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Opinion Pieces

Paid Parental Leave

Saturday 13 March, 2010

Australian Financial Review 13 March 2010 

Taking parental leave in Australia is not for the faint hearted. Men will call it something else, for example study leave or a holiday. Women know it can put the mortgage in jeopardy and change their employer’s perceptions about their commitment to a career and the company.
This is why mandating an adequate, universal, Paid Parental Leave (PPL) scheme is so important.
The fact is women who have just given birth do need some time at home, and there are volumes of evidence of the benefits for the baby who can bond with a primary carer for at least the first six months of their life. 
Eighty four percent of parents on higher wages (over $1200 per week) as well as parents in the public service and defence have had access to some Paid Parental Leave for some time. Only 24% of parents on less than $500 per week have been offered the same entitlement.
It is not fair that lower paid and part time working women are forced back to work too early, or simply cannot afford to take any leave at all.
In May 2009 when the Labor Party quietly slipped their minimalist PPL scheme onto the table for a 2011 start, the disappointment of the advocates and the unions was such that it was, and continues to be referred to as; “ just the first stage.”
As the second last country in the OECD to introduce a PPL, with decades of best practice to observe and adapt from other developed economies, with Australia’s ageing population and our productivity issues looming, how can we justify a two stage introduction, with no guarantee when or what a final decent scheme might look like.
Providing six months of parental leave on replacement salary, or the minimum wage, which ever is highest, with superannuation, is the best we can do for our parents with new born babies, and the Coalition will introduce such a scheme as soon as it can when in government.
This scheme delivers tangible benefits to parents raising the next generation and to the economy which needs greater workforce attachment for women to counter their serious financial disadvantage in older age, and to overcome the skills deficits of a recovering economy needs.
A universal, mandated Paid Parental Leave scheme will also help to change the culture in the workplace which currently can discriminate against women of childbearing age who just might cost the employer some replacement salary and inconvenience if they dare to take a little time off after giving birth.
By funding this scheme initially with a 1.7% levy on all big businesses with over $5million in taxable income, the issue of employing men over women is neutralised. As a big business you will be paying the levy whether you have women in the workforce or not. As a small business you will not be asked to foot the replacement salary for a parent taking leave, nor the superannuation.
 Labor’s Paid Parental Scheme only offers 18 weeks of leave at the minimum wage, delivering over 60% of households a significantly drop in household income. Thousands of new mothers would in fact be financially better off by sticking with the baby bonus which does not come with a leave entitlement. Labor’s scheme also ignores the retirement income imperative for women by not including superannuation payments, no doubt hoping along with the Productivity Commission that a grossly inadequate scheme would be supplemented with extra pay and leave by benevolent employers.
Most Australian businesses have not stepped up to the plate before, despite the public service, Defence and sectors like finance and banking leading the way. We can have no expectation that they will volunteer to do what is in fact the best for their business now. 
The Coalition’s Paid Parental Scheme will help to ensure that we can better meet our workforce needs and a woman’s choice to have a baby is not delayed or even denied because her income is needed to sustain the family or herself, as an independent person in older age.  


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