The 2022 Budget revealed proposed changes to the Parental Leave Pay (PLP) and Dad and Partner Pay schemes, costing $346.1 million over five years, in an effort to provide working families with increased flexibility to manage work and care.
The changes means eligible working parents will be able to share up to 20 weeks of fully flexible leave to suit their specific circumstances - essentially giving families more choice in who cares for new babies.
At the moment, the primary carer of a new baby – mostly mothers – can get 18 weeks’ leave paid at the minimum wage and their partner can take two weeks. Under the budget plan, the two schemes will be combined and parents will be able to decide how they split the 20 weeks.
Women on Boards Executive Director, Claire Braund, said while government’s plans to also raise the PPL income test to $350,000 per year for a household - instead of $151,350 for the mother only - is welcome, as well as the fact that single parents will be able to access the extended 20-week PPL entitlement, the changes could backfire.
Providing families with 20 weeks leave to use in ways to suit their specific circumstances, instead of 18 weeks for the primary carer and two weeks’ Dad and Partner Pay could lead to fewer fathers taking PPL instead,” she said. “Instead we should be shifting the burden of care from women by increasing PPL to 26 weeks, including a four-week mandated Dad and Partner Pay.
These comments were echoed by Women in Economics Network Chair, Dr Leonora Risse, a Lecturer in Economics at RMIT University and a Research Fellow with the Women and Public Policy Program at Harvard University who said the budget’s changes to PPL flexibility were “ a step backwards for gender equality”.
“International research clearly shows that removing the leave allowance earmarked for fathers results in mothers taking more leave, with little response from fathers. This policy change will have the effect of further entrenching traditional gender roles in Australian households.
"Extending the amount of use-it-or-lose-it paid parental leave for fathers would have been more effective in supporting more men to be a part of their children’s upbringing and more women to extend their workforce participation.”
Gender super gap ‘missed opportunity’
Claire Braund welcomed measures aimed at increasing women’s workforce participation but said the Federal Budget was a missed opportunity to improve women’s long-term financial security, particular around paying super on paid parental leave. The government does not pay super on PLP, despite the growing gender super gap.
“This was an opportunity to narrow the gap in retirement savings by paying superannuation on government PPL,” said Claire.
Industry Super Fund HESTA CEO, Debby Blakey, said this was an important reform Australia’s next government should deliver in its first term.
"Our super system has a persisting gender blind spot that sees women retire with almost a third less super than their male counterparts,” said Ms Blakey.
“Eighty per cent of HESTA members are women, and those who raise children continue to pay an unfair financial penalty through inadequate super balances, leaving too many vulnerable to poverty as they age.”
“Women predominantly take on the primary caring role, making an enormous contribution to our economy and society through raising children. Our super system needs to recognise this by helping new parents get their retirement savings back on track, ensuring they’re not penalised with financial insecurity later in life.”
Read the Women's Budget Statement 2022-23 HERE