WHAT WAS CLAIMED
Liberal costings show they would have cut paid parental leave.
OUR VERDICT
Misleading. While costings showed long-term savings from the Liberal policy, the reforms didn't cut benefits or spending on parental leave payments.
AAP FACTCHECK - Social Services Minister Tanya Plibersek is misleadingly claiming that costings showed the Liberal Party would have cut paid parental leave if it had won the May 2025 election.
While costings showed the budget would've been better off in the long-term via the coalition's proposed changes to the scheme, this isn't due to a reduction in paid parental leave (PPL) expenses.
The coalition policy didn't remove existing arrangements, whereby parents earn superannuation on their parental leave, but gave them the option of taking extra leave or a one-off payment instead of the super.
Ms Plibersek made the misleading claim during Question Time on July 24, 2025.
The minister spruiked what she said were numerous improvements for parents following changes the Albanese government has made to PPL since 2022.
"This was at risk during the election in May," she said.
"The Liberals' costings show that they would have cut paid parental leave." When contacted for evidence, Ms Plibersek's office pointed AAP FactCheck to the Liberals' pre-election costings.
Her office said these showed a $332 million PPL cut in 2025/26, totalling about a $158 million cut over the forward estimates to 2028/29.
But the negative figure actually represents a decrease in the underlying cash balance (UCB).
UCB is a key measure in the federal budget that tracks money going in and out of government accounts.
The negative figure represents a net cash expense to the budget in 2025/26, compared to the current government's policy.
While the costings show savings in the UCB of $45.1 million, $71.8 million and $56.6 million over the following three years, it is an overall cash expense across the forward estimates of $158 million.
In other words, the coalition's proposal did not cut spending on paid parental leave up to 2028/29.
Curtin University tax expert Helen Hodgson said the 2025/26 decrease in the UCB is an outgoing, which is consistent with the Liberal policy maintaining the benefits under the existing PPL entitlements.
"It seems to me that the minister's office has misread the table as a reduction in outlays," Professor Hodgson told AAP FactCheck.
The Albanese government introduced superannuation on parental leave payments during the last term of parliament, which applies from July 1, 2025.
The Liberal proposal, which it took to the last election, provides parents with an option to either keep or forgo that super (page 1).
If parents opt to forgo super, they can either receive an additional two weeks of leave entitlement or a one-off payment equal to the value of the super at the time it's paid.
The proposal sparked debate before the election, with critics arguing it would leave parents worse off at retirement because those choosing the one-off payment would lose out on the investment returns from a larger super balance.
But the policy would still allow super to be paid on payments should parents choose, and the costings show PPL expenses in the budget would be largely the same, with the one-off payment offsetting savings that result from lower super payouts on parental leave pay (p4-5).
The coalition is currently reviewing all of its policies.
Prof Hodgson said parents' super balances would be affected, depending on which option they chose, but that the benefit provided by the government would be the same.
"If you look at it from the perspective of the amount that is made available to parents, the proposal did not cut benefits - just the timing of those benefits," she explained.
The independent Parliamentary Budget Office (PBO) costed the Liberal PPL policy twice, before and after the election.
The pre-election costing isn't public, but former shadow treasurer Angus Taylor's office confirmed to AAP FactCheck that the PBO's pre-election work is reflected on the web page Ms Plibersek's office referred to.
The post-election costing is public and contains different numbers than on the Liberal website.
The PBO updates the economic parameters that underpin its costings following a federal budget, which explains why they're different.
These updated UCB costings, based on the most recent economic data in the budget, also show a net expense over the forward estimates.
They show the proposal would decrease the UCB by a total of $228 million over the four years to 2028/29 (p2).
Longer-term costings that stretch out to 2035/36 show a net saving of $42 million (p5), which represents an increase in the UCB.
But rather than any cut to what the government is paying out in parental leave pay, this net saving is mainly caused by an estimated increase in income tax revenue because the one-off payments, which the PBO assumes 90 per cent of parents take (p2), are taxable.
As well as the UCB, the post-election costings also use a second accounting measure to reflect the impact of the proposal.
The fiscal balance is an accrual accounting method, which means incomings and outgoings are recorded as they happen, regardless of when the money actually leaves or enters the government's accounts. That contrasts with the UCB, which records when cash changes hands rather than when transactions are recorded.
As a result, the policy costings look different depending on the accounting method. But in both cases, the financial impact on the budget is the same - it's just the timing of those expenses and revenues being recorded in the budget that's different.
This is mainly down to the way the Australian Taxation Office (ATO) administers super payments on parental leave pay.
Specifically, it issues super on parental leave pay in the financial year after parents take leave, so the super savings in the budget aren't recorded in the UCB in the same year the one-off payment expense is.
The PBO costing explains that 80 per cent of the super savings arising are recorded in the financial year after the parental leave is taken (p1) and that the remaining 20 per cent is recorded in the financial year after that.
By comparison, the fiscal balance accounts for all the super savings in the year the parental leave pay is taken, offsetting increased outlays for the one-off payment.
This creates a difference between the impact on the UCB and fiscal balance that grows over the decade as the dollar value of the super payments and income tax receipts from the one-off payments grow.
So, while the amount paid out by the government in PPL is the same, the fiscal balance impact shows a much larger net saving to the budget of $271 million over the forward estimates, and $682 million over the decade (p4).
In the same Question Time response, Ms Plibersek went on to quote Liberal MP Tim Wilson expressing a view that PPL is a "very bad scheme" during an appearance on a 2013 edition of the ABC's Q&A program.
"He said: 'That is not my choice that women have children … it's genetic,'" Ms Plibersek said, quoting Mr Wilson.
The quote is accurate (timestamp 47 minutes 41 seconds).
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