New research confirms a concerning disparity between the earnings and superannuation balances of indigenous Australians and non-indigenous Australians.
The study, carried out by researchers at Griffith Business School, reveals indigenous Australians, on average, will accumulate a superannuation balance 27% lower than that of non-indigenous Australians.
“This is a function of the current 23% earnings gap between indigenous and non-indigenous Australians,” Dr Osei Wiafe, a researcher at Griffith’s Centre for Personal Finance and Superannuation, said.
The findings show that, on average, indigenous Australians need to work 6.5 years longer after reaching the retirement age of 65. By comparison, non-indigenous Australians need to work two years longer in order to achieve a comfortable level of retirement.
“Going forward, we need to work towards closing the current earnings gap between indigenous and non-indigenous Australians,” Dr Wiafe (right) said.
“We can achieve this by delivering higher levels of education and improved healthcare which will be reflected in the incomes attained and retirement outcomes for indigenous Australians in the long term.”
The research findings, which have been published by the CSIRO-Monash Superannuation Research Cluster, show a 19% difference in superannuation balances between indigenous males and females, notably smaller than the 39% gap that exists between non-indigenous Australian males and females.
“Ultimately, we need to address the gender gap between males and females,” Dr Wiafe said.
The results suggest non-indigenous female workers face similar retirement outcomes to that of indigenous male workers.
“Our study of the lifetime impact of earnings differences on retirement outcomes shines a spotlight on the extent to which disparity in income levels today results in a significant retirement wealth gap after a 40-year career,” Associate Professor Robert Bianchi said.
The findings show that only 20% of full-time employed indigenous workers will accumulate enough superannuation savings to maintain a satisfactory standard of living in retirement (based on ASFA’s estimated income of $42,569 per annum which is required for a comfortable retirement for a single retiree).
Dr Osei Wiafe is part of a research team which includes Associate Professor Bianchi, Professor Michael Drew and Dr Adam Walk. This research was supported by the CSIRO-Monash Superannuation Research Cluster, a collaboration between CSIRO, Monash University, Griffith University, the University of Western Australia, the University of Warwick, and stakeholders of the retirement system in the interest of better outcomes for all.