The federal government is holding the first major review of Australia’s retirement savings system in 30 years, before scheduled rises in the superannuation guarantee in 2021 and 2025.
Compulsory employer contributions are set to rise next year from their present level of 9.5 per cent to 10 per cent, and to 12 per cent by July 2025.
But some federal government MPs are opposed to increasing the super guarantee, arguing super should be voluntary for low-income earners, or that the planned increases should be handed to workers as pay rises.
For Mr Pallas, the 2025 introduction of the 12 per cent super guarantee does not come soon enough, with the Treasurer also arguing in his submission to the review that 15 per would be “ideal”.
The “super gap” – whereby women retire with average super balances $110,000 less than their male counterparts – is a big target of Victoria’s proposed reforms, with a range of policies to help boost the retirement nest eggs of female workers.
Mr Pallas wants to see superannuation paid to women, and men, who are accessing the Commonwealth paid parental leave and for super funds to stop charging fees to members who are off work to have children.
Victoria says joint superannuation accounts for couples, including same-sex couples, and changes to sex discrimination laws to allow employers to pay their female workers a higher rate of super than their male colleagues would also help close the gap.
The Labor government also wants carers to be paid superannuation on their government benefits and an end the rules locking workers on less than $450 a month out of the system.
Victoria says the threshold discriminates against part-time, casual and on-demand workers who might have several jobs, each paying less than $450 a month.
The Victorian government, which pays its own workers 9.5 per cent superannuation, says it is aware of research indicating a rise in the super guarantee would impact wages, but also points to conflicting research showing there is no link between higher super and lower wages.
The state also says its above-trend economic growth and strong labour market could support an increase in the superannuation contribution without an impact on jobs and wages.
Mr Pallas told The Age on Tuesday that the system needed “refreshing to stamp out the discrimination that some Victorians face”.
“We’re calling on Canberra to make good on their commitment to raise the superannuation rate to 12 per cent – and fast-track a pathway for it to reach 15 per cent,” he said.
“Women already face enough challenges as it is without being short-changed on their superannuation just for having children.
“More Victorians are taking time out of work to care for loved ones and more Victorians are choosing part-time or casual work; the superannuation system doesn’t meet the needs of these people and needs to change.”
Melbourne woman Pamela Sulema works for a superannuation company but says not even she knows how to make the system work for her.
The mother-of-two calculates her super balance is tens of thousands of dollars worse off after she took time off to have her children and she is still in her second period of maternity leave.
The fees she still pays to her fund, despite not paying into her super while she is off work, are especially hard to take, Ms Sulema said, and she was “all for” some of the reforms proposed by Mr Pallas.
“I think they should not have fees being charged while we’re on maternity leave, for example, because it’s out of my control to not be contributing,” Ms Sulema said.
“They should also be contributing some to super as well to ensure that our superannuation continues to increase while we are having our maternity leave.
“And then employers should possibly be contributing some as well, at least for a 12-month period and definitely fees should be stopped.”
Noel Towell is State Political Editor for The Age