Cabinet to debate raising paid parental leave to 26 weeks

Paid parental leave would be raised from 18 to 26 weeks under a proposal to be put to federal cabinet ministers on Friday afternoon in a major new policy ahead of the October 26 budget.

The move is set to be the centrepiece announcement in Prime Minister Anthony Albanese’s speech to the state Labor conference in Sydney on Saturday afternoon, addressing calls for action on gender equity and help for families with the cost of living.

Prime Minister Anthony Albanese is expected to make the announcement at a speech to the NSW state Labor conference on Saturday. Credit:Alex Ellinghausen

Sources aware of the plan said cabinet would meet on Friday afternoon to discuss the plan and that the proposal would be to increase the Commonwealth’s paid parental leave to 26 weeks by 2026.

Greens and crossbench MPs have been challenging the federal government to take a stand on economic change for women by offering a more generous scheme so new parents have more help to balance work and family.

Grattan Institute chief executive Danielle Wood, who delivered a keynote speech to the government’s jobs and skills summit in September, has argued for more assistance on the grounds it would increase workforce participation by women.

“At a cost of $600 million a year, more gender-equal parental leave could boost GDP by $900 million a year thanks to increased workforce participation by mothers,” Wood said last year.

A bill put forward by the Greens would overhaul the system to give six weeks of leave to one parent, six to the other and a further 14 weeks to be used however the family decides – offering 26 weeks in total.

Under the Greens’ plan, single parents would be able to take the full 26 weeks and the leave would be paid at replacement wage, capped at $100,000 a year, rather than at the minimum wage.

While the government has previously said it was looking at ways to make the current scheme more flexible, Albanese had been urged to take a firmer stand on the calls outlined at the jobs summit.

“If a Labor government fails to deliver, I think you’ll see an increase in votes for minor parties and independents because, at the end of the day, I think the Australian people are tired of waiting,” independent MP Zali Steggall said last month.

The move on paid parental leave would add to the debate about adding new spending in the federal budget after Treasurer Jim Chalmers has warned about the pressure coming from programs including health, aged care, the National Disability Insurance Scheme and defence.

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