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Will 2019 be a game changer for economic equality?

I have one big hope for 2019 - that the financial wellbeing of Australian women is made a national priority. Not just because a federal election is looming but because it is time.

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According to the latest Financy Women’s Index (FWX), a scorecard on women’s economic progress across work, pay education, superannuation and leadership, the biggest wins for women in 2018 weren’t driven by companies or even government: they were made by women taking action.

"The biggest wins for women in 2018… were made by women taking action.”

More Australian women than ever participated in full-time employment with the number exceeding 3.21 million last year.

Indeed the pace of full-time employment growth among women rose by 4 per cent in 2018 and has out done men (+2 per cent) in the 12 months to October 2018.

This result has likely been due to a combination of cost of living pressures plus increased awareness of continued financial inequality and disadvantage, particularly around pay, superannuation, literacy, financial abuse and poverty. On top of this is an awareness of greater work opportunities for women, particularly in male-dominated industries such as construction.

Add to that an extraordinary element of social empowerment, such as #MeToo, and 2018 was a standout year for change.

The FWX captured the progress made with a 0.2 points increase to 126.3 points in the December quarter, reflecting a 4.4 percentage point annual improvement on 121.9 points in December 2017.

 

The result was supported by records being broken in full-time work, female participation rate, the gender pay gap and the number of women pursuing tertiary education. However a significant gender gap in retirement savings continued to weigh on the Index, as did a slowing in progress in ASX200 corporate board appointments.

While improved economic progress for women was achieved in 2018, the momentum that got us there was also disappointingly slower than in previous years.

The annual pace of progress was 1.7 points less than the year before and travelled at its slowest pace since 2014.

Economic equality, as measured by the FWX Progress Target, is still at least a decade away as long-standing imbalances persist, particularly in labour force and superannuation.

When the December result of the Index is compared with the FWX Progress Target of 173.3 points, it shows women are 37 per cent short of achieving economic equality in Australia.

But I do believe 2019 will be game changer - particularly when it comes to policy and business efforts around closing the national gender pay gap which is currently at a 20-year low of 14.6 per cent.

Gains made in this area are likely to flow through to women’s superannuation and potentially increase financial literacy and engagement.

For the past year, the pay gap and gender diversity have become increasingly important political issues. During the first half of 2018, the Federal Opposition vowed to put more women into senior public positions, deliver actions on pay equality and axe the goods and services tax (GST) on tampons if elected in 2019.

The Federal Government responded by abolishing the tampon tax and putting women’s economic security on the agenda with the release of the Women’s Economic Security Statement and $AU109 million in funding initiatives.

Just months away from the election, Australians now have a much clearer picture of Labor’s plan for equal pay for women, including its proposed changes to the Fair Work Commission.

This is likely to increase debate around women’s economic security and potentially force the government to do more than what is in its Security Statement. That statement has a distinct focus on domestic violence victims and helping them achieve financial independence, as well as measures to boost workforce participation rates beyond current record highs and help support more women in business.

One of the clear areas where more work is needed relates to workforce participation and ensuring the record educational attainment among women is flowing through to the labour force by way of employment and retention after career breaks to have children.

The Index found more women than men are pursing educational qualifications beyond high school (55 per cent v 45 per cent), with the fastest tertiary enrolment growth in fields linked to higher paying career pathways such as Information Technology, Engineering and Mining.

For the past decade, there have been a greater number of women than men seeking to better their qualifications beyond high school. Yet over this period, women have been under-represented in the workforce and paid less on average.

Career breaks to have and raise children are the most obvious reason for women being paid less but there is more to this story.

Individual choice, work, family and societal factors, among which include gender stereotypes about work and the way women and men should engage in the workforce, also affect the gender pay gap.

This suggests a lot more work is needed at a business and society level to address the long-standing gender imbalances that have been holding women back.

Governments, current and future, may need to consider what supportive measures they can introduce to ensure that women obtaining higher educational qualifications are being encouraged to return to work, particularly to advance their careers, after breaks to have children.

At the same time, policies and awareness campaigns that promote men taking a greater role in raising children, working flexibly and undertaking other household work and which increase the use of childcare will probably help address out-dated but persistent gender norms.

That brings me back to my hopes for 2019. I truly believe it is within our grasp this year to design and support smart measures to enhance the economic wellbeing of Australian women and which address the areas of disadvantages that are not just holding women back but the nation as well.

Bianca Hartge-Hazelman writes on women’s money matters for financy.com.au and is the author of the quarterly report, The Financy Women’s Index.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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