House debates

Thursday, 24 May 2012


Paid Parental Leave and Other Legislation Amendment (Dad and Partner Pay and Other Measures) Bill 2012; Consideration in Detail

11:33 am

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

I ask leave to move opposition amendments (1) and (2) as circulated in my name together.

Leave granted.

The amendments that I will put on behalf of the coalition are very sensible amendments. I am reminded, in listening to the minister, that I think Bill Kelty was right—sometimes the truth will do. There is nothing of the kind in the amendments that the coalition is putting forward that does in any way undermine the government's scheme. We have some well argued and clearly articulated views that people's costs do not default to a minimum wage when a child arrives—people's household expenses continue—and that the coalition's paid parental leave proposal is responsive to that real-life reality, giving real money and real time to deal with the real expenses families face.

But, given that the government is not receptive to the coalition's improved and far superior paid parental leave scheme, we are seeing what we can do to improve the scheme that is currently operating. The coalition's amendments seek to do that by relieving a completely unnecessary and unjustified burden on employers, particularly small employers, to act as the pay clerks for the government's scheme. The amendments that we have put forward seek to vary the current default position under the Paid Parental Leave Act where employers, in the majority of cases, are mandated by the department secretary to carry out the Commonwealth's paid parental leave pay-clerk responsibilities. The amendments would change this so that employers would only pay PPL payments when both the employer and the employee consented to the employer making those payments. What that means is that—for an employer with the resources, the size of operation or, in some cases, with a scheme of their own already where they are keen and in a position to do the government's work for it in making these payments, and where the employee feels that that is in their interests as well—that arrangement can take place.

That opt-in arrangement would see an employer complete the paperwork and verify eligibility in partnership with the Commonwealth. The Commonwealth would confirm eligibility and then interact with the employer and then set around a number of payments—a number of payments that in fact probably total about 20 transactions. I will just hold up for the benefit of the chamber and for those who are interested a flowchart of what would actually take place. There are almost 20 separate transactions that an employer is obliged to be engaged with once it has been confirmed that an employee is eligible for the government funded, government determined PPL payments.

Our argument is this. We know there is a significant increase in small business insolvencies, with time-scarce small business employers working very hard to stay afloat. They are cash poor, in many cases, and without the organisational infrastructure to change their payroll system so that this payment coming through the Commonwealth mimics a payment as if it were made by employers but then is not subject to many of the other requirements that come along with a payroll system. Our view is that not all employers are inclined to do that work or are in a position to carry it out without considerable and unnecessary cost and compliance risk. Once they have been determined by the secretary to be obliged to carry out this role, if they do not carry out that responsibility a substantial fine is available to the government to penalise them and that is an additional compliance risk for an employer.

I was very interested to hear in the second reading debate a number of the Labor members talk about how well the scheme was going because so many employers were involved. What an Orwellian contribution that was. They do not have a choice—they are obliged to be involved. To use that argument to say there is no problem here, there is no opportunity for improvement, is absolute nonsense. In relation to the minister's argument that this would, in her words, 'undermine the scheme' encourages me to go back— (Time expired)

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party) Share this | | Hansard source

Order! I understand the honourable member has not in fact moved the amendments but had been granted leave to move the amendments. I invite the member for Dunkley to formally move the amendments.

11:38 am

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

I move amendments (1) and (2) as circulated in my name:

(1) Clause 2, page 2 (after line 3), at the end of the table, add:

(2) Schedule 2, page 58 (after line 25), at the end of the Schedule, add:

Part 3—Amendments to reduce the compliance burden for employers

Paid Parental Leave Act 2010

36 Section 4 (fourth paragraph under the heading " Chapter 3—Payment of parental leave pay ")

Repeal the paragraph, substitute:

37 Section 6 (definition of employer determination decision )

Repeal the definition.

38 Section 6 (definition of subject to review )

Repeal the definition.

39 Section 6 (definition of transfer day )

Omit "(3),".

40 Subsection 64(1) (note)

Omit "Sections 93 and 94 affect", substitute "Section 94 affects".

41 Section 83

Omit "is being reviewed or".

42 Subsection 84(3)

Repeal the subsection.

43 Subsection 85(1)

Repeal the subsection, substitute:

(1) This section applies if both of the following apply:

  (a) the Secretary is required to pay an instalment to a person under subsection 84(4) (which deals with payment of instalments where an employer determination is revoked);

  (b) the employer determination made for the person and the person's employer has never come into force.

44 Subsection 85(3)

Omit "paragraph (1)(a) or (b)", substitute "subsection (1)".

45 Section 93

Repeal the section.

46 Section 100

Omit the section, substitute:

100 Guide to this Part

47 Subsection 101(1)

Omit "Secretary must", substitute "Secretary may".

48 Paragraphs 101(b) and (c)

Repeal the paragraphs, substitute:

(b) both the person and the employer have consented in the claim to the employer paying instalments to the person; and

49 Paragraph 101(f)

Repeal the paragraph, substitute:

; and (f) the employer determination is made on or before the day on which the payability determination referred to in paragraph (a) is made.

50 Subsections 101(2) and (3)

Repeal the subsections.

51 Subsection 101(4)

Omit all the words after and including "of all or any", substitute "that the employer is not a fit and proper person".

52 Subsection 102(5)

After "a person", insert "and the person's employer".

53 Subsection 102(5)

Omit "the person a", substitute "them a".

54 Subsection 102(5)

Omit "the person of", substitute "them of".

55 Section 103

Before "Within", insert "(1)".

56 Section 103

Omit all the words after and including "do one of", substitute "give the Secretary a written notice (the acceptance notice) that complies with section 104".

57 Section 103 (note)

Repeal the note.

58 At the end of section 103


(2) The employer may, at any time, by written notice given to the Secretary, withdraw the acceptance notice.

59 Subsection 104(5)

Repeal the subsection.

60 Sections 105 and 106

Repeal the sections.

61 Subsection 107(1)

Omit "or (3)".

62 Subsection 107(2)

Omit "or a compliance notice given under section 157".

63 Subsection 107(3)

Repeal the subsection.

64 Subsection 108(1) (table item 2)

Omit "as required by a compliance notice given for a contravention of section 103", substitute "within the time required under subsection 103(1) or has, by written notice given to the Secretary, withdrawn the acceptance notice for the employer determination".

65 Subsection 108(6)

Repeal the subsection.

66 Division 4 of Part 3-5

Repeal the Division.

67 Section 146 (table items 10 and 11)

Repeal the items.

68 Subsection 157(1)

Repeal the subsection, substitute:

Compliance notice given by Secretary

(1) This section applies if the Secretary reasonably believes that a person has contravened subsection 82(2) (which deals with notifying the Secretary if certain events happen).

69 Paragraphs 159(1)(b) and (c)

Repeal the paragraphs.

70 Section 202 (fifth paragraph of the Guide to Part 5-1)

Repeal the paragraph, substitute:

71 Subsection 203(2)

Repeal the subsection.

72 Subsection 205(1)

Omit ", 207".

73 Paragraph 206(1)(b)

Repeal the paragraph.

74 Section 207

Repeal the section.

75 Subsection 209(2)

Omit ", other than an application under section 207 (which deals with application for review of employer determination decisions),".

76 Paragraphs 210(2)(a) and (b)

Omit "an employer determination decision or".

77 Paragraphs 212(1)(c)

Repeal the paragraph.

78 Paragraph 212(1)(d)

Omit "any other", substitute "a".

79 Section 213

Omit "employer determination decisions and".

80 Subparagraphs 215(2)(a)(vi) and (vii)

Repeal the subparagraphs.

81 Paragraphs 223(1)(a) to (d)

Omit "an employer determination decision or".

82 Subsection 224(1)

Repeal the subsection.

83 Subsection 224(3)

Omit "(1) or".

84 Paragraph 225(2)(b)

Repeal the paragraph.

As Bill Kelty said, the truth will often do. The changes that we are foreshadowing in these amendments do not in any way alter people's eligibility. They do not in any way compromise what the minister boasts about as the success of the scheme. In fact, what was ironic was that in the early phase of the scheme, the option that we are putting forward was the way the scheme operated. So for the first six months this is what happened: these payments were paid by Centrelink through the Family Assistance Office directly to eligible employees and it was on that basis the government went around boasting about the success of the scheme. All we are saying is let the success continue. If that is the benchmark, make that available to employers. But for those where the employee and the employer wish to have the employer handle the payment then so be it. We are not objecting to that. If that is people's desire then these amendments facilitate that.

I remember last time this debate was held that one of the people brought out in support of the current arrangements was Sony, a very substantial international corporation with more people in their pay office than most small businesses have in their entire enterprise. They had an existing paid parental leave scheme, so it was a matter of simply bolting on the extra cash from the Commonwealth and they were more than happy to do that. I say good luck to them, but not every business in Australia is Sony. Not everyone is in a position to carry out that work and not everyone is desirous of carrying out that work, either as an employer or as an employee, but if they are, let them do that work on behalf of the Commonwealth. Let employers and employees who are eligible for PPL payments opt in to have the employer pay those payments.

The minister says this is part of the staying in touch regime. Again, I would draw her attention to the fact that the staying in touch provisions that are available under the legislation the government has introduced are not being altered at all. We are not stopping that. We see the value in that. Where there might be some change in technology or an important occasion within the workplace where someone on a period of paid parental leave is invited to come back in and be a part of the workplace because of something of significance, we are not opposed to that. What this is about is who organises the back of house work to see some digits appear in an electronic bank statement. This is not mid last century, when you came in and got your pay cheque off somebody. There is no physical engagement with this payment—it is an electronic funds transfer. So how that adds to the quality of the relationship between an employer and an employee is beyond me. I am quite certain most workplaces I have been involved with and many I have talked to, rather than turn their minds to more than 20 engagements in transactions with the risk of fines if they get them wrong, would rather spend their time talking with the person eligible for paid parental leave about how things are going, how the microhuman is going, how the family is going and how excited people are about coming back, even organising a bouquet of flowers, not having this the red tape burden that would distract the employer from that work.

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party) Share this | | Hansard source

I ask the member for Dunkley not to make excessive use of props. He has referred to the props sufficient times.

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

Sorry, I thought twice was not excessive in my second contribution, but I thank you for your counsel. I will put the props to one side, waving them to show you how many points of engagement there are. My point is the payment process is a financial transaction and the back of house work in the first six months of this scheme was done by the Commonwealth, and we believe that should continue unless the employer and the employee want it to be different. These amendments bring about that change. They actually inoculate against the risk that was identified in the Productivity Commission report, that the biggest danger employers were facing was the risk of discrimination towards women of reproductive ages because of imposts the scheme might impose upon them, not as it currently stands but if there was work and coordinated effort to require employers to push up the contribution with their own funds and their own effort.

The other thing this debate offers is an opportunity for the government to correct a broken promise. The Prime Minister, then in another shadow ministerial role, said:

Labor will not support a system that imposes additional financial burdens or administrative complexity on small businesses or in any way acts as a discouragement to the employment of women.

Yet what we have here in the way this scheme is designed are those additional financial and administrative burdens and complexities—the very thing that was promised by Labor not to be imposed on small business. Well, here is a chance for the government to honour a commitment by rectifying yet another broken promise. (Extension of time granted) That was what the government committed to when in opposition. That promise was broken. We have tried on a number of occasions to allow the government to keep the faith with those to whom it had made that commitment and here is another opportunity for that today, to actually ensure that the system does not impose additional financial burdens or administrative complexity on small businesses.

What has changed? Not much, according to a then Labor minister, Jan Jarratt, when she wrote to the previous—two ago—small business minister asking: 'Why don't you embrace what the coalition is doing? Why don't you look at even an opt-in or an opt-out proposal?' That is what Labor in Queensland were advocating, so it is nice to know that even some within the Labor movement thought what was being proposed was a perfectly sensible measure, along with the very long list of industry organisations, particularly small business groups, that want to be cut some slack here and to have the red tape burden reduced. That is exactly what these amendments seek to achieve. The big organisations have the resources and are in a position to carry out a pay clerk role on behalf of the Commonwealth with no change whatsoever to the eligibility criteria or the payments that might be available to eligibility recipients. It requires no change whatsoever, none of the undermining that the minister would have you believe exists. It is about who does the back of house work so that some digits appear on a bank statement. The Commonwealth has done that before and did it well. It used to boast about the success of the scheme. We think that should continue.

And guess what is in the bill we are debating today? Those payments to the dads. And guess who is processing those? The Family Assistance Office at Centrelink. So the machinery that we are advocating should be available to a small employer—the minister argues it undermines the very scheme and then she launches into an attack on the coalition; her argument is absolute nonsense—is the very machinery that is being used to make another payment relating to the Paid Parental Leave scheme. And guess what happens in the event that the employer is insolvent or at some risk and the department secretary chooses not to decree that they be the ones carrying out the pay clerk role? The machinery that we are arguing should be available more broadly kicks in. So this is not some transformational change; this is a sensible, completely pragmatic, very constructive and positive proposal to relieve an unnecessary and unjustified small business compliance and red tape burden in particular.

The government, when in opposition, made a commitment that it would not do this. When in government, Queensland Labor said that what you have done is not helpful for small business so why don't you do what the coalition is proposing. The Productivity Commission said there are a range of things that need to be weighed here but please do not place new barriers in front of employers employing women of a reproductive age such as additional cost and compliance burdens.

There is a shopping list on this flow chart. I will not wave it around again but I will quickly summarise the action steps that are needed in the minister's department's own material about the considerable work that is involved for an employer in these exercises. It says employers are not required to separately identify payments—but they are not required to make a superannuation contribution, so we should decouple that. It says it is not supposed to trigger any payroll action, so decouple that as well. It says there is no need for a separate bank account but you need to make sure you can account for every dollar that comes in. It says there are processes required for ensuring that people are eligible—and so on and so on. So this is not without a considerable amount of burden on an employer at a time when there is quite a lot of mutual adjustment needed in a workplace where one of your team members has the good fortune of looking forward to becoming a parent. That is a time of considerable mutual adjustment for the person anticipating the child and also for the workplace.

So why add to that with this needless, useless and unnecessary red tape burden? Well, there is a reason—and the ACTU belled the cat on it. 'If the coalition amendments got up,' the ACTU warned, 'it would restrict unions' capacity to improve and enforce PPL in workplaces.' So this is not really about the integrity of the scheme. It is not about any suggestion that we are undermining. This is about giving small business employers a break. The only argument that runs against that is the union saying that, with this machinery in place, it is easier for the union movement to fit up employers with additional costs and additional obligations. The objections to these measures should be seen for what they are. (Time expired)

11:48 am

Photo of Jenny MacklinJenny Macklin (Jagajaga, Australian Labor Party, Minister for Disability Reform) Share this | | Hansard source

As I indicated, the government will not be supporting this amendment. I am pleased that the member for Dunkley referred in his remarks to the Productivity Commission report, a very significant piece of work that was done for the government on paid parental leave. Unfortunately, the member for Dunkley did not go to the recommendation of the Productivity Commission's report on the employer role. The recommendation considered that, even though it was recommending a government funded scheme, the delivery mechanism should demonstrate that paid parental leave is a normal feature of employment arrangements like other workplace entitlements such as annual leave. They recommended the role for employers in the scheme that the government has implemented because they considered that it would benefit business. So if the member for Dunkley was being truthful today in the debate he would go to the recommendations in the Productivity Commission report that go to exactly this point.

The potential administrative burden on business, including small business, was in fact taken into account by the Productivity Commission in their detailed analysis. Once they had done that analysis they nevertheless recommended that employers make these payments for their long-term employees. I repeat again that the reason they did that was to keep a connection between an employer and an employee when the employee takes time off to have a baby. The Productivity Commission itself found that it would help employers—I think it is important that we do listen to the advice from the Productivity Commission in this regard—retain valuable and skilled staff.

I want to go to the feedback that we have had from a range of sources indicating that the employer role in the Paid Parental Leave scheme is in fact operating smoothly and that it would not be helpful to the smooth operation of the scheme for the opposition's amendment to get up. Employer funding arrangements are working well. We have had few complaints about the scheme either from parents or employers and the early findings are that employers are not finding their role burdensome.

I will just go to the preliminary advice from an employer survey conducted in the first six months of the employer role. It says that the scheme has been relatively easy for organisations to implement. Employers have found that sourcing information is easy, information was accurate and helpful and that most employers, regardless of their business size, said it was easy to organise payments. So I think in these debates it is important that we look at the facts rather than the rant that we heard from the member for Dunkley. If I can go to some of the figures, since the scheme started on 1 January 2011 we have, as I said, had more than 150,000 expectant and new parents applying for paid parental leave. We have a lot of people who have actually finished receiving their payment and others, of course, currently receiving it or waiting for their babies to be born. More than 29,000 employers have registered for the scheme. Around 43 per cent of those are small businesses—12½ thousand. Around 5,000 registered employers have opted to provide parental leave pay to employees that they are not required to pay it to. These would be employees who are working for them on a shorter term basis, for example. Around a third of those 5,000 are in fact small business, so all of the evidence would suggest that businesses are not finding it difficult; in fact, quite the reverse. That is why it is so disappointing to have this amendment moved. It was lost once. I hope it will be lost again, because the scheme is working very well for parents and working very well for employers. We hope that the scheme can continue to work very well for both parents and employers. That is why the government introduced it, and the government will be opposing the amendment.

11:53 am

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

The minister referred to the Productivity Commission report about how things will help employers. Just to assist the House, and for those listening, the Productivity Commission said a paid parental leave scheme would help employers. There is nothing whatsoever in the report that says that forcing employers to pay the payments would help employers. There is nothing of the kind in it at all. There is an on-balance recommendation in the report, if I could help the minister, that signalling—that is, some effort to characterise the nature of the payment—would somehow justify the imposition of the burden. I just correct that information for the House, because there was quite a mangulation of what is actually in the Productivity Commission report dressed up as a justification for the current arrangements.

The signalling is supposed to say that because a number appears in a bank account people will immediately understand what that is and that that will build a stronger bond between employers and employees. For anyone listening, I ask you to imagine if enhanced interpersonal relationships simply require a number to appear in a bank account—that in some way that would explain why there was cash being thrown around by the government in order to enhance its relationship with those receiving the cash. In an employer-employee arrangement, I am pretty certain that people—particularly the women I have spoken with—would have thought, 'That is a strange way of maintaining a relationship: by having a payment made into a bank account and the back office operations being a burden imposed on employers.'

Secondly, the signalling argument that is canvassed in the Productivity Commission's report is completely undermined by the government's own rhetoric. It never misses an opportunity to run around telling everybody that it is paying for this, it is a Labor scheme, isn't it great and aren't we blessed to have a Labor government. So the signalling virtue that the minister was half inferring, given that she had misrepresented the recommendations as they were provided in the Productivity Commission report, has actually been undermined by the government's own behaviour. The government's own behaviour has compromised the signalling benefits in a hotly contested on-balance conclusion in the Productivity Commission report in which there was industry organisation after industry organisation explaining the reality of it in the workplace and that this was, in their eyes, a very dubious conclusion that the government now hangs its hat on.

Also, I understand the minister to have been saying that it negates the need for the government to honour its commitments. If it was so clear, why make that commitment? Why make an election commitment that says that Labor will not support a system that imposes additional financial burdens or administrative complexities on small businesses? Why make that commitment if you are not intending to keep it? This is like: 'There will be no carbon tax under a government I lead.' The government is saying, 'There will be no compliance and financial costs for small businesses under a PPL scheme the government leads'—yet there is. It is a broken promise. Here is a chance to rectify this broken promise and actually live up to the words that seemed perfectly reasonable and were happily shopped around and traded around prior to the election, but when push comes to shove there will be some contorted representation of what is in the Productivity Commission report. It is as if the government is saying, 'Oh, we do not need to uphold our election commitments.' It is a bit like saying, 'The Greens stole my homework.' Here, it is the PC that are being blamed for not honouring the election commitment.

Finally, let me reiterate that the motive behind this is about signalling, according to the Productivity Commission. The government's own actions undermine the value of that signalling by singing out to anyone who is interested: 'It is a government scheme. We determine who is eligible. It doesn't matter what you are paid, this is what you are going to get.' That is what the government is actually doing. So even the on-balance argument in the Productivity Commission report has hit the rocks because of the government's own behaviour. What does it leave you with? It leaves you with the question: what is the justification? This is where this secret ACTU memo bells the cat. The only reason the Gillard government is opposing these very sensible and constructive measures and amendments by the coalition to support small business is that the unions want them to oppose it.

Why do the unions want to oppose it? As it says in this secret memo that was given to me, the amendments that we are proposing 'will also restrict the union's capacity to improve and enforce paid parental leave in the workplace'. This is an industrial campaign to impose additional top-up costs and burdens on small business, the very additional costs that the Productivity Commission warned against. Those are the facts behind this argument, and I urge the House to support the sensible coalition amendment. (Time expired)

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party) Share this | | Hansard source

The question is that the amendments be agreed to.

Bill agreed to.