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Accumulating poverty: Women’s experiences of inequality over the lifecycle (2009)

Discrimination Sex Discrimination

Accumulating poverty: Women’s experiences of inequality over the

Speech by Elizabeth Broderick

Sex Discrimination Commissioner and Commissioner responsible for Age Discrimination

Australian Human Rights Commission

Sydney Institute
15 September 2009

It’s a great pleasure to be speaking here today at the Sydney

My father first took me to the Institute of Public Affairs as it was then
known, before Anne and Gerard Henderson revolutionised it as the Sydney
Institute. I remember the topic was “Should Australia have an Aircraft
Carrier?” I sat next to an English engineer who was on the first nuclear
submarine. He spend 4 months submerged near the Russian base of Murmansk.
There was absolute radio silence and he didn’t learn of the birth of his
daughter until he returned to England many months later. In my role as an
independent adviser to the Chief of the Defence Force, Angus Houston, I often
think of this circumstance and the challenges of work life balance in the armed

Thank you very much Anne and Gerard for the invitation to speak here tonight.

I have been the Sex Discrimination Commissioner for two years now and during
this time, I have met countless inspirational women and men from all walks of
life. Many of these have been Aboriginal and Torres Strait Islander.

So let me begin by firstly acknowledging that we are gathered here today on
the traditional land of the Gadigal people of the Eora nation. I pay my deepest
respects to their elders past and present.

Tonight, I will be talking about what is perhaps one of the gravest and most
pressing aspects of gender inequality in Australia - the gap between women and
men’s retirement savings.

The picture that I will paint this evening is quite grim but it is exactly
for this reason that our community must formulate a viable action plan.

Let me start with a hypothetical scenario about a woman named Leena.

Early in life, Leena chooses a career in aged care. She does the relevant
training and enters the aged care sector. A few years down the track she and her
partner decide to start a family. Because her partner is paid more, they decide
that it makes sense for her to stay at home in the first few years and then work
part-time once her daughter is at school.

Her daughter is born hearing impaired. Because of her daughter’s
medical appointments, Leena isn’t able to find work that accommodates her
caring responsibilities. In the end, for the flexibility it offers, she takes on
casual work which of course is lower paid.

Fast forward 15 years later at retirement, Leena has separated from her
husband, has a mortgage to manage on her own and has little to no retirement
savings. She will be solely reliant on the Age Pension. She faces a future of
struggling to make ends meet, dipping in and out of poverty.

I realise this is a bleak example, but as I run through this scenario, there
is not a single point where you could say that Leena made a bad or a wrong
decision in community terms. In fact, at each point she has made the decision
that we would consider the right decision.

She is working in an industry that desperately needs well-trained, committed
workers. She is caring for a child who will be a future tax payer. She is taking
responsibility for the additional care needs of a person with disability.

Nobody could dispute that Leena is playing a crucial role in her family and
community. Nor that the wellbeing of the Australian economy is reliant on people
just like Leena, making exactly the decisions Leena has made.

Yet, if we look at each point in her lifecycle, as I have described it, she
has paid a financial penalty, leaving her vulnerable to poverty in retirement.
Each event I have described is a lived experience of gender inequality.

Policy frameworks have commonly focussed on gender inequality as individual
incidents of discrimination, each separate from the other. We have failed to
recognise the cumulative impact of each of these individual events.

But let’s look at the end point – namely the gender gap in
retirement savings - through the prism of a woman’s lifecycle. When we do
this it becomes clear that there is not one single point in the lifecycle where
the gap begins and ends.

The gap is the cumulative result of women’s inequality over the
lifecycle. It’s a result of:

  • decisions about careers
  • experiences of inequality in pay
  • experiences of balancing paid work and family and caring
  • experiences of divorce; and
  • experiences of straight sex discrimination.

Each of these has a cause and consequence and they are

More so, each of these experiences leads to women having less time in the
paid workforce and being paid less over a lifetime. And, because of the linking
of superannuation exclusively to paid work, this has consequences for the
accumulation of retirement savings.

The shocking reality is that, because of these cumulative experiences and the
design of our retirement income system, women are more likely to be accumulating poverty during their lives, than accumulating wealth.
This is my
main point.

May I sketch some background to this problem.

Over the last 12 months, there has been significant public focus on the
retirement income system, through the Henry Tax Review and the Harmer Pension
Review. Despite this, the issues of the gender gap in retirement savings and
women’s financial security have remained largely invisible.

Our superannuation system has been designed to provide maximum benefit once
you have completed 35 years of continuous full-time labour market participation.

In essence, the system is designed to deliver the greatest benefits to those
who fit a very specific trajectory of life – the typical male life.
Certainly, it does not reflect the reality of a typical woman’s lifecycle.

On last count in 2006, women’s superannuation balances and payouts sat
at about half of those of men.[1] That’s right – half.

Even more concerning is the breakdown of superannuation amongst age groups.
In 2004, half of all women aged 45 - 59 had a tiny $8000 or less in their
superannuation accounts. The corresponding figure for men is $31,
000.[2] That’s not much either,
but it’s significantly more.

As a consequence, women generally have lower incomes during retirement. [3] Retired men aged between 55 and 64
years have around 1.7 times the disposable weekly income of retired women
in this age group.[4]

These figures should ring alarm bells for all of us.

I am describing someone you know - your mother, your grandmother, your
sister, your aunt, your partner, your friend, your daughter or even yourself.

We are right to be concerned.

Women are currently and will continue to be heavily reliant upon the Age
Pension. Currently, 73% of those receiving the single rate of the Age Pension
are women.[5]

Between 2000 and 2005, single elderly female households had not only
experienced the highest incidence of poverty compared to other household types,
but also have been at the greatest risk of persistent

Economic modelling of the recent increases to the single rate of the Age
Pension show that while the increase will go some way to alleviate poverty,
around one in three women on the single rate of the Age Pension will remain in
poverty.[7] By international
standards our pension rates are low. Pensions make up 3.5% of GDP here in
Australia compared to an average of 7% in OECD countries.

But, before I continue, I want to be perfectly clear about two things.

Firstly, I am not saying that women are the only ones vulnerable to poverty
in retirement. Many men and individuals from other disadvantaged groups have low
superannuation balances. I am talking about ensuring that all individuals can
live with dignity and respect over their lifecycle.

Nor am I suggesting that women should choose paid work over family and caring
responsibilities. Many women want to spend large portions of their lives caring
for those they love. My point is that women should not end up in poverty for
choosing to care. Caring is a contribution that benefits everyone.

I’d like to recount a contribution from my Listening Tour blog, which I
think illustrates how life typically unfolds for women:

I’m a mother who has been out of the paid workforce for two years and
will probably be for the next 4 years, until my children are ready for
pre-school. My return to work will probably be on a part-time basis and I will
probably have to re-start my career after so many years out so I don’t
expect that I will earn very much. I never thought this would be the case - I
studied for many years, earned a higher degree, worked overseas and then started
my family...I can’t see how, after this time out of the workforce, my
earnings will ever come close to my partner’s. I dread to think of how I
will ever manage if I have to rely upon my meagre superannuation contributions
in retirement.[8]

This case study provides insight into the complexity of women’s
experiences and the harsh consequences that await them as they enter

Perhaps the best way to illustrate how the lifecycle of a woman is
effectively geared to accumulating poverty might be to examine three broad
aspects of women’s lives.

  • Firstly, decisions and choices relating to education, training and
  • Secondly, experiences of entering the paid workforce
  • Thirdly, experiences and decisions related to having children or
    caring responsibilities

It’s also important to understand that, whilst there are
shared experiences among women, there are also notable differences in
experiences of paid work and care based on other factors. These are brought
about by ethnicity, disability, age, sexuality and socio-economic status, issues
which are outside the scope of tonight’s discussion.

So firstly, I’d like to explore women’s experiences of
education and training and their decisions relating to careers.

Women in Australia have made significant advances in education. When compared
with other countries, Australia is ranked first in the world for women’s
educational attainment.[9] Women
account for over half of all students enrolled in higher education and over half
of all students who complete a higher education

These significant advances obscure the fact that educational choices remain
highly segregated on the basis of gender. Women continue to be over-represented
in areas of study linked to lower earning industries, while men continue to be
over-represented in higher earning industries. For example women outnumber men
by 3:1 in health and education courses and men outnumber women by 5:1 in
engineering courses.[11] Unsurprisingly, there is a considerable disparity between the weekly earnings of
a teacher and an engineer.[12]

I am not at all suggesting that women choosing to work in these areas are
making bad decisions. The problem is not the women’s decisions to work in
these areas – it is the undervaluation of these kinds of work and the long
term financial penalty that follows.

This leads me into my second area - looking at the point in a
woman’s lifecycle where she enters the paid workforce.

Right from the entry point, women’s lower earnings begin to impact on
their retirement savings. The gap between women’s and men’s pay,
also known as pay inequity, remains a factor contributing to the gender gap in
retirement savings across the lifecycle.

The disparity between men’s and women’s ordinary full time
earnings is currently close to
17%.[13] It’s even greater
when women’s part-time and casual earnings are considered, with women
earning around two thirds of the amount earned by
men.[14] If current earning patterns
continue, the average 25 year old male will earn $2.4 million over the next 40
years. The average 25 year old female will earn $1 million less - $1.5

The reasons for pay inequity are complex and interconnected. In Australia,
women constitute a higher proportion of casual workers. Women are more likely to
be working under minimum employment conditions. Women are more likely to be
engaged in low paid occupations and industries.

Further, the Australian workforce is highly segregated by gender and female
dominated industries have been historically undervalued. Industries such as aged
care, childcare, health and community services are all female dominated and
generally lower paid. Women such as Leena working in lower paid female
dominated industries will inevitably accumulate lower retirement savings.

The third point in a woman’s lifecycle that is critical
for her long term financial security is having children.

According to the Commission’s complaints statistics and other research,
pregnancy and return to work following maternity leave are times when women are
commonly vulnerable to discrimination. This comes in the form of demotions,
missing out on promotions, redundancies, denial of family friendly conditions
and even, in some cases,

Perhaps the most fundamental barrier to women’s full participation in
paid work, is the struggle to balance paid work and caring responsibilities.

In Australia, the workforce participation of mothers continues to be low by
international standards. [17] It is
projected that women who have children will earn around half that of men who
have children.[18] There is also a
stark difference in the projected lifetime earnings between women with children
and women without.[19] These gaps in
lifetime earnings demonstrate the financial penalty women are subject to because
of their gender and their caring responsibilities.

Unfortunately, contrary to the Commission’s recommendation, the
proposed Australian Government Paid Parental Leave scheme does not include
superannuation payments.

Maximum benefits from superannuation are likely to flow from the maturation
of contributions made early on in working life. We can therefore assume that
because women and many employers are not making superannuation contributions
when they are on maternity leave, this is a key point in the lifecycle where the
retirement savings gap widens.

Caring for children also has consequences for retirement savings in terms of
the unequal division of unpaid work. Women continue to shoulder the large
majority of unpaid work in households. This includes caring for children and
other domestic work, such as
cleaning.[20] The birth of children
is a common point in the lifecycle where gender inequality in the division of
unpaid work widens.[21]

Women like Leena often decide not to continue in paid work after having a
baby. This is because, if you take the cost of child care, commuting and the
loss of tax benefits into account, it is simply not financially ‘worth

So, it is no surprise that when superannuation balances are broken down by
age, the largest widening of the gender gap occurs between the 23 - 44 age
brackets. These brackets coincide with the time when women commonly have
children.[22] It’s also the
time when many women are working some of their longest hours caring for young
children. Paradoxically, this is exactly the time that women are most sharply
falling behind on their retirement savings. [23]

You might be thinking that women will be able to make up their superannuation
contributions when their kids go to school or when they can re-commence
full-time work. But this assumption ignores the fact that women continue to care
across the lifecycle –caring for elderly relatives, for grandchildren or
for adult children with
disability.[24] They also continue
to trade off money for the ability to care. This will only increase as we face
a period of unprecedented demographic change. Many women never go back to full
time work.

The fact is that family and caring work is not rewarded in dollar terms.
While there are a range of payments and tax benefits to support individuals with
caring responsibilities, these do not adequately reward the considerable benefit
this care provides to communities and the economy.

It is estimated that in 2005, informal carers provided approximately 1.2
billion hours of care at an estimated replacement value of $30.5
billion.[25] This work is not
recognised or rewarded as work in the retirement income system. So the
community benefits immensely but those who do this important work are rewarded
with a retirement in poverty.

Before I conclude, I’d like to add that, for some women, these
experiences of inequality are compounded by experiences of domestic and family
violence. One in three Australian women will experience violence from a current
or former partner in their lifetime. [26] Studies have shown that domestic and
family violence has a lifelong impact on financial security and participation in
the paid workforce.[27] Violent
partners may control a woman’s participation in paid work. Or a woman may
leave paid work because of threats. Or a woman’s absences from the
workplace due to violence may place her employment at risk. Again, these
experiences have consequences for women being able to build their retirement

The other issue is their relationship status. The number of divorced or
separated women entering retirement is expected to rise in the next two
decades.[28] Compared to men, women
are more likely to experience financial insecurity following
divorce.[29] Women commonly
experience a much greater drop in income than men. In 2003, men who separated
experienced an average drop in their household disposable income by $4,100 per
year. Women who separated experienced a drop of

If we look at the financial circumstances of individuals between 55-74, by
marital status and gender, they show that divorced women have the lowest levels
of income, superannuation and assets compared to married couples and divorced
men. Like Leena, women who are divorced or separated are at greater risk of

So now I’d like to pull all this together and summarise.

I hope I have made myself clear - each experience of inequality that I have
described represents an injustice in itself.

However, the fact that women are penalised in the retirement income system is
a compounding injustice. When left unaddressed, it leaves women extremely
vulnerable to poverty and financial insecurity in retirement.

The reality is, that a significant facet of women’s disadvantage in the
retirement income system stems from the unequal division of unpaid work between
women and men over the lifecycle. This work contributes significantly to the
well-being of individuals, to communities and to the economy at large. This work
is also completely unrecognised in the retirement income system.

As a nation, we need to ask ourselves one big question, “If we all have
a birth right to gender equality, why is poverty the end-point for so many women
- is it right that poverty should be the reward for a lifetime spent

I don’t want to leave you at this low point in our story. So I’d
like to briefly offer some hope by looking at what can be done to address
women’s disadvantage in the retirement income system.

Firstly, we must continue to remove the barriers to women’s
participation in the paid workforce and close the gender pay gap. This includes
addressing the inequalities that underlie women’s lower rates of paid
workforce participation and lower lifetime earnings. The Australian
Government’s Paid Parental Leave scheme is a good start, but it is just
that - a start. Let’s not forget that it doesn’t include
superannuation payments at this point.

We need stronger regulation of flexible work arrangements to support all
employees – women and men – to better balance their paid work and
caring responsibilities. There are many men who want to be more involved in
caring. It is time that we also think innovatively about how we can support men
to take on a greater role. For example, some countries have seen benefits in
providing a period of leave specifically for dads – but on a ‘use it
or lose it’ basis. This means that if dad doesn’t use it, it
doesn’t revert to mum.

These measures must be accompanied by accessible, affordable, quality child
care and other care services that will support employees with their caring
responsibilities across the life course.

Secondly, we need to invest in measures that redress women’s
disadvantage in the superannuation scheme. For example, we know initiatives such
as the superannuation co-contribution scheme have had positive outcomes for
women and others on low incomes. It should be
expanded.[31] What about greater tax
incentives for low income earners to make voluntary contributions to their

Thirdly, we need to specifically recognise and reward unpaid caring
work in the retirement income system. The fact remains that the current
retirement income system fails to recognise the value of unpaid caring work to
our society and economy. Given the levels of unpaid work for women remain
unchanged; focusing solely on women’s workforce participation and
tinkering at the edges of the superannuation system will not deliver financial
security for women.

You might argue that the Age Pension is a form of redistribution and equity
for women who have been unable to save for their retirement because of caring
responsibilities and low earnings. However, given that it is a broad based
entitlement at a minimal rate, not to mention Australia’s comparably low
spending in this area[32], it does
not properly recognise or reward unpaid work.

It is increasingly evident that a more substantial reform is needed to make
the system better reflect the reality of a woman’s lifecycle. It is time
to start a new debate about how the system can properly value unpaid caring
work, in addition to what is currently offered through the Age Pension. Is it a
national scheme of social insurance? Is it credits that are paid to those who
have cared when they retire?


The issues paper I am releasing tonight is called
“Accumulating Poverty”. It examines these matters in much greater
depth and complexity. It makes for very sober reading. This is a complex area of
policy - and we cannot continue to ignore it.

I hope this issues paper will spark a national inquiry into the gender gap in
retirement savings.

We can no longer park this issue in the “too hard” basket. We
must confront the problem and look for innovative policy solutions.

Whatever the remedy, we cannot afford to leave half the population behind.

[1] Ross Clare, Retirement
Savings Update
(2008) p 3. At (viewed 31 August 2009).
[2] Simon
Kelly, 'Entering Retirement: the Financial Aspects' (Paper presented at the
Communicating the Gendered Impact of Economic Policies: The Case of Women's
Retirement Incomes, Perth, 12-13 December 2006) p
[3] Rebecca Cassells, Riyana
Miranti, Binod Nepal and Robert Tanton, She works hard for the money:
Australian women and the gender divide
, AMP.NATSEM Income and Wealth Report
issue 22 (2009) p 27. At (viewed 2 July 2009).
[4] Ibid.
[5] FAHCSIA, Pension
Review Background Paper
(2008) p 6. Available at (viewed 9 February 2009); Robert Tanton, Yogi Vidyattama, Justine McNamara, Quoc
Ngu Vu and Ann Harding, Old Single and Poor: Using Microsimulation and
Microdata to Analyse Poverty and the Impact of Policy Change Among Older
(2008) p 15. Available at (viewed 9 February 2009).
[6] The
poverty measurement tool for this study is 50% of the median income poverty
line. Bruce Heady and Diana Warren, Families, Incomes and Jobs, Volume 3: A
Statistical Report on Waves 1 to 5 of the HILDA Survey
(2008) p.55.
Available at (viewed on 9 February 2009).
[7] Robert Tanton, Yogi Vidyattama, Justine McNamara, Quoc Ngu Vu and Ann Harding, Old Single and Poor: Using Microsimulation and Microdata to Analyse Poverty
and the Impact of Policy Change Among Older Australians
(2008) p 15.
Available at (viewed 9 February 2009).
[8] Tamara, Blog entry (2008) Human Rights and Equal Opportunity Commission
Listening Tour website at 21 March 2008
[9] Ricardo Hausmann, Laura Tyson
and Saadia Zahidi, The Global Gender Gap Report 2008 (2008) p 43. At (viewed 31 August 2009).
[10] See
Chapter 2, Australian Government, Women in Australia 2009 (2009) At (viewed 13 August 2009).
[11] Ibid.
[12] Australian Bureau of
Statistics, Average Weekly Earnings, May 2009, Cat No 6302.0 (2009). At (viewed 31 August 2009).
[13] Australian Bureau of Statistics, Average Weekly Earnings, May 2009, Cat
No 6302.0 (2009). At (viewed 31 August 2009).
[14] Ibid.
[15] Rebecca Cassells,
Riyana Miranti, Binod Nepal and Robert Tanton, She works hard for the money:
Australian women and the gender divide
, AMP.NATSEM Income and Wealth Report
issue 22 (2009) p 34. At (viewed 2 July 2009).

[16] Human Rights and Equal Opportunity Commission, Pregnant and Productive: It's
a right not a privilege to work while pregnant
(1999). Available at (viewed 16 August 2009).
[17] Australian Bureau of Statistics, Australian Social Trends, 2007 Cat No
4102.0 (2007).
[18] Partnered men
with children are expected to earn 2.6 million over their lifetime, compared to
1.3 million for partnered women with children. Rebecca Cassells, Riyana Miranti,
Binod Nepal and Robert Tanton, She works hard for the money: Australian women
and the gender divide
, AMP.NATSEM Income and Wealth Report issue 22 (2009) p
33. At (viewed 2 July 2009).
[19] Partnered women with children are expected to earn 1.3 million over the
lifetime, compared to 1.9 million for women without children. See Cassells et
al, above.
[20] Rebecca Cassells,
Riyana Miranti, Binod Nepal and Robert Tanton, She works hard for the money:
Australian women and the gender divide
, AMP.NATSEM Income and Wealth Report
issue 22 (2009) p 11. At (viewed 2 July 2009); Lyn Craig, 'Is there really a "second shift", and if so,
who does it? A time-diary investigation' Feminist Review 86 (1) 149-170
[21] Human Rights and
Equal Opportunity Commission, Striking the Balance: Women men, work and
(2005) p 35. At (viewed 31 August 2009).
[22] Ross Clare, Retirement Savings Update (2008) p 6. Available at (viewed 11 February 2009).
[23] Lyn Craig, 'Is there really a "second shift", and if so, who does it? A
time-diary investigation' Feminist Review 86 (1) 149-170
[24] In 2003, of the 2.5
million carers, 19% were primary carers and over two-thirds (71%) of primary
carers were female. For further information please see Australian Bureau of
Statistics, A Profile of Carers in Australia, 2008, Cat no. 4448.0 (2008)
p 8.
[25] Access Economics, The
Economic Value of Informal Care (2005) p i. At (viewed 2 September 2009).
[26] Jenny Mouzos and Toni Makkai, Women’s Experiences of Male Violence:
Findings from the Australian Component of the International Violence Against
Women Survey (IVAWS)
(2004) p 3. Available at (viewed 29 May 2009).
[27] Suzanne Franzway, Carole Zufferey and Donna Chung, ‘Domestic violence and
women’s employment’, Paper presented at Our Work, Our Lives
, September, Adelaide
[28] Matthew Gray David
de Vaus, Lixia Qu and David Stanton, The consequences of divorce for
financial living standard in later life
(2007) p 13. Available at (viewed 9 February 2009).
[29] Matthew Gray David de Vaus, Lixia Qu and David Stanton, The consequences of
divorce for financial living standard in later life
(2007) p 13. Available
at (viewed 9 February 2009).
[30] AMP and NATSEM, Financial impact of divorce in Australia: Love can hurt,
divorce will cost
, Income and Wealth Report Issue 10. 2005, p 9-10. At (viewed 6 February 2009).
[31] Australian Tax Office, Taxation Statistics 2006-2007 (2007) p 132. At (viewed 2 September 2009).
[32] Pensions make up only 3.5% of national income in Australia, compared with an
average of over 7% of GDP in OECD countries. Please see OECD, Pensions at a
Glance 2009: Retirement-Income Systems
(2009). At (viewed 1 July 2009).