Monday, 31 May 2010
Paid Parental Leave Bill 2010; Paid Parental Leave (Consequential Amendments) Bill 2010
I speak in support of the Paid Parental Leave Bill 2010 and the Paid Parental Leave (Consequential Amendments) Bill 2010 as moved by the Minister for Families, Housing, Community Services and Indigenous Affairs. This bill proposes Australia’s first national paid parental leave scheme, which I think is a cause for great celebration, not only for working mothers but for all working families. At present Australia is one of only two OECD countries without a national paid parental leave scheme, for which I hold the Howard government responsible. Even New Zealand, whose employment conditions generally trail Australia’s, has now had a paid parental leave scheme for the last four years. With the exception of the United States, every one of the other 29 countries in the OECD has paid parental leave, which is an indictment on the Howard government and all of its ministers, who would not countenance introducing such a scheme when in government; rather, they were too occupied by driving down working people’s wages and conditions. As a condition, paid parental leave never stood a chance under Work Choices. What chance could an employee who was forced to sign a ‘take it or leave it’ Australian workplace agreement ever have of getting paid parental leave, when many of these secret agreements did not even contain a pay rise for up to five years?
The Rudd Labor government has introduced this bill to catch up with the rest of the developed world and provide a paid scheme for working parents. Eligible working parents of babies born or adopted from 1 January next year will receive 18 weeks parental leave pay at the federal minimum wage applicable at the time. The government’s scheme provides security and support for families and will make many households in my electorate of Deakin feel much better about the challenge of having a child or further children.
In the lead-up to and during this debate it has been interesting to take note of the reaction of the Leader of the Opposition, Tony Abbott, to our policy. Not long after we introduced our plan, the opposition leader decided to introduce his own parental leave thought bubble—and, as I understand it, his plan did not go through the coalition party room; he just made an announcement without even consulting his own parliamentary members. It was quite an amazing turnaround by the Leader of the Opposition, who, whilst the Minister for Employment and Workplace Relations, did nothing to introduce a scheme for paid parental leave. In fact, by his own admission he was actively working against a paid parental leave scheme and is quoted as having said at a Liberal Party function in Victoria in 2002:
Compulsory paid maternity leave—over this Government’s dead body, frankly.
He must have had some sort of conversion, because recently he has come to look back on the wasted years and say:
I was part of the government that could have done better in this area.
But I think we should ignore his crocodile tears and look into his record on paid parental leave. He opposed it and fought against it. For 12 years the government that he was part of, the Howard government, followed his line and did nothing to start a paid parental leave scheme.
The opposition leader is on record as opposing a paid scheme and he did nothing whilst minister for workplace relations. Yet he now turns around and proposes a scheme—his thought bubble—that will cost Australian business $10.8 billion over four years. It is a great big new Liberal Party tax on employers; it is a tax on 3,200 businesses at 1.7 per cent, coming on top of the existing 30 per cent company tax rate, and will push cost of living increases right through our economy. I have no doubt that working families will be hit hard should the opposition leader ever have the chance to get his parental leave thought bubble through parliament. It would mean higher grocery bills, higher petrol bills and bigger electricity, gas and phone bills—the list is almost endless, and each and every one of those commodities comes from large companies. If you look at the supply chain, there is a large company there. They will get hit with that tax and the costs will flow on. Those costs will not stop at the first user; they will go right through the economy, which means there will be no escape for the household budget.
This comes at a time when the Rudd Labor government is proposing tax cuts for businesses that will reduce the company tax rate to 28 per cent whilst the Liberal Party is committed to increasing the rate to 31.7 per cent, a 3.7 per cent difference that will come straight off the bottom line of company profits. For some large employers this extra cost is $100 million or more per year. This Liberal Party great big new tax on companies compares with a comprehensive paid parental leave scheme that is fully budgeted and funded without increasing the tax on employers.
In February 2008 the Rudd government asked the Productivity Commission to look at the economic, productivity and social costs and benefits of paid maternity and parental leave. The Productivity Commission analysed the evidence from Australian surveys and international research. It undertook extensive public consultation on proposals for the scheme and it sought public submissions and conducted public hearings. The Productivity Commission’s final report recommended the introduction of a government funded statutory scheme of paid parental leave, paid at the level of the national minimum wage for up to 18 weeks. In last year’s budget the government committed more than $250 million a year to Australia’s first paid parental leave scheme, which was based closely on these recommendations from the Productivity Commission.
The Rudd Labor government has delivered for Australian working families a paid parental leave scheme, delivering on its promise to working families to help them in the challenge of raising children, which involves a huge cost, as we all know. The government estimates that each year around 148,000 people will be eligible for paid parental leave under our scheme. The scheme will provide eligible working mothers and initial primary carers of children born or adopted on or after 1 January 2011 with up to 18 weeks of paid parental leave, at the national minimum wage, whilst they stay at home to look after their baby or adopted child. This rate is currently $543.78 per week and can be taken in conjunction with other existing leave entitlements. All up this figure equates to almost $10,000 to assist working families adjust to the loss of income whilst the primary carer is not at work. This amount will rise in line with the national minimum wage.
Another important aspect of this scheme is that it will apply to women working part-time, in seasonal, casual or contract work, and also the self-employed. For so many years employees in most of these groups have missed out when it comes to paid leave. That is why this is one of the best components of the scheme. The extension of paid parental leave to casual workers, seasonal workers and those who own their own business is fantastic news. It will mean that many workers will able to access paid parental leave for the first time even though they may not have access to sick leave or annual leave or many of the other types of leave that most employees do have access to solely due to their type of employment. So a mother may be eligible if she has worked continuously for at least 10 of the 13 months before the birth or adoption of her child and has worked for at least 330 hours in that 10-month period, which is around one day a week. To meet the needs of contractors and seasonal and casual workers who have irregular work patterns, a parent can have a break of up to eight weeks between working days and still be considered to have worked continuously. Parental leave pay will also be available to parents who work in their own business or a family business, such as a farm or a milk bar or even a small contracting operation.
For many full-time workers who do not have a paid scheme at their workplace this government policy is great news. In my former job as a construction electrician, I and my colleagues had pretty good workplace conditions but we did not have paid parental leave. It was not in the award and not in the enterprise agreement. I suppose when you look around at the people that I was working with it was another barrier to women actually getting into that trade. I can think of large construction sites that I worked on that had 1,000 people working on them, with three of them being women. That needs to change. We need to get women involved in traditional trades. The barriers to that at the moment are big and longstanding. This addresses one of them and I hope it is a small help in that area of the economy.
Earlier this year I visited a local childcare centre, the Knaith Road Child Care Centre in Ringwood East. I went there with the Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin. We held a low-key forum with staff and the parents who came in to drop off their kids for the day. We explained to them the benefits at that time of the proposed paid parental leave scheme. I think the most well-received part of the briefing that we had there was that for the first time childcare professionals would have paid parental leave. Curious staff came up and asked for more information as it had always been an irony for them that, although their work was to care for and help educate babies and young children in their community, they as childcare professionals had never had paid leave for when they had children. I can only imagine that the news of a paid scheme is being celebrated in many other industries that have not had paid leave in their awards and agreements.
Another aspect of the government’s scheme is that it is a parental leave scheme, so the payments can be for the partner to stay with the child if the mother returns to work. Generally, it will be mothers who claim parental leave payments in the first instance as they usually provide the primary care of their child during the initial months of the child’s life. We can well understand that. However, it is becoming increasingly common for men to spend some time being the primary carer of the child during its first year. Our paid parental leave scheme is flexible and will allow parents to make their own work and family choices.
The legislation allows all or part of the parental leave pay to be transferred to the child’s other parent, provided they also meet the eligibility requirements and are the primary carer of the child. Paid parental leave must be taken in one continuous 18-week block within 12 months of the child’s birth or adoption, including in cases where the payment is transferred to the other parent or carer. A parent cannot work during the paid parental leave period, although they can stay connected with their workplace through keeping-in-touch provisions. These keeping-in-touch provisions provide for an employee to attend the workplace for up to 10 days during the period of the leave to attend training or planning days with the agreement of both the employer and themselves. Employees who participate in the keeping-in-touch provisions will also receive their normal rate of pay in addition to their parental leave pay. Paid parental leave can be taken before, after or at the same time as other leave entitlements, such as annual leave or employer funded maternity leave, to best suit a family’s circumstances.
A parent will be eligible if they have individual income of $150,000 or less in the financial year before the claim or the birth of the baby, whichever is the earlier. This is a generous income test but consistent with the principle of targeting government support to those most in need. Unlike the Liberals’ policy, which allows million-dollar salary earners to receive payments from the taxpayer, our scheme targets those working people who need it most. The thought bubble from the Leader of the Opposition would have some parents paid at the rate of $2,884 per week for paid parental leave whilst others would receive only $543.78 per week. So some people would receive roughly five times the amount for the same event, being the birth of a child and the subsequent period of leave.
We know that all mothers ‘work’ regardless of whether they are at home or in a paid job and that most mothers will spend time in and out of the workforce depending on their circumstances. We will continue to support mothers whether they are in a paid job or at home. The baby bonus and the family tax benefit will remain available for families not eligible for the scheme and for those who choose not to participate in the scheme. The government’s scheme will help employers enhance the family-friendly workplace conditions many already offer. The paid parental leave of 18 weeks is additional to any paid scheme already provided by an employer.
For many Australian workers, there will be a substantial increase in their entitlements and as such they will be able to consider a more extensive period of paid leave. For example, University of Melbourne staff with more than five years experience receive 24 weeks of leave at full pay, and the addition of the government’s scheme will increase the total paid leave to 42 weeks. Many industries have parental leave schemes that have been built up over many years through industrial agreements negotiated between unions and employers. They change wildly depending on the industry and, quite often, the employer. Australian unions and employers that have been involved in those negotiations over the years to bring about advances in workplace conditions, especially for working women, should be congratulated. The scheme that we have now put on top is in many cases a fantastic bonus. This new government scheme will augment current entitlements and extend paid leave to employees that do not have any form of paid leave and to business owners.
The government’s Paid Parental Leave scheme is fair, balanced and economically responsible. The scheme will benefit employers by assisting them to retain skilled and valuable staff without having to fund parental leave pay. Employers are integral to the rollout of Australia’s first national paid parental leave scheme. Most women will receive government funded paid parental leave through their employers. By receiving parental leave pay through their usual pay cycle, just as other workplace entitlements are paid, women will remain connected to their workplaces and, I hope, be more likely to return to work at that workplace. Previously, to access some form of leave, some women would resign their jobs and receive their leave entitlements. As the employment relationship had been severed, returning to that employer was always going to be less likely. Employers will provide parental leave pay for their long-term employees—those with at least 12 months of continuous service. Other working mothers will receive parental leave pay from the Family Assistance Office.
The Paid Parental Leave scheme has been introduced at a time when the right to request a return to work on reduced or flexible hours has been enshrined in the changes that were part of the scrapping of the Work Choices legislation. Very soon Australian families will be able to incorporate the government’s Paid Parental Leave scheme, any employer scheme they may have and a return to work at reduced hours into their plans. This will mean that leaving the workforce for a period to care for a baby and then returning to the previous position becomes the norm for our community, as it always should have been. This will have great benefits for our community, reducing the financial pressures on young families, and it will have great benefits for Australian businesses as they can retain their skilled and knowledgeable employees, who will be much more likely to return to their workplace. I commend these bills to the House.