Green’s super tokenism will do nothing to increase women’s superannuation

This week Australian Greens deputy leader Adam Bandt introduced a bill that would allow employers to make larger superannuation contributions to female employees than to their male counterparts.

According to Bandt, the Sex Discrimination Amendment (Boosting Superannuation for Women) Bill 2014 is necessary because “Currently some employers are paying women more but they have to apply for a specific exemption from the Sex Discrimination Act.” The Greens bill would remove this requirement.

This amendment is not so much bad as it is bizarre.

According to the latest ABS statistics the average super account balance in 2011-12 for women was $44,866 compared to $82,615 for men. The Greens argue that this exemption to the Sexual Discrimination Act (1984) is “…a step towards addressing the significant financial inequality women face in retirement.”

There is no reason to believe this amendment will achieve this.

Contrary to widely held misconceptions, the `employer contribution’ that employers make into their employee’s superannuation accounts come out of the employee’s gross wages. They are not a gift from the employer.

In contrast to the proposed increase in the Superannuation Guarantee (SG) rate, abandoned by the government in September, the extra employer contributions made under the Greens policy would be voluntary. Employers would be able to choose to offer their female employees more super, and less take-home pay, than their male employees.

Insofar as women retain the right to keep their super contributions as-is, they will not be disadvantaged in the way they would if the higher super contributions were compulsory.

But if women want to put more money into their super, and reap the associated tax concessions, there is nothing to stop them from doing that right now. Current policy allows anyone to salary sacrifice super contributions up to an annual cap of $30,000 including the 9.5% compulsory contribution. For those over 50 the cap is $35,000.

One might think that the Greens’ proposal is well intentioned and that perhaps they fail to grasp the fact that super contributions are delayed wages and not a pay increase. However it would seem that this is not the case.

In their minority report on the Senate Standing Committee on Economics inquiry into the introduction of the Mineral Resources Rent Tax Bill (2012) the Greens wrote “…the ultimate incidence of the increased [superannuation] guarantee will be on workers, in the form of slower growth in wages, rather than on employers, and this view was confirmed at the hearings…the SG increase will be largely borne by wages.“

This is true of all `employer contributions’ not just those mandated by the SG rate.