Thank you to the member for Franklin and shadow minister for women for creating this opportunity to discuss this very important issue and for the leadership she's showing around the issues important to Australian women in this parliament. COVID-19 has brutally exposed the fault lines in our society. Women already struggled to get paid fairly, to get permanent work, to have their industries taken seriously and to share unpaid work equally. The pandemic has exacerbated all of these issues and, in some cases, impacted women in ways that will effect them for the rest of their lives.
Superannuation is something that I am particularly concerned about in that regard. As the shadow minister for women points out, women typically retire with half the superannuation balance that men do. Put simply, it means that after a lifetime of work and care giving, women are retiring to a life of poverty, and this is borne out in the homelessness statistics. Women over the age of 55 are the fastest-growing cohort of homeless Australians. We need strategies now that assist women to boost their super balances—embrace the magic of compound interest and set women up comfortably for retirement. Therefore, it concerned me greatly when the Liberal Party started laying the groundwork last week to peel back plans for increases to the rate of superannuation payable by employers in this country.
It all began when assistant minister for super, Senator Hume, said she was ambivalent about sticking to the government's promise to increase super to 12 per cent by July 2025. The assistant minister cited tough economic times for potentially reneging on this promise. Let's be clear about what this increase actually constitutes. From next financial year, 1 July 2021, super is set to increase by 0.5 per cent. It will then creep up by 0.5 per cent every year until 2025. This is slow and incremental policy change that must continue. It is slow and incremental policy change that enables businesses to plan for the increase. Despite the pandemic and the economic impact, this slow and incremental change allows businesses to recover while also doing the right thing for the workers.
For too long we have known that the current levels of super will not provide sufficiently for Australians in retirement. Almost 50 per cent of Australians expect to retire with less than $200,000 in super, and just 19 per cent of us expect to be able to retire with enough to live comfortably. To make matters more challenging, both for the individual and for the country, the ratio of taxpayers to pensioners is decreasing as our population ages. Right now we have about 3.6 workers to every one pensioner. By 2040 this will drop to about 2.6 workers to every pensioner.
In part, super was designed by Labor to ensure that this challenge was mitigated—good, long-term economic planning to set up the country and its citizens for the future. But this government wants to undo this planning. Despite taking home 15.4 per cent taxpayer funded super himself, the Prime Minister has indicated he is considering the delay of the already legislated increase to superannuation. The Prime Minister claims that any decision on this front will be made in the best interests of Australians. If that is the metric, clearly keeping the legislated increase in place is in the best interests of Australians.
Instead of going backwards on super, we actually need to go further. We need to think carefully about how we improve the superannuation balances of Australian women. We need to think about how we can mitigate the effects on super balances that happen to women when they go on maternity leave, when they take time off to care for children and other relatives, and when they work part-time in order to balance these caring responsibilities. We need to figure out how to change the fact that the median superannuation balances for women at retirement are 20.5 per cent lower than that for men. It has been astounding to watch this government throw any consideration of the needs of women out the window as they have dealt with this crisis. The way they have treated the female dominated childcare and early education workforce, which consists of 96 per cent women, is a prime example of this, from the fake free childcare policy to swooping in to take JobKeeper away from the female dominated industry months before anyone else. These are not highly paid people. Why do they have to take the brunt of this government's erratic policymaking process? I call on the government to rethink their approach to economic stimulus and create an economy that is truly equal for men and women in this country.
