Monday, 27 November 2023
Paid Parental Leave Amendment (More Support for Working Families) Bill 2023; Second Reading
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House:
(a) the Coalition's strong record supporting government funded paid parental leave;
(b) the former Government's commitment to supporting women's participation in the workforce saw women's participation reach record highs;
(c) at both the 2010 and 2013 federal elections, the Coalition's paid parental leave policy sought to deliver 26 weeks paid parental leave based on actual wage;
(d) both Labor and the Greens opposed the Coalition's paid parental leave policy; and
(e) the current paid parental leave scheme disproportionately adversely impacts smaller businesses, imposing an additional red-tape burden on small businesses by making them the pay clerk for the Government's paid parental leave scheme; and
(2) calls on the Government to amend the Paid Parental Leave Act to require the Secretary, as defined by the Act, to pay parental leave pay instalments directly to employees of small businesses except in cases where a small business opts to pay parental leave pay instalments directly to an employee".
The amendment seeks to highlight a couple of things. Of course we're going to support the bill, but we really need to make some things clear. There are a number of people in this chamber who will come into the House on every single occasion and speak very passionately about why they believe 26 weeks of paid parental leave is such a worthy cause, both from an economic perspective and from a fairness perspective, and many of them are the same people who opposed the coalition's 26 weeks of paid parental leave, which, again, we took to two elections and on which we received a mandate when we were elected in 2013. They argued against it, presumably because it wasn't their idea. So now we find that 10 years later—in fact, it will be 12 years later—we'll get to 26 weeks of paid parental leave. Those who just a few short years ago did not support paid parental leave of 26 weeks include a minister.
So there's huge hypocrisy, and I think Australians recall the very vociferous opposition to 26 weeks of paid parental leave from the Labor Party at that time. Most Australians won't be particularly surprised by the hypocrisy of the Labor Party and their attempts to be wreckers while in opposition. Now they are seeking to atone, I suspect, for that opposition that they—in, I think, an unprincipled way—went forward with while in opposition. We won't adopt a similar unprincipled position. I have always supported 26 weeks of paid parental leave myself, and obviously our party has, so we will support this bill notwithstanding the concerns we have with some particular aspects of the scheme.
Most notably, as I outlined in my amendment to the second reading of the bill, in essence there are certain payments—depending on what an employee adopts as their favoured mechanism of receiving paid parental leave—that require small businesses to administer and pay the paid parental leave, as opposed to Services Australia, which would be the customary thing to do. I don't think it's beyond the ability of the government to amend the legislation and to say to small businesses—quite frankly, small businesses that are struggling under a Labor economy, struggling under an economically restrictive environment imposed on them by a Labor government: 'We will make this minor amendment to ensure that this isn't an additional burden placed on you.'
We think that's wholly consistent with the view that we want, to the greatest extent possible, to maintain a relationship between an employee and their employer during a period of leave, however they choose to take that—whether they take that as a single period or whether they take it over a period of time—and, indeed, for partner pay as well. The best way to facilitate that relationship is to make it as easy as possible for small businesses. I think there's a general principle on this side of the chamber that we believe that, where a government imposes a duty on, particularly, a small business, it should do everything it possibly can to ensure that that small business is not required to pick up additional regulatory impost. That's what will happen here. So we again call on the minister to do some of that work. That work should have already been done, quite frankly.
I think the small business sector, throughout this process, made clear their reservations with respect to this aspect of the bill. We were quite surprised, I must say, that the government didn't seek to amend that, to place the obligation on the government, through Services Australia, to administer those payments, as opposed to transferring that requirement onto small businesses. It's quite remarkable that the government wouldn't have listened through that consultation. It begs the question: why on earth would you consult small businesses for their views on these measures and then entirely ignore what they've said to you? It's a bit like the bill we were just debating. If you ask for that consultation or advice—I think most Australians would agree—it's reasonable for a small business to say, 'You're imposing an additional impost on us.'
Unless they, as small businesses, elect to make those payments directly themselves, our amendment requests the government to ensure that they don't have to do that. We think the amendment spells out, clearly, best practice here. Give small businesses an opportunity to be the pay clerk if they want to, but, if it's a burden that they cannot wear in a reasonable way, then it should become the primary obligation of the government, through Services Australia, to do that.
Again, we're quite surprised that they haven't listened. I've got in front of me the submission from the Motor Trades Association of Australia. The MTAA submission noted:
…the current (and future) impost on small business employers to act as the administrative payment intermediary between the Commonwealth and new parent employees is unwarranted and disproportionately adversely impacts smaller businesses.
We are told by the MTAA that, for the 246 businesses which completed their survey, it added to the payroll processing time for nearly 91 per cent of respondents, increased the administrative burden on business for about 92 per cent and—this is probably the most concerning aspect in this economic environment—created cashflow problems for nearly a third, or 32.1 per cent, of respondents.
So, at a time when we have—let's be frank—a Labor economy and a Labor minister and government in a way that ensures that we have more sluggish growth and higher inflation and we are seeing insolvencies and liquidations creeping higher and higher, the government has brought forward a bill that will create cashflow problems for nearly one-third of all members of the Motor Trades Association who participated in this survey. Then, having been given that evidence, they've wilfully ignored it and proceeded without changing their proposal.
This is not a remarkably difficult thing to do. If we had a government that cared about small businesses and the families that are generally the backbone of those small businesses, it would make this change. It is absolutely reasonable for the small businesses to have made that recommendation. The National Electrical and Communications Association made very clear, through their members, that they'd prefer Services Australia to pay PPL directly to all staff members. In its submission to the inquiry, the Australian Small Business and Family Enterprise Ombudsman concluded:
For many small and family businesses, the costs associated with administering the scheme are magnified as they do not have the existing organisational capability or internal expertise to implement complex processes. Allowing small businesses to 'opt-in' to administering the scheme or have Services Australia administer the payment directly to the employee will reduce the disproportionate regulatory burden on the sector, while allowing businesses to administer the scheme if they prefer.
What on earth is controversial about that? Why on earth would the minister ignore that? Do some work. I know it's inconvenient. I know it's difficult sometimes when you get advice that you don't like, when you have dragged your feet a bit and you don't really want to have to change something and all the processes that go along with it, but Australian businesses will suffer as a result. The overwhelmingly good objective of delivering 26 weeks of paid parental leave albeit staggered over a period of time does not of itself absolve the government of its responsibility to implement those changes in a way that makes it as easy as possible for small businesses to cope and, indeed, through their own stated objective, to facilitate a relationship between an employer and an employee.
I would have thought that, when you have the Motor Trades Association, who are one of many of the organisations that represent stereotypical mum-and-dad small businesses, come out and so clearly and reasonably articulate to the government what the limitations are on their proposal and, importantly, don't just come along with a complaint or an axe to grind but actually then suggest what an administrative fix could be, for the government to ignore that is pretty extraordinary. I think it says a lot about this government.
Most people have suspicions about Labor governments essentially working through the wish list of their union paymasters and not having much consideration for small businesses, but, even so, moments like this are still pretty surprising, because this is not controversial. Again, having nearly 92 per cent of respondents tell the government that it will increase processing times and be an administrative burden on their business and a third of businesses saying that it will create cashflow problems for them should on its own should have been enough for the minister to do some extra work and get the bill right. It's not a huge burden on Services Australia to administer these payments under the scheme as they administer other payments.
It's being imposed by the government—quite rightly; it's good policy—so why on earth would you impose that on a small business that's not capable of administering it? In fact, it runs counter to the stated objective of trying to bring employers and employees in these circumstances closer together.
If the government change this when it gets to the Senate, we'll give them credit for finally listening to the feedback that's been given to them. Why on earth ask for feedback from small businesses then ignore it when they come back with something that's eminently sensible? Is that a discussion that goes on in the minister's office, where the minister gets the advisers around the room and they just say: 'No. It's all in the too-hard basket. Let's just keep ploughing on with what we've got. We can't be bothered. We can't be stuffed changing this. It's just a few small businesses that are going to suffer'?
I find it pretty extraordinary that this didn't change. Our full expectation, following that feedback and how overwhelming it was, was that the government would come back and include that quite minor administrative fix to alleviate those potential problems for small businesses. The fact that they haven't done so, sadly, says a lot about the way in which this government seeks advice and ignores it. I'm not sure if that's pigheadedness, inertia or just being slack. I'm not sure which of them it is, but in any event you have circumstances where Australians suffer. Here we'll have small businesses suffering. Small businesses are overwhelmingly family businesses, people who pay the rent first, staff second, tax third and themselves last. Now further obligations are being imposed on them, under this PPL amendment bill, to be the pay clerk for employees in certain circumstances where, in the ordinary course of events, Services Australia would be administering these payments.
Inconvenient though it may be at times for the government, we in the coalition will always stand up for small businesses: the people who by and large, other than through some large representative groups, don't have the ability to come and stalk the halls here and knock on ministers' doors and seek an audience with a minister to put their case, like many of the large unions do. These are small business who just rely on their local representatives to do the right thing by them. Sadly, in this instance, their local representatives on the government benches have completely ignored them by refusing to make some very minor changes to this bill that would have been consistent with the feedback they received. For that reason, I've moved the amendment, and I again call on the government to see some common sense at the eleventh hour. We'll give you credit for finally listening if you do. I know it will be a bit of extra work, but—let's be frank—there's not a huge amount on the plate of the government, with a fairly thin legislative agenda. So do some extra work and help our small businesses, as opposed to asking for their advice and completely ignoring them.
I rise to support the motion moved by the Minister for Social Services, the honourable member for Kingston, who has been in this place for quite a while—about the same time as me, in fact, so happy anniversary, Minister! It's funny that I have to make this speech after that presentation by the member for Deakin, bizarre speech that it was. It sounded like there was an ambulance circling Parliament House; it just wailed on and on for nearly 18 minutes.
It was unbelievable. He had only two things to say, and he just kept saying them over and over again like an ambulance coming in and out of hearing—unbelievable.
A government member: A wambulance!
Yes, a wambulance—I'll take that interjection from the whip. But this is the serious business of government, and we have a shadow minister who has nothing positive to contribute other than some silly motion saying, 'Weren't we wonderful?'
The bill that the minister has put forward will implement the second tranche of the Albanese government's paid parental leave reform. It is great Labor policy, something to be proud of, a reform that is vital for families, vital for women and vital for the economy—three things that were ignored by the shadow minister, the member for Deakin. Paid parental leave is a cornerstone of Labor policy, and the Albanese government will always ensure that Aussie families get the support they deserve. The continued investment in and expansion of paid parental leave represents a commitment made and fulfilled by the Albanese government. It is a commitment to families, a commitment to the future of young Australians and a commitment to increasing gender equality, something that is good for productivity. This bill builds on our record of supporting Aussie families and is critical to increasing our productivity and fostering a modern Australia. Investing in paid parental leave benefits our economy, and we know that when it's done right it can advance gender equality.
This bill extends the Paid Parental Leave scheme from 20 to 26 weeks, giving more support to parents at a vital stage of life. This bill also increases the reservation period for the dad or partner from two to four weeks and doubles the period where parents can take simultaneous leave from two to four weeks. These additions make it easier for partners to take a larger role in the caring responsibilities and for families to have more flexibility in their caring situation.
Labor is committed to modernising our policy and ensuring that the system of paid parental leave is equitable and, most importantly, useful. Starting from 1 July next year, two additional weeks of leave will be added each year, reaching up to 26 weeks in 2026. The increases in total amount of paid leave and the amount that can be taken simultaneously provide critical additional support to mums after childbirth and allow for far more flexibility when it comes to divvying up the caring responsibilities. The increase in the reservation period from two to four weeks allows for partners to take a more active role in child care. Single parents will have access to the full 26 weeks.
This Albanese government bill not only gives support to dual-parent household; it also helps single parents by allowing them to take that full amount of leave. Single parents have a tough job raising a family and financially supporting them at the same time, so it's vital that we ensure that they have as much help as possible.
I take that 'hear, hear' from the minister at the desk. As the son of a single mother of 10 children—I don't think she would have had paid parental leave!—I can say that as much support as possible is needed in modern Australia. Supporting families in their care responsibilities and helping them to balance care effectively is key to ensuring women's long-term economic equality. The Albanese government is committed to helping give women more flexibility in child care and to making sure that they don't have to choose between having a child and having a career.
When fathers take a greater caring role from the start, it benefits mums, dads and their kids, hopefully—my sons, Stan and Leo, just gloss over that fact! This bill sends a clear message that treating parenting as an equal partnership supports gender equality. The Albanese government values men as carers too, and we want to see that reinforced in workplaces and our communities right across Australia. We're committed to helping create a system which supports modern Australian families. This scheme is flexible, fair and drives positive health, social and economic outcomes for both parents and their children.
Paid parental leave is also vital to ensuring the health and wellbeing of parents. Increasing the amount of leave that can be taken simultaneously from two weeks to four weeks means that parents can support each other through the stages of early parenthood without needing to incur extra financial hardship. With the rising cost of living, paid parental leave enables families to have that little bit of flexibility in distributing the role of caring and helps to ease the financial strain of child care.
This is the largest investment in Paid Parental Leave since Labor established it back in 2011, and it will benefit over 180,000 families each year.
Labor governments have always been the ones who stick up for families. We've implemented cheaper child care, better paid parental leave and helped more families to buy a home. This is all part of the Albanese government's plan to ensure a better future for all.
Obviously children and young families are the future of Australia—that's plain and simple. So it's vital that we make sure that children have the best possible start in life. That is a wise investment. Increasing paid parental leave is so important because it enables parents to give their child the care that they need and will mean better outcomes for both children and parents. The Paid Parental Leave scheme makes it easier for both partners to share the childcare responsibilities and, according to the Women’s Economic Equality Taskforce, is one of the best ways to advance women's economic equality.
The Albanese government will always look for ways to further gender equality, and these changes will benefit not only women but obviously all Australians. Paid parental leave also creates more flexibility for employers, with parents able to return to work earlier and balance work and care more effectively.
More flexibility for families creates a more flexible and versatile economy, which is a good thing. It benefits all Australians. It makes it easier for women to participate in the workforce, and I'm sure both sides of the chamber would see that being a sound economic policy and a key component of building a modern Australia.
Matt and Anna, a couple in my electorate of Moreton, have told me of the benefit that paid parental leave gives to their family. They said: 'The Paid Parental Leave scheme is of huge benefit to working families. It gave us the ability to take time off at a vital stage of life and gave us the option of flexibility. The scheme is vital for ensuring that women have the option of returning to work if they choose. Children also get the benefit of developing a strong bond with both parents from an early age.' Thank you to Matt and Anna. This is a story that would be echoed by many families across Australia and demonstrates how important it is that we keep supporting parents and children, especially at such an early age. Giving people the option of flexibility and the stability of 26-weeks leave means that having a child does not have to become a complex financial decision.
Another one of my constituents stated, 'This is an area I'm passionate about, and I'm glad it's finally receiving attention from the government.'
This is the largest investment in Paid Parental Leave since Labor established it back in 2011 and goes to show how important it is to maintain these strong institutions. The continual advances in Paid Parental Leave and the focus on cheaper child care demonstrates just how committed we are to ensuring that families across Australia have a strong network of support from government. Raising children is a tough job. It's important that children have a strong support system, especially in those early years. Labor governments are committed to making sure that all families have equitable access to government support and that parents have the opportunity to take leave at that vital stage of life for their child, which is the hours best spent.
The expansion of Paid Parental Leave is a commitment put forward in the October budget, and it's great to see it being enacted in legislation. It was the centrepiece of Labor's first budget, where we invested half-a-billion dollars to expand the scheme to six months by 2026, and now the Albanese government obviously does more than just talk about such change—we make commitments, and we enact them. That's what sensible governments do. You make that promise and you stick to it. The implementing and maintaining of Paid Parental Leave is critical in maintaining a modern Australia. Paid parental leave gives women more flexibility in their caring role and gives children the vital care they need at such a young age.
In another life, I was a school teacher, and there's a lot of evidence that shows if you can invest in young kids as much as possible that time and attention and support all pays off in primary school and then in high school, so this bill makes it easier for both partners to be active in child care and encourages a more equitable arrangement for families. This bill honours our commitment to Australian families by delivering a policy that is flexible, fair, drives positive health, and social and economic outcomes. I stress again: it has economic outcomes for both parents and their children. It goes to the heart of what Labor governments are about—giving people the support to grow and looking after families to foster a modern Australia.
The bill before the House is good for parents, good for kids, good for employers and good for the economy. I recommend that to the House and totally discount the amendment put forward by the member for Deakin—I do not recommend that at all.
I rise to speak to the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023. Paid parental leave is an issue I care very much about, and I've been pushing for this government and the previous government to do much more. It's an issue that affects many people around the country, including my constituents. I'm glad to see that some progress has finally been made in extending the Paid Parental Leave scheme.
The economics behind paid parental leave speak for themselves. Equity Economics has estimated that the cumulative impact of proposed changes to expand paid parental leave could increase GDP by 4.1 per cent, or some $166 billion, by 2050. If Australia could lift female participation to that of men, it would increase GDP by 8.7 per cent, or some $353 billion, by 2050. Further modelling by Equity Economics shows that if an average Australian woman had the same rate of workforce participation after having children as that of a woman in Sweden, for example, she would earn an additional $696,000 over her working life and retire with an extra $180,000 in superannuation. Those are pretty stark statistics.
Research by the Grattan Institute shows that shared paid parental leave boosts mothers' earnings and boosts our entire national GDP. Grattan modelling suggests that increasing the entitlement to 26 weeks shared between parents would cost the government some $600 million per year but add $900 million to GDP per year as well as boost mothers' lifetime earnings by $30,000. So not only does this make sense, but it is also very good for children. But it is important in this context because so many barriers have gotten in the way of gender equity and equal economic participation for men and women.
So expanding paid parental leave just makes sense, and that's exactly what this bill does. It expands parental leave, albeit in phases. It is very gradual, from 20 to 26 weeks by July 2026. My concern is that we will have another federal election before that. If this is not bipartisan and supported by the opposition, there will be the fear that they will repeal or wind back some of this progress, despite the fact that it is good economics, good for productivity, good for equality, good for women's economic security, good for Australian society and, of course, good for the families and new babies themselves.
At present, a working family can access up to 20 weeks of government funded paid parental leave. Shared care is encouraged. Two weeks are reserved for each parent, and they must use or lose those two weeks. This leaves 16 weeks for parents to share however they choose. By 1 July 2026, some 2½ years away, the scheme will be 26 weeks long, where four weeks are reserved for each parent on a 'use it or lose it' basis. That will leave 18 weeks that parents can choose to share however they wish. For instance, a couple may decide to share leave equally and take 13 weeks each. Meanwhile, single parents will have access to the full 26-week entitlement. Coupled parents will also be able to take up to four weeks of paid parental leave at the same time, whereas currently parents can only take up to two weeks together. It's important to note that being able to take up to four weeks enables parents to take parental leave together, and that has positive effects on maternal recovery. It's a clear step in the right direction, but it's clear that more can be done.
There is ongoing frustration with the pace of change. Whilst the government can be commended for finally acting on this, it is still very gradual, and the pace of change is very slow. In September 2022 I presented a petition to the House on behalf of my constituents, Peta and Shane Arthurson, to ask the House to immediately increase paid parental leave from 18 to 26 weeks. That was simply on the basis of the benefit to children of being able to be breastfed for the period of time that is actually recommended.
This bill now fulfils what the Arthursons' petition asked for but at a slow pace, rolling the extension out until 2026. No doubt the government will campaign on this at the next election as an election pledge to families, prior to this full instalment of parental leave being available, but it is a long way off and, I would argue, needed much sooner. So I support this bill, but there is more work to be done on the paid parental leave front and for achieving greater equality and economic security for Australian women. We need to get to gender equity.
The final report of the government's Women's Economic Equality Taskforce was released in late October. While this bill doesn't go as far as that report recommends, it is worth noting what more can be done and is recommended in that report. The final report recommended extending the Paid Parental Leave scheme by phasing the entitlement up to 52 weeks; legislating the payment of superannuation on all forms of paid parental leave; increasing investment in childhood education and abolishing the activity test, which requires both parents to be working to access childcare subsidies; boosting the availability of high-quality flexible work and strengthening the right of employees to flexible work and family-friendly working arrangements; encouraging employers to set gender equality targets and strengthen reporting obligations to include meaningful benchmarks; and introducing a tax offset for people with caring responsibilities who are re-entering the workforce, to curb the motherhood penalty facing women which means they earn less—and I should note that, invariably, it is women who take time out for caring for elderly parents as well, and that further impacts their superannuation.
These sorts of bold reforms recommended in the report are what we need not just for paid parental leave but for actual economic equality. When women succeed, Australia succeeds. We need to stop seeing such initiatives as costs and rather think of them as investments.
As I noted at the beginning of this speech, the untapped economic potential that we have that can be unleashed by lifting women's economic participation and making them more economically secure is what we should be focusing on. As stated by the current head of the Productivity Commission, 'If untapped women's workforce participation was a massive iron ore deposit, we would have governments falling over themselves to give subsidies to get it out of the ground.'
The government is yet to fully respond to the report on women's economic equality. I would hope that all reforms will be implemented, and I would encourage the government to lay out the pathway to do so. As the chair of the taskforce, Sam Mostyn, has said:
We have arrived at a moment of consequence where a genuine commitment to respecting women, and valuing and nurturing their economic contribution by removing systemic barriers, is vital.
This bill before us today takes a step in that direction, but it's only a step. More needs to be done. I urge the government to do more so that we can empower Australian women, make smart investments in our future and try to achieve genuine economic equality in the years ahead.
Today I advocate before the House the passage of the transformative legislation that is positioned at the core of family welfare, economic progress and gender equity. This bill, the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, forms the second tranche of the Albanese Labor government's paid parental leave reforms. It follows the legacy of Labor's noteworthy contributions to family welfare—contributions which include Medicare, the Pharmaceutical Benefits Scheme, the National Disability Insurance Scheme and the introduction of paid parental leave in 2011. This bill stands as a testament to our ongoing dedication to shaping a more inclusive, flexible and equitable paid parental leave system.
The Gillard Labor government's introduction of paid parental leave in 2011 marked a historic milestone in Australian social policy. As Prime Minister, Julia Gillard's commitment to the wellbeing of working families was manifested in the establishment of this scheme. The 18-week payment, fully funded by the government, marked a pivotal moment for Australian families.
This visionary reform ensured that parents, particularly mothers, were supported following childbirth. It provided financial support during a crucial life event and advanced workplace and economic equality for women. Former minister for families and member for Jagajaga the Hon. Jenny Macklin MP expressed the incredible significance of the introduction of paid parental leave in 2011. She stated:
This historic reform is a major win for working families who have been waiting decades for a national Paid Parental Leave scheme.
As the federal member for Holt I have the privilege of regularly engaging with families at various community events. It is heartwarming to witness firsthand the profound love and commitment that parents have for their children. The joyous moments shared at these gatherings underscore the desire of parents to be actively present in their children's lives and play an integral role in their upbringing. It is evident that families cherish the precious time spent together fostering strong bonds and creating lasting memories, especially during those crucial early months after childbirth. The introduction of this paid parental leave aligns with these sentiments, recognising the invaluable role parents play in the early years of a child's life.
Building on the legacy of former Prime Minister Julia Gillard's pioneering move, today's bill embodies the ongoing commitment of the Labor Party to continue increasing support for Australian families. Funded through the October 2022 budget, the measures in this legislation stand as a beacon of our unwavering commitment to creating a more inclusive, flexible and gender-equitable paid parental leave system. At the heart of the bill lies the extension of paid parental leave to 26 weeks, a significant leap from the current 20 weeks. This expansion has been methodically planned with an incremental addition of two weeks each year, starting from July 2024 and increasing to a 26-week period by July 2026.
This bill signifies a profound shift in response to the evolving needs of Australia families. This initiative is not merely a policy change. It is a reflection of our commitment to making families a top priority. Families are at the forefront of the Albanese Labor government's policy agenda. This commitment is embedded in the fabric of our government, recognising that strong, healthy families form the bedrock of a prosperous and cohesive society. Let us delve into the details of this transformative legislation, focusing not just on its national implications but also on the direct benefits it will bring to the families of Holt.
We are lengthening the payment period. The extension from the current 20-week period to 26 weeks provides a more sustainable foundation for parents to nurture their newborns and infants. The extra weeks of financial support will mean that families can focus on the crucial early stages of their children's development without the undue stress of financial constraints. We are reserving weeks for each parent. The bill advocates for an increase in the number of reserved weeks for each parent from two to four. This 'use it or lose it' provision ensures that both parents actively participate in the caregiving process by encouraging shared parental responsibilities. We are not just promoting family values; we are laying the groundwork for a more equitable society.
Acknowledging the significance of family dynamics and the need for flexibility, the bill proposes to double the period during which parents can take paid parental leave at the same time, reaching four weeks in 2025. This reform is not just about flexibility; it is about acknowledging the diverse ways families structure their lives and about providing a necessary support to accommodate those differences. The road map for those changes is crafted with input from the Women's Economic Equality Taskforce, whose recommendations have been instrumental in shaping a comprehensive and inclusive approach.
Their insights, coupled with the experience and needs of families in Holt, have shaped a policy that is not just top-down but is rooted in the lived realities of Australian households. This legislation acknowledges the importance of supporting families by providing the means for parents to spend more time with their children during these formative stages, allowing them to nurture a foundation of love, care and connection that will endure throughout their lives.
In addition to these advancements, the bill addresses a minor technical amendment to ensure fathers who do not meet the work test requirements, due to premature births, can access paid parental leave. This provision, already in place for birth parents, ensures that all parents have equal opportunities to bond with and care for their newborns. The implementation of these changes is slated to commence from July 2024, applicable to births or adoptions from that date onward.
This bill marks the largest expansion of paid parental leave since its inception in 2011, representing a total investment of $1.2 billion over five years. The positive reception of these reforms by family and gender advocates, employers, the Business Council of Australia and the ACTU speaks volumes about the potential positive impact of this legislation.
It is estimated that over 180,000 families across Australia will benefit from the extended paid parental leave each year. Within my electorate of Holt, this initiative will be a game changer. The impact of this legislation will be tangible and transformative for my community, given that 82 per cent of households in Holt are families. The lives of families within our community will be directly touched by the extended support and financial security and the equitable framework that this bill proposes.
Crucially, this expansion is a strategic move towards greater gender equality. By encouraging shared care and increasing the reserved period, the bill aims to foster an environment where both parents get actively involved in the upbringing of their children. Investing in paid parental leave is not just about supporting families; it's about boosting the overall health and wellbeing of our society. It is about recognising that families are the backbone of our nation. Ensuring that they have the support they need is fundamental to our prosperity. Under the Albanese Labor government, families are seen not as mere constituents but as vital contributors to the nation's success.
For the 46,000 families in Holt, this bill is not just about providing financial support during crucial life events; it is about recognising the central role families play in shaping the social fabric of our country. Our commitment to this reform is not merely political; it is deeply rooted in the understanding that an equitable paid parental leave system is crucial for the health and wellbeing of parents and children. We know that investing in paid parental leave is not just a cost but an investment in the future, a future where children can thrive, parents are supported and the entire nation prospers.
As we look towards the future, it is imperative that our Paid Parental Leave scheme aligns with the realities of modern Australian families. It is imperative that our Paid Parental Leave scheme is flexible, fair and committed to driving positive health, social and economic outcomes for both parents and their children. This bill is a declaration of our dedication to the wellbeing of Australian families. It stands as a testament to our belief that supporting families is not just a policy; it is a fundamental duty of government.
The changes proposed are carefully balanced, providing increased support to mothers, encouraging active involvement of fathers and offering families the flexibility they need. This bill is not just good for parents; it is good for children, good for employers and good for the economy. It is a declaration that, as a nation, we value and prioritise the crucial role of parents in shaping the future of our society. I urge each member of parliament to stand united in support of this transformative legislation.
Together, let's usher in a new era of support, equality and prosperity for the families of this great nation.
I would like to conclude by applauding the work of the Minister for Social Services, the Hon. Amanda Rishworth MP, for her exceptional work in spearheading the reform of paid parental leave in this country. I commend this bill to the House.
I'd like to begin by acknowledging the important steps being taken by the government and the Women's Economic Equality Task Force. One thing that motivated a lot of voters at the last election was a very real sense that we had a government which didn't understand the concerns and priorities of women—and didn't have enough women in the government either—and had no interest in learning, let alone acting. So I gratefully acknowledge the change we have seen over the last 18 months and the progress that is being made against some of those concerns. The bill today, the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, is part of that progress. It is a step towards the equality and equity that so many Australians want to see, and I welcome it. It implements a further expansion of the Paid Parental Leave scheme, expanding the total leave entitlement for partnered parents to 26 weeks over the next three years, up from the current 20 weeks. It also increases the number of reserved weeks—that is, weeks that can only be taken by the second parent—from two to four, and it does the same for concurrent leave.
The expansions are important and they are welcome. They will make a real difference in the lives of many new parents. But, honestly, we should not believe for a second that these movements and changes are sufficient. In particular, I do not believe they will change the culture of parenting in Australia, which is that it is predominantly the responsibility of the mother, and that must be the ambition of future reforms and of this parliament.
Let me give you some personal examples. I and many of my friends had children around the same time, and many of us had partners—in the cases where it was a man and woman—with similar careers, similar ambitions and similar career trajectories. I would say that probably in at least 80 per cent of cases the partners were relatively equal in their careers, and that changed when children came along, because with my family and those of my friends, in 80 per cent of cases, it was the women who took a back seat, because they took a front seat in caring for children. There are a number of men, who I'm very proud of, who took an active role, taking on significant care of children, going part time themselves and taking significant parenting leave when the children were born. But these were not the majority. This is a culture that I think we need to change, because that time when the women take on more care of the children has a significant impact on women's economic equality. It certainly did for me and the friends that I have in this space. This is why I think it's so critical that we change the culture. I think that this parenting bill could have gone further, and I urge the government to continue to go further in changing the culture and making parenting a truly shared endeavour.
Let's look at the research on this, beyond the anecdotes from me and my friends. Research from the Australian Institute of Family Studies shows that the average number of hours worked by fathers doesn't change significantly after the birth of a child, while the situation for mothers is completely different: the number of hours they work falls by around two-thirds on average. We have a gendered segregation of parenting responsibilities, and this is an enormous issue for the economic participation of women. This is one of the main drivers of the motherhood penalty, the 55 per cent reduction in women's earnings once they become mothers. This is not appropriate.
We are a country that invests heavily in educating our women and promoting an equal and equitable society, but the fact is that, honestly, these efforts are not translating into the outcomes we want to see.
Research by the Grattan Institute has shown that, on average, female parents do two hours more of unpaid care per day than male parents, and male parents do two hours more of paid work per day. Parenting habits at the early stages of a child's life, at those critical early days, are critical in determining future parenting strategies and that sharing of caring, and that is why supporting new parents to equally share the parenting is absolutely critical.