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The super gap we’re not talking about

average worker, retirement, superannuation, wages, financial literacy

Indigenous Australians retire with 27 per cent less in super than the average worker and “insecure” employment, poor wages, poverty and financial illiteracy are all to blame. 

That’s according to Amanda Young, CEO of financial literacy advocacy group First Nations Foundation.

Speaking to Nest Egg, Ms Young said the super gap isn’t helped by a paucity of research done on Indigenous super and the fact that superannuation funds don’t tend to record the ethnicity of their members.

Questioned on the impact of the gig economy on Indigenous workers, Ms Young said: “[There is] no data on Indigenous participation in the gig economy being collected.”


Acknowledging this, Ms Young said a combination of lower pay, less secure employment, the $450 monthly threshold for super contributions and nearly non-existent contributions are some of the main factors contributing to the super gap.

Additionally, early access to super on the grounds of poverty “remains a downward pressure on any Indigenous savings”.

Most stark is the fact that, as Ms Young put it: “Many [Indigenous Australians] don’t live to retirement age”.

Indigenous men have an average life expectancy of 67.2 years, while Indigenous women have an average life expectancy of 72.9 years. That’s a difference of 11.5 years between Indigenous and non-Indigenous men and a life expectancy gap of 9.7 years for Indigenous and non-Indigenous women.

“[An average] 10-year gap in life expectancy naturally plays a part in Indigenous super balances,” Ms Young noted.

The data problem

While research from the CSIRO-Monash Superannuation Cluster and Griffith Business School uncovered the 27 per cent super gap, that same research was frustrated by a lack of financial data on Indigenous Australians, researcher Dr Robert Bianchi said in a UniSuper insight recently.

“When we started this project, we assumed there was a lot of financial data and statistics on Indigenous Australians. After some time, we realised this wasn’t the case, and that there are gaps in our understanding,” Mr Bianchi said.

“We advocate that the ABS and the Australian Taxation Office (ATO) release more data and information on Indigenous Australians so more research and practical assistance can be dedicated to this important group.”

The research report identified an earnings gap of 27 per cent as the main factor in the Indigenous super gap, but also revealed that in order to achieve a comfortable retirement, Indigenous workers would need to boost their super payments from 9.5 per cent to 14.3 per cent, compared to 11 per cent for non-Indigenous workers.

The average Indigenous male worker retires with a balance 27 per cent lower than the median male balance, while Indigenous women retire with a super balance 39 per cent lower on average than the median male balance.

This means that only 15 per cent of Indigenous Australians achieve the Association of Super Funds of Australia (ASFA) benchmark for a comfortable retirement, compared to more than 30 per cent of non-Indigenous workers.

“This research demonstrates that the current earnings gap between Indigenous and non-Indigenous Australian workers translates into large differences in retirement outcomes,” Mr Bianchi said.

He continued: “Government initiatives to improve the education, health and income outcomes of Indigenous Australians would be enormously helpful in closing today's earnings gap, resulting in higher super balances and adequate savings at retirement.”

Joining Mr Bianchi, researchers Michael Drew, Adam Walk and Osei Wiafe said addressing Indigenous Australian life expectancy gaps and smaller incomes were two factors with a potential to improve Indigenous Australians’ retirements.

Ms Young agreed with Mr Bianchi’s suggestions, although also pointed to Indigenous employment opportunities as something to be considered.

Continuing, she said the current discussion around the ramifications of a casualised workforce and a gig economy are “very much” a case of an employment trend that has impacted the Indigenous economy for a long time only achieving air-time now that it has begun impacting the broader labour market.

The super gap we’re not talking about
average worker, retirement, superannuation, wages, financial literacy
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