Labor has unveiled a $400 million plan to boost superannuation contributions for new parents by ensuring workers on the federal government’s paid parental leave scheme continue to receive super.
In a policy announcement on Wednesday morning, opposition leader Bill Shorten said the current scheme was not working “as fairly as it should” for Australian mums, who retire with much lower super contributions than men, on average.
“Labor’s proud of our superannuation system, but it’s not working as fairly as it should for women as it is for men,” he said via social media.
The current paid parental leave scheme awards $719 to new parents each week for up to 18 weeks and is available for those that individually earn less than $150,000 annually.
Under Labor’s plan, super contributions will be added on top of that figure, helping to address the gender gap on retirement savings.
Retirement savings for women are, on average, $113,690 lower than the super balances of men, according to the Association of Superannuation Funds of Australia (ASFA).
This leaves women about 40% worse off with just $157,050 in savings, on average, compared to $270,710 for men.
Labor also says it will make it easier for employers to make extra top-up payments to the super funds of employees on parental leave.
Labor’s proud of our superannuation system, but it’s not working as fairly as it should for women as it is for men — and we’re going to change that today.
To find out more, watch below: pic.twitter.com/lLA27EvveB
— Bill Shorten (@billshortenmp) 18 September 2018
“These are important steps to begin to reduce inequality in our superannuation system,” Deputy Leader of the Opposition and Shadow Minister for Women, Tanya Plibersek, said via social media.
Plibersek told Sky News that women with two children can expect to be up to $24,000 better off by the time they retire under Labor’s plan.
A current rule that prevents people earning less than $450 a month from accessing the super guarantee levy would also be scrapped under Labor’s plan.
Labor wants to reduce the current threshold by $100 each year until its gone, adding more workers to the super contributions pool.
The current super levy guarantee requires employers to contribute at least 9.5% of employee earnings to their super, a figure that’s slated to rise to 12% by 2027.