Comment

Danielle Wood
How to make women an economic priority

Anthony Albanese understands the power of symbolism. He has carefully cultivated signals that women will be front and centre of his government’s agenda, particularly its economic one. From the gender balance of participants and speakers at its jobs and skills summit, to the formation of a Women’s Economic Equality Taskforce, and the embrace of gender-responsive budgeting, there can be no criticism that women have gone unnoticed by the new government. 

The challenge for the prime minister is to marry the power of symbolism with real policy action. Albanese can rightly point to his government’s commitments to reduce the out-of-pocket costs of childcare and its move to support pay rises for aged-care workers as evidence of meaningful policy change. But gender-equality policy has been unloved for so long, the metaphorical top drawer of the Office for Women filing cabinet groans with worthwhile proposals.

The challenge, as always, is money. With the treasurer and Finance minister, who is also the minister for Women, keen to draw attention to the nation’s budget challenges, even the best spending ideas are going to face an uphill battle. So how does the government square its commitments to economic equality and fiscal prudence? 

The policy levers that will transform economic opportunities for women are well understood. Indeed, if you ask the many passionate researchers and advocates tilling the policy ground in this area, they will rattle off pretty similar priorities.

 

One is to boost economic security for the most vulnerable. This means a safety net that ensures short-term financial hardship doesn’t translate into a lifetime of poverty. 

Single-parent families – 82 per cent of whom are headed by women – are at particular risk of poverty. A series of changes to policy during the past two decades – including moving parents off the single-parenting payment when their youngest child turns eight (previously 16) and indexing these payments to prices rather than wages – has substantially reduced disposable income for this already vulnerable group.  

These policy choices have also magnified the challenges for women leaving violent relationships. A recent report by Professor Anne Summers highlights the difficult choice women face between staying with a violent partner or risking poverty with their children. 

Another vulnerable group is older women. Older women on JobSeeker, most of whom have been on the payment for more than a year, and full-rate single pensioners who do not own their own home, have a higher risk of financial distress. Many of these women gave decades of their lives to care for others and now find themselves in a precarious position, often because of relationship breakdowns. 

The ways to boost economic security for these groups of women are straightforward but come with a hefty price tag. 

Meaningfully boosting the Parenting Payment (Single) and the rate of JobSeeker would ensure a minimum basic standard of living for the most vulnerable. But any changes large enough to meaningfully close the gap with community living standards – for example a $75-a-week increase in JobSeeker payments – would cost about $5 billion a year. 

However, boosting the safety net would provide a better foundation to support women to move back into the workforce. For all the handwringing about welfare creating disincentives to work, punishingly low levels of payments actually create a barrier to finding stable employment. 

For older women in poverty, boosting Commonwealth Rent Assistance would be the single most effective way to deliver targeted financial assistance. A 40 per cent increase in the maximum rate of rent assistance – which would be worth about $1450 a year for singles – would cost $1.5 billion a year. In future, rent assistance should be indexed to changes in rents typically paid by people receiving income support, so that its value is maintained. 

 

A second priority is to improve economic opportunities for women. 

This goes to closing the massive lifetime earnings gap between men and women – particularly those with children – that currently sits at more than $2 million over the lifetime. The single biggest thing we could do to close this gap is to dismantle the barriers for women with children wishing to take on more paid work.

High-quality, low-cost childcare supports women’s workforce participation in the first decade after a child is born. That is why so many advanced countries pick up all or most of the bill. Just as we don’t baulk at governments investing in roads so people can get to work, or supporting education and training for people to be job-ready, we should applaud leaders who understand that childcare underwrites current and future workforce participation for Australia’s highly educated women.

The Albanese government has already committed to investing $5.4 billion over the next three years to reduce out-of-pocket childcare costs for families. The policy will be rolled out by mid-2023. This has been backed by the New South Wales and Victorian governments working towards free kindergarten in the year before school and providing access to childcare in the so-called childcare deserts. 

The federal government has also committed to lay the groundwork for universal low-cost childcare. Putting meat on the bones of this plan will be a crucial test of Albanese’s commitment to transformational policy change. 

The other critical policy to improve economic opportunities for women is more generous and more gender-equal parental leave. A major impediment to women’s paid workforce participation is the sheer amount of unpaid care that falls to them. Australia has some of the most unequal divisions of paid and unpaid work in the OECD. 

Policy settings can and do shape culture. In the many countries that have a government parental leave scheme designed to be used by both parents, there is a more equal sharing of care responsibilities, both in infancy and as children get older. 

At the Albanese government’s jobs and skills summit, there was near-universal support for Australia to move in this direction. Even a modest step – boosting the full entitlement of parental leave from 20 to 26 weeks per family, including six weeks of use-it-or-lose-it leave for dads and partners – could make a big difference to choices made by families. Grattan Institute estimates that this would cost about $600 million a year, but yield about $900 million a year in increased economic activity through higher workforce participation – and it would deliver significant benefits for parental and child wellbeing. 

 

The third priority is properly remunerating care. This is critical to economic equality because women make up 80 per cent of the workforce in key care sectors. 

High workloads and low pay are pushing people out of these sectors and creating acute shortages of workers. When aged-care and childcare workers on award wages – as most are – are earning about the same as someone working at Bunnings or McDonald’s, is it any wonder they are leaving these jobs in droves? 

The unvarnished truth is that these roles pay less because most of the workers in these roles are women. We pay less for care work because we expect women to do it selflessly and, therefore, for modest pay. 

But now the market has caught up with us. We will not be able deliver the services we need or boost workforce participation unless we boost the pay and quality of these crucial enabling roles. 

Aged-care workers are asking the Fair Work Commission for a 25 per cent pay rise, and the new government has rightly committed to funding the cost. Grattan Institute modelling suggests that the full 25 per cent increase would cost the government about $3.4 billion a year. Early childhood workers will also need a significant increase to ensure a fair rate of pay and one that can attract enough workers to the sector. 

 

These three – address disadvantage, create opportunity and make care jobs good jobs – are the big rocks for economic equality. If we can move them, Australia will be a better place for women. But none are easy to budge when budgets are under pressure. 

Despite recent commodity price windfalls, the federal budget remains in structural deficit. Commitments to higher spending as a share of the economy by both the former and current governments have not been matched by commitments to boost revenues. 

The Albanese government is rightly looking to wind back low-value grants and infrastructure spending commitments from its predecessors. It should also look closer to home in programs, such as its own National Reconstruction Fund, which also have the potential to degenerate into expensive pork barrels. Reconfiguring the stage three tax cuts to reduce their cost to the budget should also be on the agenda.  

But ultimately Albanese will need to nail his colours to the mast. Budgets are about priorities. Governments routinely find billions, if not tens of billions of dollars, to fund big-ticket infrastructure or defence procurements, often with pretty rubbery business cases and almost no eye to value for money. 

Women are tired of hearing that measures to lift them out of poverty, to pay them what they are worth, or to enable them to participate in the workforce, are unaffordable. This government has lifted women’s voices in economic policy discussions. This has been symbolically powerful. But if the prime minister thinks women will be silent in the face of a lack of real policy progress, he has another thing coming.

This article was first published in the print edition of The Saturday Paper on October 8, 2022 as "How to make women an economic priority".

For almost a decade, The Saturday Paper has published Australia’s leading writers and thinkers. We have pursued stories that are ignored elsewhere, covering them with sensitivity and depth. We have done this on refugee policy, on government integrity, on robo-debt, on aged care, on climate change, on the pandemic.

All our journalism is fiercely independent. It relies on the support of readers. By subscribing to The Saturday Paper, you are ensuring that we can continue to produce essential, issue-defining coverage, to dig out stories that take time, to doggedly hold to account politicians and the political class.

There are very few titles that have the freedom and the space to produce journalism like this. In a country with a concentration of media ownership unlike anything else in the world, it is vitally important. Your subscription helps make it possible.

Select your digital subscription

Month selector

Use your Google account to create your subscription