Anne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) Share this | Link to this | Hansard source

I rise to speak on the Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024. I want to state at the outset that, whilst the coalition will be supporting this bill, I will be moving a substantive amendment at the appropriate time to give further choice and control to Australian families.

From the government's perspective, paid parental leave has been quite a tortuous path. Those of us with any history or background in this whatsoever remember the incisive criticism of the then Labor opposition in relation to the former coalition government's generous Paid Parental Leave scheme—a scheme that the Australian people voted on in 2010 and 2013 and that the Labor Party vehemently opposed. The coalition's landmark policy was essentially wage replacement paid parental leave, which included superannuation. But, despite the very unprincipled position that the Labor Party adopted in relation to paid parental leave in the past, we have sought to be much more constructive as the opposition. Where the government has put forward sensible ideas, we have supported them. Indeed, we have supported a range of measures in relation to paid parental leave. The changes contained in this bill essentially seek to extend superannuation contributions to paid parental leave. As I have already touched on, the Albanese government is 14 years late on this reform—but, I suppose, better late than never.

The coalition has long supported the economic security of women and families. We delivered the landmark funding of $5.5 billion through our two women's budget statements; key amendments to paid parental leave legislation while in government, which included introducing special circumstances, which allow a person to meet the work test if they've been impacted by family and domestic violence or a natural disaster or a severe medical condition; allowing JobKeeper and COVID-19 disaster payments to count towards the work test for paid parental leave to prove a genuine connection to the workplace; and indexation of the income threshold for the first time since the scheme was introduced.

In March 2022, as part of the women's budget statement, the coalition underlined its commitment to PPL by announcing enhanced paid parental leave. Enhanced paid parental leave would have seen an investment of $346.1 million over five years to expand PPL, giving working families full choice and control over how they used the 20 weeks of taxpayer funded paid parental leave. Under these measures, the coalition sought to expand the scheme by combining the existing two weeks of dad and partner pay with the 18 weeks paid parental pay to create a single payment; making the 20-week payment fully flexible for eligible working parents so they can share the entitlement between them as much or as little as works for their specific circumstances within two years of their child's birth or adoption; and broadening the income test to allow a household income eligibility test of $350,000 per annum, providing an additional 2,200 families with access to the PPL scheme.

The changes announced by the coalition in March 2022 sought to reduce the complexity of PPL and increase support to new families while ensuring the scheme continued to support the health and wellbeing of birth mothers. It was pleasing to see the government adopt the sensible measures of the former coalition government following the election. The Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024 will add superannuation contributions to the Commonwealth funded Paid Parental Leave scheme.

The bill also makes minor technical amendments to the Fair Work Act 2009 relating to unpaid parental leave.

The key measures in schedule 1 will establish a paid parental leave superannuation contribution entitlement as part of the scheme; provide for the calculation of the amount of the PPLSC and the manner in which this amount is to be paid; create mechanisms for the Commissioner of Taxation to correct under- and overpayments of the scheme; provide an avenue for recipients to seek a review of PPLSC decisions made by the commissioner; and give the commissioner new compliance and enforcement powers to assist with the administration of the scheme. Schedule 2 of the bill contains a minor technical amendment to the unpaid parental leave provisions of the Fair Work Act 2009, to clarify the entitlement to keeping-in-touch days, and amendments to the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953 that are consequential to the paid parental leave superannuation contribution related amendments in schedule 1 to this bill.

It is estimated that 180,000 families would benefit from the changes in this bill when the PPL scheme reaches 26 weeks by 2026. The maximum a family would receive in superannuation contributions would be $3,000, based on a superannuation guarantee rate of 12 per cent. From 1 July 2025, for both born and adopted children, parents eligible for the Commonwealth's PPL scheme will receive an additional 12 per cent of their paid parental leave as a contribution direct to their superannuation fund. The contribution will match the superannuation guarantee rate of the year the PPL is taken, as at 1 July of that year. The contribution is to be made by the ATO after the conclusion of each financial year, with an additional interest component to address any foregone fund earnings that may have occurred had the payment been made on a regular basis.

In recognition that it has never been more expensive to raise a family, and in line with the coalition's commitment to support the choices of Australians, the coalition will seek to amend the legislation to introduce more flexibility into the Commonwealth's Paid Parental Leave scheme. Under the coalition's amendment, Australian parents eligible for government funded paid parental leave will be able to choose to receive superannuation on the government funded paid parental leave payment; receive 26 weeks of paid parental leave from 1 July 2025, increasing to 28 weeks from 1 July 2026; or receive a one-off payment equal to the value of the superannuation amount, to help with the costs associated with the arrival of a newborn or adopted child. The amendment seeks to do two things. It seeks to provide parents of a newborn or adopted child with an additional two options: they can choose to take the additional superannuation contributions on PPL payments as outlined in this bill, or they can choose one of the two additional options. Firstly, they could elect to take an additional two weeks of PPL so that, at each stage over the next two years, they could elect to take an additional two weeks more than they would otherwise have been entitled to. Secondly, they could take a one-off payment. We think parents are in the best possible position to determine, in their own circumstances, what it is that they need.

For many Australians, one of the primary purposes of paid parental leave is to provide them with the financial flexibility they need at a special and beautiful time of their lives—the arrival of a newborn or adopted child. Providing parents with the option of taking those two extra weeks leave is something that we think the government should absolutely support. Every parent knows that spending time with their new arrival is worth far more than the financial benefit. Finally, we know how difficult it is, generally, for families, with the cost-of-living crisis they are facing, so providing them with an additional option of being able to take the equivalent amount to the PPL superannuation as a lump sum is a worthwhile amendment. Anyone in this place and anyone watching this who has a child, many of whom, I suspect, have never had the benefit of PPL, know that it's an extraordinarily difficult time financially, so providing these additional options for parents is treating them with the respect they deserve.

On that, we hope the government will see that it is a good idea and will support it. While the coalition will be supporting this bill, our amendments that will be moved offer further choice and control to the Australian families taking paid parental leave.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I rise to speak to the Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024. Today has been a long time coming. The Greens are so glad to finally see Labor get on board with our longstanding policy to pay superannuation on paid parental leave. Unions and stakeholders have long called for super on PPL, and the Greens have lobbied Labor consistently on this subject for over a decade. We heard consistent significant evidence at multiple previous Senate inquiries. Paying super on PPL was a key recommendation of the government's own Women's Economic Equality Taskforce in 2023. Paying super on PPL was a recommendation of the 2016 Senate inquiry into economic security for women, which I participated in. Earlier this year, when its last PPL bill was before the Senate, I moved an amendment for the government to pay super on PPL. At that stage Labor voted against it, despite having, at the time, already announced its intention to pay super on PPL. So, after all of those many false starts, we are so pleased finally—after almost a decade—that this bill will pay superannuation on paid parental leave.

However, once again, it is delay upon delay. This bill won't start paying super on PPL until 1 July 2025. Why, as with other meagre but positive improvements for women in previous PPL bills, are you making women wait? After waiting this long for super on PPL, women should not have to wait until after the federal election for it to kick in. I don't see nuclear subs waiting for their money. I don't see coalmining companies having to wait for their fossil fuel subsidies or property investors having to wait for their public purse perks. But, unfortunately, women once again are being asked to wait by this government.

Currently, paid parental leave is the only leave entitlement that is paid without superannuation. It's also the leave that's predominantly taken by women. Make that make sense, other than it being discrimination against women. So I'm pleased we're removing this last vestige.

The gender pay gap leads to a gap in retirement income, with women retiring into poverty, often after a lifetime of care and underpaid work. This means that women retire with significantly less super savings than men, with the gender retirement gap currently sitting at about 23 per cent, according to the Association of Superannuation Funds. One in three women retire with no super at all, according to the Super Members Council. This has significant consequences for women's financial security in retirement. I hope we all know that, sadly, women over 55 are the fastest-growing cohort of those at risk of homelessness. Paying super on PPL is one important measure that will improve retirement income for women. On that, the opposition's suggestion to allow women to raid their super are certainly not going to help and would instead contribute to more poverty in retirement.

But there are plenty more levers that the government could pull to close the gender retirement gap. One of them is to approve the affordability and accessibility of early childhood education and care so that women can stay in the workforce if they choose to after they have kids. This means making early childhood education and care free so that more parents can access it. It also includes properly valuing our early childhood educators, who deserve the 25 per cent pay rise that they asked for, not just the 15 per cent that the government has committed to.

Another measure the government could take that would have immediate benefits for women's retirement security is to improve the low income super tax offset, or LISTO. This was originally designed to make the super tax system fairer for low-income earners, and it currently refunds the 15 per cent tax on superannuation contributions up to a maximum of $500 for workers earning up to $37,000 per year. But those settings and that eligibility no longer reflect the cohort that they were designed to represent. Tax scales have changed. Inflation has increased. LISTO is no longer doing the job that it is supposed to do. The government could realign the LISTO eligibility and increase the offset through minor adjustments which would make the super tax setting significantly fairer for low-income earners, the majority of whom are women, the majority of whom work in lower paid jobs or on a part-time basis.

Nonetheless, we're really pleased that the government is getting on with legislating paying superannuation on paid parental leave. But you can and must do more to make the Paid Parental Leave scheme itself fairer. We'd like to see that happen immediately. Australia has fallen behind other countries in the rate of paid parental leave. In fact, our paid parental leave rate is one of the lowest in the OECD. Continuing to pay parental leave at minimum wages forces difficult decisions about who can afford to take leave and for how long. For some people, the full-time minimum wage is an increase on their previous earnings, but for many parents the minimum wage is well below their normal wage. As many stakeholders have pointed out over many PPL inquiries, continuing to pay parental leave at the minimum wage is not an effective incentive to induce more fathers to take parental leave.

The Greens support full wage replacement, including incentivising employers to top up the government scheme to replacement wage. Last year, the government's own Women's Economic Equality Taskforce recommended expanding paid parental leave to 52 weeks, paying superannuation on PPL and eventually paying PPL at replacement wage. The Greens will continue to push Labor to actually implement the WEET's advice.

We were glad to support the package of legislation earlier this year to increase PPL to 26 weeks by 2026. However, parents should not have been asked to wait two more years to get to the 26 weeks that's accepted as an international minimum standard—again, making women wait for the small good thing that they deserve to have now. There's no reason to delay the implementation of good policy. This bill presents a critical opportunity to move towards best practice. It could have included an immediate increase to 26 weeks of paid leave. It could have included and should have included a pathway to 52 weeks of paid leave by 2030 in line with international best practice.

Women deserve fairer paid parental leave. It improves their economic security, reduces the gender pay gap and increases the likelihood of mothers returning to work. Paying super on PPL is a good but small step in the right direction. We're pleased that, after a decade of advocating it, this small but important change will finally be made.

Lisa Darmanin (Victoria, Australian Labor Party) Share this | Link to 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.

Nita Green (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I, too, seek to make a contribution on this incredibly significant bill, the Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024. I acknowledge the contribution from Senator Duniam about the valuable work of the ASU and particularly of our friend and colleague Senator White. The campaign for super on PPL has been longstanding, and it is really pleasing and historic that we have now reached this point and that we have a Labor government prepared to deliver superannuation on paid parental leave.

I want to add to the contribution of my colleague by reiterating the support that this scheme and this proposal has from stakeholders across the country. We know that many groups have come out in support of the proposal to pay super on paid parental leave. Of course, we've seen that support from the unions, the ASU in particular, and the ACTU. It's worth mentioning that other groups have come out to support this proposal, including the National Foundation for Australian Women, the Australian Institute of Family Studies, the Diversity Council of Australia, KPMG and the Business Council of Australia. We know that this is an important step forward for women's economic security. These peak bodies have made it clear that reform is both wanted and needed. When listening to the research and the data that these stakeholders are providing, it's clear that this amendment to the legislation will be essential for improving gender equality and women's retirement savings.

I also want to take this opportunity to object in the strongest possible terms to the proposal being put forward by the Liberal and National parties. The coalition has come out proposing amendments to this legislation and tried to frame this about choice. But this proposal from the Liberal and National parties to not support superannuation on paid parental leave is a false choice for Australian women. They have completely missed the point about what this legislation is trying to address. It's about creating a strong parental leave system that is empowering and that increases the super that women will be able to receive in retirement. It's about making sure that women don't retire poor, and yet the proposal from those opposite misses that point completely.

The proposal that the government has put forward is about acknowledging the role of care within our country and how important it is to the economic security of women in our country. We know that, under this government, we've made incredible inroads when it comes to the gender pay gap and that super on paid parental leave is the unfinished business of that work. That's why we seek to make these changes. The proposal put forward by the Liberal and National parties does none of that work, and it never would. It's not surprising that, after a decade of turning their back on the project of women's economic security, they hardly touched paid parental leave when they were in government, and now they're putting forward a scheme or proposal that would undermine the very principles of super on paid parental leave. But this is what they do.

During COVID, the Liberals encouraged people to raid their super, against the advice of economists. They've encouraged women fleeing domestic violence to raid their super to escape violence. It's absolutely shocking. Now they're encouraging people to raid their super for a housing deposit. Whenever you hear a scheme or proposal from Liberals that has to do with super, they cannot be trusted. A party that seeks to make super voluntary should never be trusted when it comes to super. That's why the Albanese Labor government is putting forward this incredibly important scheme for women's economic security. We seek to make sure that women do not retire poor. We seek to make sure that care, women's work and the process of having a family are valued in our country. That's what our legislation seeks to do.

What those opposite are seeking to do is the complete opposite: to devalue the work of women, make sure that women retire poorer and turn their back on the idea that, somehow, working women and working families don't deserve a secure retirement. Women see this. They see through you. They see what you are doing—

Debate interrupted.