Labor ditches election promise to pay superannuation on paid parental leave

It can be revealed the Opposition will dump one of its longstanding election promises - and the cost of the scheme is why.

Labor will abandon its promise to deliver working mums thousands of dollars for their retirement, allowing a system slammed as a “tax on pregnancy” to remain in place if the party is elected.

In a blow to Labor’s credibility supporting women’s economic security, The Daily Telegraph can reveal the party’s leadership has resolved to walk away from its longstanding commitment to pay superannuation on the 18 weeks of Commonwealth paid parental leave.

Labor leader Anthony Albanese. Picture: Liam Mendes / The Australian

Labor took the policy to the 2019 election and had indicated as recently as last year intention to do so again, but union officials and stakeholders have recently been advised the scheme would be scrapped from the party’s 2022 platform.

Sources familiar with Labor’s decision said the cost of adding super to parental leave, expected to increase the $2.2 billion annual scheme by about $200 million, was the primary driver behind the call to dump the policy.

One source said the party was “braced” for “significant backlash” from female supporters, unions and parent groups, but believed it would “not necessarily be a vote changer”.

Women account for about 99.5 per cent of leave applications, meaning they are disproportionately impacted with less superannuation at retirement as result of taking time off to have children.

Bondi mum Catherine Nantel with her son William, 5, and Matilda is one of millions of Australian women missing out on future retirement income because the government does not pay superannuation on paid parental leave. Picture: Jonathan Ng

Industry Super Australia’s Georgia Brumby said unless both major parties committed to the policy, women would be forced to pay a “big future price for taking time out of the paid workforce to raise a family”.

“We fear at this election women’s future financial security is going to be sacrificed in the name of fiscal restraint, despite the modest super contributions being vital to a mum’s retirement savings,” she said.

“Working mums should not be left behind for having a baby, it’s time to end this tax on pregnancy.”

The addition of superannuation to parental leave was recommended by Treasury’s retirement income review, but has not been adopted by the Morrison government.

Labor’s superannuation spokesman Stephen Jones has previously backed paying parents super when they take leave. Picture: NCA Newswire/Gary Ramage

Labor’s superannuation spokesman Stephen Jones has repeatedly backed the policy and called on the Coalition to introduce it.

“This is a job that has to be done,” he said in June last year.

“We know the superannuation gap between men and women is big and getting bigger.”

A 27-year-old mother of one would miss out on $1390.60 in super contributions if she took the full 18 weeks of available government leave, costing her about $6000 at retirement.

A woman in NSW aged between 30 to 34 has about 16 per cent less super than a man, which is a worsening of the gap of 5 per cent in just six years, according to new figures from ISA.

Originally published as Labor ditches election promise to pay superannuation on paid parental leave