Paid parental leave would be raised from 18 to 26 weeks under a major policy proposal to be debated ahead of the federal budget.
Prime Minister Anthony Albanese is considering the proposal ahead of the October 26 budget, which would be aimed at addressing gender equity and helping families with the cost of living.
Mr Albanese told reporters he would have more to say on the matter but that helping women into the workforce was "low-hanging fruit" to improve the economy.
"We need to maximise women's economic participation in the interests of family budgets but also in the interests of our national economy," he said.
The prime minister said Australia was "towards the bottom" compared to other advanced democracies when it came to paid parental leave.
"We'll make announcements when we make them. But we've said consistently paid parental leave is something that Labor has championed. It's something that we've said we would like to do more," he said.
"One of the things about paid parental leave that we need to do, just like we need to do with childcare, is to increase women's workforce participation, to make sure that they can stay in the workforce, to build productivity for companies as well as by boosting their living standards."
Mr Albanese said people having families was good for the economy as well as for individuals.
"And so Labor will always do what we can to provide more support, but I'll have more to say about that over the coming period," he said.
As it stands, eligible working parents who are the primary carer of a newborn can receive 18 weeks of parental leave pay at the national minimum wage.
Secondary carers such as fathers or partners can receive pay for up to two weeks.
The Australian Council of Trade Unions has called on the Albanese government to increase paid parental leave to 26 weeks initially, before extending it to 52 weeks by 2030.
