Is superannuation working for women?
By Marian Baird and Susan Thorp
The superannuation system is stacked against women because it fails to pay any attention to their working lives.
The royal commission into banking, superannuation and financial services shone a spotlight on the management fees of superannuation funds. But it did nothing to address how the scheme could work better for women.
Australian women have a distinctive work pattern over the course of their lives, one that is quite different to men’s.
Whether by choice or constraint, women in Australia manage their care responsibilities with part-time work. In fact, levels of full-time work for women have not increased at all over the past 40 years, despite the surge of women entering the labour market.
Nearly half (46 per cent) of women work part-time compared to 17 per cent of men. Two-thirds of women move to part-time work after the birth of their first child and one third are likely to move to jobs requiring different skill levels. This inevitably leads to less pay, and therefore less superannuation. As a result, on average, women retire with about 40 per cent less superannuation than men.
There are four things wrong with the superannuation scheme.
- The default settings do not favour people who move jobs and default into new superannuation accounts. Multiple accounts cut into retirement balances by multiplying administrative charges. The Productivity Commission has estimated that one extra superannuation account may lead to a 6 per cent lower retirement balance. Default settings should allow one superannuation account to follow a worker from employer to employer. This would help part-time and gig-economy workers avoid the costs of multiple accounts.
- Default life and temporary and permanent disability insurance is set up for full-time workers. Premiums are set by age not income, and people who work part-time pay premiums as if they worked full-time. Furthermore, premiums are deducted for a period of time after members stop contributing. Women who take time out of the workforce continue to pay premiums. The Productivity Commission estimates that a retirement balance could be eroded by 14 per cent by inappropriate insurance premiums. Insurance in superannuation needs a complete overhaul. Better communication with members about insurance, and easier processes to adjust policies, are critical starting points.
- In a defined contribution scheme like Australia’s, lower earnings at younger ages means less funds to benefit from compounding of investment returns. For every dollar that women do not contribute in their 30s, their child-bearing years, they need to contribute $3 in their 50s to achieve the same balance. Improvements to the performance and efficiency of superannuation funds will make the early dollars contributed by women count more. However, the system should facilitate women contributing to their superannuation in their 20s or early 30s, before they have children.
- The annual and lifetime limitations on concessional contributions mean that women who reach their peak earnings in their 40s or 50s cannot get the advantages of tax concessions in the same way as if they had smoothed work hours over their lives. Concessional contribution caps should accommodate the uneven workforce participation that many women experience. The current catch-up windows around parental leave, for example, are too short. The regulations should allow people to catch up in their 50s and 60s when they have more money to save, without imposing higher tax rates.
It’s time to make a good superannuation scheme even better.
Land values increase across Queensland despite drought
More than a million Queensland properties have been revalued for 2019, with sixteen out of eighteen local government areas recording strong increases in land value.
The 2019 Valuer-General’s report saw an overall increase in the value of urban land, with Brisbane and south-east Queensland leading the trend.
The Brisbane City Council area saw a land value increase of 6.8 per cent overall from the last valuation in 2017, while industrial land value in the same region increased 17.5 per cent.
More than 300,000 residential properties in the Brisbane area were valued, with a median rise of 7.1 per cent.
Across Brisbane, 126 suburbs saw median land value increases of up to 15 per cent, and 16 suburbs saw a land value increase of more than 15 per cent.
Thirty-seven suburbs saw no median value increase.
“There are continued signs of strength in some areas of Queensland’s property market,” Valuer-General Neil Bray said in the report.
“Generally, across Queensland, there has been increased sales activity in rural markets.”
Statewide land values increased a median of 8.2 per cent, with the Lockyer Valley reporting one of the highest increases of 15.21 per cent and Logan close behind at 11.6 per cent.
Brisbane generally saw a 6.8 per cent increase, and Longreach a 14.8 per cent decline in land value.
The Valuer-General reported inner-city suburbs saw major increases, including Auchenflower, Milton, Paddington and Woolloongabba, while Paddington reported a new residential median land value of $740,000.
Brisbane’s overall median residential property now sits at $455,000, and rural residential at $670,000.
Further out from the inner-city ring, suburbs such as Carseldine, Boondall and Rocklea saw a strong increase in value, and western suburbs such as Sinnamon Park also increased.
Outside the Brisbane region, other local government areas saw minor residential land increases including Redlands, Ipswich, Logan and Moreton Bay.
To the north, south and west of the greater Brisbane area land values at the Sunshine Coast, Noosa, Lockyer and Somerset Valleys also reported value increases.
The Sunshine Coast particularly saw increases attributed to the ongoing demand for coastal living and tourism, with mid-priced residential coastal properties the highest in demand.
Outside the city boundaries, rural residential saw minor to moderate land value increases around south-east Queensland, with a demand for agricultural land also increasing.
This was despite most of the state still being fully drought declared, with agriculture demand and beef prices strengthening.
Further west, land values in the Darling Downs saw decreases as coal seam gas activity declined.
“The town of Wandoan also previously saw significant increases in value based on a proposed coal mine development nearby,” the Valuer-General said.
“The shelving of this project has resulted in very limited interest in this market.”
However, in the Darling Downs rural land values increased “significantly” on the back of stronger beef prices and low interest rates.
The new land valuations will come into effect on June 30.
Crypto exchange may have lost $A152 million after CEO with passwords suddenly died
The death of a Canadian entrepreneur has left a huge stash of cryptocurrencies locked off from the people who own them.
Quadriga, Canada’s biggest cryptocurrency exchange, said it’s unable to gain access to $A152 million of bitcoin and other digital assets after Gerald Cotten, its 30-year old CEO and co-founder, died of complications arising from Crohn’s Disease while travelling in India.
Many of the digital currencies held by Quadriga arestored offline in accounts known as “cold wallets,” a way of protecting them from hackers. Cotten appears to have been the only person with access to the wallets, according to court documents cited by Canadian media and posted online by cryptocurrency news site CoinDesk.
The unusual case highlights the risks investors face looking after their assets in the thinly regulated industry.
Cotten’s death has plunged Quadriga into crisis and left it struggling to figure out how to refund more than 100,000 of its users.
The company filed for creditor protection in the Nova Scotia Supreme Court on Thursday.
“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets,” Quadriga said in a statement on its website. “Unfortunately, these efforts have not been successful.”
Cotten’s widow, Jennifer Robertson, said in the affidavit posted online that the laptop that Cotten used to run the currency exchange is encrypted.
“I do not know the password or recovery key,” she said. “Despite repeated and diligent searches, I have not been able to find them written down anywhere.”
The Canadian High Commission in New Delhi told CNN that it was aware of Cotten’s death and had “provided consular assistance,” but declined to reveal further details.
The company has hired tech experts in an attempt to hack into Cotten’s laptop and other devices to retrieve the missing cryptocurrencies, but Robertson warned that at least some of them “may be lost.”
Quadriga also owes about $A73 million in cash that it’s unable to pay back, she said, citing difficulties accessing funds through the traditional banking system.
Quadriga and a lawyer representing Robertson didn’t immediately respond to requests seeking comment late Monday.
A court hearing on Quadriga’s financial difficulties is scheduled for Tuesday in Halifax, Nova Scotia.
While the case is unusual, it isn’t the first time the cryptocurrency industry has been hit by security concerns. Hundreds of millions of dollars’ worth of digital currencies have been stolen by hackers over the past few years.
The spectacular boom and bust in the prices of bitcoin and other cryptocurrencies have presented a quandary for governments around the world, which have taken differing approaches in trying to regulate their use.
Kogan launches online retail marketplace
Kogan.com Limited has launched a marketplace for online retailers as it seeks to fend off the threat from Amazon, which runs a similar service.
Kogan said on Thursday that more than 100,000 products from brands like Microsoft, Breville, Fisher-Price and Gillette are now available through Kogan Marketplace.
“Our mission is to make the most in-demand products and services more affordable for all Australians,” said Kogan Marketplace director Lazar Monin.
Kogan said it expects more retailers to sign up with the platform now that it has been launched.
Kogan shares were up for the first time in eight days on the news, gaining 20 cents, or 5.36 per cent, to $3.77 at 1059 AEDT