Photo: Rochelle Hartman, CC BY-SA

What’s in the budget for older working women?

by Erin Maclean


In recent years, the gap between rich and poor has widened significantly in Australia. While we are not yet at the levels of inequality seen in the United States, thanks at least in part to our universal health and education systems, policy discussion is increasingly focused on inequality — especially the intergenerational disparity between Baby Boomers and young people in the housing market.

Just last year, opposition leader Bill Shorten’s budget reply speech argued the government had “forgotten and betrayed” young people, women, pensioners, carers and veterans.

This year’s budget has made notable gestures towards many of these struggling groups, with plans to address housing affordability (however superficial the reforms may be), reinstate pensions, fully fund the National Disability Insurance Scheme and provide additional funding to veterans’ services.

But this Mother’s Day, it seems one group of Australians have been forgotten — older working women, who charities are reporting are experiencing homelessness at unprecedented rates.

Who are these women?

Contrary to the usual risk factors of homelessness associated with youth and low income, the spike in homeless older women is mostly among those who have had otherwise ordinary, middle-class lives.

These are women that, just a few years ago, could have been the ‘typical’ Australian of the 2016 Census data — the Australian Bureau of Statistics calls her Claire, a 38-year-old female, married with two children, who completed Year 12 and lives in a three bedroom house (owned with a mortgage) and has two motor vehicles.

But as they have entered their 50s, their circumstances have changed dramatically. As Homelessness Australia explain, older women may be forced out of the workforce early, become ill or suddenly find themselves without a partner they relied on for financial support (often because of death, divorce or domestic violence).

This is only compounded by the general inequality women face in Australia. As The Machinery of Government has previously discussed, women on average earn less than men and, more relevantly for this age group approaching retirement, have little more than half the superannuation of their male counterparts.

That means if their circumstances change in their 50s for whatever reason, they may struggle with maintaining a self-sufficient income and are likely to have insufficient savings to protect themselves from homelessness.

Of course, it is worth noting that, at the 2011 Census, men were still more likely than women to be homeless. However, the gender disparity appears to be decreasing and it is expected the June release of the 2016 Census data will indicate a marked rise in homelessness for women, exacerbated by the housing affordability crisis.

So what is the 2017 budget offering Claire and those older working women?

What Claire can look forward to

Let’s start with the positives: this budget is heading in the right direction for addressing inequality in a general sense, especially compared to the Coalition’s previous austerity approach.

It has an increased focus on funding for infrastructure, education, health and disability — all crucial puzzle pieces that Claire and her older counterparts will likely benefit from, at least to some extent.

As is the case for almost all Australians, the reversal of the Medicare freeze and additional hospital funding will ensure these older working women are able to access healthcare as they need. This reduces their risk of having their circumstances change because of illness.

Likewise, many of these women will be in a better position as a result of the full funding of the National Disability Insurance Scheme. Regardless of whether they have a disability or take on significant caring roles (as women disproportionately do), it will allow them to live more independently.

For those older working women who have reasonably young children, the reforms to childcare and the Gonski 2.0 school funding will likely be welcomed as well.

However, the most relevant initiatives in this budget include the funding certainty for homeless services and the government’s attempts at housing affordability reforms (including increases to social housing and concessions for retirees who downsize).

Funding for mental health services will also keep women like Claire safer, especially in rural and regional areas.

But it’s not all good news for Claire. This budget is putting money into vital services, which means someone is paying for it — and that will include Claire and older working women, even if they are struggling.

What will hit Claire hard?

Generally speaking, women are slightly more likely than men to live in low income households. This means Claire will not benefit from the Coalition’s discontinuation of the budget repair levy for high income earners and, instead, will be disadvantaged by the Medicare levy’s increase to 2.5 per cent.

Though this will not be introduced until 2019, it will apply to people on incomes as low as $21,655. At this stage, the increase is unlikely to pass the Senate — with the Australian Labor Party and several crossbenchers concerned about the impact on low income earners.

The Coalition’s plans to tax the big banks are also a source of financial concern for workers and unemployed alike. Though Treasurer Scott Morrison begged the banks not to pass the levy on to customers, it will likely result in raised banking fees, increased interest rates for mortgages and/or poorer superannuation returns.

At a time when interest rates are already expected to rise (and mortgage stress has begun), this could be disastrous for many of those typical Australians who have mortgages with the big banks. Likewise, the possible superannuation hit could make matters even worse for working women as they approach retirement.

On top of these hits to the household budget and retirement savings, older working women with remaining HECS-HELP debts may have to repay their student loans at lower income levels — with the repayment threshold dropping to $42,000, which is barely above full-time minimum wage. Though women in their 50s are less likely than Claire to have a university degree, women are now more likely than men to pursue higher education (and have to repay their loans, on top of other financial commitments).

University fees are also set to increase slightly, so it will be harder for Claire and older women who are forced out of the workforce early to return to university to up-skill and increase their earning capacity.

The summary

This budget certainly puts on the pretence of being fair and is, almost inarguably, a better outcome for most Australians than the Coalition’s previous budget nightmares.

But overall, there is not much for Claire or this forgotten group of older working women.

There are small victories with healthcare, infrastructure and the government’s hopes to increase housing affordability, as well as funding for mental health and homelessness services, but otherwise these women will lose out with the Medicare levy increase and probable stress from the banks.

At a time when Australian households have some of the highest debt in the world (and it is already expected mortgage stress will rise), this budget will put many Australians in an even more vulnerable financial position — and that means older working women may be at even greater risk of homelessness.

I appreciate the 2017 budget’s sentiments of returning to health, education and infrastructure spending to put Australia as a whole on the right track, but it should not be overlooked that it will be hitting young people, low income earners and the Claires of Australia hardest — at the same time the government reduces the tax burden on businesses and higher income individuals.

That is not equality, especially not this Mother’s Day.


ABOUT THE AUTHOR

ERIN MACLEAN

Erin is a freelance journalist and PhD student at Griffith University.

Erin specialises in news media depictions of popular culture, but is particularly interested in the way media framing affects public perception and politics.