Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Monday, 29 November 2004
Page: 95


Senator GREIG (7:35 PM) —The Family Law Amendment (Annuities) Bill 2004 gives the Family Court the power to split certain annuity products in determining property settlements in the event of marriage breakdown. As we did with the original family law bill that dealt with the division of superannuation on marriage breakdown back in 2001, we Democrats will be supporting the legislation. At present, annuity products cannot be split, but they can be taken into account by the Family Court. This bill will allow the splitting of interests. In the event of a marriage breakdown, it is always preferable for marriage assets to be divided fairly between the parties by agreement. Given the complexity of superannuation and annuity products, fairness demands that an effort be made to ensure that people make informed choices about the division of superannuation assets. The previous family law bill required that the parties to a financial agreement splitting superannuation assets obtain legal advice prior to entering into such an agreement.

I note that the Parliamentary Library's Bills Digest for this bill deals only with `eligible annuities'. These `eligible annuities' are those normally purchased from superannuation funds and known as `allocated annuities'. Perhaps due to technical problems in splitting term and lifetime annuities, these are not included. These annuities will be taken into account in allocating matrimonial assets but are not split. Arguably, this may add to the confusion and complexity of the divorce process, but due to the nature of, say, a lifetime annuity this is understandable.

It should be noted that annuities represent only 2.3 per cent of all superannuation assets and that they seem to be on the decline. The Democrats support the legislation and will monitor its implementation to ensure that it operates fairly and provides a workable solution to the problem of dividing superannuation and annuities upon divorce. The splitting of annuities is another small improvement towards ensuring that women gain equitable access to assets for retirement in the sad event of divorce.

I want to use the second reading debate on this bill to take the opportunity to stress the need for greater effort by governments and policy makers to address the insufficient retirement savings that many women in Australia face. Women on average live longer than men and, as they age, more women will live alone and be largely dependent upon their own financial resources, but because of women's interrupted working patterns as a result of child-bearing, child-rearing and other caring responsibilities and, on average, their lower lifetime earnings, the typical female will have less than half the superannuation savings upon retirement than the average male. According to a recent paper given by Diana Olsberg at the HREOC Women, Work and Equity Forum:

The facts are: women do save less, they start later, and they tend not to consult financial planners or focus on long-term financial planning. But this is not from some financial naivete, disinterest or laziness. My recent research, containing controls for income and savings, shows this is more the result of women being in low paying jobs, having small sums in superannuation and little or no other savings, and having absolutely no income surplus to their day-to-day needs.

The Democrats believe that a number of areas need to be addressed, including greater equity for women in the paid work force and further changes to the superannuation system. Because superannuation is directly tied to income it is intrinsically linked to work force participation and to pay. Therefore the best way to improve women's superannuation savings is to ensure that women are paid equitably and that they are supported to stay longer in the work force. However, the problem is that there remains a significant wage gap between men and women in Australia and that we still have one of the lowest work force participation rates of women in OECD countries.

In Australia only 55.8 per cent of women are in work compared with 71 per cent of men. A recent OECD report found that the full-time participation rate of women aged between 25 and 54 in Australia was 20 per cent below the OECD average. The participation rate of mothers of pre-school children is 45 per cent compared to 55 per cent in the UK, 61 per cent in the US and 66 per cent in Denmark.

What is needed and what the Democrats have been fighting for is to support women to balance work and family through initiatives such as greater access to flexible work practices, government funded paid maternity leave, and affordable and accessible child care. A report by the OECD found that Australia has some of the least family friendly policies for working mothers in the developed world. Only South Korea and Turkey provide less child-care support, and Australia and the US remain the only countries that do not provide government funded paid maternity leave.

The Democrats have led the debate on the need for and the right of women to government funded paid maternity leave and are the only party with legislation to provide for 14 weeks government funded paid maternity leave at the minimum wage with the ability to negotiate top-ups at the employer level. The Democrats have also recommended that the scheme should allow for superannuation contributions to be made during paid maternity leave.

The bill proposes that entitlements be paid, in the first instance, to the employer, who would then pay the money as wages in the normal manner. In effect, the employer is receiving from government the cost of the maternity payment. Regulations would assist employers to be paid in advance. This system has been adopted to minimally disrupt existing systems, to ensure that the period of paid leave is counted as continuous employment and to ensure ongoing contributions to employee benefits such as superannuation.

Government funded paid maternity leave seeks to address disadvantage and inequality in the work force and is likely to encourage work force attachment as much by the legitimacy it gives working mothers as by the financial support it provides in replacing lost earnings. Strategies to address the undervaluation of female dominated work and vertical sex segregation within occupations are also important if the so-called pay gap is to be further narrowed. A number of states have initiated inquiries into the pay gap. The Democrats believe that the issues also need to be addressed at a federal level and have called for a national inquiry into this issue.

The Democrats supported and substantially improved the superannuation co-contribution for low-income earners scheme. We believe that more should be done to encourage working partners to contribute to the non-working partner's superannuation scheme when they are out of the work force because of child-bearing and rearing and other caring responsibilities. On balance, the bill before us is within our policy framework and we are happy to support it.

Debate (on motion by Senator Ian Campbell) adjourned.