Tuesday, 28 November 2023
Paid Parental Leave Amendment (More Support for Working Families) Bill 2023; Second Reading
Paid parental leave is essential for working families, for parents and for their children. The changes in this bill update a scheme that is now more than a decade old. It does the work those opposite failed to do during their time in government but the work that Labor governments do.
Almost 13 years ago, the Gillard government introduced Australia's first national Paid Parental Leave scheme. This change was spearheaded by Jenny Macklin, my predecessor as the member for Jagajaga, and I was proud to work with Jenny to help bring paid parental leave to life as part of the reforming work of the Gillard government. This Labor government is now doing the work to continue to help Australians and Australian families, building on the existing Paid Parental Leave scheme and the positive impacts it's had and that we've seen in the past 13 years, making it even better.
These reforms to Paid Parental Leave are a significant expansion of the scheme, taking it to 26-weeks leave by July 2026. This expanded scheme will include four weeks of reserve leave for each parent from 2026, meaning that both parents will be encouraged to share caring responsibilities for their kids. This does send a strong signal to families and to employers that both parents, mum and dad, should be playing a role in taking on care responsibilities.
The bill also introduces concurrent leave, which means that from 2026 both parents can take four weeks of leave at the same time if they want to, giving families more flexibility in how they organise their care. This does really reflect the reality of modern families, where both parents are working and where we increasingly see that dads do want to take time off to care for their children.
We know these changes will support families a whole. We also know that they will support better maternal health and recovery by giving women more supported time after giving birth. Having fairly recently gone through the experience of having babies myself, I am very aware that there is possibly no greater disruption in a woman's life, and too many Australian women do still feel like they go through that period without enough support. That is another reason why it is really important that we expand this scheme and that we make it easier for parents to take the flexible leave that will support women in this life-changing period. This will provide long-term benefits to both parents to take good chunks of leave, balance work and family life and help to embed the habits of care in the months and years that follow, for the rest of that child's life and for the household. Around 180,000 Australian families will benefit from these changes each year.
As I've already said, the introduction of paid parental leave in 2011 was a game changer for Australian families. Eighteen weeks paid leave fully funded by the government was a first for many families, particularly for women in lower paid industries and in casual or part-time work. In many cases employers in those industries were not offering paid leave schemes, so the government scheme, introduced by a Labor government in 2011, was the first time those women had access to paid leave. It gave them stability and it gave support to families at a time of great change in their day-to-day lives. It did mean a parent—and it was and has been overwhelmingly the mother—could take time in those crucial early months to care for their child while still having money coming in and while continuing that connection with their workplace until they were ready to return.
That connection is important. A report on the early years of PPL in Australia found that it has improved longer term attachment to the workforce, so, rather than women simply leaving jobs because they couldn't get any paid leave, they were continuing to have a connection to that workplace. More women have been returning to the workplace 12 months after giving birth following the introduction of the scheme. Of course, that is important not just for those women individually but for all of us, in terms of workplaces and productivity in our country.
The present setting for PPL is up to 20 weeks, with two weeks reserved for each parent on a 'use it or lose it' basis. From 1 July next year, this scheme will be expanded by the government by two weeks each year until PPL reaches 26 weeks in 2026. That's a full six months for families. As part of that expansion, the number of weeks reserved for each parent on the 'use it or lose it' basis will be four weeks. That then leaves 18 weeks of paid leave remaining for parents to divvy up how they like and for whatever structure works best for their family. Again, there is that element of flexibility and of recognising that, for modern families, both parents are generally trying to juggle work and both parents want to be part of caring for their children.
The changes do mean parents will be able to take up to four weeks of PPL at the same time, doubling the existing measure. With that, as I said, come the benefits of parents also being able to take leave together. This goes back to that point on maternal recovery. The extra support that comes from being able to take leave together is very important, and I do hope that that reduces some of the stress that parents find at this life-changing moment of upheaval. Single parents will also benefit from the expansion. They'll have access to the entire 26-week entitlement.
Paid parental leave in this country has been a huge step forward, particularly for workplace and economic equality for women. We do know that in this country the disproportionate share of unpaid caring still falls to women, and that does have long-term consequences for their careers and for their economic security. The Grattan Institute, in a report, highlighted that care and family responsibilities account for 39 per cent of the gap between men and women. Time out of the workforce and part-time work associated with care puts women on a lower earnings trajectory because this reduces their years of job-specific experience and because flexible part-time work is generally associated with slower career progression.
Of course, over a woman's working life, this trajectory leads to a lifetime earnings gap—which is rightly called a 'gulf'—between mothers' and fathers' earnings. We've seen data that, after a woman has a baby, her earning potential decreases, while men see no change. That's why this scheme is so important. I know that previously, for so many women, the combined effects of not having access to good paid parental leave and not having access to affordable child care have been a really huge part of why they may have decided to not participate in the workforce as much as they wanted to or as much as it would have benefited them and their family to do so. So it is important. Our government is working through this Paid Parental Leave scheme, through our changes to child care, to make that easier for families.
This reform will allow both parents to take up caring responsibilities. International evidence shows us that, when both parents take leave and take on care roles, there are long-term benefits. Rather than what we've previously called the primary caregiver—the mother, in the vast number of cases—taking all or the vast bulk of the leave, we will have what we call the secondary caregiver—the father, in most situations—taking leave as well, meaning those caring responsibilities are being shared. This will normalise the idea that dads take time off too, that they get involved from the very beginning. It will normalise that parenting is a partnership.
The evidence—particularly from overseas where there are paid parental leave schemes already in existence that provide greater support for men to take leave—shows us that, when fathers take a greater caring role from the start, there is a more even distribution of household responsibilities, not just in the immediate term but persisting throughout the child's life. That's a good thing for families and it is also a good thing for how people interact with their workplaces, because the research also shows us that dads who use paid parental leave tend to have increased job and life satisfaction and increased happiness, in having the chance to spend solo time caring for their child. It may not always feel like that at the time, when you're spending solo time caring for a child, but the data does show us that it absolutely increases people's sense of satisfaction and the sense that they can balance the responsibilities they have between work and family. That's what our government wants to see and support—both parents being a part of caring. Shared care is important, and we want workplaces and communities to reinforce and support this idea too.
We're certainly not there yet. The Grattan Institute has found that Australian women do an average of two hours more unpaid work per day than men. On the other side, Australian men do two hours more of paid work. We have one of the biggest labour divisions of countries in the developed world. In 2017-18, 0.5 per cent of parents using the parental leave pay part of the scheme—the primary caregiver part—were men. Just 0.5 per cent of men were the primary caregiver. The dad and partner pay aspect of the scheme, which was almost entirely taken up by men, had only half the uptake of parental leave pay. So we're still not seeing the uptake that we would like to see. I very much hope these changes will drive an uptake in that flexibility, normalising the idea that men are able to take that leave, that both parents can take that leave, when the child is born and make use of it.
The 'use it or lose it' provision is particularly important here. With these changes, each parent has at least four weeks of leave to take. Beyond that, they can use the remaining weeks in whatever combination they like. Again, the international evidence shows us that 'use it or lose it' provisions are particularly effective in encouraging fathers to take up leave. In Quebec in 2005, the year before their version of this type of 'dad leave' started, 28 per cent of fathers were taking parental leave. In 2018 this had jumped to 80 per cent. The 'use it or lose it' provision there was particularly important in making that change.
We know that expanding PPL means that we spend more money on the scheme, but what we get from that is an increase in GDP from increased workforce participation by women. So we all, as a community, benefit from the economic participation element that can come from this scheme.
I'm also really pleased to see more and more employers taking up the challenge of providing good paid parental leave schemes and providing paid parental leave schemes that support both women and men to take time off. That is a powerful thing that employers and workplaces are normalising, and we do want to see a greater uptake of those employer led schemes. Importantly, the government scheme works closely with employer schemes to ensure that parents and families get as much support and as much time off as they can in those crucial early years.
Our government hasn't wasted time in getting on with making these changes to paid parental leave. As I said, it was a Labor government that introduce this scheme that meant that, for the first time, Australia did have a national paid parental leave scheme. It's been a decade in between, but our government, since we have come into office, has got straight on with listening to the experts, listening to Australian families, and modernising and updating our Paid Parental Leave scheme to provide families with expanded support, to provide mothers and fathers with flexible care, to provide workplaces with care that works for their employees and to benefit us all by making sure that we are supporting Australian families at a time when we know that cost of living is a real issue, when we know that parents are making critical decisions about how they do support their families. I know that this Paid Parental Leave scheme, this expansion of the amount of support that Australian families are receiving through the Paid Parental Leave scheme, will be warmly welcomed in my community and in communities around this country.
We do know that it is often the time when families are looking at having a new child that they do particularly feel some of those cost-of-living pressures and they are making decisions about financial security and financial options into the future. This scheme reflects the realities of modern Australian families' lives. It reflects the fact that both parents work, that both parents want to be involved in caring, and it allows that to take place for families. This scheme will support women to remain connected to the workforce. It will do some of that work we still need to do to continue to close the gender pay gap, to continue to build women's economic participation so that they are not left at the end of their working lives with a gap in their retirement incomes. It will also, importantly, support young people and children. We do know that, when families are secure, when both parents are able to participate in caregiving, that is a much better start to life for Australian children.
I'm very pleased and proud to be speaking to this bill today and I'm very pleased and proud that it's a Labor government that's building on what was a very important Labor initiative in 2011 with this expanded and more flexible scheme.
I seek leave to speak again.
I move an amendment to the amendment moved by the member of Deakin, as circulated in my name:
That all words after "House" be omitted with a view to substituting the following words: "
(a) that parenting in Australia is a disproportionately unequal activity, with mothers significantly more likely to undertake parenting obligations than fathers, at significant economic and professional loss; and
(b) the essential importance of shared parenting for the healthy development of children, gender equality, women's economic empowerment, and paternal fulfilment and mental health;
(2) notes the bill expands the 'reserved period' from two to four weeks; and
(3) calls on the Government to provide at least six reserved weeks in the next tranche of Paid Parental Leave reform".
I'd like to start by acknowledging the important steps that have been taken by the government and the Women's Economic Equality Taskforce. One thing that motivated a lot of voters at the last election was the very real sense that we had a government that didn't understand the concerns and priorities of women and wasn't acting on them, so I'm grateful to acknowledge the change we've seen over the last 18 months and the progress that has been made against some of those concerns.
The Paid Parental Leave Amendment (More Support for Working Families) Bill 2023 is part of that progress. It is a step towards equality and equity that so many Australians wish 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. It also increases the amount of reserved weeks—that is, the leave that can be taken by the second parent only—from two to four and does the same for concurrent leave.
These expansions are important and they are welcome. They will make a real improvement in the lives of many new parents, but we should not believe for a moment that these changes are sufficient.
In particular, I am concerned that they will fail to change the culture in parenting in Australia, which is that it is predominantly the responsibility of the mother. This is borne out by research from the Australian Institute of Family Studies, which 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. This is one of the major drivers of the motherhood penalty, which is the 55 per cent reduction in women's earnings once they become mothers.
We are a country that invests heavily in educating our women and promoting an equal and equitable society, but the fact is that 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 around two hours more unpaid care work per day than male parents, and male parents do two hours more paid work.
There's a wealth of evidence around this extremely gendered division of child care, which is driving the gender division of our workforce and our labour markets. For example, Australia's rate of primary care undertaken by a male partner is one of the lowest in the OECD. While in Sweden and Iceland the male partner is the primary carer in 40 per cent of cases, the rate in Australia is just around one or two per cent. The average in the OECD is around 18 per cent. We are incredibly gendered in how we bring up our children.
We see that this plays out in our workforce as well, because Australia has one of the highest rates of part-time work for women in the world: 37 per cent, one of the highest in the OECD, versus the OECD average of 25 per cent. Australian men, when they have children, don't really change the amount of time they work. When Australian women have children, they dramatically change their workforce participation and their economic engagement in the workplace. I've seen this personally in Wentworth amongst a whole group of different people, with parents who had had relatively similar levels of careers, aspirations, seniority and earning capacity before they had children. In the vast majority of cases where women took on the primary caring, those things dropped back significantly for them, and that persists and persists and persists.
These are cultural issues in Australia that have a very significant impact on women's economic empowerment, but they also have an impact on fathers' engagement with their children, fathers' mental health and also the health of our children. We want more men to feel free to become equal or even primary caregivers, to embrace the joys of parenthood and to realise closer, more meaningful relationships with their children. We know that, if they do this, if they take up that initial significant amount of parental leave, they will have increased job satisfaction, increased happiness and a new sense of purpose in many cases. We want women, at the same time, to maintain their careers and their professional aspirations and not feel like these need to be sacrificed for motherhood. It is remarkable and regrettable that so many women make this sacrifice even when they have the higher income in the relationship.
So there is a question that I think we have when we look at this bill. Obviously, this is a very positive bill and it is a step forward, but how do we change the culture of parenting in this country? How do we make sure that parenting is about men and women and is truly a shared endeavour between parents, not a burden that continually falls on women almost solely? How do we change these norms?
One lever obviously is providing more reserved weeks. This provides a significant incentive for the second parent to take more leave and become more involved in the child's early weeks and months. The government's proposal shifts us from two weeks to four weeks, and this is welcome. But I'll be honest: I'm really concerned that this is just not far enough and that we need to move to six or eight weeks to ensure that the incentive is really significant, is properly utilised and starts to change the culture of care in our country. If we're going to achieve a culture of shared parenting, we need to ensure that dads are involved from the very beginning, because we know that the norms started when babies are first born often persist through childhood. We need shared and equal parenting to become more widely acknowledged and accepted within our community.
I have spoken to the government, and I appreciate that the government has further to go in this policy space. But I will continue to urge them that they need to go further to, particularly, support a culture of shared parenting and that we need to see further progress on this in the next round of paid parental leave reforms, which I hope are not going to be too far away. Thank you.
The original question was that this bill be now read a second time. To this the honourable member for Deakin moved as an amendment that all words after 'that' be omitted, with a view to substituting other words. The honourable member for Wentworth has now moved as an amendment to that amendment that all words after 'House' be omitted, with a view to substituting other words. The question now is that the amendment moved by the honourable member for Wentworth to the amendment moved by the honourable member for Deakin be agreed to.
The Paid Parental Leave Amendment (More Support for Working Families) Bill 2023 is a major investment in paid parental leave. It's the largest in more than a decade. This is the second tranche of the government's paid parental leave reform that was announced in the 2022-23 October budget. It follows the first tranche that we legislated at the start of the year to modernise the scheme to reflect how Australian families and their needs have changed over the past decade. These changes, which commenced on 1 July, give more families access to the payment, give parents more flexibility in how they take leave, and encourage parents to share care.
The bill expands paid parental leave to 26 weeks by: increasing the total number of weeks by two weeks each year starting on 1 July 2024 and reaching 26 weeks on 1 July 2026; increasing the number of weeks reserved for each parent on a 'use it or lose it' basis, reaching four weeks in 2026; and doubling the number of weeks that parents can take concurrently, reaching four weeks in 2025.
When we announced our paid parental leave reform in the 2022-23 October budget we tasked the Women's Economic Equality Taskforce with providing advice on the best model for paid parental leave to advance women's economic equality. We wanted to ensure that any changes we institute will continue the current growth of gender equity in Australia. The task force recommended reserving four weeks for each parent on a 'use it or lose it' basis and allowing parents to take up to four weeks of leave at the same time, and we've adopted that advice in the bill. This is important to enable both parents to bond with the child. Childhood attachment is so important to outcomes for older children and for adults.
This bill will continue to push Australia in the right direction on women's economic equality. Starting on 1 July 2024, two additional weeks of leave will be added each year until reaching 26 weeks in 2026. Currently up to 18 weeks are available for one parent, which is usually taken by the mother, with two weeks reserved for the dad or partner. The increase to 26 weeks means that mums can access up to 22 weeks of paid parental leave—an additional month compared with the current scheme. It also doubles the period reserved for the dad or partner from two to four weeks on a 'use or lose it' basis.
Gender experts have been clear about the need for reserve portions to promote shared care and gender equality, because we know that when fathers take a greater caring role from the start it benefits mums, it benefits dads and it certainly benefits the kids—the whole family. We know that when men take parental leave it normalises it, and it will be a step to addressing the 'mummy pay gap', where women lose years and seniority in their careers because they've taken parental leave and they suddenly find themselves on the mummy track.
Crucially, this expansion provides additional support to mums after childbirth, supporting their own and their child's wellbeing while also encouraging dads and partners to take more leave. The changes in this bill send a clear message that treating parenting as an equal partnership supports gender equality.
The government value both parents as carers and we want to see that reinforced in workplaces and in our communities. In that vein, this bill also provides flexibility by increasing the number of weeks parents can take paid parental leave at the same time. Single parents will have access to the full 26 weeks because all families need time to care for their new baby. The bill also includes a minor technical amendment to ensure access for fathers and partners who do not meet the work test requirements but would have if their child had not been born prematurely. This provision is already in place for birth parents. The changes will commence from 1 July 2024 and apply to births or adoptions from that date. Over 180,000 Australian families are expected to access Paid Parental Leave each year and to benefit from these changes.
The October 2022-23 budget measure was widely welcomed by a wide range of stakeholders, including the Business Council of Australia, the ACTU, Minderoo's Thrive by Five, the Parenthood and Sam Mostyn, chair of the Women's Economic Equality Taskforce. The expansion to the 26 weeks is the largest investment in the scheme since it was introduced in 2011, and this reform reflects our continued commitment to improve the lives of working families, improve outcomes for children and advance gender equality. Improving paid parental leave is a critical reform. It is critical for families, it is critical for women and it is critical for the economy. The Albanese government knows this and is acting to ensure all families are able to spend time with their children during this important stage in their lives.
I know paid parental leave is vital for the health and wellbeing of parents and their children. I know this because it didn't exist when I gave birth to my three boys. When I told the staff in my office that paid parental leave didn't exist when I had my children 24 years ago, they looked at me like I was from another century. It's such a normal part of life now. It is such an expected thing that you would not sacrifice your finances to have a baby. I went on unpaid parental leave at 18 weeks of gestation. As a triplet pregnancy, it was, of course, a high-risk pregnancy and, by that stage, I was having difficulty walking. So I went on unpaid parental leave at 18 weeks, which had a significant impact on the family finances. My children were born at just under 35 weeks and I went back to work part time when they were three months old. That's a long time without pay for any family. Paid parental leave would have changed my life.
This is absolutely another initiative by this government to address the cost of living in ways that are not inflationary. When you have a new baby—or, in my case, three new babies—the last thing you need is financial stress on the family. In this day and age, many families have both parents working, and both parents want to keep working. For mothers to be able to remain connected to work and avoid the mummy gap and the impact of being a parent on their career is a really important step forward. Not only is it vital that parents are given time to raise their children; investing in paid parental leave also benefits our economy and is an opportunity to advance gender equality.
Before the last election, my electorate told me that they were concerned at the lack of interest the previous government had in the status of women and the things that impacted women's lives. I am pleased to say that we recently heard we have the lowest ever gender pay gap at 13 per cent. We've still got a very long way to go, but at least we are moving in the right direction. This is a government that's paying attention to that.
Businesses, unions, experts and economists all understand that one of the best ways to boost productivity and participation is to provide more choice and more support for families, and that means more opportunity for women. That is why we made Paid Parental Leave reform a centrepiece of our first budget. We invested half a billion dollars to expand the scheme to six months by 2026. This is the largest investment in paid parental leave in over 10 years. It will benefit 180,000 Australian families each year and it reflects the Albanese government's commitment to improve the lives of working families, support better outcomes for children and advance women's economic equality.
Together, our changes strike an important balance of increasing support to mums, encouraging dads to take leave and providing families flexibility in how they choose to structure their care arrangements. It is critical that our paid parental leave scheme supports modern Australian families and their evolving needs. This is a scheme that is flexible, that is fair and that drives positive and social economic outcomes for both parents and their children. Crucially, our bill gives families access to more paid parental leave, provides parents options in how they take their leave entitlements and encourages them to share care to support gender equality.
This bill is good for parents, good for kids, good for employers and good for the economy. I commend the bill to the House.
The Greens welcome the extension of the paid parental leave scheme. Increasing the availability of leave from 18 to 26 weeks is an important step forward in ensuring that parents are adequately supported in the crucial first few months of parenthood. But why do people have to wait for another three years to get the 26-week entitlement? Women have already waited over a decade for fairer paid parental leave. This should come much sooner, and we should be moving quickly to 52 weeks paid parental leave and paying superannuation on PPL.
Unions and business groups are united in their calls for a fairer PPL scheme that includes 52 weeks paid leave, superannuation and more incentives for both parents to share care from the outset, for its economic and social benefits—now, not staggered over the next three years. Australia has one of the weakest parental leave schemes globally. The experience in other countries puts beyond doubt that more equitable parental leave coupled with free child care improves women's workforce participation and helps shape the long-term sharing of care work.
The reintroduction of 'use it or lose it' provisions in this bill, the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, to encourage shared parenting is a welcome change. We've seen time and again in Scandinavian countries how this provision causes a huge jump in the number of dads taking leave, and that fairer sharing of care has been sustained for more than a decade. But Labor can and must do more to make the PPL scheme fairer, and immediately. The Women's Economic Equality Taskforce has again recommended that super be paid on PPL, a measure that would improve women's economic equality. But the government are making women wait to fund it, but can somehow find $313 billion for the stage 3 tax cuts. The Greens will be pushing to ensure Labor actually listens to WEET's advice, particularly regarding paying super on PPL and extending the scheme to 52 weeks.
Time out of the workforce and taking on more unpaid labour contributes to the gender pay gap and the super gap. By failing to pay super on parental leave, the government is increasing the risk that more women will retire into poverty. Women deserve fairer paid parental leave. It improves their economic security, reduces the gender pay gap and increases the likelihood of mothers returning to work. Fairer paid parental leave is a no-brainer that benefits everyone—parents, children and the economy. If we scrap the stage 3 tax cuts, we can easily afford it.
I rise to support the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023. We're the first government in Australia's history with a majority of women in our ranks. As the finance minister and Minister for Women has often said, we know equality for women is not just an add-on or a nice-to-have; it's absolutely crucial for our economic prosperity. That's why, in our first budget last year, we expanded the paid parental leave scheme and made it more generous.
On 1 July Australians began to benefit from these reforms. This was the biggest expansion to paid parental leave since its creation, with the government investing more than $530 million to progressively scale up the scheme, reaching six months paid leave in 2026.
For two-parent families, a portion of this leave will be reserved for each parent, to encourage families to share caring responsibilities. Again, this goes beyond taking a bit of pressure off household budgets; this is about greater equality and greater security for Australian women and about dads doing their bit. It goes to the PPP framework of population, participation and productivity. That's what makes it more than good social policy; it's good economic reform as well.
This bill implements the second tranche of our significant expansion of paid parental leave, first announced in last year's October budget, increasing the scheme to 26 weeks by July 2026. It's about the Albanese government keeping its commitment to improving the lives of Australian working families. With this legislation, the government is committed to providing each parent four weeks of reserve leave from July 2026, when the full scheme is implemented, which will encourage shared care and send a strong signal that both parents play a key role in caring for children. We're increasing the amount of weeks reserved for each parent on a 'use it or lose it' basis, reaching four weeks in 2026.
The bill introduces concurrent leave, meaning that, from 2026, both parents can take four weeks leave at the same time if they choose to do so, providing flexibility for families in how they arrange their care. Families come in different shapes and forms and have different needs and aspirations and different work arrangements, so that's very important. It also aids maternal health recovery, providing the birth parent with extra support as they recover from childbirth, and it's been shown to reduce parental stress, so it's good for mental health as well. It's good for long-term health and wellbeing for both children and parents.
These changes reflect the additional advice on PPL sought by the government from the Women's Economic Equality Taskforce and represent the largest investment in paid parental leave since the scheme was first introduced in 2011 by the Gillard Labor government; it's always a Labor government that does these types of things. We've responded to sustained calls from a wide range of stakeholders to improve and expand the scheme, particularly to encourage shared care.
The bill introduces a minor technical amendment to ensure access for fathers and partners who don't meet the work test requirements but would have if their child had not been born prematurely. The provision is already in place for birth parents. Importantly, this investment will increase support for both birth parents and partners. Up to 22 weeks of leave will be available for one parent, up from 18 weeks, with four weeks reserved for the other parent, up from two weeks. Single parents can access the full entitlement. As well as increasing the reserved period to encourage shared care, which is critical for women's economic equality, the bill also gives families more flexibility by doubling the period parents can take concurrently from two to four weeks. Altogether, this legislation delivers more support for working families, improves outcomes for children and advances gender equality. The bill follows changes commenced from 1 July 2023 to make the scheme more accessible, flexible and gender equitable. These important structural changes lay a foundation for our expansion of the scheme to 26 weeks.
From the Jobs and Skills Summit and the employment white paper, the government has heard loud and clear that support for families to balance care is critical to ensuring women's long-term economic equality. In fact, this was one of the strongest points of consensus and one of the clearest calls for action from the Jobs and Skills Summit in September last year. Businesses, unions, experts and economists were all on a unity ticket on this. They all understand that one of the best ways to boost productivity and participation across the economy is to provide more choice and more support for families and more opportunities for women. It ticks all the boxes under the PPP framework. There's also extensive research—for example, from the Grattan Institute and Equity Economics—showing that boosting women's labour supply or workforce participation is one of the best ways to increase GDP.
The Albanese government has listened, consulted and taken action to deliver Australian families the kind of support they need to boost productivity, boosting the economy and increasing the time parents have with their newborns. Indeed, the October 2022-23 budget measure was welcomed by a huge cross-section of stakeholders—the Business Council, the ACTU, Thrive by Five, the Parenthood and the chair of the Women's Economic Equality Taskforce, Sam Mostyn.
We know that good women's policy is good economic policy. Women will tell you that.
They've been telling men that for years. This investment is promoting parenting and an equal partnership while boosting the economy. This is all about making sure that every family has more choice, better security and more support.
The changes to the scheme better address the needs of families and provide greater security. Roughly 180,000 families who receive paid parental leave each year will benefit from a more generous scheme that supports maternal health and wellbeing and encourages dads and partners to take leave.
It's estimated that about 4,300 people would now gain access to the scheme who would be ineligible under the current arrangements. Not only that, this will help families to balance work and care. It's a double dividend for the Australian economy. It strikes a balance between supporting families' greater gender equality and supporting workforce participation.
Subject to the passage of this bill, two weeks of additional payments will be made from 1 July 2024, applying to births or adoptions from that day, increasing the overall length of paid parental leave by six weeks by July 2026. Again, the bill increases the number of weeks reserved for each parent to four weeks in order to encourage the sharing of care and household responsibilities. The rest of the 18 weeks can be split in any way people choose. They can choose to use it concurrently—by both parents at the same time—for up to four weeks. They've tried to make this as flexible as possible.
The bill increases the number of weeks people can take and increases flexibility, and that's a big improvement. I think the impact firstly on mums and dads being able to take time off from work for the birth of a baby is extremely important, and, with the reserved period as well, we're going to see an increase in the sharing of caring responsibilities in households. I think that's extremely important. Children need to know that dads and partners, not just mums, are the ones involved in the caring of them from their time of birth.
Another key objective of the scheme is to encourage partners and fathers to take leave, and that in turn helps balance work and family life. The changes in the bill send a clear message that the government supports shared care. We want to see that reinforced in workplaces and across our communities.
It's worth noting the taxpayer funded Paid Parental Leave scheme is a minimum entitlement designed to complement employer provided leave, therefore it doesn't act in substitution—it's a minimum entitlement. And we're encouraging employers and employees, unions and businesses to look at a more generous scheme on top of it. It's the minimum entitlement.
Data collected by Workplace Gender Equality Agency shows the portion of businesses providing their own paid parental leave has increased over the last decade. This positive trend demonstrates employers increasingly see themselves as having a role alongside government in providing paid parental leave. We want to see that continue in the future. We definitely want to see that continue. It's important we have a paid parental leave scheme that complements other paid parental schemes offered by numbers of employers, and that's why this bill is so important.
Look at the OECD—and we always compare ourselves to the OECD—Australia is historically towards the bottom in terms of support for paid parental leave. This is not only to do with child care; we need to increase women's participation through this measure so they can stay in the workforce and build productivity and build their living standards.
On a related note, it was great to see reports today that Australia's average gender pay gap, as measured by the Workplace Gender Equality Agency, fell by 1.1 per cent and points to a new low of 21.7 per cent over 12 months to March. Since coming to office, we've worked hard to improve women's economic equality in Australia, and it's encouraging to see this reduction in the gender pay gap.
Earlier this year we passed legislation to improve transparency on gender pay gap reporting to accelerate the closing of the pay gap and keep a spotlight on the issue. But we also know that to close the gender pay gap we need to address gender segregation in the workplace and ensure caring responsibilities are shared within families, and that's why this bill is important. That's where PPL and the measure in this bill will go a long way in encouraging more sharing of care and household responsibilities.
Paid parental leave is another great reform introduced by Labor. Very little happened in this space in the last decade after the Gillard government introduced it. Then, in our first budget, we announced the change. We were legislating an increase from 20 weeks to 26 weeks so parents could have more time off after the birth of their child. That's a very significant increase. We think this helps a lot of families to better deal with cost-of-living pressures as well as having extra weeks off that are paid and will be of great assistance. It's an investment of $1.2 billion over five years. Of course, it benefits the broader economy in terms of workforce participation, and the multiplier effect, if you like—if you're a Keynesian like me—will be much greater than that.
As a result of these reforms, from 2026-27 the government's total investment in PPL will be around $4.4 billion a year. This is a significant investment that reflects the government's commitment to better outcomes for families and advancing economic equality for women. I know a lot of working families with young children in my electorate will benefit hugely from this. In the 2021-22 financial year, we saw the number of families grew, and it will grow to 2,625 by 2022-23.