Alannah Mactiernan (Perth, Australian Labor Party) Share this | Hansard source

The women on the minimum wage will get the minimum wage. The scheme is very unlike any other government payment because the more you earn, the more you get, which is completely contrary to the general payment scheme.

The justification that the Prime Minister always gives us for this little pet project of his is that this paid parental leave is a workplace entitlement; it is not a welfare entitlement and should be paid at people's wages in the same way that sick pay or holiday pay is paid at people's wages. This is a very different thing from any other benefit. According to the Prime Minister, this is scheme completely different and all those other benefits that were being alluded to by the member for Mitchell are to be assessed in a different way. As it is a workplace entitlement then clearly it makes sense for it to be an entitlement that is paid for by the employer—although quite clearly the employer has to be properly compensated in advance so that there are no cash flow problems as a result of having to pay this entitlement. Indeed, this notion that an entitlement like this should in fact be paid for through the employer is not something that has just been invented by the Labor government but, indeed, was the recommendation of the Productivity Commission. The Productivity Commission, in providing its analysis of paid parental leave, said:

Given the desire to link paid parental leave to work—

which is clearly something Prime Minister Abbott wants to do—

where an employee has reasonable tenure with an employer, the employer would act as an agent for government and pay the statutory leave payment on its behalf. This is the arrangement used in the United Kingdom.

They go on to say:

Structuring payments in this way would strengthen the link between the employer and employee, which should increase retention rates for the business (and lead to higher lifetime employment by women).

They go on to recommend that there be prepayment of this money so that there are not cash flow problems. As I understand it, that is what was duly implemented.

So here we have the Productivity Commission saying that it is important to create this linkage between the employer and the employee on paid parental leave. We have got the Prime Minister going into overdrive trying to justify what could only be, in the current climate, considered to be overly generous arrangements for a certain segment of the community, saying these are workplace entitlements; these are completely utterly different from any of the entitlements that are paid by government. Yet we had the member for Mitchell and the member for Corangamite before that come in here and say 'these benefits should be considered in the same light as every other social benefit that is paid out by the government'. So it is really important for us to stand up in the debate on this piece of legislation and say we are not going to support it because it absolutely underpins the hypocrisy of the Prime Minister in this whole scheme.

Before their last election, Labor committed to providing some relief for small businesses, and there was an acknowledgment that when you are dealing with very small businesses—20 employees or fewer—they are unlikely to have HR staff and, therefore, we were prepared to look at an exemption in relation to those small businesses. But there was not this general opt-out; in a scheme that has now been sold to the public as something completely different from all other welfare payments, and that has been used, as I said, to justify the excessive nature of this scheme.

I want to talk about many of the things that the member for Hotham has raised. As someone who has had children and known what the difficulty is for young mothers returning to the workforce, I want to highlight the complete implausibility of even the Prime Minister's stated intention for this overly generous paid parental leave that is quite clearly being funded in part from a tightening and a holding back on childcare payments.

I know from my own experience and I know from dealing with the young women in my electorate who want to return to work that the biggest problem is the availability of child care, and second to that is the cost of child care. Even the availability is a massive problem in Perth. Trying to find somewhere to provide care, and decent quality care in particular, particularly for children under two-years-old, is the greatest impediment for women returning to the workforce.

The Productivity Commission had some really interesting things to say about the proposal for full replacement wages which is effectively what we are getting here:

Payment at a flat rate would mean that the labour supply effects would be greatest for lower income, less skilled women precisely those who are most responsive to wage subsidies and who are least likely to have privately negotiated paid parental leave. Full replacement wages for highly educated, well paid women would be very costly for taxpayers and, given their high level of attachment to the labour force and a high level of private provision of paid parental leave, would have few incremental labour supply benefits.

So any rational analysis of the government's scheme for replacement wages, as opposed to the payment at a flat rate, tells you that this is not good value for money. If your aim is to try to get women back into the workforce, this is not how you do it. They point out that 'women on higher incomes are very likely to have a high level of attachment to the labour force' and there will be 'few incremental benefits to labour supply' by directing the replacement wages policy.

Can you imagine if we were putting $5 billion a year into child care? Imagine how that would revolutionise the participation in the workforce of women with young children. I put it to you that even if we were adding $1 billion a year to child care we would see a marked increment in the number of women that would be returning to work and the amount of hours that were spent by those women who have returned to work.

Common sense—combined with one's knowledge of the challenges to young parents, particularly women, wanting to return to work after they have had a child—will tell you that the additional money should not be put into providing more money to wealthy women to stay at home. Those women, in all likelihood, will be returning to work, because of their pay levels and their education levels and because of what they can expect when they return to work. Every economic bone, every common sense bone, every equitable bone, in one's body should tell you that this vast investment, this vast increment of money, that is going into this replacement wages policy of paid parental leave is going down the wrong path. A very considerable proportion of this money should be put into beefing up the availability of child care.

But in this budget we get the opposite. We get a significant scaling back of childcare benefits. We see the childcare benefit threshold frozen; we see the childcare rebate cap frozen. One of the appalling things we see is the universal access to preschool—almost $500 million per year—discounted. This is where we get kids going to kindergarten for four-year-olds, and the Commonwealth assistance to that being cut. This is an absolutely retrograde step, not just for child care and women's participation. The outcomes that we are getting in performance at school as a result of introducing universal access to kindergarten has been huge. This is a cut not only to child care; it is also a dreadful cut to our education standards. We see the Jobs, Education and Training Child Care Fee Assistance scheme cut back while, at the same time, the Prime Minister is saying that he is going to cut back on family tax benefit B because no-one should be sitting at home once their child is six and expecting the taxpayers to support it. But where are you going to put the child when outside school hours childcare places have been cut? If you are wanting to return to work and you have a six-year-old child, during school holidays and after school hours, you are going to require out-of-school care. We have seen $450 million cut out of the after-school-care budget.

All of these positions that have been embraced are completely and utterly contradictory. They say they want to cut out the 'age of entitlement'. They say that people should be going back to the workforce once their kids turn six, but they are cutting the availability of child care for that. This is at the same time as they are embracing a replacement wage policy for paid parental leave that, on any economic analysis, is shown to have very, very few incremental labour supply side benefits.

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