Thursday, 11 June 2020
Paid Parental Leave Amendment (Flexibility Measures) Bill 2020; Second Reading
The importance of making leave available for parents for the arrival of a child is well known, contributing to the health and wellbeing of mothers, babies and the stability of families. A 2016 Ernst & Young study of more than 1,500 employers showed that over 80 per cent of companies that offered paid parental leave reported a positive effect in employee morale, and over 70 per cent reported a boost in productivity. If employees are happy with their work and home balance then they are more likely to be satisfied at work, positively affecting their productivity.
Under the current PPL system, the primary caregiver is given 18 weeks of parental leave pay in a continuous block within 12 months of the birth or adoption of a child. The Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 seeks to amend existing legislation by allowing mothers or primary caregivers to split the 18-week leave block to better suit their situation. This reform will mean that the first 12 weeks of the PPL will remain as a continuous block within the first year, while the remaining six weeks can then be used at any time up until the child turns two.
The purpose of the bill is to provide wider and more convenient options for families so that the PPL scheme can best meet their needs. This amendment will help women who are self-employed or small business owners who cannot afford to be off work for such an extended period—18 consecutive weeks. With the legislation as it now stands, women and primary carers who must return to work effectively lose the balance of their entitlement. With the support of the Senate and the passage of this bill, parents and, more particularly, women will retain their full PPL entitlement and finally be able to tailor their leave to fit their personal circumstances.
Primary carers have a balance of up to six weeks, which, based on a five-day working week, equates to 30 work days to use as they wish after the initial 12-week block. For example, if a woman works from home running her own business and has a baby, under the current legislation she is entitled to Paid Parental Leave which she must take in a continuous 18-week block. During this time, the woman cannot return to work and run her business or she will forfeit her remaining PPL. However, for women in this situation, being away from their business for such a long time has the potential to cause serious financial damage. Incoming clients, as well as valuable momentum, can be lost, especially if the business is in its infancy and has not yet started turning a profit. If the woman wanted to do any work to keep the business going, she wouldn't be able to do so without losing the remainder of her PPL.
The new bill does away with some of this rigidity and will allow mothers to go back to work after 12 weeks, while they retain the option of claiming a further six weeks later. They therefore have the flexibility of using the remaining six weeks as best suits them in their situation. Some may choose to take their leave over the Christmas and new year period, when many businesses slow down, while others may prefer to spread out their leave, taking regular breaks while they continue to manage their work commitments. As for employed women, the flexible leave can help support a more gradual return to work.
Since paid parental leave is dispensed by the employer, employees can negotiate with their employer to work part-time. This could operate as an effective, three-day working week by receiving PPL for the remaining two days. Alternatively, some women may also choose to use the six weeks immediately after the initial 12, making it 18 consecutive weeks of PPL, as before. However the leave is used, the point is that there is now flexibility of choice for women to make a personal decision about what is best for them and their family.
It is anticipated that this reform will help ensure greater economic independence and improved career development, key aims of the Women's Economic Security Statement. The bill will also make it easier for mothers to transfer their leave to eligible partners who become primary carers, thereby encouraging the sharing of parental duties with fathers and secondary carers. This could lend itself to a shift in social norms, whereby fathers take on a more active role in child rearing and giving both parents more opportunity to balance their work and home lives to better suit their situation. As a stay-at-home father, I can thoroughly recommend to take that option up to all fathers who are thinking about staying home.
This bill makes a very worthwhile amendment to an important piece of legislation to support self-starting women to have the same advantages as those conventionally employed. It allows the government to help support women so that they don't have to miss out on either a family or a career. Approximately 4,000 parents are anticipated to use the new flexible leave provisions, where currently around 2,300 mothers fail to use their full PPL entitlement before returning to work. In most cases that's simply because they can't afford it.
This bill will ensure that women's employment, businesses and careers will be more secure and productive, leading to better outcomes for them, their families and, in turn, the nation. I commend the bill to the Senate.