Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Hansard source

I rise to speak on the Paid Parental Leave Amendment Bill 2014. If you listened to the previous speaker, you might think that this was the bill that actually introduces the rolled-gold Paid Parental Leave scheme of the Abbott government, but actually it is not. In fact, it is likely to be some time before we see that bill, because, even though it has been a central, core promise—

Mr Chester interjecting—

A signature policy, says the minister sitting opposite—it actually has not managed to make it to the budget. Even though the coalition have been in government for eight months and they have known about this scheme—and presumably they have had all the time in the world to work it out—it is still actually not in the budget. It is in the contingency reserve, so we are told. It is clearly not developed enough at this point to be solid enough even to be in the budget, let alone to be in a bill before this House. This bill actually deals with how the current Paid Parental Leave scheme is paid. It was interesting to hear the member for Lyons talk about this not being a welfare payment, because the purpose of this bill is to transfer the payment from business to Centrelink. This bill makes the Paid Parental Leave scheme a Centrelink payment. It is quite interesting that they do not see it as a welfare payment, although it will be going through Centrelink.

The current Paid Parental Leave scheme was introduced in 2011 by the Labor government. It was Australia's first Paid Parental Leave scheme, and I consider it to be one of the Labor government's quite extraordinary achievements. Since then, it has benefited more than 340,000 families. An additional 40,000 dads and their partners have benefited from dad and partner pay since it came into effect in January last year. The scheme was designed to benefit all Australian families, but particularly it assisted those on low and middle incomes, many of whom were in casual and part-time work. It pays 18 weeks at the minimum wage. Around 55 per cent of working mothers had no access to paid parental leave at all before Labor's scheme was introduced. Today, access to paid parental leave stands at around 95 per cent of all working mothers. It is interesting to note that the median income of these women is around $45,000—so the median income of 95 per cent of working mothers is actually less than the amount of the Prime Minister's scheme, which is $50,000.

The new scheme will come with a cost of $5.5 billion a year. That is $21 billion over the forward estimates. One of the reasons why those of us on this side of the House have a difficulty with the size of this scheme being $5.5 billion a year is the cuts that the government is making in order to afford this extraordinary $21 billion hit over the forward estimates. We are seeing a slashing of family payments, cuts to pensions, cuts to health, cuts to education, and a $7 co-payment on GP visits. On the one hand, the people who are least able to afford it are being well and truly harmed by this budget of broken promises, but, on the other hand, the government has found $21 billion over the forward estimates for this rolled-gold Paid Parental Leave scheme.

I want to speak mainly about this particular bill because it is a really interesting bill. There will be some people out there that are not particularly interested in the figures that sit behind this bill, but I think it is worth having a look at how the government came to their conclusions and what they covered in the regulatory impact statement that supports this move of the Paid Parental Leave scheme from business to Centrelink. They really are quite interesting. I have to say it is some of the most amusing maths I have ever seen. If it were not for the fact that a government have relied on it, I think I would have spent more than the 10 minutes that I spent laughing when I first read this regulatory impact statement. The figures that they use to support their claims about savings in red tape as the rationale for moving the Paid Parental Leave scheme from business to Centrelink are not just rubbery; they are complete rubbish. By the time I have finished going through this, I do not think anyone out there who understands maths at all will disagree with me. I suspect there are not many on the other side that actually understand maths or they would be a little embarrassed by this.

Minister Billson claims that moving the payroll function of Paid Parental Leave from business to Centrelink will save $48 million per year. For that to be true, the public sector—Centrelink—must be able to deliver payroll services to employees of a business more cheaply than the business itself can, even though the business already has set up the payroll, already knows when the person is going on leave, already has their tax file number and has already been producing group certificates. It is already set up; just the amount changes for 18 weeks.

According to the regulatory impact statement, it is cheaper for Centrelink to set up all of those things and pay a person whom they have not paid before than it is for a business. In fact, it is 31 times cheaper for Centrelink to set up the payroll and pay a person than it is for a business, which already has it all set up and has already been paying the person. Thirty-one times cheaper! If that were in fact true, then I would suggest that many businesses should outsource their payroll to Centrelink, because 31 times cheaper is an extraordinary result.

According to the regulatory impact statement, for Centrelink to pay a person for 18 weeks it would cost $28, yet for a business to pay that same person it would cost $880, even though the business has already been paying that person a wage, so the payroll is already set up. Centrelink sets it all up and manages to do it for $28.

I have calculated those figures, because there were no totals in the RIS, based on the 50,000 people who had received paid parental leave each year in the two years leading up to the regulatory impact statement. The numbers seem to be slightly higher than that, which means that Centrelink would be able to do it for presumably less than $28. But, again, that is an extraordinary achievement. It flies in the face of all the arguments that the private sector is far more efficient than the public sector. In order to get these results, you have to realise that the government has seriously fudged its figures.

According to the regulatory impact statement, the median cost of administering the Paid Parental Leave scheme for business is $1,783. That is actually written in the regulatory impact statement. But the median is the mid-point of a series of numbers. That means half the businesses must be paying less than that and half the businesses must be paying more than that. But, if you look at the series of numbers, you will see that over 80 per cent of respondents put the cost at less than $1,000. So if 80 per cent of the respondents put the cost at less than $1,000 and half put it at less than $250, the median cannot be $1,783. It cannot be nearly twice as high as the 80th percentile. It simply cannot. It must be closer to $250.

The regulatory impact statement also says that the median number of hours for a business to implement the Paid Parental Leave scheme is 22 hours. But the median cannot be 22 hours, as well over half the results show fewer than 15 hours. These are not fudged figures; this is profoundly flawed maths. In fact, it is not maths. A high school student would be able to drive a truck through this. It cannot be the case that the median is 22 hours if over half the respondents say that it takes fewer than 15 hours.

Forty-six per cent of respondents said it took fewer than five hours, and the government comes up with a median of 22 hours. This cannot be true. I think the STEM education level in our parliament is seriously lacking. I would suggest that the government start doing something about it, because this is not just shonky maths; this is fantasy land. It is a basic misunderstanding of words such as 'median'—

Mr Chester interjecting—

The interjector says, 'Swanny was good with numbers.' I never saw the ex-Treasurer do something as extraordinarily bad as this. This is extraordinary.

Mr Chester interjecting—

I will leave the interjection, because clearly the interjector does not understand the maths, either, or he would be a bit embarrassed at the moment, rather than trying to make excuses for the government.

The government claim to be removing red tape. But, in this case, they are simply moving it. Moving the burden of red tape does not save the bottom line, although the government claim that they are saving $48 million. It simply moves those costs to another department. That $48 million figure is calculated on some of the most extraordinarily fraudulent maths that a high school student would get a giant F for. In fact, a grade 8 student would get a giant F for this maths.

Fifty-four per cent of employers disagreed with the statement that organising payments for the Paid Parental Leave scheme has been time consuming. Only 29 per cent stated that additional costs were involved in implementing the scheme. Of those reporting additional costs, 94 per cent of employers stated that those arose from extra workload that they took on themselves, rather than from purchasing new payroll systems or hiring extra administrative staff. Seventy-four per cent of employers said the Paid Parental Leave scheme was easy to implement. If it was so onerous, as the government claims, why did 11.7 per cent of businesses that did not have to pay parental leave do so when the requirement, according to the government, was so onerous?

Labor introduced a Paid Parental Leave scheme, back in 2011, which, as I said, we were very proud of. We set it at 18 weeks at the minimum wage. We deliberately began this program in a modest way because it had to be sustainable. We started it in a modest way. We also wanted to have further discussions with the community, women, families and childcare centres about where we went from there. We were already hearing from women that issues such as superannuation and child care in the longer term were as important and, for some of them, more important than paid parental leave. So we knew we had a rather complex world to negotiate. We knew there needed to be a lot more discussion with parents and with childcare centres about where we went with this program in the future. Unfortunately, the current government has not had those discussions. We are already hearing loud and clear from women that the childcare issue is a far greater impediment to returning to work than paid parental leave. Of course, childcare costs last for an incredibly long time. They can last for 12 years or more. Again, there is nothing in this budget that gives women hope that child care will be a focus of this government; neither have we seen this government focus on superannuation. In fact, we have seen a delaying of the increase in the super guarantee levy by a number of years. So, again, the issues that women are talking about have been ignored by this government. It is a thought bubble of the previous opposition leader, Mr Abbott, turned into a core policy and a signature policy, and a refusal to waver from that policy, in spite of extraordinary feedback from the community that there are other issues that are far more important than this.

I have also heard from some of the childcare centres in my electorate which are also concerned about this rolled-gold Paid Parental Leave scheme. If you think about it, it is really obvious that if a woman, who already has one or two children, is given six months on full pay under the Paid Parental Leave scheme, she will take both of those children out of child care. Again, I am not arguing whether that is good or bad for the family. What I am saying, though, is that there is considerable concern within the childcare sector that this rolled-gold Paid Parental Leave scheme will affect their viability and their ability to continue to offer childcare services.

There are a number of elements that I think the government have not considered—let's face it, they have not yet introduced it, because they still do not have the numbers; they are still working on it eight months later—when they put this program together.

Again, I just want to point out that this particular bill and its regulatory impact statement, and for that matter its explanatory memorandum, include some of the shonkiest maths I have seen in a long time. When the government tries to claim $48 million in savings from this move, we need perhaps to get 13- or 14-year-old maths student to redo the calculations. I am sure they can do a better job. The median is the midpoint in the series of numbers. If 80 per cent of the numbers are under 500, the median cannot be 1,700. It just cannot be. It is shonky maths and a shonky program.

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