Practical policy: Scrap annual super cap to boost women’s financial security

Chartered Accountants Australia and New Zealand (CA ANZ) is calling on both major political parties to commit to replacing the annual superannuation contribution cap in place of a lifetime cap.

The call comes as the election campaign is heating up and cost of living pressures are squarely in focus.

CA ANZ Superannuation Leader, Tony Negline, said a lifetime cap will simplify the superannuation system and make it fairer for people with broken work patterns, particularly women.

“The gender pay gap in Australia is 14 per cent, which puts women at a significant financial disadvantage to their male counterparts,” Mr Negline said.

“With lower wages comes lower super contributions – resulting in a less secure financial future.

“To compound the issue, women often take more career breaks to care for family members, resulting in them earning less or no superannuation over their formative career-building years.

“An annual contribution cap holds women back from topping up their super when they are in a position to do so later in their careers.

“This is a really dangerous position to be in, especially if women leave a relationship and need to support themselves independently.

“To fix this, we are asking both major political parties to commit to a lifetime super contribution cap, which levels the playing field for anyone getting back into the workforce and playing catchup on their finances.”

Mr Negline said the lifetime super cap was also a simple, practical – and non-inflationary – policy solution in an election campaign that has so far been absent of any bold superannuation ideas.

“If a woman re-enters the workforce into a high-paying job and the capacity to make generous super contributions, she should not be penalised for wanting to make up for the years super contributions weren’t being made,” Mr Negline said.

“That’s why today we are calling on both sides of politics to adopt our sensible and equitable policy that levels the playing field for women and their finances.”