Is poverty to be the reward for a life spent caring?

Is poverty to be the reward for a life spent caring?

Women’s financial security over the lifecycle

Speech by Elizabeth Broderick

Sex Discrimination Commissioner and Commissioner responsible for Age Discrimination

Australian Human Rights Commission

Women in Super (NSW) Luncheon

 12.15pm, 30 April 2009

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Thank you very much for the invitation to be here. It’s just fantastic to be in a room with so many great women.

I would like to start by acknowledging that we are here today on the land of the Gadigal people of the Eora Nation. I pay my respects to their elders past and present. I have had the great honour of meeting many inspirational Indigenous women in my role – their energy, courage and determination leaves me in awe.

Just a couple of months ago I had the privilege of travelling with two inspirational women from Fitzroy Crossing to the United Nations in New York. They told their amazing story of how women in the community came together to address alcohol abuse and violence by lobbying for a ban on the sale of take away full strength alcohol. The results have been groundbreaking with a 43% drop in reports of family violence and a significant rise in school attendance for children. This was a community that had 13 suicides in 13 months.

The story of Fitzroy Crossing is a testament to the strength and resilience of the Indigenous women of this community. At the United Nations, their story resonated with many women from different corners of the world and inspired and energised many more.

Today I have been asked to talk to you about my personal journey into the role as Sex Discrimination Commissioner and my priorities for the role.

Given the fantastic opportunity I have today to be in a room with talented experts from the superannuation industry I would like to also spend a bit of time outlining my work in the area of women’s financial security in retirement and draw on your incredible expertise on how we create a system that works better for women.

So, how did I find myself in the role as Sex Discrimination Commissioner? Well, I’ll start at the beginning.  I’ve always been surrounded by women – I come from a family of three daughters.  One of my sisters is in fact my identical twin, which has proved quite useful over the last 18 months as I’ve travelled around Australia!

We also had a younger sister and we grew up believing in the equality of men and women and that anything boys could do girls could do better!

When I thought about career, I wanted a job where I could mix work and family. Why I decided that law would allow me to do this was anyone's guess. Technology was just starting to come into law firms and I thought if I combined law with technology I would be ready for the wave of opportunity this would create.

I combined my law degree with a computer science degree – worked and lived overseas for several years and then returned in my late 20s to Australia. 

After working overseas for a period, I came back to a law firm Blake Dawson and accepted a job setting up the technology for a high profile case in Papua New Guinea.

Over the next 5 years, we went on to build the Legal Technology Group – with multi million dollar revenue and around 50 employees. The internet was in its infancy but was changing fundamentally the way services were delivered so we moved into the development of online products in a big way.  This meant that instead of always obtaining legal advice from a live lawyer, clients had the option of obtaining more competitively priced but more generic legal advice from an expert system that lived out on the web. 

It was also at this time that I became very interested in the impact of technology on work practice.  This interest came to the fore in 1996 when it looked as if our new Legal Technology Group might crash and burn.

About 5 years after the group had been established; I had a day at work where one of my lawyers popped into my office to tell me she was pregnant.  The same afternoon another senior manager came to see me with the same news.  And what they didn't know was that I also was pregnant.  When three weeks later a fourth lawyer joined the mother-to be queue we knew we had a problem.  That was half the entire team that would be out on maternity leave at one time.  As the person in charge of the team I had to find solutions and find them fast.   

With four of the team pregnant we now had a solid business reason to reinvent the way we worked.  We developed a program where the ultimate responsibility for matters rested with the individual, whether or not they worked full or part-time.  And if a flexible worker needed to come in on a non-designated work day and could not arrange child care at short notice, they could bring in the kids.  They also agreed to carry a mobile phone when away from their home, and to access their e-mail account at least once a day.  I wanted each of our flexible workers to remain just as committed to the firm as they had been before they had their maternity leave, and this meant that they maintained their previous position and level of seniority.  At the heart of each of these arrangements was reciprocity and trust.

We realized early on that we needed support staff who also shared the vision.  That’s when we hired Michelle as a new junior secretary.  Michelle had been a secretary for only 3 weeks but she’d been a nanny for 3 years.  With that experience, we knew we needed her on our team

Workplace flexibility allowed me to build a supportive and productive environment like nothing else. It built a loyalty among staff that money could not buy. As Mother Teresa said "There are no great things, only small things done with great love." We didn't set out to change the world but to make flexibility work in our small team.  But that had some amazing flow on impacts. Now 20% of all staff in a flexible work arrangement.

My experiences at Blakes taught me that with a strong evidence base, a platform from which to advocate and a strong network of support - change can happen.

It was through those shared experiences that I continued to grow my interest in using technology to change work practice.  Having a year as Telstra’s NSW Business woman of the year expanded my horizons and allowed me to see how technology was changing work practice outside the legal profession.

It also enabled me to consider more generally issues for women in other industries.  So that when I was approached about having my name put forward for the role of Sex Discrimination Commissioner I jumped at the chance.

Like many lawyers I suspect I had come to a time where I was keen to be involved in social change.  I loved every day of my time at Blakes but I had a yearning to be engaged in a broader agenda, one that would allow me to have a hand in creating a fairer and more equal Australia.

When I first moved into the role I figured I could sit here in yet another high rise office block in Sydney and devise the equality agenda by building on the work of my predecessors and speaking to a number of people.  The alternative was to get out around Australia and to listen to the stories and suggestions of women and men for change.  So that’s exactly what I did.

Over the first 6 months, I travelled Australia.  I have been to capital cities and regional and remote areas in all states and territories. Let me tell you, it has been an incredible experience so far. From the mouth of the Murray, to the remote communities of WA and NT, to the board rooms of Sydney and Melbourne. I have met with many diverse groups of people – from abattoir workers, young women, bankers, Chinese factory workers, African women, lesbian mothers, prison advocacy groups, indigenous women, community workers, academics, business roundtables, ministers and public servants - just to name just a few.

The everyday experiences I heard provided a powerful human dimension to the statistics that come across my desk every day.  At the end of the Tour I was clear that gender inequality remains an everyday lived experience for women and men in Australia – it’s a challenge that remains real and demanding.

The Listening Tour directly informed the setting of my priorities for my term as Commissioner. In July 2008 I launched my Plan of Action Towards Gender Equality. My Plan focuses on five key areas:

1. Increasing the number of women in leadership positions, including supporting Indigenous women’s leadership;
2. Achieving greater balance between paid work and family responsibilities for men and women which starts with a national scheme of paid leave for parents
3. Driving down the incidence and impact of sexual harassment in Australian workplaces
4. Reducing the gender gap in retirement savings and increasing women’s financial security over the lifecycle; and
5. Strengthening laws to address sex discrimination and promote gender equality;

Yesterday I gave a speech at the National Press Club where I pointed to the depressing picture of women’s leadership in this country as a stark indicator of how we as a nation, continue to leak female skills and talent, despite being a world leader in women’s education.

Everyone I meet in my role is always startled to hear that according to the World Economic Forum, Australia is amongst countries ranked first in the world on women’s education, but 40th on women’s workforce participation. This statistic leaves many thinking, ‘Hello? What’s going on here?’

And for us women, the answer is pretty obvious. How many times have you heard the story of the woman who takes on work well below her skill level to accommodate family responsibilities? What about the woman who changes to part-time hours and then never gets promoted?

These stories are reflected in the numbers of women in senior decision making positions. In the corporate sphere the 2008 Census of Women in Leadership told us that women chair only 2% of ASX200 companies and hold only 8.3% of Board Directorships. 2% of ASX200 companies are led by women Chief Executive Officers and women hold only 10.7% of Executive Management positions.

I’m sure these numbers are no surprise to you. But what they reinforce is that very real challenges to gender equality in the workplace persist.

As many of you would know, while the opportunities available to women in terms of education and employment have expanded dramatically over the last decades – our caring role has remained constant.

Some have termed it the “double shift” of working full-time and caring full-time – it is no surprise that many women report feeling increasingly pressed for time.

This is why I in my role so far I have been advocating for a national paid leave scheme for parents as a foundation for building workplaces that enable both women and men to balance their paid work and family responsibilities. It is a great embarrassment that Australia remains one of two OECD countries without a legislated national paid leave scheme for parents.

As a close companion to paid parental leave, I have been raising the need for strong regulation to support flexible work for women and men with caring responsibilities. While we have seen an increase in flexible work practices offered by employers, what I heard consistently on my Listening Tour is that the mere existence of these policies does not mean that they are being taken up.

These policies are needed to enable all employees – women and men – to work and care.

It is alarming to me that the end result of women’s role in caring is the gender gap in retirement savings. This was really brought home to me when I met a woman called Lurline as part of my national Listening Tour. 

Lurline was working in a young women’s refuge in Tasmania. Her life story is a long chain of incredible achievements – of course most of these are unrecognised. Over the course of her life, she has not only spent many years caring for her own children, but she also helped to better the lives of many disadvantaged young women.

Now that her children have grown up and moved on, Lurline works with girls who are homeless for all sorts of reasons – like violence and abuse from parents, drugs, alcohol or poverty. Lurline gets up all through the night to help these young women – and on the morning I met with her she had been up at 2.30am when one of the girl’s boyfriends dropped around and she had to send him on his way, up at 3.30am when he came back with his ’mates to burn down the refuge, and up at 6am when she had to ensure that all the girls were dressed and ready for school. 

The sad part of this story is that Lurline should now have the option of retiring from paid work.  She is 72. But because of a life spent caring for her own children and now others, combined with the poor wages in the feminised community sector, she has little to no retirement savings.

And her situation is not unusual. 

The very sobering reality is that, like Lurline, many women face the prospect of poverty in their twilight years. Of all household types in Australia, single elderly female households are at the greatest risk of persistent poverty.

We need to ask ourselves as a nation, “Is poverty to be the reward for a lifetime spent caring?”

And this is why closing the gender gap in retirement savings is a key priority for my term.

Current superannuation payouts for women are approximately half of those of men. A gender breakdown of the total shares of superannuation assets again shows a significant gender gap. In 2006, men held around 66% of total superannuation account balances, compared to 34% for women.

What is particularly disturbing is the considerable number of women who have minimal savings. In 2004, half of all women aged 45- 59 had $8 000 or less in superannuation. The corresponding figure for men in $31 000.

In recent decades, there has been a growing global recognition of the role of retirement income systems in maintaining national economic stability and financial security across the lifecycle. As such, Australia’s retirement income system is a vital element of the nation’s economic and social policy framework.

We have seen a strong public policy focus on superannation as a means to provide income during retirement and reduce reliance on the Age Pension. As the population ages in coming decades, this is becoming more of a pressing issue.

However, since the introduction of the Superannuation Guarantee in 1992, there has been consistent concern about how women will fare in our retirement income system, with superannuation being linked exclusively to paid work.

The figures I have outlined today show that this concern is grounded in reality.

Women are disadvantaged on a number of counts with the current system. Women are more likely to have broken paid work patterns due to caring responsibilities and have lower life-time earnings due to pay inequity. This means that not only do women generally have lower levels of superannuation coverage over the lifetime, but when they do engage in paid work, because of their lower earnings they accumulate lower amounts of superannuation.

With women generally retiring earlier and living longer than men, there are a number of serious implications stemming from the gender inequality in retirement savings. Many women, after a life spent in unpaid caring work, face prospects of financial insecurity and poverty in retirement, often solely relying on the Age Pension. Around 73% of those on the single rate of the Age Pension are women.

On my Listening Tour I heard from many women who are justifiably anxious about poverty in retirement. There was a common disappointment that the retirement income system did not in anyway recognise or value unpaid caring work.

Based on the evidence so far it is clear that there are two major aspects of the retirement income system that need to be addressed to make it work for women.

Firstly, we need to look at ways to remove barriers to women’s workforce participation and increase women’s earnings to redress the disadvantage experienced by women due to its link to paid work.

Secondly, we need to look at ways the system can better recognise and value unpaid work, the large majority of which continues to be carried out by women.

In my submission to the Review Panel for Australia’s Future Tax System, I made a number of recommendations to address these issues.

These include strategies to remove the barriers to women’s workforce participation that I outlined earlier such as paid parental leave and stronger regulation to support flexible work for employees with caring responsibilities. Closing the gap between women and men’s earnings is another area for action I have identified as a measure to increase women’s retirement savings.

As a gender equity measure, I recommended an immediate increase to the single rate of the Age Pension.1 As it stands, the Age Pension, as a safety net for those unable to save for their own retirement, is the only way in which unpaid work is somewhat recognised. Given that 73% of those currently on the single rate of the Age Pension are women, this is urgently needed.

To address the question of how the system can better recognise the value of unpaid work I have asked the Government to investigate establishing a specific retirement income scheme to recognise the value of unpaid caring work. This could include government funded carer superannuation credits to be paid at the time of retirement, or a national fund or social insurance scheme established specifically for carers.

As a start, I have suggested that superannuation be paid for those individuals on the parenting or carer Centrelink payments.

In recognition that the large majority of low income earners are women, we have asked the Government to review of the superannuation tax concessions to ensure they are equitable.

In reference of the superannuation industry, I have recommended the Government investigate specific strategies to increase the representation of women in senior leadership positions, and specifically, in superannuation fund governance positions. This could include the introduction of mandatory quotas and targets, allocation of specific funding to train women trustees and board directors or tax incentives for funds that have an appropriate balance of gender in trustee positions.

I am keen to hear from you, as experts in the superannuation industry, on how the system can deliver better outcomes for women.

1. How do you think the system could better recognise the value of unpaid work?
2. How can the system work better for low income earners, the majority of whom are women?
3. How would increasing the superannuation guarantee or removing the $450 a month threshold impact on women?
4. Will increasing women’s representation in governance positions make a difference? If so, what do you think are the best ways to make this happen?
5. What role do you see for your industry in building women’s economic security over the lifecycle?

These are the questions that I will be considering as part of my work to close the gender gap in retirement savings and increase women’s financial security over the lifecycle. And I hope that this is the start of an ongoing dialogue I have with the Women in Superannuation group to progress these issues.

The current gender gap in retirement savings is an injustice which, if left unaddressed, will only grow as a major social and economic problem.

As we enter an unprecedented period of longevity this is one area that we cannot ignore. Many older women are now living in poverty, and unless action is taken, many more will share this same fate.

This is a very complex area of public policy. It is important that we get it right – and the review of the retirement income system as part of the broader Tax Review is an important first step.

I am confident, by working together, that we will be able to create a fairer and more equal Australia for women and men to live with dignity and respect over the lifecycle.

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