Katy Gallagher has opened the door to paying superannuation on paid parental leave as early as the May budget, and suggested the government may remove financial penalties from the controversial ParentsNext welfare program.
On Thursday the finance minister and minister for women said paying super on paid parental leave (PPL) “remains on the table” for the May budget and she would “like to do it now”, although she added pressures on the budget are intensifying.
The comments respond to a growing push from super funds, the Greens, Senator David Pocock, and independent MPs to pay super on PPL, an idea Labor supports in theory but has not committed to do, even as it proposes to raise $2bn a year in revenue by taxing super balances above $3m at 30%.
On Wednesday Guardian Australia revealed the Greens’ intention to move the plan as an amendment to Labor’s big balance super bill, which it aims to legislate ahead of the next election, along with accelerating the increase to 26 weeks of PPL slated for 2026.
Gallagher told ABC radio that Labor had “made no secret of the fact” it would like to pay super on PPL, an idea that was pushed heavily at its September jobs and skills summit.
Gallagher said the government was working on how to “reprioritise inside the budget to make room for all these priorities” and paying super on PPL “remains on the table” for the May budget.
“I would like to do it now. I would have liked to do it 10 years ago.
“But the reality is we have a $50bn structural deficit, as far as the eye can see. The pressures on the budget aren’t lessening, they’re intensifying.”
“We’re going through it bit by bit looking at how we can make sensible changes to ensure budget repair so that we can fund the things that people really value like health, like aged care, like dealing with the gender inequality issues in super they are all … front and centre of every discussion we have with the [expenditure review committee].”
Earlier in the week the prime minister, Anthony Albanese, played down the prospect of paying super on PPL, noting the government would not “hypothecate”, or reserve the revenue from higher taxes on big balances for the measure.
Labor has also pointed to other measures to close the super pay gap between women and men, including reforms to address the gender pay gap and increasing PPL to 26 weeks by 2026.
On Wednesday the Greens employment spokesperson, Barbara Pocock, said paying super on PPL was a “no-brainer” but would be “a drop in the ocean” in closing the gap on balances.
“We need to do a lot more – not just to pay super on paid parental leave but to significantly increase the period of paid leave,” she said, describing the government proposal to increase from 18 weeks leave as a “miserly” increase of two weeks year after year.
On Wednesday a Senate select committee recommended that the ParentsNext welfare program should be abolished and replaced by a new service that dials down mutual obligations and offers cash incentives for parents.
Gallagher said “a lot of stakeholders in the women’s sector [are] concerned about it” particularly due to the “punitive side of that program where young parents, single parents lose entitlements for not … attending a certain parenting class or whatever the requirements are”.
“I think we want to make sure that we’re not penalising women unfairly, but also that we are providing the right support for them when they’re parenting young children.”
“When you’re already … living hand to mouth and trying to raise children, I think there is a real question over [losing payments].”
