Government continues to not pay super on paid parental leave, leaving Aussie mums worse off

The government has again ruled out paying superannuation to new parents in a major setback for working women.

Australia’s peak union bodies say the government’s decision not to pay superannuation on paid parental leave is hindering efforts to achieve gender equity and leaving Australian women behind the rest of the world.

A new report by the Australian Council of Trade Unions has revealed not only do women retire with about half the amount of super as their mail counterparts, but Australia’s paid parental leave scheme – which does not currently require superannuation to be paid – is the second worst in the developed world.

In addition, the ACTU says the government’s recent decision not to legislate changing its paid Commonwealth Paid Parental Leave scheme – of which 90 per cent of recipients are women – to include superannuation is further hurting working women.

It follows reports from Nine Newspapers that revealed cabinet’s expenditure review had voted against the advice of the Retirement Income Review to pay superannuation on paid parental leave, because it wouldn’t have a big enough impact on women’s economic security.

However, the review found even if it was small in terms of closing the gender gap, it was still worth doing for equity.

“Failing to take this action is costing women more than $200m a year in lost superannuation contributions,” ACTU president Michele O’Neil said.

“The Morrison government has had plenty of press conferences pledging their support for women, and today shows yet again just how little the promises of the Prime Minister actually mean.

“Working women will not forget that this election.”

ACTU president Michele O'Neil said the government’s refusal to pay superannuation on paid parental leave was sending women’s equity backwards. Picture: NCA NewsWire / Gary Ramage

Coinciding with International Women’s Day, the ACTU has in its new report – titled “Morrison Missing” – called for superannuation to be paid on all paid and unpaid parental leave and care-related absences, as well as a legislated pathway to a super guarantee of 15 per cent, expedited for women.

“The government’s failure to properly support working parents and carers is a significant contributor to the gender pay gap and economic insecurity for women,” the report said.

“(The solution to) improving Australia’s paid parental leave scheme is to provide access to 52 weeks’ paid leave at full-wage replacement, with both parents entitled to access the same amount of paid parental leave and to share the entitlement as they see fit.”

The report also found women still earn on average $483.30 less per week than men, and two out of three will experience sexual harassment in a workplace.

The ACTU’s report found not only were women 50 per cent worse off when it comes to their super, but were still earning less than their male colleagues and were more likely to experience sexual harassment in the workplace.

Industry Super analysis from last year found not only was the CPLP scheme one of the last leave entitlements on which super was not required to be paid, but that it is also the only option available to 50 per cent of Australians who work in the private sector.

This almost exclusively impacts women, who account for 99 per cent of CPLP recipients.

The analysis found since the scheme’s inception, Australian mothers would have received an additional $1.6 billion in superannuation payments if the guarantee was paid on CPLP.

Despite that, according to Nine Newspapers, when Retirement Income Review chair Mike Callaghan advised the government it should pay superannuation on paid parental leave, the government did not accept the proposal.

The Callaghan Review reportedly estimated adding superannuation to the government-funded scheme would only cost taxpayers $200m a year, less than one per cent of the total budget.

Emeline Gaske, assistant national secretary of the Australian Services Union, echoed Ms O’Neil’s sentiment, and said women around the country were demanding a more equal super system.

“Scott Morrison’s stubborn refusal is yet another example of where the government could act, but has decided not to,” she said.

“On average, women have about half the superannuation balances of their male colleagues and the Prime Minister knows this is the case. He knows this is wrong, he knows it’s unfair – he has decided not to act anyway.”

Greens senator Larissa Waters says the Greens would overhaul the paid parental leave scheme and improve superannuation entitlements to new parents. Picture: Sam Mooy/Getty Images

With both the ACTU and the ASU calling for voters to keep the government’s actions around superannuation in mind when they cast their ballot later this year, Greens senator Larissa Waters said her party wanted to expand a government-funded scheme to nearly mirror what former Prime Minister Tony Abbott pledged in 2010 and 2013 before later dumping it.

Under the Greens’ policy, six weeks of leave would be paid each to individual parents, with a further 14 weeks to be used as they choose. If only one parent takes leave, the family is entitled to 20 weeks, but if they take turns caring for their new child, they will receive 26 weeks in total.

The government would fund up to 26 weeks of leave at full replacement wage plus super, with a portion offered to the second parent on a use-it-or-lose-it basis.

Senator Waters said women were essentially being punished for giving birth, which had propelled Australia to 50th place on the Global Gender Gap ranking.

Senator Waters said studies consistently showed the best ways to improve women’s participation was to have access to a strong parental leave scheme, flexible working arrangements and affordable childcare.

“It’s shameful that in one of the richest countries in the world, the reward for taking time out of the workforce to raise children is … too often, poverty in retirement,” she said.

“The current parental leave scheme tends to lock mums into the role of primary carer and the loss of work opportunities that comes with it. We need to do much more to encourage both parents to share the parenting load.

“Australian women can no longer afford a government that cries poor when it comes to meeting women’s economic needs.”

While Labor took a policy of paying super on top of parental leave to the 2019 election and it remains part of the ALP’s national platform, the party has yet to confirm whether it will take the policy to this year’s poll.

Opposition spokesperson for superannuation Stephen Jones was approached for comment, as was Women’s Economic Security Minister Jane Hume, and Women’s Safety Minister Anne Ruston.

Originally published as Government continues to not pay super on paid parental leave, leaving Aussie mums worse off