House debates

Thursday, 24 February 2011

Paid Parental Leave (Reduction of Compliance Burden for Employers) Amendment Bill 2010

Second Reading

9:51 am

Photo of Bruce BillsonBruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Hansard source

in reply—In summing up the debate on the coalition’s private member’s bill, the Paid Parental Leave (Reduction of Compliance Burden for Employers) Amendment Bill 2010, I would like to acknowledge the contributions of all members to the debate. I particularly want to recognise the contributions of the members for Farrer and Forrest for their very clear articulation of the coalition’s clear desire not to in any way delay or impede eligible recipients accessing the government paid parental leave payment entitlements.

Coalition members reiterated that this bill is solely about reducing the compliance burden on employers in the processing and delivery of those payments. The member for Forrest, Ms Marino, highlighted the great demands on employers in her electorate, particularly on small business people. Ms Marino spoke about how employers already face challenges in replacing a valued staff member who is absent on maternity leave and how the last thing a workplace facing this change and adjustment needed was additional and unnecessary red tape and compliance burdens. The member for Farrar, Ms Ley, emphasised how the government’s current arrangement, which has the Family Assistance Office administering the payments in a more user-friendly process, is in fact the very administrative arrangement that has supported the government’s boast about the success of the Paid Parental Leave scheme. Ms Ley correctly identified the central role of the Family Assistance Office and how it will continue to play a role in receiving PPL applications, handling queries, resolving eligibility concerns and making payments to employers simply to have the employer on-pay what the FAO determines to be the correct amount.

The bill simply seeks to retain the Family Assistance Office as the government payment agency for the government PPL payments and not have the PPL pay clerk role and all of its associated costs, risks and compliance burden handballed from the Commonwealth to all employers from 1 July. Employer organisations, the small business community, payroll professionals, business advisers and managers are all deeply concerned about being forced to be the pay clerk for the government’s Paid Parental Leave scheme because of the costs, the red tape, the compliance burden and the risks this will impose. These unnecessary and avoidable costs and risks include the need for employers to become familiar with their obligations and responsibilities under the government’s scheme; to make necessary changes to payroll and accounting systems; to undertake staff training; to seek advice; to receive, handle, process, account for and pay instalment amounts in a timely way; to attend to the compliance, verification and reporting requirements; and to absorb the opportunity costs of all of this displaced effort and all these displaced resources that take people away from the business of running their businesses.

The government brushes away these concerns of yet another layer of compliance. These are yet more things imposed by government on small business owners that distract them from nurturing their businesses, creating employment opportunities and contributing to the economy and their communities. The Gillard Labor government sees these genuine and legitimate employer concerns as unimportant and insubstantial, suggesting that these impositions on businesses are very small. The government says that all that is needed is for an employer to make payments through their normal payroll system. Yet the government ignores the impact and complications of its other arguments about other aspects of its Paid Parental Leave scheme, such as the fact that no superannuation is to be paid on PPL payments, how amounts paid are not to be included in payroll costs for payroll tax and workers compensation purposes and how only the processing of PPL payments are to be considered as expenses. It is little wonder that many businesses report that their payroll and accounting software providers have yet to come up with systems changes to accommodate either this whole new arrangement of money coming in from the government just to be passed or the complex reconciliation tasks that sit around this new arrangement.

Despite all of these real and quantifiable impacts on employers, the government continues to defend its decision to impose this PPL pay clerk burden on employers on the basis that forcing its bureaucratic arrangements onto employers will help employees stay more connected with their workplace relationships. Amy Lyden, a respected advocacy adviser for the Australian Businesswomen’s Network, pointed out in her 16 February analysis, ‘Depositing money into one’s account doesn’t constitute a relationship.’ Only an out-of-touch Labor government would claim that forcing employers to spend their scarce time and money changing systems and passing on government funded payments that appear as an anonymous electronic transfer amount in an eligible recipient’s bank account would help women to ‘remain connected to their workplace’. In order to back its scheme, the government falsely users return-to-work data that shows a person is more likely to return to work after an addition to the family, suggesting that having employers as paymasters helps return-to-work rates. What nonsense. It is not who undertakes the keystrokes to see payments appear as an electronic payment entry on a bank statement that influences return-to-work rates. It is instead the family friendly nature, the size and the flexibility offered overwhelmingly by the large and government employers who are fortunate to be able to offer voluntary PPL benefits that support a higher return-to-work rate.

Another argument advanced by the government for relieving the Family Assistance Office of its current payment-processing responsibility and forcing employers to take on tis bureaucratic burden is that it will somehow help to ‘image’ the payments as something other than a government funded family support payment. The government has given this dubious rationale no prospect of credibility, as it spends extensive taxpayer money on its extensive government funded advertising campaign to make sure everybody knows that they are government funded PPL payments. The government can produce no evidence to support this impost of yet another new red tape burden on employers and simply dismisses legitimate costs and compliance concerns as unimportant. This is yet another example of Labor’s indifference to the legitimate concerns and interests of the small business community. According to the most recent ABS figures, this indifference has seen 300,000 jobs lost in small business since the election of the Rudd-Gillard Labor government.

I have heard some commentators simply parrot on about the Productivity Commission as justification for imposing the PPL pay clerk burden on employers. For those time-poor crossbenchers—none of whom are here today—who have many issues on their plates and who are subject to government briefings designed solely to advance the government’s interests and agenda, I recap some of the issues the Productivity Commission actually considered. Interestingly, the ACTU on page 33 of its Productivity Commission submission of May 2008 stated:

The simplest administration system would seem to be that the government provides the safety net component to all new mothers via the existing welfare system, as it already does with the baby bonus. Employers would provide any additional top up payment to employees as per their usual methods.

That seems to back the coalition’s position. In its final report, the Productivity Commission recognised that the ‘staying close’ and ‘signalling benefits’ arguments that the government is offering are hotly contested by employer groups. On page 8.34 of the commission’s final report, it is very cautious and very qualified in concluding:

Benefits from assigning payment responsibility to employers are sufficient to favour the approach over direct government payment in most cases.

The commission recognised that small businesses would be burdened most by the imposition of the PPL pay clerk role but comforted itself by suggesting that there is only a small percentage of small businesses that might have an employee eligible for PPL and that that somehow made it less of a concern.

This does not negate the need to prepare for this PPL pay clerk role. A significant proportion of potentially eligible PPL recipients work in sectors where the majority of employers are in fact smaller businesses. This issue and the government’s ‘it won’t happen much’ argument have been strongly challenged, even in Centrelink’s own implementation consultation processes, where the data they relied upon has been challenged time and time again. If a very contested, qualified, cautious and on-balance view from the Productivity Commission is thought to be persuasive on how crossbenchers might vote on this issue, then an adamant, forcefully put view by the commission must be a knockout and give all members the opportunity to vote in favour of this bill. Guess what? The commission has offered that knockout conclusion that I draw the crossbenchers’ attention to.

We know the government has failed to provide any—


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