It’s time that we in the third sector set a moral standard for all when it comes to paid superannuation on parental leave

Australian Tax Office data shows that in 2018-19 the median superannuation balance at, or approaching, retirement age (60-64 years) was $137,051 for women and $178,808 for men – that is, 30 per cent more than for women.

This gap is the accumulated result of economic disadvantage too many Australian working mothers face in their lives – lower wages than men, more career breaks to raise children and care for others, and more part-time work. In this age of feminism and calls for (and actual) gender equality in a range of areas it seems odd that our society still accepts that carrying and nurturing the next generation of leaders, workers, taxpayers is not a communal decision. The result is that one of the parents – nearly always the mother – must accept breaks in income, and a lower safety net (superannuation) when they retire from the workforce.

The relatively new Australian Labor Government recently indicated intent to introduce a scheme to add superannuation onto government paid parental leave… once an audit of the previous (Coalition) government’s spending and budget promises has been completed. While this pledge by the current Federal Government to seriously consider alterations to the scheme is welcome, why is it taking Australians so long to adequately address this matter?

Business decisions aren’t always popular – that’s a given. Paying super on parental leave requires a financial commitment that will impact on a business’s bottom line – but it’s the right thing to do and opting against doing so is frankly, legalised discrimination.

The government’s decision as to whether or not to add superannuation onto its paid parental leave scheme should not be contingent on anything. The government of Australia in 2022 should not just be considering this change and assessing IF it can happen but rather, the government needs to absolutely commit to the change immediately and make its enactment an urgent priority.

I was very proud to announce at the start of this year that Growing Potential Ltd now pays all its staff that take parental leave superannuation for the duration of their leave. This was a decision we took to support our staff (91% of whom are women) in a sector where the vast majority of the workforce is made up of women. We estimated that making the payment would cost us about $8,000 for every staff member who took 12 months parental leave. While this amount might not seem like much, the value of that $8,000 in 30 years when the staff member may want to draw down on their superannuation will be around $70,000 (compounded annually at an average of 7.5% pa). Our predominately female team – like other Australian working women – deserve this assurance, just like their male colleagues. They should not be disadvantaged because of their personal choices to parent.

Growing Potential is not a large multinational for-profit. We are a Western Sydney-based not-for-profit that has a workforce of about 140 people, with 91% of our team women.

Why did we take this step especially when the staff member does not get an immediate tangible benefit? One reason is because we believe in gender equality, and we believe that women should not have to face retirement with a lower superannuation balance than their male counterparts because they have had breaks to nurture and raise children. More importantly though, is that we at Growing Potential believe it is the moral and ethically-correct decision to support our staff in the best way we can while they are on parental leave.

Isn’t it about time that we get back to accepting that children are the future and that parents who take time away from their careers to nurture and raise them need to know that they will not feel the impacts of their choices 30(ish) years later when they retire? It’s time that we in the third sector take the moral high ground and make a statement that our staff matter when they take parental leave; that their newborn children matter, and that their retirement years matter. It’s time that we in the third sector show the for-profits and government that we do still care about communities, especially the community that make up our workforce. It’s time.

Otto Henfling

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Otto Henfling is an experienced CEO, senior executive, and Board member in the Not-For-Profit (NFP) sector and has been the CEO of Growing Potential Ltd since October 2014.

Otto has worked in the NFP, social services sector at senior executive and CEO levels since 2005.

Otto has a strong reputation for community consultation to ensure services meet local needs and his experience allows him to talk with authority about the issues facing non-government organisations affecting and implementing social policy.

Otto is committed to supporting the people of Western Sydney and beyond and especially the Aboriginal and Torres Strait Islander communities and individuals. He has a history of ensuring programmes and support services are culturally sensitive and relevant to local needs.

Otto’s passion for community means he always puts people first and is continually looking for new ways to make a difference in the lives of families and children in the Western Sydney area and beyond.

GrowingPotential.org.au – supporting and growing the potential of children, families and communities.

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