PAUL CULLIVER, HOST: 5:10pm on your Thursday afternoon. Great to be back on your radio after a few days off. Thanks to Scott Bevin for sitting in the chair in the meantime. How much of a difference would it make if you got super paid on your parental leave? Should having a baby and taking time off to care for it set you back when it comes to how comfortable you are in your retirement? Well, in one of the first bits of confirmation of what we're going to see in the federal budget coming in May, the Federal Government have announced they will pay super added to your paid parental leave from next year. Let's find out how it will work. Sharon Claydon is the Federal Member for Newcastle. Sharon Claydon, good afternoon to you.

SHARON CLAYDON, FEDERAL MEMBER FOR NEWCASTLE: Good afternoon.

CULLIVER: Look, before we do discuss this news around paid parental leave, of course, a colleague of yours, Joel Fitzgibbon, and the very sad news of his son's death today, I wondered if you'd like to share any thoughts.

CLAYDON: It is just the most tragic news. It's every parent's nightmare. I can hardly even put into words what I could only imagine what Joel and Diane are going through right now and it is devastating to lose a child in any circumstance. I know that whilst Jack was doing the very work that he loved and serving his nation, and for that we must all be deeply appreciative. Losing a child is every family's nightmare. And my deep condolences go out to Joel, Diane and all the family, his partner and everybody who knew and loved him. It's really, really devastatingly tragic news.

CULLIVER: Yeah, our thoughts certainly with the Fitzgibbon family and to all who knew them, knew Jack across the Hunter and beyond. Sharon Claydon let's talk about this new policy that the Federal Labor Government has announced today. How will it work?

CLAYDON: Well, it's really building on some historic reforms of paid parental leave. It was the only workplace entitlement that didn't really accrue superannuation. So, other workplace entitlements like sick leave, annual leave, you are always paid superannuation. But for some historic reasons, paid parental leave was not treated initially as an ordinary workplace entitlement. And I think this announcement today where the Albanese Labor Government is really building on a number of significant reforms now for paid parental leave, this really brings it in line with other workplace entitlements and that is a great thing.

It's especially great for women who really share the largest proportion of care arrangements in Australia still. We would like to see that change of course, I know there's lots of dads that would really like to be a much more active part of the caring relationship with their kids. And this is going to be good news for both men and women because now when you take leave to look after your newborn infant, or if you've just adopted a baby, the same applies there, then you are going to not be put at a terrible financial disadvantage for doing so. Really, this is great news for all working people.

CULLIVER: Just how much of a disadvantage do you think it is to not get super paid on parental leave?

CLAYDON: We knew that women were already at least 25% behind their super balances when they retire to men. It's not just paid parental leave that was causing that. There are a range of reasons why women have gaps in employment and different kinds of caring relationships throughout life. It's not just little ones, they often end up caring for parents later in life too. But this will absolutely go some way to redressing that great inequity.

It was a real concern to us that women were retiring with really very minimal retirement incomes and that is really unsustainable. We cannot have that going forward. And paying superannuation on those government parental leave, it's an important investment, really, in not just women's earnings now, but making sure that they have a safe, secure retirement income as well.

CULLIVER: How much will it cost?

CLAYDON: Well, it's not going to be cheap. We are still working out the full budget measures will be released in the budget itself in May. We know there have been costings in the past and people have estimated that a couple of hundred million. But really, I think this is an investment. I would see it as in our greatest asset, and that is our people and, paying super on paid parental leave, it's part of our government's efforts to ensure that women earn more, that they get to keep more of what they earn, and that they retire with more as well. That's the ambition and that is what this government intends to see put in place.

Paid parental leave was introduced by a Labor Government in 2011. It was left largely untouched by the former government. Now we've got legislation before the Senate to extend paid parental leave from 20 weeks through to 26 weeks. And we've got these important reforms announced today that will come into play as well where, provided we get support through the parliament, which I certainly hope we do, then there will be for the first time, bringing paid parental leave into line with other workplace entitlements.

CULLIVER: Do you think this change would encourage more people to have babies or people that otherwise were, I suppose, deterred because of the impact on their financials might actually find themselves in a better position to do so?

CLAYDON: Yeah, I do. And I think, to be very honest with you, a lot of conversations I have with young women having children, they had no idea that they were not going to get superannuation paid on their parental leave. It was a horrific shock to a lot of them. And I've got to say, I suspect a lot of men will be surprised to learn that this is a leave entitlement that never accrued superannuation.

So, we want women to be able to retire in dignity with a healthier superannuation balance, and we want to also encourage men to be taking more active roles in parenting arrangements. It was a great disincentive for men to take leave, paid parental leave, to participate in what should be the most joyful moment of their lives, and to help nurture their children coming on. It was a real disincentive for them because they realised the financial consequences of taking paid parental leave, doing damage to their superannuation balances at the end of the day. So, let's hope this is great news for both men and women and we start seeing fair, equitable arrangements around paid parenting arrangements, and that women finally get some recompense for the value that we really should be attaching to the raising of our children and our next generation.

So, this will be a great measure. It will go a long way to making sure that, as I said, we're working on the front of making sure women get paid more by backing those important equal pay cases. We know women tend to be employed in those- the highly feminised industries where women are employed are amongst the lowest paid industries as well. So, making sure that those pays get to increase, that women get to keep more of what they earn. So, the tax cuts that are about to come into play, 90% of Australian women are going to be better off from those reformed tax cuts than they would have been under the other one. So, this is just building on all of those important reforms we're doing for women and this announcement today on superannuation on paid parental leave means they get to retire more as well. That’s the ambition.

CULLIVER: Sharon Claydon, thanks for your time today.

CLAYDON: Thank you very much.

CULLIVER: Sharon Claydon, Federal Member for Newcastle on the news that the government will pay super from July 2025 on paid parental leave. How much of a difference do you think it might make in your life?