While acknowledging the Federal Budget had a range of measures that could assist HESTA members, the $72 billion industry fund called for urgent action to address long-standing super inequities seeing women missing out on billions in retirement savings.
HESTA CEO Debby Blakey said independent modelling HESTA commissioned earlier in the year shows women had missed out on more than $2.8 billion[1] in super savings at retirement from taking time out of the workforce to have children, since the Government’s Parental Leave Pay scheme was introduced in 2011.
The decision to further delay paying super on the Commonwealth Parental Leave Pay scheme would mean women would continue to forgo thousands of dollars in superannuation.
Modelling shows a delay for one year until 1 July 2024 would reduce the retirement savings of a typical HESTA member who has a child in the financial year 2024 by more than $6,000[2]. A further delay until 1 July 2025 would cost a HESTA member with two young children more than $12,700[3] in retirement savings.
“While tonight’s Federal Budget had much needed cost of living relief, funding for a 15% pay rise for aged care workers and funding for the climate transition, more is needed to address the long-standing gender-blind spot in our super system,” Ms Blakey said.
While women continue to wait for key equity reforms, Ms Blakey said women and low-income earners would benefit from the pre-budget announcement that compulsory Super Guarantee contributions will be paid to super accounts at the same time as wages.
“Paying super with wages will help millions of working Australians as it’s easier to see their super contributions and can mean this money goes into their accounts earlier, starts getting invested and helps grow their long-term retirement savings. We commend the Government on this important reform,” Ms Blakey said.
Ms Blakey also welcomed confirmation in the Federal Budget that the Government would cut back super tax concessions for earnings on account balances over $3 million but said that savings should be directed towards helping deliver a fairer and more equitable super system.
HESTA has also called for extending eligibility for the Low Income Super Tax Offset (LISTO) to those earning up to the top of the second tax bracket ($45,000) and bringing the offset in line with the Superannuation Guarantee (currently 10.5%).
Budget funding to support the low carbon transition and facilitate institutional capital were also welcomed, with HESTA seeking to invest 10% of its portfolio in climate solutions by 2030.
HESTA was pleased to see the Government announce funding for the National Net Zero Transition Authority, which will play a key role in maximising new energy opportunities and supporting economic diversification to deliver the transition.
Other budget measures helping Australia’s economy transition to a low carbon future include funding for the Government’s sustainable finance agenda.
Ms Blakey said the development of the Government’s sustainable finance agenda would assist investors manage climate risk in their portfolios, with the taxonomy providing a clear framework to invest in new green opportunities and help high-emitting sectors transition.
“When it comes to investing in the transition, investors want haste without waste.”
“A taxonomy will give investors greater certainty and the confidence to commit capital over the long-term timeframes typically required for energy transition investments.”
Ms Blakey commended budget measures aimed at addressing the housing crisis, saying HESTA was looking to invest more in solutions that could earn good investment returns for members through addressing shortages in affordable and social housing.
