The Turnbull government’s bill to stop parental leave “double dipping” will reduce the payments of more than half of new mothers, and some fathers. By shifting from a base of government-funded 18 weeks of pay at the minimum wage, able to be topped up by employers, to a maximum of 18 weeks including any employer payment, the government hopes to push the primary carer back to work by reducing funded leave.
This is a major Coalition shift of policy as, in July 2002, then-PM John Howard included debate on paid “maternity” leave in his “barbecue stopper” issue of balancing paid work and family responsibilities. Shortly thereafter he rejected funding a paid maternity leave proposal, put by his personally appointed sex discrimination commissioner, Pru Goward. Instead, the following year he introduced the baby bonus for all mothers so there would be no favouring of mothers who took on paid work.
This is a very different tack to that taken by current minister Christian Porter, who has clearly stated that his cuts to paid parental leave are designed “to get women back to work”. It is now clear that the Coalition has abandoned its long-term commitment to women who “choose” to be “stay-at-home mothers”, even in the first year. A sop of a new baby payment, agreed to with the Nationals, seems to have disappeared from the Coalition agenda, too.
The current policy, which Labor introduced in 2011, was based on a Productivity Commission report that gave it the economic imprimatur. While recognising 18 weeks’ pay was less than most comparable countries offered, the scheme was designed to provide a base payment and encourage additional weeks from employers. This approach was seen as giving parents encouragement to argue with their employers for a top-up and thereby move to at least the 26 weeks that the World Health Organization declared the appropriate minimum. The changes will kill off any pressure for further employer increases, as neither they or the workers will get the benefits.
At that time, about a third of employers, including the public services, offered paid leave, which has now increased to more than 50%, mainly from the private sector. This leaves almost half of recipients still with no employer top-up, so they only get the 18-week payment, which is about $12,000 in all. The inability of recipients to add the payments together means that 18 weeks will become a ceiling, rather than a floor, for most parents.
Just over half of mothers have employer leave. On average this is 12 weeks, but deduct the public servants and it drops to eight weeks or less. Many of these are quite low-income earners, such as childcare workers, part-time workers, retail and health workers. In some cases these payments will replace possible wage rises in an enterprise agreement, so they will miss out on the pay rise they sacrificed as well. They will be very angry, and so will their employers.
The OECD Family database shows Australia is mean with its payments compared to most other countries. The OECD average entitlement available to mothers stands at just over 36 weeks, with most countries providing somewhere between 26 and 52 weeks. Comparisons are hard to make but, as a relatively wealthy country, we can afford to increase government entitlements, so as not to limit the capacities of parents.
Missing in the current debates is discussion of why this payment should be publicly funded. Is parenting time with new babies a public good or a private choice parents should fund? I have a collection of reports, going back to 1993, which initially pitched the need for the payment on health grounds. The benefits of parent bonding and possible breastfeeding make clear cases for encouraging adequate time with new babies.
[Let’s acknowledge Abbott’s parental leave plan is better]
Now there are much wider expectations that women will be in paid jobs, not just before parenting but during even the early years. So questions of parental leave, which also covers partners, became more serious and should address workplace relations. However, the proposed model further undermines the push from some feminist groups to see parental leave as a workplace entitlement. This would mean treating the pay as wage replacement, similar to sick, holiday and compensation payments, which would normalise this core aspect of life in the workplace. This is the basis of most employer contributions, which see this payment as a way to get and keep parental labour. The standardised government pay rate was an awkward partner with the employer rate, but it was seen as a starting point and safety net for those whose employers could or would not pay. The proposed cuts, therefore, make the mix even more problematic and discourage the further expansion of this workplace connection.
An interesting interlude in this debate came a few years ago from Tony Abbott’s brief flirtation with a feminist model of replacement income version while in opposition. He offered a version of 26 weeks pay at current rates, capped at $150,000 annual pay, plus superannuation. His cap income level and a comment on it being needed for “women of calibre” became the focus of widespread negative reactions.
Despite his proposed model including what most women’s groups and unions had wanted, there was vocal disbelief and trashing of targeting the well-off. Abbott was not seen as credible as he had opposed parental pay before, though he recanted in Battlelines in 2009. However, the model was publicly condemned with similar vigour by many feminists as well as the usual conservatives, so the message was clear that the welfare model was accepted and high-income earners could be cut. This debacle offers the rationale for the current model, tabled in the 2015 budget, now before Parliament.
The proponents of the current bill therefore are selling it as “double dipping” and a welfare payment. The example they use is a high-income earner, ignoring the bulk of recipients who earn much less than average weekly earnings. The opposition seems to be focusing mainly on the unfairness of the timing but identifies losers.
Jenny Macklin, who brought in the ALP scheme, estimates 80,000 mothers would be worse off by as much as $12,000. “We estimate that 40,000 to 50,000 women who are already pregnant are going to lose some or all of their government-funded paid parental leave, which is a pretty modest scheme by international standards,” she said.
The core questions is really what effects these changes will make to parent-child wellbeing. Most mothers and some fathers really want to stay home for a year. On a totally practical point, trying to get carers of babies back to work earlier ignores the serious shortage of childcare services for this age group. Who is going to care for these babies whose mothers are forced back to work because their leave has been cut?
Whilst understanding the argument, better than most with 30 years in HR behind me, I have to side with the LNP on this. When paid maternity leave is both expensive and too little, it should be targeted at those who aren’t getting it, or getting very little rather than those who are receiving it through their employers. That is amplified further by the fact that a substantial portion of people who receive paid maternity leave are already doing that through the public purse, those being public servants.
Public money should go to those most in need. It’s a simple principle. Given my employers very generous paid maternity leave provisions, I was gobsmacked to learn that women earning $200K plus would also receive the government top-up.
It’s just a poor use of scarce resources, whatever the ideological underpinnings.
D’sB, you say: “Public money should go to those most in need.” That would be the case if it were a welfare model we were talking about. But paid parental leave is a workplace entitlement, not a handout. Cutting payments back in order to push new mothers back to work will be as short-sighted, nay stupid, as Julia Gillard’s assault on single mums – for the same purpose.
I agree with your comments DB…and Hugh, until PPL becomes a “workplace entitlement” for EVERY woman, then we ARE talking about a “welfare model”.
I just cannot get my head around why babies of well paid woman are more entitled to their mother’s ‘bonding’, than those of low paid women who do not receive ‘top-up’ PPL from their employers.
Why is it that babies of the former group deserve 12 months+ of their mother’s care…while those of the latter have to make do with 18 weeks? If a cap is put on government funded PPL, then surely the money saved should be distributed in such a way as to give ALL women at least 26 weeks leave…and even more if possible.
Makes sense to me…even though this mob will never do it. However, I think Labor should have a rethink along these lines.
As it stands, the system is totally unfair!
It will be interesting to see how many employers will now abandon their own paid parental leave schemes. These changes to the scheme are being sold as a crude way of means-testing the payments, but in reality they are punishing good employers, rewarding bad ones, and perversely discouraging the enactment of more meaningful/generous PPL schemes. Then again, this is a government that opposed Labor’s PPL scheme, then attacked it for not be generous enough, and is now gutting it. Perverse outcomes aren’t exactly a surprise.
While not commenting on the scheme, I am gobsmacked by the double standards applied by this mob (again); several ministers have availed themselves of ‘double dipping’ recently, also the expectation that it is OK for us to pay for joe hockey’s baby sitting while denying working women any govt funding to care for their babies.
Gotta love all these policies to ‘get people back to work’ when Job Is Dead and we’re all on the way to NEETdom
Do we have to convince each batch of new federal ministers of the importance of the early years for lifelong health and development? Their predecessors got it (e.g. Larry Anthony, Julia Gillard) and developed policy that promoted investment in the parent-child relationship and early learning. There is a sizable bomb smouldering out there that will affect the millennials’ life chances – rations of parental time, human-influenced global warming – and still we bury our heads in the sand.