Policy Changes Needed to Match ASIC’s ‘Women Talk Money’ Campaign
ASIC has launched an educational video series meant to get women talking and feeling more confident about their finances, but an industry association says while the financial literacy effort is welcomed, policy reform is needed to narrow the gender pay gap. ASIC’s Women Talk Money videos feature Australian women sharing personal tales about their successes and failures with money, good and bad habits, managing money, making informed decisions and planning for the future.
The regulator warned that if women don’t get more comfortable making decisions about their finances, they “run the risk of not getting the most benefit out of their money in the future”. Women who engage with their finances and super early on will have a much better chance of “financial independence and self-determination in later years”, said ASIC deputy chair Peter Kell in a statement.
ASIC’s research found that 46% of women find money decisions overwhelming and stressful, and 85% of women under age 35 don’t understand fundamental investment concepts. And, on average, women retire with half the super balance of men, $230,907 versus $454,221. A 2018 Industry Super analysis of ABS data found that the super savings gap between women and men aged 25-34 on the same salary is 15%, and at retirement age, the upper savings gap between women and men on the same salary is 47%.
Industry Super Australia consumer advocate, Sarah Saunders, said simple policy changes are needed to match ASIC’s message. “Policies like adding super to parental leave, and removing the $450 Superannuation Guarantee threshold are worth considering,” she said. “The threshold currently locks hundreds of thousands of women working part time and casual hours out of the super system.”
Planning for the Future
ASIC commissioner Cathie Armour said it’s important to engage women with their finances so they can safeguard their futures. “We want to encourage them to share their personal stories and have real conversations about money so they become empowered. We believe this is the best way for women to have real control over their financial futures,” Armour said. Amour acknowledged that there are inequity issues to consider, such as the gender pay gap. And workforce issues often become further complicated because women tend to be the primary carers, whether for young children or senior parents. That creates career breaks that suspend the continuity of earning— something men don’t experience in the same way.
According to Carers Australia, in 2015, two-thirds of Australia’s 2.7 million unpaid primary carers were women. “Women often focus on the everyday needs of their families and lives and have looked at money in a very immediate way. We want to change this and encourage women to look at money from a longer-term perspective,” Armour said.