Greens ignite super war with Anthony Albanese over paid parental leave

The Greens are threatening to block Labor’s $2.3bn tax hike on super balances for wealthy retirees.

Greens senator Larissa Waters. Picture: NCA NewsWire / Martin Ollman

The Greens are threatening to block Anthony Albanese’s proposed $2.3bn tax hike on super­annuation balances for wealthy retirees, unless the government immediately adds the 11 per cent retirement payment to paid parental leave.

Labor’s policy agenda is now at risk of being derailed, with its signature housing policy at a stalemate and relations with the minor party deteriorating, ahead of parliament resuming next week.

Greens senator Larissa Waters has opened up a new war with the Prime Minister by declaring the party would use its numbers in the upper house to demand superannuation payments on paid parental leave in return for supporting the government’s tax hike on large super balances, a key revenue measure outlined in the budget.

The Coalition is opposed to Labor’s proposal to double the concessional tax rate on superannuation balances above $3m ­leaving Mr Albanese needing the support of the Greens to pass the bill through parliament. Crossbenchers David Pocock and Jacqui Lambie have already indicated their support for the policy.

Senator Waters, the Greens spokeswoman for women’s issues, said the government needed to spend $200m a year from the tax increase on superannuation payments for women accessing the commonwealth paid parental leave program.

“The Greens will use our ­balance of power in the Senate to ­ensure the government makes superannuation on paid parental leave a priority reform, as part of its changes to super,” Senator ­Waters said.

“This is such a timid proposed change to the tax concessions the obscenely wealthy receive. If Labor is not going to improve it, the least they can do is put it to good use.”

While Labor in principle supports superannuation for paid parental leave, Jim Chalmers rejected the policy ahead of the May budget, citing concerns about debt.

The Greens’ move threatens the government’s push to broaden the tax base and to tackle the structural budget deficit, potentially plunging the budget into deeper deficits over the next four years than forecast.

The Greens are also going to vote against Labor’s $2.4bn tax ­increase on gas producers, arguing the reforms to the petroleum ­resource rent tax do not go far enough and need to be at least doubled. The Coalition is expected to finalise its position on the proposed reforms to the PRRT next week but opposition finance spokeswoman Jane Hume this week criticised it as “very much a new tax”.

Senator Hume said the government’s PRRT proposal was a concern because gas producers were “already under so much pressure”.

While the Greens last year rolled over on key government ­reforms, including updated ­emissions-reduction targets and the safeguard mechanism, the party has in the past six months kyboshed a number of significant policies, including legislating a $10bn fund to build social and affordable housing.

Despite Labor announcing ­increased funding for social housing and a package giving states incentives to deliver an extra 1.2 million homes by 2029, the Greens have continued to call for national rent freezes in exchange for their support for the Housing Australia Future Fund.

The opposition from the minor party has sparked fury from Labor, with Mr Albanese accusing the Greens of forming a “no-alition” with the Liberals and seeking to “play politics” on important reforms. But Greens sources said the party did not want to be seen as acquiescing to the government’s agenda.

On top of blocking the HAFF, the minor party in February also killed off Labor’s push to change superannuation disclosure laws, which would have allowed super funds to provide less information on donations and sponsorships.

Labor has been urged to add superannuation to PPL payments since coming to government, with the idea raised at the Jobs and Skills Summit last September and recommended by its own women’s economic taskforce ahead of the budget in May.

The Greens sought to add super to paid parental leave with amendments to Labor’s legislation that expanded the payment to 26 weeks earlier this year, a move defeated by the government and the Coalition.

While Labor initially left out the commitment to pay superannuation on paid parental leave from its national platform, it agreed at its national conference in Brisbane last month that the party would “work to implement payment of superannuation on government paid parental leave as a priority reform”.

Labor is also under pressure to add superannuation to carer’s leave, which KPMG estimates would bolster women’s retirement savings by more than $120,000.

The threat to stall the super­annuation changes came as a ­Liberal-dominated committee on Thursday recommended businesses with fewer than 20 ­employees should not have to administer PPL payments because of the administrative burden. Businesses have raised concerns over the past year about the adverse impact expanding PPL could have on small companies struggling under rising costs.

A dissenting report by Labor and Greens senators criticised the recommendation as a “disappointing outcome” in light of the gender-equality gains made over the past decade, which “risked being undermined by reducing the role of employers in PPL”.

The government has refused to put a time frame on paying super on paid parental leave, with Social Services Minister Amanda Rishworth declaring Labor would make the change “when we can afford to do so”.

Senator Waters said the moment to bring forward the reforms was “now” if Labor wanted the Greens’ support for the proposal to double tax rates on super balances worth more than $3m. “We will use our balance of power in the Senate to get outcomes for women and young families who are struggling with the cost of living crisis,” Senator Waters said.

The proposal to increase the tax rate from 15 to 30 per cent for large super accounts was made ahead of the release of the intergenerational report, which outlined the need to improve generational inequity over the next 40 years.

While Dr Chalmers said the tax changes would apply to about 80,000 people from 2025-26, analysis of government figures showed the reform could impact more than two million young Australians over time.