WomenCAN Australia Logo

Now, here’s a super idea!

WomenCAN Australia CEO, Mikaela Stafrace
A simple path for the government to unlock billions of dollars of superannuation to leverage charities and the not-for-profit sector.

A potentially game-changing report by Philanthropy Australia provides a simple path for the government to unlock billions of dollars of superannuation to leverage one of the most economically and socially effective and efficient elements of our communities – charities and the not-for-profit sector.

As the CEO of an organisation that helps women into, or back into, the workforce, often in the face of adversity, I want to state my support for Philanthropy Australia’s compelling policy suggestions of in its report, released in recent days, Unlocking the Potential of Superannuation for Charitable Giving.

And I also want to underscore Philanthropy Australia CEO Jack Heath’s statement that the changes should only be implemented after extensive consultation between the superannuation industry, government, and the not-for-profit sector.

It’s important to get such a reform right.

The Federal Government has tasked its independent policy research operation, The Productivity Commission, to double charitable funding of the sector by 2030.

That won’t happen with policy status quo.

Grants and distributions by charities rose by five per cent to $9.7 billion in 2021, but that rate of growth is not enough to hit the Albanese government’s goal of doubling philanthropy by 2030

Here’s the opportunity to hugely help achieve this crucial social and economic goal, as set out in Philanthropy Australia’s report.

Australia is one of the wealthiest countries in the world. Despite our relative wealth, we lag our international counterparts in charitable giving. We can increase Australia’s levels of giving through creating the right policy conditions.

One of the most significant areas of potential giving is superannuation balances remaining at the end of life. Australia’s superannuation savings are currently valued at $3.5 trillion, and they are designed to provide a better standard of retirement income for Australian employees.

However, many people die with significant superannuation savings intact: in 2018, $17 billion in superannuation death benefits were paid by superannuation funds. This has been forecast by Treasury’s Retirement Income Review to grow over seven-fold in real terms to $130 billion by 2060.

Current policy settings discourage Australians from giving a portion of these remaining savings to charities. Donations to eligible charities when people are alive are tax deductible. Gifts or bequests through a will are also tax free. By contrast, bequests to charities from superannuation are subject to a 17 per cent tax.

In addition to the tax implications, the process for making a bequest to a charity from remaining superannuation is complicated, differs between superannuation funds, and is often an area of legal dispute. Currently, people are unable to directly bequest funds to a charity from any remaining superannuation when they pass away.

There’s a massive amount of value in the sector to leverage.

Just imagine were a portion of these remaining savings able to be directed to organisations who so efficiently that make such a positive difference in our communities and around the world. Imagine if we could leave a legacy that reflects our values and (com)passions. Imagine if we could make a lasting impact on causes we care about.

At WomenCAN Australia, we have proved the manifold benefits of our unique model of helping women move from JobSeeker Payment to being skilled, tax-paying employees.

We’ll soon be officially presenting the evidence to a federal parliamentary inquiry into employment services and will be seeking meetings with the offices of relevant ministers and the policymaking public servants so vital to our nation.

The evidence shows our work supports women on the road to financial independence, accompanied every step of the way by our celebrated peer-support program.

We’re doing the numbers carefully, but at this stage can estimate direct annual savings to the federal budget of tens of millions of dollars (basically created by adding the reduced expenditure and the increased taxation revenue). Within only a few short years, we’ve achieved proof of concept.

We’re heading towards 1000 women either in training, trained and/or employed. That’s in regional Victoria and Melbourne, concentrating on aged care and childcare, and now moving into horticulture and hospitality.

Those numbers do not capture the total benefits.

    • Women get skills and job and financial independence.
    • Children who now have aspiration, see a confident mum and can participate in their school activities more fully.
    • Employers get great staff.
    • Local economies get boosted – the multiplier effect.
    • GST revenue rises.
    • Local communities get strengthened.
    • Families get increased security and opportunities.
    • Government administration costs are reduced.

Yep, pretty much everyone wins. This is fact, not conjecture. Which is why we are building the case that our model should be piloted nationally. Given the benefits, we would argue that the risk lies in not trialling the model widely.

We are clearly part of the solution to Australia’s skills shortage. We are also partly self-fund, through our social enterprise of tradeswomen for women; we have ourselves also generated employment.

The key is collaboration across industry, education organisations, government, local employers, and local communities, and then to wrap it in peer-support.

When women have been out of the workforce for years, often caring for others, they lose three things that we help restore:

    • Confidence.
    • Connections.
    • Skills and Capacity.

One way perhaps to look at the potential benefit of this desired reform of superannuation law is to put some numbers on the charities and not-for-profit sector”

    • Employs 1.3 million people. That’s 11 per cent of the population.
    • Contributes more than $174 (2021) billion to the economy. That’s more than 13 per cent of GDP. This figure does not fully reflect the economic contribution of the sector, because it does not account for the value of volunteer work, donations, social benefits and other non market activities. And it eclipses the $140 billion the entire, massive financial services industry generated.
    • Comprises around 50,000 organisations in 14 different classifications including education, health, employment, culture, the environment, and public welfare.
    • Helps millions of people in need every year, in Australia and overseas. Estimates are difficult to calculate, but a comprehensive study in 2018 found the number to be 134 million, of whom 120 million were in Australia (the number counts multiple uses of various services).
    • Helps provide connection, community, and purpose to the almost 6 million volunteers who are part of these organisations. That’s almost 30 per cent of the population aged 15 or more. Of them, 26 percent were women, 23 per cent men.

 

Sounds like a super idea whose time has come. Just imagine.

Mikaela Stafrace is CEO and founder of WomenCAN Australia.

Share the Post:

Related Posts

Daine - trainee

Diane is Thriving in Aged Care

“It just, how can I put it, it’s brought my self-confidence back.  I now feel like part of society again,”

Up until 2023, Diane was a primary carer for her Father and Mother. 

Read More

Early Years Training Program has launched in Shepparton

Women from diverse communities can now benefit from WomenCAN Australia’s proven peer-led support program and be paid to train on-the-job in childcare or kindergarten.