Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Hansard source

I will go to the member for Kennedy’s amendments which he has just moved. The primary purpose of his amendments, as he has just outlined, is to remove the role of employers in providing parental leave pay to their long-term employees. The first thing I would like the member for Kennedy to be aware of is that we are requiring that this role be undertaken for long-term employees only—that means employees of more than 12 months. That is the first thing. It will not apply to shorter term employees. To give the member for Kennedy an idea of how many people we expect this to apply to, we understand that only nine per cent of all businesses will be a paymaster in any given year. (Extension of time granted) I understand the member for Kennedy’s concerns about small businesses, and I think his points are well made, but I inform him that we expect only three per cent of small businesses to be the paymaster in any one year. So we expect a very small number of small businesses to have to undertake this task.

The other remark I would make is that the member for Kennedy’s amendments are really contrary to the whole objective that the government has. We do want to see employers having a role in the whole Paid Parental Leave scheme. We want to see that paid parental leave is delivered as an entitlement for women participating in the workforce. That is one of the reasons we are having employers be the paymaster to their eligible long-term employees, in exactly the same way that they currently pay them.

There are a couple of other things that I think might help the member for Kennedy. We certainly understand, as many employers do, that paid parental leave really does return benefits to employers. Many employers understand that, and that is of course why they offer their own paid parental leave schemes. One of the things we have done in this legislation is delay the requirement on employers to be the paymaster, so they will not have to start being the paymaster for their long-term employees until after 1 July next year. This recognises that they need a little bit of time to get used to the new scheme and also ties it in with the beginning of the financial year. If employers do not want to start that on 1 January, when the scheme begins next year, the Family Assistance Office will make the payments for the first six months.

We also will be providing employers with the necessary funds to pay parental leave pay in advance. We certainly do not want to have any adverse impact on their cash flow. Employers will not be making superannuation contributions during the paid parental leave period. They will not accrue any additional leave entitlements during a period of parental leave pay. Also, employers will not have to change the normal pay cycle. They will not have to set up any special accounts or report back to the Family Assistance Office. They will just have to do what they normally do, which is pay the parental leave pay to their employees with the usual tax deducted. The estimated transitional costs are in fact very small and, based on Productivity Commission analysis, will be far outweighed by the benefits that employers will receive through retention of any skilled staff.

Finally, I say to the member for Kennedy that any reasonable costs incurred by employers will of course be tax deductible. As a result, we will not be supporting these amendments.

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