Monday, 31 May 2010
Paid Parental Leave Bill 2010; Paid Parental Leave (Consequential Amendments) Bill 2010
I am proud to stand to speak to the Paid Parental Leave Bill 2010. I have been looking forward to its introduction to parliament, as have many people in my electorate. As of 1 January next year it will deliver, for the first time in Australia’s history, paid parental leave. This bill will go down with the great Labor reforms—the pension, Medicare, compulsory superannuation and now paid parental leave. It is that important. It has been a very, very long time coming. There are many people in the community who have been working for decades towards a national paid parental leave scheme. We are so far behind that we are currently one of only two—yes, two—OECD countries without a national paid parental leave scheme. But, as of 1 January next year, eligible parents will receive 18 weeks paid leave at the minimum wage. That date will be an extremely important one for many people in the community.
Our Paid Parental Leave scheme is fully costed and funded and delivered as promised. Early in our term, I am sure there were many women out there who had lobbied so hard for this for so many years who held their breath. We finally had a government prepared to introduce a paid parental leave scheme and we were faced with a global financial crisis that wiped an estimated $210 billion off the bottom line for the government over the forward estimates. Many people wondered whether the budget that was coming up would contain a paid parental leave scheme. Many people held their breath. But it was there. It is being delivered in spite of the financial downturn and here it is in the parliament today.
Currently there are around 176,000 employed women who have babies each year. They have been entitled to unpaid parental leave until now. Some have been receiving paid parental leave but many have not. Most return to work following the birth of their child. Quite a substantial number—about 126,000 of that 176,000—return to work with the employer they had prior to the child’s birth. Around 11 per cent return to work before the child is three months old, 26 per cent before the child is six months old, 57 per cent before the child is 12 months old and 74 per cent before the child is 18 months old. The Paid Parental Leave scheme increases the flexibility for parents. I am sure we all hope that parents who might be in financial difficulties with the birth of a child will be able to spend some more important time with their baby in those early months.
For many people in the workforce, paid parental leave already exists. According to the ABS in 2008, 40 per cent of the then 8½ million employees were entitled to paid parental leave, while 44.9 per cent of female employees were entitled to paid maternity leave. The highest coverage was in areas of public administration and safety—where 82 per cent of employees were covered—and in electricity, gas, water, finance and insurance and education and training, which are mainly government and similar kinds of organisations. The worst coverage was in areas such as cafes, restaurants, the retail trade, administrative and support services and arts and recreational services—that is, many of the industries that have the highest numbers of female workers. Submissions to the Productivity Commission indicate that many of the bigger businesses will continue to offer the added benefits of paid parental leave as a way to attract and retain quality staff and they will do that over and above the entitlements in this Paid Parental Leave scheme. The scheme has been designed so that government paid parental leave can run concurrently with or after any leave that is provided by an employer.
For many parents—and I say ‘parents’ because both the father and the mother are entitled to leave under this scheme, although not at the same time—particularly those in low-paid jobs, there is very little opportunity for paid parental leave at this time, and that causes so many of them to return to work far earlier than desirable. It also leads to those parents using up other forms of leave in order to be able to spend as much time as possible at home with their child. It also leaves them short of leave later in the year and adds considerable stress to families. Families do incredibly important things for the community. They raise children, they educate children and they support those children until they reach working age. We all benefit when it goes right and it costs us all when it goes wrong. It costs us in health, in crime, in welfare benefits and in public housing. These are all costs that we would rather not have, particularly if they come from the difficulties that a child has in its family life.
This bill normalises what actually happens in the workforce: parents work, stop work for a while when a child is born and then return to the workforce. Requiring businesses that have these ongoing employees to make the payments through their normal payroll process helps keep the worker in touch and normalises what happens in the workforce for both employers and the community. The bill also provides support for a family at a very critical time. The birth of a child profoundly changes the world and adds new complexities and, sometimes, strains on the relationships both between the parents and among others in the family. The mother also requires time to physically recover and establish a bond and a feeding routine with the child. If the mother chooses to breastfeed, paid parental leave is, of course, incredibly important. It is worth focusing on that for a small part of this speech.
Overall evidence suggests that there are significant benefits from exclusive breastfeeding for up to six months. The benefits include: reductions in a wide range of infant conditions—for example, respiratory tract infections and eczema; cognitive gains; and reduction of potential adult impacts such as obesity, diabetes and high blood pressure. There is considerable scientific evidence which demonstrates the benefits to us all of a strong breastfeeding culture. Mothers also gain psychological benefits, faster recovery from the birth, reduced risks of breast cancer and ovarian cancer and possibly a reduced risk of postmenopausal hip fractures and osteoporosis. For many women who have to return to work because of the financial circumstances of their family, breastfeeding is not possible for as long as they would wish to do it. This bill is extremely important in that regard. It does provide mothers with greater flexibility to determine how they raise their child.
Many decisions need to be made in designing a paid parental leave scheme: how long the leave is to be, who is to pay for it, whether fathers can access it and much more. This scheme has been developed over two years of work. It is not, like the one proposed by the opposition, a thought bubble. A substantial contribution to its development was made by the Productivity Commission, which delivered a report that in the main has been accepted by the government and its recommendations incorporated in the bill. It was necessary to do that substantial research because debate on the scheme had essentially been stalled under the previous government. We heard the now Leader of the Opposition say quite openly while he was in government that paid parental leave would be introduced over his dead body. So while the community were still talking about it and parents were still talking about it, the debate had been well and truly stalled under the former government.
Women make up a substantial part of the workforce and have been incredibly affected by the lack of paid parental leave until now. Around 45 per cent of those in the working population are women, but our participation rate during the peak child-bearing years is lower than for women in other leading industrialised countries. In Australia, workforce participation by single women is rising while by single males it is actually falling slightly. By partnered females, there has been a substantial increase in workforce participation and a slight decrease by partnered males. So the trend is overwhelmingly that of an increase in the number of women working, yet around one-third of mothers return to work very quickly—that is, within six months—of the birth, and around two-thirds of those return to work because they need the money.
This Paid Parental Leave scheme provides real choices for parents and is remarkably flexible. It allows parents to choose to remain with the baby bonus and family tax benefits if they prefer that option. It allows parents to transfer the 18 weeks from one parent to another if they choose to share the role of primary carer over that period of time. That 18 weeks must be taken in a block, but it can be taken at any time within that 12-month period. So the scheme allows parents to consider the use of other forms of leave and it allows parents to share the role with other family members—it provides an incredible amount of flexibility.
We expect that businesses that already have substantial paid leave will add to this scheme. Submissions to the Productivity Commission confirm that businesses that offer levels of paid parental leave now in order to attract and retain good quality staff are likely to build on this scheme and continue to offer benefits over and above this scheme. We have heard from some that the range of things being discussed with employers range from child care to topping up this scheme and extending leave beyond this scheme. Again, it is incredibly flexible for businesses to offer greater incentives to attract and retain staff.
Our scheme is in complete contrast to the thought bubble put forward by the Leader of the Opposition. Our scheme is costed and funded. It is carefully thought through and is backed up by substantial work by the Productivity Commission and consultation across the community. On the other hand, the opposition’s scheme was an idea for the moment. They are still trying to explain it and define it, and of course it is paid for by a great big new tax on business. It is not costed. As the Productivity Commission report noted—and they considered a range of options similar to this—the opposition’s scheme favours those on the highest salaries. On the other hand, our scheme tends to be more powerful for those on lower wages and casual workers. It is very strong on making sure that people in casual work can access the scheme.
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. That is around one day a week. In addition to full-time workers, women in part-time work, seasonal work, casual work or contract work and the self-employed may be able to access the Paid Parental Leave scheme—many for the first time. Because many contractors, seasonal workers and casual workers work irregular patterns, the scheme allows a person to have a break of up to eight weeks between working days and still be considered to have worked continuously. Parental leave will also be available to parents who work in their own business, a family business or on a farm. A person will be eligible if they have an individual income of $150,000 or less in the financial year before the claim or the birth of their baby, whichever is earlier. It is based on an individual income of $150,000, not a couple’s income.
Casual workers are by far the big winners from the first Paid Parental Leave scheme. Women are far more likely than other workers to be casual. They make up almost 57 per cent of all casual employees in Australia. Almost 20 per cent of employed women work in casual jobs and receive no paid leave entitlements at this point. For them this is a major step forward. Arguably, casual workers would be under the most financial strain after the birth of a child. Under our scheme, an eligible mother who is a contract worker but whose contract finishes before the baby is born will still receive parental leave pay, providing she meets the work test. Parents who are not employed at the time of the birth of their child will be paid directly by the Family Assistance Office. Those who were employed until the birth of their child will receive the payment via their employer. Essentially, their parental leave pay will go through the usual pay cycle. That, again, helps women remain connected to their workplace. This scheme is introduced without significant additional burdens on the employer.
It is estimated that around nine per cent of all businesses will be involved in the Paid Parental Leave scheme in any year and only three per cent of small businesses will be involved. So for businesses, in terms of their company payroll, it will be business as usual, but for families this will be a major step forward in allowing them to spend time with the new addition to the family—bonding as a family and setting up important routines. Importantly, it will provide the mother with an opportunity to recover physically from the birth.
The government understands the importance of reviewing schemes such as this. We have allocated almost $3 million for this purpose. We have committed to a review of the scheme in two years. That is incredibly important. I am sure that many of those who fought so hard for this—they have been acknowledged by several speakers today and I acknowledge them again—have not finished. In the two-year review, I am sure they will be back again and they will be watching this scheme very carefully in the interests of families around the country. We have committed to look at two issues in particular: paid paternity leave and superannuation contributions for the period of paid parental leave. I am particularly glad that we have considered looking at those two issues. They have both been raised by people in my community since we first made announcements about the scheme.
We have waited far too long for this. Australian families have waited too long for a national paid parental leave scheme. I am glad to see it introduced to the House at this time. I hope that the opposition decides to vote for it. At the moment, you never know what the opposition will do in the Senate, but I am hoping, for the sake of Australian families, that they get behind this scheme and vote for it. It is a major win for Australian families. I thank the minister for her work and commend the bill to the House.