Australia announced on Thursday that it will provide pensions to workers who take paid parental leave. It is the latest attempt by the centre-left Labor government to tackle gender inequality in the workplace.
Under the new policy, in addition to government-funded parental leave, the government will pay 12% of a worker's wages into superannuation, known as superannuation in Australia. The policy will begin in July 2025, Finance Minister Katy Gallagher said in a statement.
“The data is clear: When women leave the workforce to raise children, it affects their retirement income, as women, on average, retire with 25% less pension than men,” Gallagher said, referring to Pension Insurance.
Currently, new parents on state paid leave do not receive pension contributions.
AustralianSuper, the country's largest superannuation fund, welcomed the move, which will see its members pay A$7,000 ($4,594.10) per parental leave period upon retirement.
“This boost to pension savings for Commonwealth parental leave recipients will primarily benefit low earners and vulnerable workers,” AustralianSuper chief executive Paul Schroeder said in a statement.
Employers are legally obliged to pay employees 11% of their salary as a pension contribution.
Tackling gender inequality in the workplace is a key policy focus of Prime Minister Anthony Albanese's Labor government.
Despite years of feedback from governments and businesses, there is still a gap between men and women in some of Australia's biggest employers. The first report of its kind, published last month, showed the national pay gap between men and women was 19%.
($1 = 1.5237 Australian dollars)
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