The Australian Government’s Federal Budget announced in March had a particular focus on creating future opportunities for women. The 2022-23 Women’s Budget Statement1, builds on the prior year’s statement by investing a further $2.1 billion in a broad range of initiatives to improve the livelihoods of Australian women and children.
Take Jane for example, who is a mother of one and carer to her elderly mum. She is concerned about the rising cost of fuel, having to run errands and take mum to doctors’ appointments. She is also keen to get back to full-time employment and has asked how the budget will improve her life.
We explore five areas the budget may enhance her financial position.
The government announced tax cuts for income earners less than $126,000, in the form of a low-and-middle-income tax offset (LMITO). Jane works part-time earning $48,000 per annum and her husband on $89,000. They are expected to receive a cash boost of $420 each ($840 in total) when they lodge their tax returns in July 2022. As Jane is the primary carer for her mum, she will receive a one-off payment of $250 in addition to her mum’s $250 as a concession cardholder. Add this to the reduction to the cost of fuel at the pump over the next six months, Jane can expect a financial boost of $1,790 to subsidize the household’s cost of living.
The budget included funding of $482million to “enhance women’s economic security” focusing on “maximizing flexibility and choice”. An area of interest for Jane is the $3.9million being pumped into ‘Supporting Women’s Mid-Career Transition to the Tech Workforce initiative’ and $40.4 million to create pipelines for women to progress into leadership positions. In her discussions with her employer, Jane can build a pathway to transitioning back to full-time employment through training and upskilling. Her employer will receive a 20 percent benefit from the lower cost of training courses to employees.
What’s exciting to Jane is the announcement of $346.1 million funding over 5 years to introduce an enhanced Paid Parental Leave scheme for eligible working families by integrating Dad and Partner Pay and Parental Leave Pay. This initiative aims to provide eligible families access to up to 20 weeks leave to use in ways that suit their specific circumstances. As Jane and her husband are planning to grow their family over the coming years, it provides the option for Jane’s husband to stay home whilst she continues to build her career. Changes to the scheme mean dads and partners will be able to access the Government’s scheme at the same time as any employer-funded leave, in the same way mothers currently can.
Perhaps an area that Jane will find respite is the announcement that the government has committed $7.7 billon to home care reforms. Figures from the Australian Institute of Health and Welfare (AIHW)2, show that 72 percent of primary carers are female with 61 percent of them work part-time to care for family. Broken working patterns adversely affect a woman’s security and adds to the gender pay gap. Jane can access care for her mum through the Commonwealth Home Support Program (CHSP), Home Care Packages and Short Term Restorative Care, allowing her to pursue her career and future earning potential.
According to Australian Bureau of Statistics (ABS)3, women’s average weekly ordinary fulltime earnings across all industries and occupations was $1,575.00 compared to men’s average weekly ordinary fulltime earnings of $1,837.00. This suggests that on average, women continue to earn less than men, pegging the national gender pay gap at 14.2 percent according to the Workplace Gender Equality Agency (WGEA). This may be due to broken working patterns, different industry sectors and inequality in the workplace. Given that women retire with an average of 40 per cent less superannuation than men, Jane is encouraged by the budget initiatives, giving her the choice to transition to full-time employment, build her retirement savings and improved her economic security.
1 Source: Australian Government Budget 2022-23, Australia’s plan for a stronger future
2 Source: Australian Institute of Health and Welfare, 2021, Informal carers
3 Source: Australia’s Gender Pay Gap Statistics August 2021, Workplace Gender Equality Agency.
The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.