equal pay = a more secure future

More than 80% of HESTA members are women. On Equal Pay Day 2022, we're highlighting urgent changes we want to see that can improve financial security for our members in retirement.

First, some sobering stats

Women currently have lower workforce participation than men,¹ earn less than men,²  and many retire with inadequate super for a financially secure retirement.

At HESTA, we want this to change.

Increasing women’s workforce participation is one of the most effective ways to improve financial security and boost the Australian economy. Halving the workforce participation gap between men and women would increase Australia’s annual GDP by $60 billion by 2038.³

There are also important financial benefits for organisations that foster an inclusive culture and retain a diverse workforce,⁴ including improved productivity and long-term performance. And investors who apply a gender lens to their investment activities have an opportunity to improve investment outcomes for our members.

Financial security in retirement for our members also depends on secure, well-paid jobs, particularly in industries such as early childhood education, aged care, disability care, health and social services. Decent work in the care economy will help address the gender gaps across pay, workforce participation and superannuation.

Here are the top three changes we want to see

Pay super on Commonwealth Parental Leave Pay

Parental leave is the only common form of paid leave that does not include superannuation. This sends a message that paid caring work is not real work.

Women take 93.5% of primary carer’s leave⁵ which can increase their risk of financial insecurity in retirement. The lack of super contributions for women doing caring work when they have children is a key reason that Australian women retire with less super than men.

HESTA modelling shows that paying super on the Commonwealth parental scheme could mean as much as 4.5% in additional super savings for an early childhood educator with three children, or 2.6% more for an aged care professional with two children. This could be a life-changing amount for women on lower incomes. ⁶

This could be life-changing for HESTA members on low and middle incomes.

Find out more about super on paid parental leave.

Introduce a superannuation ‘carer credit’ for unpaid parental leave

A ‘carer credit’ should also be introduced to compensate parents for superannuation lost due to unpaid parental leave.

Unpaid time out of the workforce to care for others has a significant impact on women’s financial security in retirement. Women perform 80% more unpaid work at home each week than men⁷ including childcare, caring for other family members, housework, shopping, food preparation. PwC has previously estimated that the replacement cost of informal childcare alone would be $409.5 billion - this is a massive contribution to society.⁸

If a small fraction of this amount was paid as super, this would make a real impact to women’s retirement outcomes and signal that unpaid care work is valued. Women’s unpaid caring work shouldn’t result in financial insecurity in retirement.

Achieve gender balance in executive leadership across ASX300 companies by 2030

Better gender balance in the leadership of companies HESTA invests in can promote improved performance, which can translate to better investment returns for our members. This can help improve their financial outcomes in retirement.

Women in Australia can also benefit from the greater opportunities that flow from fairer and more inclusive work places.

40:40 Vision is an initiative led by HESTA, supported by industry partners, seeking to achieve gender diversity in the executive leadership teams of ASX300 companies by 2030.

40:40 stands for:

• 40% women
• 40% men
• 20% any gender.

Find out more about 40:40 Vision.

1. In 2021 the workforce participation rate was 61.4% for women and 70.7% for men - https://www.wgea.gov.au/publications/gender-workplace-statistics-at-a-glance-2021
2. HILDA 2021 - https://about.unimelb.edu.au/newsroom/news/2021/december/HILDA-shows-the-changing-face-of-21st-century-australia
3. KPMG - Ending workforce discrimination against women - 2018 https://assets.kpmg/content/dam/kpmg/au/pdf/2018/ending-workforce-discrimination-against-women-april-2018.pdf
4. McKinsey, Why Diversity Matters, 2015 https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/why-diversity-matters
5. WGEA - It’s the luck of the draw for parental leave – 2019 https://www.wgea.gov.au/newsroom/its-the-luck-of-the-draw-for-parental-leave
6. HESTA - https://www.hesta.com.au/about-us/media-centre/new-hesta-modelling-paying-super-on-paid-parental-leave
7. WGEA Women’s economic security in retirement – 2020 https://www.wgea.gov.au/publications/womens-economic-security-in-retirement
8. PWC Understanding the unpaid economy 2017 - https://www.pwc.com.au/australia-in-transition/publications/understanding-the-unpaid-economy-mar17.pdf