Lisa Darmanin (Victoria, Australian Labor Party) Share this | Hansard source

Let me begin by outlining this dark reality. Women in Australia are retiring with significantly less superannuation compared to their male counterparts. On average, women retire with about 25 per cent less. In addition to this, on average, women live four years longer, so they need to make their money stretch further. As a result, right now women are far more likely to experience poverty in retirement in their old age. That is a fact, and it's a fact that reflects a deep-rooted inequality in our society of women's value in this country. This isn't just a number; it's a reflection of one of the many systemic inequities that have persisted for too long. Addressing these inequities is multilayered and will take many interventions, and the Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024 is one of them. It is an important piece in solving the gender inequality puzzle and another vital step towards closing the gender pay gap in retirement.

Retiring with less means facing increased risks of poverty and financial insecurity in what should be the golden years of one's life. It means that, after a lifetime of work both paid and unpaid, women are more likely to struggle to afford basic necessities, medical care and even housing. It's a reality that denies the dignity and peace of mind every person deserves after decades of contributing to our society. Universal superannuation is a vital part of a system designed to give Australians a decent standard of living in retirement, yet for too many women this promise is yet to be fulfilled. Throughout my career I have fought for the principle that every Australian should be able to retire with dignity, security and peace of mind. The Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024 is designed to help fulfil this promise.

By ensuring that superannuation is paid on government funded paid parental leave, we are treating this entitlement just like any other government workplace entitlement that attracts superannuation. My union, the Australian Services Union, has been at the forefront of this reform for many years. In 2017, the ASU released the landmark Not so super, for women report, shining a light on the systemic bias within the superannuation system against women. This report laid bare the heartbreaking reality that many working women face that the very system designed to secure their future is systematically skewed against them.

The ASU's report did more than just highlight a problem; it called for the reform I am so very proud to be speaking on tonight. It also sparked a campaign that demanded that superannuation be earned on every dollar earned, including extending superannuation to paid parental leave. Workers from around the country have taken on this cause with gusto. They have lobbied governments tirelessly and negotiated paid superannuation on parental leave into workplace agreements. They have even achieved the inclusion of superannuation payments on unpaid parental leave in agreements.

I want to take a moment to acknowledge the significant contributions of the ASU women who have been pivotal in advancing this cause. Adele Walsh, Ann Edmonds, Kate Cotter, Debbie McDonald, Lindy Henderson, Julie Douglas, Maggie L'Estrange, Sarah Cleggett, Imogen Sturni and Jenny Thomas have been relentless advocates for this change. Their dedication deserves our deepest gratitude. Their work exemplifies the power of collective action and the change that can be achieved when we fight for what is right. To Julia Fox and Lori-Anne Sharp, along with Emeline Gaske: this bill is also the fruits of your labour.

I could not talk about the trailblazers who built the foundations for paying super on paid parental leave without, of course, talking about former senator Linda White, my dear friend. Linda championed this reform for over a decade. She put the issue of women's unequal superannuation outcomes on the national agenda. This legislation is also a testament to Linda's unwavering persistence and her commitment to making life fairer for working women. Though her time in this parliament was much too brief, her impact is lasting. Her legacy is everywhere—in the fights we have won, in the progress we continue to make and certainly in this reform. Linda's work endures, and her vision of a fairer system for all is closer to reality because of her efforts.

The inequality in the gender superannuation gap is linked to two major factors: the gender pay gap and the career interruptions that are caused when people, predominantly women, take time out of work to raise children. Firstly, on the gender pay gap, superannuation contributions are a direct percentage of someone's wage, so the gender cap is a key contributor to women's superannuation balances remaining lower than those of men. Australia has one of the most gender segregated workforces in the world, where women predominate in lower paid sectors. Therefore, it is a big problem for our country and a simple proposition: when you earn less, the percentage that goes into your superannuation account balance is also less.

I am proud to be part of a government that is actively working to close the gender pay gap, and I note that the current pay gap under this government is now at its lowest on record at 11.5 per cent. This is a huge step, but there is still much more to do. We've implemented measures to raise wages in female dominated sectors like aged care and early childhood, ensuring fairer pay for the invaluable work done in these industries.

But addressing the gender superannuation gap requires more than just closing the gender wage gap; it also requires systemic changes to address the other drivers of the superannuation gap for women, which some have described as the care penalty. One-third of our gender pay gap can also be attributed to the time women spend caring for family and the resultant interruptions in full-time employment that this creates—one-third. That is significant. Women with children face an average 55 per cent drop in earnings in the first five years of their parenthood journey, while fathers' incomes remain largely unchanged. A 55 per cent pay drop in five years following becoming a parent is a massive penalty. This is referred to as the motherhood or care penalty, a reality where women, who make up 99.6 per cent of the recipients of paid parental leave, are financially punished for taking time out of the workforce to raise children. When women take time off to care for children, they are not just losing immediate wages; they are missing out on crucial superannuation contributions. This creates a cumulative disadvantage that grows over time, exacerbating the gap in retirement savings.

Let me touch on the miracle of compound interest as it was first described to me. Compounding is the investment returns generated on the returns you've already earned. The earlier and the longer you add to your balance, the greater the benefit of compounding you will realise. For younger women, compounding interest is not so miraculous if you are in lower-paid work, you have children and you take time off work to care for them. Recent data from the Australian Taxation Office puts the gender super gap between 22 per cent and 32 per cent. We cannot in good conscience allow women to be penalised with financial insecurity in retirement simply because they take on the essential role of caregiving. Carers who take the government provided Paid Parental Leave scheme, overwhelmingly working mothers, are currently punished for this choice by losing out on essential super contributions and the compounding benefits that follow. That is why the Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill is so crucial.

So what is the Albanese government's commitment to rectifying this inequality as part of the multilayered approach? By investing $1.1 billion over the forward estimates, we are ensuring that superannuation will be paid on the government funded Paid Parental Leave from July 2025. This reform will benefit over 180,000 families across the country. For parents receiving Paid Parental Leave from July 2025 onwards an additional 12 per cent will be paid directly into their superannuation accounts. This is on top of the significant improvements since taking office. From 1 July 2023, we made changes to give more families access to the payment, made it more flexible to support parents in their transition back to work and made it easier for parents to share care by creating a single payment accessible by both parents. From 1 July this year, we're delivering the largest expansion to Paid Parental Leave since Labor established it in 2011. By expanding the scheme to a full six months by 2026, families will receive an extra six weeks of paid leave following the birth or adoption of a child. From July 2026, families will receive up to $3,000 in superannuation contributions per birth. These measures demonstrate our commitment to supporting families and ensuring that both parents have the opportunity to care for their children without sacrificing their financial future.

I want to talk about the second reading amendment moved by the member for Deakin. Earlier this year, the coalition seemed to support this critical legislation; however, now they seem to be backing away. It is unfortunately not surprising that we hear this given their history of attempting to dismantle the superannuation system and use super as an easy policy fix for their whim of the day. The coalition has spent years working against the very framework that aims to provide Australians with a secure retirement, and today is no different. The proposal that was outlined earlier by Senator Ruston was a so-called choice between cash payments and superannuation contributions on Paid Parental Leave. The very core of superannuation is that it is deferred savings—you put money aside now so that you can retire with some money later. It's for retirement. It's not for now. It's not to kick the can down the road—'I'll take it now and then, sorry, there's nothing left when I retire.' This ridiculous proposition underlines a fundamental disagreement that those opposite have when it comes to understanding and respecting the essential role that superannuation and paid parental leave play in achieving financial security for women and the nature of superannuation being deferred savings for retirement.

Further, this proposition suggests to me that those opposite think the miracle of compound interest is only suitable for some, not childbearing women or young, low-income families just starting out. The proposition to allow parents a so-called choice to forego superannuation contributions, encouraging them to cash out their superannuation, completely misses the mark on what this bill aims to achieve. The purpose of this legislation is to put in place another strategy to close the gender pay gap in retirement, to ensure that government Paid Parental Leave is treated as a standard workplace entitlement, attracting superannuation contributions. Women have the right to retire with the same level of financial security as men. Ensuring superannuation is paid during parental leave is crucial to this goal. The coalition's proposed amendments would ultimately disadvantage parents at retirement, leaving them worse off. This indicates a failure to recognise the long-term impact on women's retirement savings when they take time out of the workforce to raise children or that there is a need to close the gender pay gap at all. Promoting the option to raid your super balance now undermines the fundamental purpose of superannuation to provide a safety net for you in retirement.

For those fresh into the workforce, starting a family or perhaps looking towards the end of their careers, the superannuation you earn over the course of your career will determine what your life looks like in retirement. Starting a family should be an exciting time, not a moment forcing you to make an awful choice, one that may sentence you to a future of financial uncertainty. The Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill is a critical step in the right direction. It acknowledges the essential work done by parents and ensures that taking time out to care for a child does not come at the cost of your future security. This is more than a policy. This is about dignity, respect, and a fair go for everyone. It's about ensuring that every Australian can retire with the security and peace of mind they deserve.