Why Australia has a gender gap

Luke Keioskie
Thu 16 Nov

The key factors contributing to Australia’s gender pay gap have been revealed with the first in-depth look at inequity in our tax and welfare systems in 30 years.

The new research from The Australian National University (ANU) also revealed that women make up less than one-quarter of the top 10 percent of income earners in Australia, and that lifetime wages of women are less than two thirds those of men.

University education leads to higher earnings for women, although not as much as men. Women who do Certificate I-IV training are no better off than if they left school at Year 12, in sharp contrast to men.

The low lifetime earnings of women mean that many never pay off their higher education HECS debts because they do not reach the income threshold required to repay.

The research, published on Thursday in the book Tax, Social Policy and Gender: Rethinking Equality and Efficiency points to issues with current child care and retirement income policy as some of the reasons women continue to face financial inequality.

ANU Tax and Transfer Policy Institute Director Professor Miranda Stewart said women were still bearing the brunt of work in caring for young children, which has seen them fall behind in their careers.

“Gender equality is not being achieved and this is partly a result of the current tax-transfer system. We see it particularly in relation to care obligations,” Professor Stewart said.

“Although there has been some progress in the last decade with the introduction of broader child care and paid parental leave policy, we still have settings in place that embed gender bias in the system.

“Successive governments have abolished universal child payments that used to be a feature of Australia’s welfare system.

“If we keep pushing that care burden to be borne more by women than men, and are also pushing them back into the workforce, at some point it becomes unsustainable.”

Professor Stewart suggests Australia looks to countries like France, who have formalised early childcare education for 3 to 4-year-olds as a way to reduce the burden.

“Our research found that the quality of care is a priority when mothers are deciding whether to return to work,” she said.

“A more formalised early education program frees up women to return to work earlier knowing that there is quality care.”

The research also confirmed the well-known assumption that women faced a retirement-income gap.

 “Women have more interrupted work patterns than men over the course of their career, so they can’t accumulate as much super,” she said.

“They are also paid lower wages, and super is dependent on income levels.

“The reality is that private savings are not going to deliver adequate retirement income for a majority of the population – we can’t just rely on super.”