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Industry funds welcome Budget PPL measure

Mike Taylor14 May 2024
Parliament House

Industry superannuation have, unsurprisingly, welcomed the Federal Budget with the Super Members Council describing the payment of superannuation on Paid Parental Leave as a landmark reform.

Super Members Council chief executive, Misha Schubert said paying super on parental leave will boost the savings of a mother-of-two by about $14,500 by retirement – with 180,000 Australian families set to benefit each year.

“The historic announcement to pay super on parental leave takes Australia another major stride closer to ending the financial motherhood penalty many women face when they have children,” she said.

“It’s a watershed reform that will powerfully strengthen retirement savings for Australian mums and help to narrow the gender gap at retirement.”

“The anticipated pay rises for the highly feminised early childhood education and aged care workforces are also key changes to help close the retirement savings gap for Australian women.”

“These are big steps on the road to gender equity – and the Government has signalled it intends to continue that work. Australia cannot rest until all women have a financially secure retirement.”

Lower rates of pay for feminised industries are a key driver of the gender super gap. Anticipated pay rises for Australia’s female-dominated workforces in aged care and early education – expected to flow from imminent decisions in the Fair Work Commission – will help tackle gender inequity at retirement.

Last year’s Budget announced a commitment to deliver payday super reforms from 1 July 2026. An estimated 2.8 million working people in Australia are underpaid a total of $4.7 billion a year in super.

Those reforms will require super to be paid to people’s super accounts when they are paid their wages – rather than just four times a year. Consultation on the design of these important reforms is ongoing.

The 2024 Budget pledges $60 million over four years to boost the Productivity, Education and Training Fund – to bring employer and worker representatives together to work on measures to boost productivity – and help workplaces prepare to implement policy changes such as payday super.

Ahead of payday super commencing, the 2024 Budget includes support for new small business cashflow, with $25 million to speed payment times and $290 million in cashflow support.

“Unpaid super costs workers $1,700 a year on average – and our modelling shows payday super reforms could add up to $36,000 to the retirement balances of the lowest 20% of wage earners.”

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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