Summary
In its submission to the Henry Inquiry into the Future of Australia’s Tax System, the National Foundation for Australian Women calls on government to reform the Age Pension by creating a centralised retirement insurance plan for low-income earners and increasing the single pension rate, and to introduce policies to encourage women to work such as a national paid parental leave scheme.
After receiving advice from respected economist Professor Patricia Apps and consulting widely with women and women’s organisations, NFAW says that the single rate of pension (including the GST supplement) should be benchmarked at 30 per cent of MTAWE and raised to 67 per cent of the couple rate.
This equates to an increase of approximately $35 per week for single aged pensioners.
NFAW is also concerned that there are multiple systemic problems with current models of superannuation savings for lower income women, and calls for the Government to develop a centralised insurance plan for retirement income for low-income earners. This could be designed to allow additional contributions from Government for those on short or long-term Government income support payments such as Carers’ and Disability Support Pension, as well as employer and personal contributions.
Any new superannuation tax measures should discriminate in favour of low-income earners. This would not only allow the super savings of low paid women to grow much faster, it would in part compensate for the tax free final benefit provision which favour high earners.
We also regard the introduction of a national Paid Parental Leave scheme as essential to encourage better workforce participation for women. At an estimated cost of $500m this would be less expensive than providing tax concessions to well off super savers.
Improving the current system of child care for children under school age, especially in relation to accessibility, quality and cost, and immediate enhancement of the current deplorable provision of out of school hours care and school vacation care for young school age children would also improve workforce participation.