David Pocock (ACT, Independent) Share this | Hansard source

I rise to speak on the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022. In doing so, I note the worthy and very welcome aims of this bill in assisting to close the gender pay gap and provide greater freedom to dads and partners taking time out to spend with their newborn children. It is important we get this right as there is a lot at stake, most importantly the wellbeing of the next generation. Research overwhelmingly shows the benefits of parents taking time out of work to spend time with their newborns. It's important for bonding but also for the mental health and wellbeing of parents. Throughout the committee process, I've also seen evidence of the wellbeing benefits for dads. These are the kinds of benefits we have the opportunity to promote through this bill.

More broadly, for our economy, we know we need to do more to lift women's economic participation. The National Skills Commission estimated that 1.2 million additional workers will be needed across the economy by 2026. A large majority of these roles will be in traditionally feminised industries such as those in the care economy. We are feeling those impacts even now as we look at the shortages of registered nurses available to enter the aged-care system. Modernising our paid parental leave scheme is one lever we can pull to help close the participation gap and, by extension, the pay gap. Deloitte recently reported more flexible ideas around gender norms could lead to an additional $128 billion each year for Australia's economy and deliver 461,000 additional full-time employees into the economy. When we look across the world, there is ample research to show how tweaking PPL schemes can work to lift women's economic participation and close the gender pay gap. This bill presents a first step on that pathway.

There's plenty that's good about this bill. Firstly, the bill allows all paid parental leave days to be taken as flexible days. Allowing flexibility in how new parents manage care and work is a good thing for both parents and businesses. It means that parents and partners can manage a gradual return to work in a way that suits them and their needs. It respects that each parent in every family will have different circumstances, whether that's a grandparent able to help with care or a job with irregular hours. For businesses, a gradual return to work is also optimal. As the Australian Chamber of Commerce and Industry notes, forcing people to take 12 consecutive weeks off work has always been an unnecessary feature of the current scheme. In reality it's far easier for a business to manage a partial vacancy rather than a full vacancy, and it's likely these changes will help strengthen the contact between employers and employees while a person is using PPL.

I also welcome the positive changes for dads and partners. For too long women have shouldered the greatest burden of caring responsibilities for newborns. Currently 80 per cent of all paid parental leave is claimed by women. This is despite the host of evidence showing the benefits of fathers being able to take time to care for newborns in their first years of life, including improved wellbeing for both dads and children. These changes do the right thing, by giving dads and partners greater access to a shared PPL entitlement, which I hope will give them more incentive to take time out of work.

While there's plenty to be proud of in this bill, it really should be seen as a first step. There's so much more to do. Given the workforce shortages being felt in various industries, I feel this bill misses an opportunity to accelerate those changes needed to unlock greater workforce participation by women. The bill will not increase the overall PPL entitlement. It joins together the current 18-week scheme with the separate two-week dad and partner pay scheme into a single 20-week entitlement that can be used by both parents. While it is the government's stated ambition to reach 26 weeks leave by 2026, that is not included in this bill. As of right now, the 26-week entitlement remains just an ambition, and, even after we reach 26 weeks, Australia will still lag behind other OECD nations. The OECD average is 51 weeks, which is more than double what is offered in this bill. PPL is also not offered at a replacement wage; rather, it is offered at the minimum wage. So, at full-time equivalent pay, the OECD average for PPL is 36 weeks, while Australia currently offers just 8.6 weeks.

We know that more is required to increase the participation of dads and partners in PPL and to stimulate workforce participation by women. We know this because the international research in this area is well advanced. When we look across the world, we can clearly see the policy ingredients that are needed. A big ingredient is the 'use it or lose it' period. That is the period within the whole entitlement that is reserved for just one claimant to use. Under this bill, the 'use it or lose it' periods are set at two weeks for each claimant. This is basically what already happens under the current scheme, and so far there has been very little uptake of PPL by men.

Nordic countries that have implemented dedicated parental leave for fathers have seen significant increases in uptake by men. To give one example, when Iceland, in 2002, introduced 13 dedicated weeks for fathers, the proportion of fathers who took leave increased from less than one per cent to 80 per cent. I feel it is a shame that this bill does not contemplate longer 'use it or lose it' periods to greater effect, knowing from international experience that they have been making a huge impact. However, I'm aware that this is a question that the Women's Economic Equality Taskforce is currently considering, and it will form part of another bill on this subject later in the year.

A big concern that's been raised with me through consultations on this bill is around the continued administrative burden that PPL is putting on our small businesses, and these small businesses are increasingly being run by women, who are having to shoulder this burden. With this bill, we have an opportunity to change that by giving small business the option to either pay Commonwealth PPL directly or have Services Australia pay this, as they already do for 40 per cent of payments. I believe there's a really strong argument for medium and large businesses to administer the payment and to ensure that there is a connection between them and the employee taking the leave. However, for small, overworked businesses, we need to be doing all we can to reduce the amount of red tape and cost. Even small changes to a payroll can have a big impact on a small business. Small businesses need to liaise with the government, grapple with how to manage the flow of cash between Services Australia and their employee, and recalculate how much tax needs to be withheld.

It is a clear pain point, and it's something that has been raised with me by businesses in my community, the Australian Chamber of Commerce and Industry, the Canberra Business Chamber, the Australian hairdressing association and others. And it's not a new concern. It was something that was raised with the parliament when it was first contemplating PPL over a decade ago. It was then raised again in a review of the PPL scheme, which I quote here:

… employer and industry groups generally did not support the employer role, particularly in relation to small business. These stakeholders considered the employer role places an unnecessary administrative burden on business, and any benefits to employers in terms of employee retention were not commensurate with the administrative burden imposed.

This is feedback that has been reflected in my conversations with small businesses here in the ACT. Kate from The Healthy Eating Clinic told me her small business, employing 11 people, has seen payroll processing time blow out from half an hour to two hours. That lost time is precious, and it adds up. We hear a lot about the workforce shortages. In many small businesses, it's the owners of those businesses who have to step up and work extra hours to fill the gap.

This burden on small businesses will likely increase when, hopefully, we start paying super on Commonwealth PPL as well, and that means small business will be logging on to myGov, receiving money from the Commonwealth, withholding tax and sending it back to the ATO, processing super and then sending that on to the super fund—and doing this every pay cycle. None of these transactions involve any interaction between the business and the staff members other than a deposit of money and an emailed payslip, but the greater burden risks being a disincentive to employing women—the last thing we want to see with this legislation.

I have been frustrated to hear we shouldn't take action because it has always been a pain point. Clearly, just because something has always been broken doesn't mean it shouldn't be fixed. It's also frustrating to hear that we need to force small businesses to administer this payment as it will preserve their relationship with their employees. Small businesses are likely to be far closer to their employees than medium and large businesses. Often in small businesses your staff may also be family—if not technically, then in spirit. Some small businesses may want to administer the payment themselves, and that's fine. We should provide them with the option, recognising small businesses are as unique as the people that run them and require some flexibility. It is a small piece of red tape that we can start cutting today, and I hope the Senate will endorse my amendment.

I also want to join my colleagues across the chamber in urging the government to prioritise changes to extend super to paid parental leave. PPL is currently one of the only types of paid leave for which the superannuation guarantee does not apply. Paying super on PPL would significantly reduce the super gap between men and women. Currently, women retire with nearly 35 per cent less super than men, which is clearly unacceptable and something we need to address.

One last point I wanted to bring to the attention of the Senate is issues with how we are supporting foster and kinship carers. While this bill contemplates adoption, I want to note that adoptions are generally quite rare in comparison to the number of children in foster or kinship care. Foster and kinship carers are not entitled to PPL. It has been raised with me that the exclusion of foster and kinship carers from this type of leave actively discourages those carers from taking opportunities to welcome and settle often very vulnerable children into a new home environment, and we know how important those early years are for children. One of my constituents has seen the impact firsthand. She was able to take time away from work to spend with a child placed in her care, and she noted how it promoted steadiness in their relationship which endures today. She also experienced not being able to take time away with another child and experienced a placement breakdown as a result of this. She's raised this with me: 'To have those extra weeks to focus on the child, setting aside employment pressures, is invaluable to the child or young person to build bonds and attachments crucial to their development.'

While foster and kinship care is the domain of the states and territories, no payment is offered to help them take time out of their work. It seems to me that foster and kinship carers are falling between a gap in our federal, state and territory systems, and that more can and should be done to assist them in taking time out of work for the benefit of the child or the children they're looking after. I urge the government to consider this in more detail. I commend the bill to the Senate.