Paid parental leave changes welcomed, but more needed to close gender pay gap

The Albanese government has announced an additional six weeks will be added to Australia’s current Paid Parental Leave (PPL) scheme, giving parents a total of six months of total leave payable.

But some experts say much more needs to be done if the scheme, which won’t reach its full 26 weeks rollout until July 2026, is actually to address the gender pay gap.

According to the Australian Bureau of Statistics, there are 680,000 business-owning women and 345,000 business-owning mothers in Australia.

Mums & Co, a community supporting business-owning mothers across Australia, has welcomed the changes.

Co-founder Carrie Kwan says women starting and staying in business is addressing the pay gap and the proposed parental leave scheme has more flexibility to suit Australia’s business-owning mothers.

“For Australia’s 680,000 business-owning women, the proposed scheme allows women greater choice between career, financial security and caring,” she said.

“The significance of the new proposal is the increased duration of paid leave and greater flexibility. On behalf of Australia’s 345,000 business-owning mothers, Mums &Co welcomes the move from 18 to 26 weeks and celebrates parents being able to take leave in blocks. This allows a micro business owner the flexibility to receive support at times that best suit their business and family.”

A Mums & Co Mums in Business Survey by EY Sweeney revealed that 9% start their business while pregnant, while 32% start their business on parental leave.

Kwan says the reforms will also be beneficial for single parents.

“This reduces the gender pay gap because carers can return to their work, on their own terms. Women can return to doing meaningful, paid work. Men can contribute to caring. Parents can make broader business, financial and career decisions together as a family,” she said.

“It’s a great step for wellbeing to allow the focus on caring, the next step is livelihood, building in contributions to superannuation. If we can normalise childcare and share the load, more women can participate in the workforce. This is Australia catching up with the world and fostering a national culture of entrepreneurship and a community of support for female founders. This scheme is de-risking business for business-owning mothers.”

SHK Asia Pacific career management practice lead Endi Frydman says the expansion is a positive step as it incentivises dads and secondary caregivers to share parental leave and take on a more equal parental load, empowering women to return to work sooner.

“Whilst the expansion of paid parental leave is a way to lift female workforce participation, to make a more significant impact, much more is needed. In my opinion, parental leave should be paid at the full replacement wage, not the minimum standards, and should also include superannuation payments to address the gap in women’s super and cumulative lifetime earnings,” she said.

Think + Grow partner Kylie Neale says Australia is behind on fast-tracking change to alleviate the pressures on working mothers and to address macro issues attached to the gender pay gap.

“Unfortunately the gender pay gap is a far bigger issue which requires a lot more support and systemic change than adjustments to paid parental leave,” she said.

“Whilst some would argue that as a nation with one of the worst paid parental schemes globally and this is a positive step forward we have a long, long way to go with a gender pay gap sitting at 14.1 per cent and it has actually widened again marginally this year.

“The changes announced last week see paid parental leave creep up pretty slowly until 2026 to be still significantly behind average paid leave figures for OECD countries. There is a lot more to be done in changing behaviours in the workplace and to offer more in paid support. alternate care options and incentives, as well as in addressing stigmas and bias to see true correction.”