Wed Mar 6

Government to pay super on paid parental leave, benefitting 180,000 families a year

Written by: Michelle Grattan, Professorial Fellow, University of Canberra

The government will pay superannuation on its paid parental leave from July 1 next year. This will benefit about 180,000 families annually.

Minister for Women Katy Gallagher will announce the move on Thursday when she releases Working for Women, a national strategy to achieve gender equality.

The commitment will be costed in the May budget.

Eligible parents with babies born or adopted from July next year will receive an extra 12% of their government-funded paid parental leave as payment to their super fund.

July 2025 is when employers’ compulsory contributions climb to 12% of salary after climbing from 11% of salary to 11.5%^[1] in June this year.

Paid parental leave can be taken flexibly, in blocks as little as a day, until the child turns two, and can be shared between two parents.

The superannuation move follows earlier announced changes to parental leave including expanding the payment to six months by 2026.

Paying super was recommended by the government’s Women’s Economic Equality taskforce ^[2].

Gallagher said the data showed clearly that “when women take time out of the workforce to raise children it impacts their retirement incomes with women retiring, on average, with about 25% less super than men”.

Social Services Minister Amanda Rishworth said parental leave was “not a welfare payment – it is a workplace entitlement just like annual and sick leave”.

Treasurer Jim Chalmers said more economic inclusion of women was “at the centre” of the government’s agenda.

The Working for Women strategy says: “Equality cannot be achieved without addressing who takes on and who is expected to take on caring responsibilities. Nor can it be achieved without valuing the substantial contribution unpaid and low paid care makes to families, the community and – notably – the Australian economy”.

Funding to spur takeup of electric vehicles

On Thursday the government will also announce the provision of $55 million for electric vehicles and associated infrastructure from the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC)

Energy Minister Chris Bowen will commit the CEFC to make up to $50 million available to Anglo Auto Finance to enable it to get 20,000 new electric vehicles onto Australian roads in the next two years.

Anglo Auto will give short-term loans to car dealers to help them buy vehicles from manufacturers. The loans will have a shorter turnaround time than traditional auto finance.

ARENA will advance $4.76 million to car rental company Europcar to enable it to add 3100 new electric passenger vehicles to its Australian fleet over three years, in a transition the government values at $110.6 million

Europcar will team up with Ampol to install 256 chargers across 41 hire care sites.

Electric vehicle sales have increased 70% over the past year and now account for 5.4%^[4] of all new vehicles sold, with hybrids making up another 10.9%.

The move comes on top of plans to introduce a national fuel efficiency standard ^[5] from January 2025 that would require manufacturers to increase the average fuel efficiency of the cars they sold each year until 2029.

Manufacturers would be able to meet the target by either making the vehicles they sold more efficient or changing the mix of vehicles they sold to include a greater number of electric vehicles.

Some progress on Closing the Gap

Also on Thursday, the Productivity Commission releases new data on eight of the Closing the Gap data targets and nine supporting indicators.

Five of the 19 targets for Indigenous Australians are now on track compared to four previously.

The proportion of Indigenous babies born with a healthy weight has improved. It is now on track to meet the target of 91% by 2031.

The target of a 15% increase in land and sea covered by Indigenous people’s legal rights is also on track.

But on the downside, there has been no improvement in closing the life expectancy gap. Indigenous males are expected to live 8.8 fewer years than other Australians. For women, the gap is 8.1 years.

The target of reducing the number of children in out-of-home care remains not on track. The target is to reduce the rate of over-representation by 45% by 2031.

Also not on track is the target of reducing adult imprisonment – in fact the situation is worsening. The target is a cut of at least 15% by 2031.

The Productivity Commission will release a further update in July.