The COVID-19 (coronavirus) outbreak has affected Australian and global economies, but Financy Women’s Index report is showing that women have been hit hardest financially, in the form of job cuts and lost income.
Lara Bourguignon, Managing Director, Superannuation, Retirement and Platforms at AMP and Bianca Hartge-Hazelman, editor and founder of Financy, discusses the latest quarterly Women's Index and the key steps women can take to protect their financial wellbeing.
LARA: Hi, I’m Lara Bourguignon, Managing Director of Superannuation, Retirement and Platforms at AMP. Today I'm joined by Bianca Hartge-Hazelman, editor and founder of Financy, which has just released its latest quarterly Women's Index.
Bianca, can you give us a bit of background about Financy and the Index.
BIANCA: Financy is a website, a blog content website that's dedicated to improving the financial wellbeing of women. I started it back in 2016. And in 2017, indeed on International Women's Day,I started the Financy Women's Index, which actually measures how women are progressing financially and economic equality here in Australia.
Now over the March quarter, you know, January to March, we began to see the early impact of COVID-19. And as you know, Lara, after reading the report, it's been women who have been hit fastest and hardest by COVID-19 in terms of those job cuts in particular, and the impact of female employment growth.
LARA: Can you share with me what we learnt from this report. How has it impacted women in employment?
BIANCA: Now, since the lockdown, and indeed even before that, we've seen sectors like travel, health, beauty, hospitality – these are areas dominated by women that have been particularly hard hit. When we look at food and accommodation services, there's been more than a quarter of female jobs actually lost.
Now there's no doubting the immediate impact of this is quite great. What concerns me most is what does this mean long-term, and I'm worried about the impact on the gender gap within superannuation.
And that's a question I wanted to put to you, Lara, is that something you're looking at or you're worried about? Or, what do you expect will transpire?
LARA: Yeah, thanks Bianca. I mean, obviously being out of paid employment means that super contributions are not being made during this period of time. And in turn, this has an impact on retirement balances.
Financial hardship could also mean that women choose to withdraw some of their superannuation early under the Federal Government's early access scheme. We're supportive of this initiative as it will help women meet basic needs today, and it is their money, of course.
However, the really wonderful thing about super is the compounding effect of contributions that are invested for many years. And when money is withdrawn today, you give up those gains that you would have earned between now and retirement.
So it's a little bit of a double whammy. So, we'd really encourage anyone considering withdrawing their super to carefully consider the decision, and to only access it as a last resort. And if it is the best thing for right now, consider maybe trying to contribute the amount back into super once you're back in paid employment.
BIANCA: I guess, Lara, my concern is that the longer this continues is that it could actually derail the financial progress of women, as we've been measuring for many years now through the Financy Women's Index.
I wanted to ask for your opinion on what steps can be taken to help women through this process, to better support them.
LARA: There are four things that I would recommend. The first is managing debt, and to the extent possible, reducing spending. Where eligible, taking advantage of government assistance. Understanding the impacts of accessing super early. And, doing your research and finding good quality information, like the government's Moneysmart website or AMP's dedicated COVID-19 support hub.
Women possibly have a little extra time on their hands right now and knowledge is power. So we can't control COVID-19 but we can seek to understand our choices and focus on what we can control.
Changing tack a little bit, Bianca. What did you see are some of the more positive findings for women in this report?
BIANCA: Well, there are actually a few. I suppose one of the most significant things, though, has been the adaption and the use of technology to enable more flexible work arrangements.
So I've seen that as being something that could really help the flexible work future we could see here in Australia. Not just for women, but indeed it will have a huge impact on women, and the return to work and participation in the workforce, but also for men, who we know tend to be more likely to have their flexible work arrangements that they put to employers rejected more so than women.
I've also got hope that we can value those traditional female-dominated sectors like health, education, training a lot more than we have in the past. We've seen particularly with health just how vital that sector is.
These women, and men, are on the frontline every day trying to help support the nation.
LARA: I couldn't agree more, Bianca. And you know, while we're so focused on physical wellness right now, anything that we can do to really support women in their financial wellness, you know I think, we are here to help.
BIANCA: Lara, I couldn't agree more. It's been lovely talking to you.
LARA: And thank you too, Bianca, so much for your time and for the report.
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