parents can decide how to split between themselves. 

Labor

— Have not announced any changes to the current scheme.

Greens

— Increase Paid Parental leave to 26 weeks. 
— Require each parent to take at least six weeks leave, and decide how to divide up the remaining 14 weeks between themselves.
— Pay parents the same wage that they were earning before they took leave, up to $100,000 pro rata. 
— Pay superannuation contributions during parental leave.

Childcare

One of the biggest barriers to mothers heading back to work, though, is the cost of childcare. 
To explain the problem, Refinery29 spoke to Kate Griffiths, Deputy Director of the Grattan Institute’s budgets and governments program.
Unless parents are lucky enough to have their children's grandparents available and willing to watch their kids when they return to work, they will need to look into childcare. According to Griffiths, the cost of childcare in Australia is typically $120 a day, but can be significantly higher in inner-city areas. 
The Australian government provides the childcare subsidy, meaning that they will pay for a portion of the childcare costs depending on how much money you are earning as a household. 
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If you have one child in care, the subsidy starts at 85% for families earning less than $70,015, and goes down from there. Families with a household income of $354,305 or more receive nothing. 
As Griffiths explains, most families will receive around 50% back on the cost of childcare for their child. 
It used to be that every child received the same subsidy. But in March, the federal government changed the policy so that if you had more than one kid in childcare, the subsidy starts at 95% for your second or subsequent children. In effect: you could get up to 85% back for child one, and up to 95% for child two (or three, or four).
But this is where things get tricky and where women can be disincentivised from returning to work full time. 
The more money that you earn as a household, the less you receive in childcare subsidies. But there are also other benefits and payments that you can miss out on as a family when your household income goes up, like the Family Tax Benefit A and B, and the Parenting Payment. 
As Griffiths explains, choosing how many days to go back to work becomes a financial calculation.
"The question is how much extra income will you bring in from your job to compensate for that loss? Because working that extra day, by definition, brings in more income, but you lose some in childcare subsidies and tax. And so for some women in particular circumstances, you can lose more than you gain [from working those extra days a week]."
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Here are the major parties’ plans to address childcare:

The Coalition

— Increased the childcare subsidy by 30% for second and subsequent children aged five or under, to a maximum rate of 95%. 
— Removed the $10,655 cap on childcare subsidies for families earning over $190,015. 

Labor

— Lift the maximum child care subsidy rate to 90% for the first child in care.
— Keep childcare subsidy rates higher for the second and additional children in care.
— Extend the increased subsidy to also cover after school care.
— Extend childcare subsidies for households earning up to $530,000 in household income.

Greens

— Make universal childcare free
— Phase out privately-run child care operators, and replace them with government and non-profit centres. 
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We have a long way to go to close the gender pay gap. And while politicians will sometimes try to wash their hands of the problem and say it’s up to society to fix it, the truth is that the federal government has a lot of power to achieve women’s economic equality. So if these are issues that matter to you, make your voice heard on voting day. 
The 2022 Federal Election takes place on Saturday, May 21.
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