Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

Paid parental leave is an important benefit, both private and public. It shows that it is normal and desirable to take time away from the workforce when you have kids. It helps families bond. It helps people afford to take the time away from work. It helps society if it is administered so as to let people better participate in our workforce and if it leads to stronger families But, as Professor Pocock has said:

… work and family policy is about much more than PPL. The body of existing research about good work and family regimes around the world supports a balanced policy approach: one that walks on more than one leg—responding to the intensive demands of early childhood that reach beyond the moment of birth—to ensure quality care for children and flexibility in workplaces.

In Australia there is much to be done to make workplaces flexible enough to enable people with kids to fully participate for their own benefit and for the nation's. There is also much to be done to make quality child care that meets parents' and children's needs accessible and affordable.

When there is so much to be done, the Prime Minister's expensive and inequitable Paid Parental Leave scheme seems unfair and indulgent. It is inequitable because people who are more well off will receive greater government support—up to $75,000, because it fully replaces wages of up to $150,000 per annum for six months—than people who are less well off.

The scheme is expected to cost $5.5 billion and Mr Abbott intends for it to be funded by a 1.5 per cent levy on big business, but it is far from clear that that levy will be enough. It has been said that the Commission of Audit report, which Mr Abbott has already received but we have not seen, 'supports the concept but feels the price tag is too high given the pressure on the budget.'

The 2009 Productivity Commission report into paid parental leave expressly disapproved of a scheme like Mr Abbott's, instead recommending the option that Labor implemented—parental leave at the minimum wage. The report said:

Payment at a flat rate would mean that the labour supply effects would be greatest for lower income, less skilled women—precisely those who are most responsive to wage subsidies and who are least likely to have privately negotiated paid parental leave. Full replacement wages for highly educated, well paid women would be very costly for taxpayers and, given their high level of attachment to the labour force and a high level of private provision of paid parental leave, would have few incremental labour supply benefits.

The report also noted that high earners 'usually have better access to resources to self-finance leave,' and said:

Our approach—

the commission's approach—

… takes into account the balance between the needs of parents and the burdens on taxpayers—especially those who would not receive any direct benefits, such as those without children.

The report cautioned against an overgenerous policy. It indicated that if there were a need to top-up the scheme, a future government could consider higher education style loans where repayment depends on income. The report said:

That option would recognise that paid parental leave has both public and private benefits, but the government has not heeded the Productivity Commission's report. Instead, it is going ahead and doing exactly what the Productivity Commission said not do to. It is already seeking to extend the scheme. It is not going to use the commission's suggested option of loans; it is going to pay replacement wages. Public policy experts, economists and business people have criticised the government's scheme and it goes against the Productivity Commission's recommendations. Coalition MPs have been openly, as well as less openly, breaking ranks on the government's expensive Paid Parental Leave scheme.

In the face of all of this criticism, one would think that the Prime Minister would reconsider the scheme. If it is possible to raise sufficient moneys for a $5.5 billion scheme, then why not use those moneys on other legs of work and family policy like making paid work more compatible with family demands; introducing genuine flexibility that meets parents' and children's needs and helps integrate family demands into working life; or making quality child care that meets parents' and children's needs more available, affordable and accessible? Why not those policies instead of this expensive, unfair and inequitable Paid Parental Leave scheme?