Superannuation to be added to paid parental leave as Labor unveils landmark gender equality plan

Superannuation will be added to Government-funded paid parental leave from next year as Labor finally plugs a gaping policy gap that leaves women worse off in retirement.

Minister for Women Katy Gallagher will make the announcement on Thursday as she unveils a new strategy to achieve gender equality, which will declare the aspiration can only be reached if caring responsibilities are shared more equally.

Under the Government’s new plan, eligible parents with babies born or adopted after July 1 next year will receive a 12 per cent superannuation contribution on top of their taxpayer-funded paid parental leave.

Parents can currently access 20 weeks of paid parental leave, rising to 26 weeks by 2026 under legislation before the Federal Parliament.

The announcement follows a years-long campaign from women’s equality advocates – and the Labor movement itself – to close the “super gap”.

Industry research shows the average super balance for women is roughly 25 per cent lower than men, due in large part to women taking time off work, or working fewer hours, while raising children.

Labor took a super-on-PPL policy to the failed 2019 election before dropping the commitment ahead of the 2022 ballot.

The Government resisted pressure to adopt the policy in last year’s Federal Budget after its women’s equality taskforce recommended the measure.

At the time, Senator Gallagher insisted the Government would act when there was room in the budget.

The internal pressure intensified after Labor’s national conference endorsed a resolution calling on the Government to implement the policy as a “priority”.

Senator Gallagher, who will appear at the National Press Club on the eve of International Women’s Day, said it was an “important investment” to close the super gap and make decisions about balancing work and care easier for women.

Roughly 180,000 families each year receive Commonwealth-funded paid parental leave, which is equal to the minimum wage of $882 per working week.

“The Albanese Labor Government is serious about making sure women are supported when balancing caring and working responsibilities,” Senator Gallagher said.

Treasurer Jim Chalmers said the changes would result in a “more dignified and secure retirement for working women”.

The cost of the change won’t be revealed until the May budget.

The retirement income review, handed to then Treasurer Josh Frydenberg in 2020, estimated it would cost about $200 million each year to pay super on 18 weeks of paid parental leave.

It would add an extra 0.17 per cent in retirement income for the average female earner, the review found.

Senator Gallagher will also use the press club speech to launch the first national gender equality strategy, titled Working for Women.

Extracts from the strategy, supplied to The West, state the Government will prioritise policies that support families to make choices that work for them.

“To achieve gender equality, unpaid and paid care responsibilities need to be more equally shared, and care needs to be valued and celebrated.,” it states.

“Equality cannot be achieved without addressing who takes on, and who is expected to take on, caring responsibilities. Nor can it be achieved without valuing the substantial contribution unpaid and low paid care makes to families, the community and – notably – the Australian economy.”