Changes to parental leave are being proposed to help reduce the superannuation ‘baby debt’ for mothers. 

The Australian Chamber of Commerce and Industry (ACCI) has urged the federal government to revamp the administration of parental leave payments during a Senate committee hearing, which discussed possible modifications.

According to the ACCI, a well-structured system to enhance women's economic participation is urgently needed. 

The current practice, where Services Australia requires employers to manage these payments, is being questioned. 

The ACCI's Director of Skills, Employment, and Small Business, Natalie Heazlewood, highlighted the challenges small businesses face, acting as intermediaries in the payments process. 

Heazlewood stressed the administrative burdens and tensions caused by payment issues, advocating for an option for operators to manage payments directly for their staff.

The committee, chaired by Labor senator Marielle Smith, is contemplating legislation to progressively extend the paid parental leave scheme to 26 weeks by 2026. 

It also aims to allow multiple parents to claim up to four weeks' leave from July 2025, with added provisions for surrogacy arrangements.

Pauline Vamos, Chief of the Policy and Engagement Committee at Chief Executive Women, emphasised the necessity of including superannuation guarantees in the Commonwealth paid parental leave. 

Women nearing retirement currently have approximately 23 per cent less in superannuation savings compared to men. 

Vamos argues that securing superannuation during parental leave is crucial for Australia's economic security in retirement, potentially narrowing the savings gap and enhancing living standards post-retirement.

Vamos also pointed out that the rise in house prices, leading to more parents renting, underscores the importance of a larger superannuation balance at retirement. 

She said that enhancing superannuation during parental leave would not only benefit individuals but also reduce the reliance on the full aged pension, benefiting the economy at large.

The Business Council of Australia has joined the discussion too, advocating for changes that encourage a more balanced sharing of the extended 26-week paid parental leave between parents. 

It says research indicates the removal of structural barriers and changing social norms around child care could add an astounding $128 billion annually to the Australian economy and introduce 461,000 full-time workers each year for the next half-century.