Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Hansard source

I wish to congratulate and thank the member for Warringah for putting this very important issue on the agenda here today. It's an issue that is seeing a constraint on Australia's economic development and a constraint on the development of families in our community as well.

Australia's Paid Parental Leave scheme was introduced by Labor and started on 1 January 2011. When the scheme was introduced, Australia was one of only two OECD nations that didn't have a national scheme of that nature, with the United States being the other. In 2021, the current Paid Parental Leave scheme is up to 18 weeks at the minimum wage, and it's below the OECD average of 50-plus weeks leave. Australia now ranks fourth among OECD nations for some of the highest childcare costs in the world.

Paid parental leave signals to employers and the Australian community that parents taking time out of the paid workforce to care for a child is part of the usual course of life and should be supported by government. It also enables participation of women in particular in the workforce. A high workforce participation rate is important in the context of an ageing population and the economic recovery from the impact of COVID. It helps to address the gender pay gap as well, particularly for those women on low and middle incomes who have less access to employer funded parental leave.

The gender pay gap remains a big problem in Australia and has remained stubbornly high over the past two decades, with only minor changes widely attributed to the ending of the mining boom. If the Morrison government were genuinely serious about fixing the gender pay gap, they would oppose cuts to penalty rates. The vast majority of workers who have had their penalty rates cut in this country have, unfortunately, been women working in itinerate work in the hospitality and retail sectors. Those cuts to penalty rates are exacerbating the gender pay gap by making it harder for women to earn a decent income and to pay the rent and cover their bills.

Paid parental leave is also meant to promote equality between men and women and the balance between work and family life, yet the shortcomings in the current approach are impacting constituents not only in my electorate but across the country. One example is Catherine. Catherine is the main income earner in her household, but she is unable to receive paid parental leave support because her income is too high, yet if their roles were switched and her husband was earning the same salary then Catherine would be entitled to the benefit. It's because the current test is based on the mother's income, not the overall household income. That is not only hampering that particular family's earning capacity and ability to support their family and grow it but also a handbrake on our economic development. With gender roles now less defined and double income the norm, is it the best approach to be helping working families if we have this impediment built into the system?

This is particularly the case given that increasing childcare costs are also locking many Australian parents out of the workforce. We've seen in the recent Productivity Commission report on government services in 2021 that almost 300,000 Australians are not in the labour force because they are caring for children, and the number of parents saying they are not working mainly due to the cost of child care has skyrocketed by 23 per cent. This confirms that the cost of child care is prohibiting Australian parents from working the hours that they want. With the Morrison government itself predicting fee increases without CPI for years to come, the hits will keep on coming for Australian families.

It is clear that there is a problem in this area, and that is why Labor has developed its plan for cheaper child care—to support those working families to work the hours that they can and want to support their families. That's why we will scrap the $10,500 childcare subsidy cap which often sees women losing money for working an extra day's work; lift the maximum childcare subsidy rate to 90 per cent; and increase the childcare subsidy rates and taper them for every family earning less than $530,000 a year. Importantly, the ACCC will be tasked with designing a price regulation mechanism to ensure that the costs are kept down. It's important that we support families to work the hours that they need to support their family as it's growing. But the current system is an impost on that, because working that extra day is often impaired by the way the subsidy works. That's why Labor's plan will deal with this issue.

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