Australia is one of just two developed countries that doesn’t have a national system of parental leave. The other, of course, is the United States. Mr Howard always was reluctant to sign up to anything if George W. Bush had not done so first.
Low paid women with part-time jobs have struggled without a national system. Howard’s baby bonus favoured middle class mums, helping those who could afford to stay at home after their babies were born. We shouldn’t be surprised: working women were never really part of Howard’s world.
All this is about to change.
Kevin Rudd has finally announced that it is time for Australia to "bite the bullet" on parental leave. The Productivity Commission has proposed how we might do so in its draft inquiry report on paid parental leave, released this week. The Australian Nursing Federation is delighted with at least one aspect of the Commission’s plan, noting that it finally recognises the importance of parental leave. Many women are presently being forced back to work "too soon" by financial pressures, said the Federation’s National Secretary, Ged Kearney.
The Productivity Commission is proposing a period of 18 weeks leave for new mothers immediately after the birth of their babies. New fathers will be entitled to two weeks special leave. The Federal Government will pick up most of the bill, which the Commission estimates will add up to some $527 million a year.
Under the Commission’s plan, employers will initially be "paymasters" but they will be quickly reimbursed by the Government. The only extra expense they will carry is their absent employee’s 9 per cent superannuation contributions for the duration of their parental leave.
The Commission’s reasoning is delightfully simple. That is, having children is a normal part of life and should be treated as such.
New mothers and fathers should take the necessary leave after their babies arrive and should be paid while they are absent. The offer of paid parental leave applies only to working parents. Mothers who quit their jobs when their babies are born will still be entitled to the baby bonus, albeit under a different name.
Furthermore, the commissioners note that most people have some leave owing at work. They argue that it will therefore be possible for many people to extend their 18 weeks leave to six months by using up some of that private entitlement.
Is there an ideal time needed for mother and child to bond well, and for bub to get a good start in life before mum goes back to work? ACTU president Sharan Burrows states bluntly that maternity leave needs to extend beyond 18 weeks. The commission notes that some experts believe a full year is necessary. That might be so, but six months — or even a bare 18 weeks — is still better than most entitlements as they presently stand.
The Commission reports that 47 per cent of Australia’s working women have no access to employer provided parental leave. Not surprisingly, those in higher paid work receive the lion’s share of that which is available. "Only about 10 per cent of women on very low wages have access to paid maternity leave," the Commission reports. That compares with 80 per cent on high wages.
So how will this all work in practice? Two examples given by the Commission answer the question.
Firstly, let’s take "Laura", a working mother with a part-time job. She earns $400 a week. Laura is entitled to — and takes — 18 weeks leave. Under the proposed scheme, she will receive the minimum wage of $543.78 a week during her leave. This adds up to around $9788 in wages.
By taking this leave, Laura will miss out on the new maternity allowance that will replace the present baby bonus and some other benefits. However, once her employer superannuation payments are taken into account, she will receive a total of $10,436 gross for that 18 week period.
Laura would be $3,037 better off than she would have been without the new scheme.
The circumstances of our second case study, Roberta, are different. She chooses to leave her $40,000 a year job to become a full time mum. Roberta will receive a $5000 maternity allowance and $654 in family tax benefits, giving a total of $5654 for the 18 week period after the birth of her child.
Where a father is eligible for the full two weeks paternity leave and takes it, he will receive a gross payment of $1088 from the government in wages and an extra $98 in superannuation contributions. The the maximum combined benefits for any family taking advantage of the proposed scheme will be $11,854.
By any standards, the Commission is proposing sweeping industrial and social change. Predictably, its plan is controversial and employers are wary.
The Australian Chamber of Commerce and Industry, for example, worries about the extra expense and book-keeping. Its chief executive, Peter Anderson, has warned that the industry won’t support the proposal without substantial changes. Some businesses, he claims, might be forced to close if the Commission’s plan is implemented. John Hart, the CEO of Restaurant and Catering Australia, said restaurant owners would not be able to pass on the extra cost to diners. Barnaby Joyce agrees. The National Party’s Senate leader has gone so far as to predict that small business owners might stop hiring young women of child bearing age, if the plan is adopted.
The Commission’s report is still in draft form. It will hold a further three weeks of public meetings from 10 November to assess the response and no doubt representatives of employers will make their objections heard. Once its final report is in, the government will make a decision.
And this time, at least, we can expect Rudd’s Government to act quickly.
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