Apples for apples? Comparing Liberal and Labor platforms on economic security for women

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With the federal election campaign in its final days, people are heading to polling booths to vote in Australia’s next government. In today’s federal election piece, Policy Whisperer Susan Maury (@susanmaury) and Laura Vidal (@lauraemilyvidal), both of Good Shepherd Australia New Zealand, break down the Government and Australian Labor Party’s policies for women on improving economic security, providing both a comparison between the platforms and commentary on how the plans fall short. Today’s piece on economic security is the first in a two-part series; you can view part 2 on increasing women’s safety here.

According to a recent survey undertaken by Women Vote, 94 per cent of voters believe that party leaders should better address core women’s issues. The ALP have released a comprehensive plan focused on advancing gender equality and covering numerous domains, while the Liberals have focused on a few key issues off the back of their Women’s Economic Security Statement late last year. There is some overlap in areas of focus for both Liberal and Labor, including economic security and child care.

Economic security

Ensuring the economic security of women requires a multi-faceted approach, including in the domains of employment, social security, retirement income, and better legal protections against experiences of economic abuse.

Liberal

Liberal strategies for improving women’s economic security are primarily aimed at increasing women’s workforce participation and moving them off of income support. Income support and income management policies can be harsh for women, and especially so for women who are in vulnerable circumstances, including single mothers and Indigenous women. Punitive regimes such as the heavily criticised ParentsNext normalize the state-sanctioned surveillance of women under the rhetoric of a ‘pre-employment’ program. While access to employment and educational opportunities is essential for breaking down disadvantage, the Government’s attempts to support women into employment are increasing disadvantage and financial stress. The Coalition has announced some minor changes to improve their welfare conditionality policies, but overall they continue to support a ‘mutual obligation’ framework underpinned by the threat of sanctions. Further, the Government does not back increasing the Newstart Allowance.

The cornerstone of the Government’s election messaging for women’s economic security is the creation of 1.3 million new jobs since they were elected in September 2013; over 55 per cent of these jobs have been taken up by women. While the numbers sound encouraging, analysts have questioned whether the government is in a position to take credit for this growth, and pointed out that it is primarily due to population growth, an increase in part-time jobs, and jobs created by the NDIS.

Just announced is a two-part Mid-Career Checkpoint targeting women aged 30-45 to re-enter the workforce following time out for caring responsibilities, which includes assistance to ‘step in’ to work and also ‘step up’ in their careers following a period of 18 months’ employment. This second element represents a slight shift away from the idea that any form of paid work is positive and towards what the Minister for Women says will “give working women options based on their needs, interests and objectives … by helping them to get the job they want”. However, as an individualised form of support it does not address the systemic barriers to meaningful employment such as the rise of the gig economy and the erosion of employee protections that make it difficult for women to balance employment and caring duties. With no detail provided it is unclear how this program would interact with programs already in place for women not in paid work and in receipt of income support, such as ParentsNext.  

The gender pay gap stands at 14.2 per cent; this record low is celebrated by the Government. However, it is possible that the gap is closing because men’s wages are decreasing; The Australia Institute reported late last year that employment is becoming increasingly precarious for all workersincluding men. Low pay rates in female-dominated industries have long been understood as a significant contributing factor to maintaining the gender pay gap; the Government has been silent on this and indeed any proposal to lift wages, focusing instead on actions such as tax cuts.

The issue of superannuation is particularly fraught for women. Women currently retire with 47 per cent less superannuation than men and receive only one third of the government tax concessions on super. Forty per cent of older single women live in poverty and experience economic insecurity in retirement, and women who have worked for most of their adult lives are increasingly finding themselves experiencing homelessness. This alarming trend is attributed to a number of factors, however unequal wealth accumulation due to lower wages and superannuation is a significant contributor.

According to the National Foundation for Australian Women, the changes to superannuation made by the Government in 2017 (Low Income Superannuation Contribution), rendered a neutral outcome—meaning that women were neither better nor worse off following these reforms. Specific actions which would be of benefit to women, such as guaranteed superannuation contributions whilst on paid parental leave, and indeed examining the broader taxation system – including the issue of high effective marginal tax rates for women with young children – have not been considered.

A major contributor to women’s lower retirement incomes is their time out of the workforce due to caring responsibilities. Released late last year, the Government’s landmark Women’s Economic Security Statement included several measures to support a more equal sharing of paid work and care between women and men. These include increasing flexibility in the Parental Leave Pay system and extending access through changes to the work test with a focus on reducing the “flexibility gap”. These are welcome initiatives which will support the mainstreaming of flexible work and the emerging social norm of involved fatherhood.

Labor

Both Labor and Liberal platforms include plans to increase women’s economic security. Here’s a little help in understanding the differences and omissions from both plans.  Photo credit: Pexels .

Both Labor and Liberal platforms include plans to increase women’s economic security. Here’s a little help in understanding the differences and omissions from both plans. Photo credit: Pexels.

The ALP have made a detailed statement on addressing the gender pay gap, and much of this rests on making pay equity a central objective of the Fair Work Act. This includes such actions as legalising an Equal Remuneration Principle, increasing the Fair Work Commissioner’s remit to conduct gender pay equity reviews, order pay increases in feminised industries as needed, ban secrecy clauses, and requiring public declarations of gender pay gaps for companies with 1,000+ employees. Other, more publicised actions include a prioritised pay rise of 20 per cent for early childhood educators across 8 years, and restoring cuts to penalty rates, which disproportionately impact women. They have also vowed to  conduct a comprehensive gender pay audit of the government within 1 year of taking office, while also enforcing gender-equitable government procurement processes.

While not directly aimed at women, Labor's recent announcement that it would replace the minimum wage with a “living wage” should be a significant boost to women, who are more likely to be reliant on minimum-wage jobs while also supporting a family.

Concerning superannuation, Labor’s detailed statement proposes some important changes, including paying superannuation on Paid Parental Leave and Dad and Partner Pay, phasing out the $450 pm income threshold for the Superannuation Guarantee, and amending the Sex Discrimination Act 1984 (Cth) so that businesses are able to make higher contributions to women. They also propose to use a Council of Superannuation Custodians to provide a gender lens on any proposed changes to superannuation tax policies. However, as noted in the Liberal response, a more comprehensive review of taxation policies should be considered.

What’s missing

These are welcome initiatives, with the commitment to address gender pay equity within the industrial relations system a potential game changer. However, there are also other drivers which sit behind the gender pay gap, making it difficult to eliminate without a wider range of initiatives. For example, there are significantly higher numbers of women in part-time, and often precarious, employment due to caring duties. Part-time and precarious workers need stronger protections and there needs to be a greater emphasis on encouraging men to take on caring duties, to equalise the imbalance.

Income support policies and child support policies interact with women’s working lives in complex ways and can’t be disentangled from the gender pay gap and gendered poverty. While Labor has promised a comprehensive review of the Newstart Allowance, and an overhaul of ParentsNext, neither party has mentioned fixing the child support system which is often disastrous for women – particularly when they have left a violent relationship.

Child care

Both parties recognise that the high cost of child care keeps many women out of the workforce, or at least limits their hours in employment. This has long-term systemic impacts to the economic security of women, directly resulting in inequitable superannuation balances and reduced capacity to cover the costs of the retirement years. Additionally, the National Foundation for Australian Women rightly point out that access to child care and pre-school is “critically important for the development of children” (see here for example).

Liberal

According to the Lifting our Game Report, progress toward the quality and accessibility of child care is being made. Federal and state governments are investing, and they are improving outcomes. It does however point out that there are gaps and “opportunities to do more to ensure all children participate in quality education and care irrespective of background and location”.

A new Child Care Subsidy promises to see families $1,300 better off each year, reducing out-of-pocket costs for families by 10 per cent within the first 6 months of its rollout. This is, however, juxtaposed with an underwhelming commitment to only provide funding for children to attend one year of pre-school or kindergarten before starting school. The ‘National Pre-School’ review, to be commissioned under an LNP Government, has the stated aim of identifying ways to lift-pre-school attendance rates. This review is somewhat unnecessary given State and Territory Government support of the Lifting our Game Report. Additional reviews should be put aside in favour of implementing the existing recommendations, which includes a long-term funding commitment to make pre-school accessible for all children, and improve opportunities for women to participate equitably in the workforce.

Labor

Last month Bill Shorten announced a $4 billion plan to overhaul child care subsidies. This includes an increase to the child care subsidy for families with household incomes under $175,000 per year, from 50 to 60 per cent. Low income families (incomes under $69,527) would receive a 100 per cent subsidy on child care costs. This is the kind of practical support that low- and middle-income families in particular will benefit from. This policy also dovetails nicely with Labor’s commitment to raise wages for early childhood professionals. Ideally the policy not only increases workforce participation for women, but also provides greater access to quality early childhood education and care for young children.

What’s missing

While both parties have announced large funding increases to child care subsidies, neither has committed to examining the structure of funding to child care services, including the dominance of for-profit operators. We are concerned that with subsidies going to parents – rather than, as they did before the late 1980s, directly funding not-for-profit community services – subsidies may be swallowed up by services charging higher fees while doing nothing to address availability in areas of need. A full-scale review of the way child care funding is structured may augur a system that delivers better quality and value for parents and the public purse.    

Summary

It has often been the case that government policy has not considered the impacts of policy on women; it is encouraging to see both the ALP and the Liberal Party acknowledge that targeted policies are necessary to right many historical inequalities. Achieving economic security for women requires a multi-faceted approach, including in the domains of employment, social security, retirement income, and better legal protections against experiences of discrimination and economic abuse. Regardless of who wins the election, the need for ongoing, evidence-based advocacy will remain.

This post is part of the Women's Policy Action Tank initiative to analyse government policy using a gendered lens, and this piece is part of our Federal Election series 2019. Photo credit for the voter’s box in our logo: Flaticon. View our other policy analysis pieces here and follow us on Twitter @PolicyforWomen