Monday, 31 May 2010
Paid Parental Leave Bill 2010; Paid Parental Leave (Consequential Amendments) Bill 2010
I welcome the opportunity to speak on the Rudd government’s Paid Parental Leave Bill 2010 and the cognate bill, the Paid Parental Leave (Consequential Amendments) Bill 2010. Being one of the final speakers on this debate, many of the relevant matters relating to this proposal have already been raised by other speakers, particularly from this side of the House. I will, however, outline once again the key provisions of the government’s Paid Parental Leave proposal. The government funded scheme will provide parental leave pay to mothers and adoptive parents who have been working and who have a baby or adopt a child on or after 1 January 2011. To be eligible for the scheme, claimants will need to meet the Paid Parental Leave work test, income test and residency requirements. Paid parental leave will be for a maximum of 18 weeks and must be taken in one continuous block. A person will be eligible if they have individual income of $150,000 or less in the financial year before the claim or birth of the baby, whichever is earlier. Parental leave pay will be paid at the rate of the national minimum wage, which is currently $543.78 per week before tax, and will be treated in the same way as other taxable income. Parents can nominate when they wish to receive their pay and all the pay must be received within the first 12 months after the date of birth or placement. Parental leave can be received before, after or at the same time as employer provided paid leave, such as recreation or annual leave and employer provided parental leave.
If a person returns to work before they have received all of their 18 weeks of paid parental leave, the person’s partner may be able to receive the unused amount of paid parental leave, subject to meeting eligibility requirements. Otherwise paid parental leave will stop when the person returns to work. If parents are not eligible for or do not choose to receive paid parental leave, they may be able to receive the baby bonus and family tax benefit under the usual rules. Parents will lodge their claim with the Family Assistance Office, which will assess their eligibility. Once the scheme is fully implemented, parental leave pay will be provided by employers to their long-term employees. I understand there will be a six-month transition period before employers take responsibility for providing the pay. The Family Assistance Office will send a notice to an employer if they are required to pay an employee parental leave pay. It will also advise the parent of this. In other cases, the Family Assistance Office will make the payment directly to the parent.
The Rudd government’s Paid Parental Leave scheme follows an extensive consultation period in August, September and October 2009 with key stakeholders, including major employee and employer peak bodies, representatives of small business, family and community stakeholder groups, tax professionals, payroll specialists and payroll software developers. There were also consultations with the state and territory governments. I understand that 32 consultation meetings and teleconferences were conducted with over 200 representatives. Feedback from the consultations was taken into account in the development of the Rudd government’s scheme.
Unpaid parental leave is already provided for under the National Employment Standards in the Fair Work Act. Under those provisions, employees have the right to separate periods of up to 12 months of unpaid parental leave relating to the birth or adoption of a child. There also exists the right for a parent to request an additional 12 months of unpaid parental leave, and that request can only be refused by the employer on reasonable business grounds. The National Employment Standards also provide rights relating to flexible working arrangements for parents. These, however, are unpaid provisions. Whilst there are some private employers with schemes in place, it is only with the introduction of these bills that parents for the first time ever have a government funded national paid parental leave scheme in place.
Australia lags well behind the rest of the world in supporting new mothers. It is my understanding that over 157 nations around the world have some kind of paid parental leave provisions already in place. The consequence of Australia not having paid maternity leave is that Australia has one of the lowest levels of workforce participation for women between the ages of 25 and 44 and is ranked 23rd out of 24 OECD nations. Australia and the United States are the only two OECD countries that do not offer paid maternity leave at the moment. It is estimated that under this scheme about 148,000 parents, mainly women, will be eligible for assistance.
I welcome the support for a paid parental leave scheme from some of the members opposite, although I notice that there is not unity on this issue amongst all coalition members. I also notice that there have not been a large number of opposition members prepared to come into this place and speak on this bill. I wonder whether that reflects the fact that they do not all support it or that they do not support their own leader’s amendments.
Since the Leader of the Opposition has now proposed his own paid parental leave scheme, I take this opportunity to make some observations on the coalition’s stance on this issue. I note the comments already made by the member for Solomon and the member for Robertson earlier on, and more recently by the member for Moreton, in respect of the opposition leader’s position on this very important issue. My first observation is the criticism by some members opposite that the government’s scheme does not include superannuation payments within it. These are the same opposition members who right now are opposing the government’s efforts to raise the superannuation guarantee levy from nine per cent to 12 per cent. When it suits their purpose they believe in superannuation; when it does not they oppose it. Coalition members simply cannot have it both ways when it comes to the question of superannuation. If it is so important that it ought to have been included in this scheme, then it is important enough for them to be supporting the government’s measures to increase the levy for the working people of Australia from nine to 12 per cent, as the government is proposing to do. Yet they do the exact opposite and oppose it. Clearly, that is hypocrisy.
Let me address the alternative policy on leave put forward by the opposition leader. In a desperate act by a desperate opposition leader, who knows he only has one shot at becoming Prime Minister and who is prepared to do and say whatever it takes, we saw the opposition leader go from one extreme position to another extreme position. This is the man who said in 2002, and I will quote him as did the member for Moreton a moment ago:
Compulsory paid maternity leave? Over this government’s dead body, frankly. It just won’t happen …
He has now taken that extreme position to a completely new level—and I heard his address to this parliament in respect of this bill in which he talked about how he had changed his mind and the like. But in fact he had five years as a member of government after he made that statement in 2002, if he had changed his mind or was coming around to understanding the importance of paid parental leave, in which to move some kind of amendment or even to suggest that he had a different view of the matter. He never did, so in effect this is a policy reversal that has occurred in just over a period of two years. Effectively he has changed his position from the time he left being in government to then being in opposition. That has happened in just over a two-year period.
Having changed his mind in just over two years, he now wants the Australian people to believe that he is legitimate and serious as to his proposal. It might seem absolutely reasonable in normal circumstances to change your mind. But in this instance, in changing his mind, he has gone from one extreme position to another. He now wants to take us from no scheme at all to a scheme that pays some mothers up to $75,000. It is pretty hard to believe and, quite frankly, I do not think too many people do believe it. Perhaps he is hoping that he can stand on the platform of a scheme that will pay mothers up to $75,000 while knowing full well that this bill will get through the parliament and then he can quietly distance himself from his original proposal. So that gives him the opportunity to walk both sides of the fence at the same time.
But that is only one element of the opposition leader’s extreme position on paid parental leave. His policy was developed without any public consultation whatsoever, without any government inquiry or investigation to support it and without any consultation with his own coalition members. It is pretty extreme when he is prepared to come into this House with that kind of a policy, having gone through none of those processes, and say that he stands for something. It is pretty extreme, but one should not be surprised. This was the opposition leader’s policy and his alone. He made it—as he makes other statements, without thinking—believing that this was one way that he could win back the support of women voters in this country. How can it be taken seriously? Quite frankly, it cannot. How can the Australian people have any confidence that if elected this opposition leader will even implement a paid parental leave scheme, let alone a scheme which imposes a 1.7 per cent tax on larger businesses? Does anyone seriously believe that larger businesses will allow the opposition leader to do that if he is elected? Does anyone seriously believe that they will allow him to get away with that? I certainly do not.
There is another aspect of the opposition leader’s scheme which I also find fundamentally wrong. It is my view that all mothers should be valued equally if they forgo working income to have a child. Under the opposition leader’s scheme, some mothers could be paid around five times as much as others. If you want to argue that the basic minimum wage is insufficient, then do that—and that is a legitimate argument to have—but do not differentiate between mothers for payments which ultimately come out of the public purse from tax. This parental leave scheme is paid for out of a public tax revenue. Whether it is revenue raised by adding a 1.7 per cent tax on larger businesses becomes irrelevant. The money goes into general government revenue. We do not provide unemployment benefits to Australians at the rate of their last employment income. We do not provide pensioners with pension payments at the rate of their last employment income. They are all treated equally when Australian tax revenue applies—and quite rightly so. They will also be treated equally under the Rudd government scheme but not under the opposition leader’s scheme. It is a major flaw in that scheme.
Other speakers have spoken in this discussion about the financial pressures on families and the costs of parenthood, and I agree with the views generally expressed. There are, however, other social consequences and costs which I believe a paid parental leave scheme may assist with. In fact, I am quite confident that it will assist. Statistics over recent decades confirm that mothers are having children at an older age. In 1975 the median age of mothers was 24 years. In 2000 it had risen to 29 years of age. Whilst I do not have the latest figures, the median age of first-time mothers is expected to reach 31.2 years this decade. In other words, the median age of mothers has risen by seven years, from 24 years of age to 31 years of age, over the last three decades.
The wish to have financial security and financial independence has been identified as a primary cause of the higher median age for first-time mothers. In other words, the reason why many mothers are having their children at a later stage of their life is that they want to ensure that they have the financial security to look after those children. That is being quite responsible. We have all heard about the financial pressures on families today. But the fact is that financial pressures are driving mothers to have children at an older age in life.
Providing paid parental leave may begin to lower the average age of mothers having children. Having children at an older age causes some concerns and complications. Firstly, conceiving a child becomes more difficult. Secondly, the risk of pregnancy complications or serious health issues for both the baby and the mother increases considerably as the mother’s age increases. For example, for a woman aged 20 the risk of Down syndrome in the child is one in 1,000. By the age of 30 this risk increases to one in 600. At the age of 35 it is one in 225 and by the age of 40 it is one in 62. So it goes from one in 1,000 at the age of 20 to one in 62 at the age of 40.
There are numerous other health risks for both the mother and child as the age of the mother increases; health risks which have social, emotional and financial consequences. So it is in the mother’s interest, the baby’s interest and the nation’s interest for mothers to have children in their 20s rather than in their 30s. Paid parental leave will enable many of them to do exactly that.
I want to conclude my remarks by commenting on one aspect of the amendment that the Leader of the Opposition has moved. He has moved that the House:
(10) acknowledges that the bill places a totally unnecessary impost on Australian businesses by requiring employers to act as paymasters for eligible employees …
The member for Solomon raised this matter as well. If anything is going to put additional pressure on businesses, it is the 1.7 per cent levy that the opposition leader’s proposal places on them. To suggest that the flaw in the government’s system is that employers will be making the payments and to ignore the real burden that the opposition leader’s proposal would put on them is absolute nonsense. I simply say, as I have said in this place on many occasions before, if you look at the track record of the Rudd government since coming to office you will see that this is a government that is truly supporting business out there in the community. The addition of a 1.7 per cent levy on businesses around Australia who turn over more than $5 million—and you do not have to be a big business to do that today—would be an impost that many of them simply do not need.
This bill complements other measures already taken by the Rudd government—for example, raising the child care tax rebate from 30 per cent to 50 per cent and providing education rebates of $375 for primary school children and $750 for secondary school children. This scheme is fully costed and fully funded. I am also pleased to see that the minister has announced that this bill will be reviewed within a couple of years of being in operation.
Finally, the measures in the Paid Parental Leave (Consequential Amendments) Bill 2010 relate to fixing up anomalies in respect of social welfare payments and income provisions of the taxation laws. Whilst I will not go into the detail of them, I believe that the bill needs to be supported because, if it is not and the parliament supports the Paid Parental Leave Bill 2010, then there will obviously be ramifications for a whole range of other payments that are currently being made to people. I commend the minister and everyone who has been associated with this legislation and I commend the bills to the House.