Now is the time for a fairer super system

I have found myself reflecting recently on the founding vision of superannuation.

It is easy to forget that for many years superannuation was not something that all working Australians had access to, so it is wonderful to reflect on how far the system has come. Superannuation is driven by a fundamental belief that dignity in retirement is for everyone, not just the lucky few. We must also acknowledge that there are gaps in our system that I am absolutely passionate about solving.

Recently HESTA made a submission to the Federal Budget consultation process seeking to recommend solutions that will help address the gaps that still exist in supporting those on low incomes – and in particular women who continue to retire with far less security than they should.

HESTA modelling shows the introduction of several key measures in the May Federal Budget such as paying super on the Commonwealth Parental Leave Pay scheme and better targeting tax concessions could significantly improve the retirement balances of critical health and community services professionals.

The combined impact of paying super on the Commonwealth Parental Leave Pay scheme, extending eligibility for the Low Income Super Tax Offset (LISTO) to those earning up to $45,000 and bringing the offset in line with the current Superannuation Guarantee (10.5%) could have a profound impact on retirement outcomes for many Australians.

If these equity measures were introduced, mothers working in health and community services sectors could see a super boost in retirement ranging from 3.7% to more than 11%, depending on how many children they have. Furthermore, about 250,000 HESTA members could see an increase to their super savings if the LISTO eligibility alone was extended.

For us the key is to prioritise paying super on the Parental Leave Pay scheme – a key outstanding equity measure for our retirement system disproportionally impacting women. Failing to address this sends a clear message that unpaid caring work continues to be undervalued in our society.

This is just one of the glaring gaps that overwhelmingly impacts low and middle-income earners who are yet to fully benefit from our world-class retirement system.

Close to 80% of our 970,000 members are women estimated to earn a median salary of $59,214. The median super balance for female HESTA members accumulating their super is $29,377.

That’s why every extra dollar our members can get in their super counts. And why the May Federal Budget is such an important opportunity to start making our super system fairer now and for future generations.

As stewards of our members’ savings and custodians of our retirement system 2023 is such a critical year to make super more truly universal, equitable and sustainable for all Australians.?