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.
I'm grateful to have the opportunity to speak on the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 and the subject of paid parental leave. It's an area that Australia could and should be doing a lot better in, particularly when we're compared with similar OECD countries.
Of course, up until the introduction of the Paid Parental Leave scheme by the Gillard Labor government in 2011, Australia was one of only two OECD countries that did not have a paid parental leave scheme, the other country being the United States. And, while the scheme isn't perfect, 150,000 parents a year do benefit from it. Nearly half of all new mothers benefit from the scheme, and this has allowed improvements when it comes to enabling women to continue to participate in the workforce; enhancing the health of birth mothers and children; and also, critically, in promoting equality between women and men. However, it's important to note that we do still have further to go on all of these.
The flexibility measures that we're talking about today will, hopefully, go some way to improve these indicators even further. The flexibility measures in this bill will change the paid parental leave rules by splitting the 18 weeks of publicly paid parental leave into a 12-week paid parental leave period and a six-week flexible paid parental leave period. The 12-week period will still have to be taken as a continuous block, but will now be accessible by the primary carer at any time during the first 12 months. Right now, it has to be taken immediately after the birth or adoption of a child. The six-week flexible paid parental leave period will be able to be taken at any time during the first two years, and doesn't need to be taken as a continuous block. That's going to allow families to split their entitlements over a two-year period, with periods of work in between. The changes are modest but they will, hopefully, allow parents more flexibility when it comes to sharing parenting responsibilities in a way that works for them. Parents will now be able to use the leave when it suits them most, rather than it being entirely prescribed.
In practice, the most likely use of this new flexibility will be parents spreading the new flexible paid parental leave period over a number of months to allow them to return to work part-time. And while these changes are really positive, they are modest. They don't increase paid parental leave entitlements for families. We do need to look at both the quantity and the quality of support that we're providing to new parents in this country, because when compared with other OECD countries we're starting to fall behind. Unfortunately, the bill doesn't do anything to address that or to change that. For example: other countries are quickly increasing the support that they provide to fathers and to partners, both to encourage them to spend more time at home during a child's early years and to increase the flexibility for families as well.
Again, this bill does provide more flexibility, but it's a small step and there are plenty of issues that it doesn't solve which we, as a parliament, need to think about in the context of paid parental leave. One of those critical issues is the persistent gender pay gap in this country. Female workers in Australia earn on average 14 per cent less than their male colleagues, which is an extraordinary figure to be citing in 2020. This has been persistent over the last two decades, and the changes—the narrowing of that gender pay gap—have been really minor. Paid parental leave and providing families with flexibility are major factors in addressing the gender pay gap, but not enough on their own.
With the current COVID-19 crisis ongoing, we're currently relying on so many female dominated industries to keep us safe and healthy: our medical, hospital and allied health workers, our social carers, aged carers and disability carers and, of course, our early childhood educators, who've done such a heroic job over the past few months by continuing to go to work every day to care for and educate future generations and keep Australians at work. On average, all of these groups of workers are paid significantly less than their male colleagues in other sectors and, indeed, within the same sectors. In healthcare services, the gender pay gap is a whopping 32 per cent. So these essential workers need a lot more than just our thanks at this time. What they really need is recognition in their pay packets and the ability to progress their careers with the respect and the recognition that they deserve.
Paid parental leave is an important part of this. It's also an important part of the discussion around workforce participation, and ensuring that women stay in the workforce and in these critical industries. In relation to paid parental leave, a pressing issue raised by my friend and colleague, the federal member for Bendigo, that needs to be addressed is those parents who could miss out due to the COVID-19 crisis, because to be eligible for paid parental leave you must have worked an average of one day a week for 10 of the last 13 months. Right now, across the country, there are thousands and thousands of workers—and we know lots of them are women—who have been stood down from their jobs or have had their industry shut down. If they're stood down for too long, there's a chance that they'll miss out on paid parental leave. If that family loses both paid parental leave and dad and partner pay, they could be in really significant trouble. The government's suggestion that affected families should apply for other forms of income support, such as JobKeeper, is just not the right solution at this time. The last thing that any new parent wants is to have to worry about how much money they have in their bank account. So I'd like to take the opportunity to urge the government to address that issue as fast as possible so that new parents don't miss out.
In conclusion, this bill that we're talking about today, is a step in the right direction. It's small, it's modest, but it's definitely heading in the right direction, and it's going to benefit families by providing more flexible access to the Paid Parental Leave Scheme. By splitting up the 18 weeks of paid parental leave into a 12-week period and a six-week flexible paid parental leave period, families will be able to use their entitlements in a way that is more tailored to them and that suits them. So I hope the parliament continues to engage in a discussion about how to address some of the issues that I've spoken about today and that others have spoken about, including the persistent gender pay gap, recognising our essential female workers and improving the workplace participation of women into the future.
I rise today to speak on the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020. As chair of the Senate Community Affairs Legislation Committee, I'm pleased to make a contribution to this discussion on paid parental leave. This bill expands on the safety net already in place for working families with the Paid Parental Leave Scheme, but it makes it more flexible and therefore better. It means families are able to enjoy that special time in the first months of a child's life without having money worries. This is time our new parents deserve to enjoy with their newest family member.
It may be hard to believe, but it's 32 years since I first took what was then known as maternity leave. In fact, 32 years ago today, I was at home looking after my first child, my son, who at that time would have been about six weeks old. Those first few months with your child, adapting to a new daily structure, bonding with them, loving and caring for them and also experiencing the weight of responsibility of another human being to look after are all very special, precious moments. I acknowledge that, when I had my family, I was fortunate to work in a bank that was ahead of its time and offered staff paid maternity leave combined with the opportunity to take additional unpaid leave for up to 12 months. I also had flexibility and was able to take leave, but I returned to work on a part-time basis after about the 10-month period. Then I gave birth to my daughter, only 16 months after my son was born. But, once again, I was able to take that maternity leave and enjoy the precious time at home with both my children. Many others in the community at that time were not as fortunate. They had to use up their leave entitlements, take unpaid leave and, in many cases, simply resign when they decided they wanted to have a family. And, even if you were in the banking industry, if you were a man wanting to take paternity leave, you were offered just two weeks off.
How things have changed, and definitely for the better. On 6 February 2020 the House of Representatives introduced the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 to parliament. It was referred to the Senate Community Affairs Legislation Committee on the same day, and the committee tabled its report on 19 March, recommending that the bill be passed. The bill was introduced to the Senate on 25 February. In its report the committee noted the clear and widespread support for the measures proposed in the bill, submitters to the inquiry emphasising the positive impact the bill will have on a range of options available to working parents accessing paid parental leave and the flow-on consequences of this for women's workforce participation.
The Paid Parental Leave Amendment (Flexibility Measures) Bill builds on amendments to the Paid Parental Leave Act 2010 made by the Paid Parental Leave Amendment (Work Test) Act 2019. It also introduces additional key aspects of the Women's Economic Security Package which were previously announced in 2018-19 Mid-Year Economic and Fiscal Outlook. The Women's Economic Security Package measures have three key areas of focus: improving women's workforce participation, economic independence and earning potential. The focus of the Paid Parental Leave Amendment (Flexibility Measures) Bill is to increase women's workforce participation and provide more options to families accessing parental leave pay.
The latest statistics from the Australian Bureau of Statistics show there were more than 315,000 registered births in Australia in 2018. The median age for mothers is 31.4 years and it is 33.5 years for fathers. Considering the ABS also found that the proportion of families with children younger than five where both parents work full time rose to 21 per cent in the past decade, we can see that working families are becoming increasingly more common.
The Paid Parental Leave scheme provides eligible working parents with 18 weeks of payment at a rate based on the national minimum wage, which is currently $740.60 per week. This equates to a total of $13,330.80 over 18 weeks. This bill is all about increasing flexibility for new parents, which will help those working families bond in the early weeks. We need to be able to balance the health and wellbeing needs of new parents and babies with meaningful workforce participation. Changes to the Paid Parental Leave scheme aim to give mothers and primary caregivers the flexibility to split their maximum parental leave pay entitlement of 18 weeks over a two-year period after an initial 12-week block is taken in the first year.
When the Women's Economic Security Statement was announced in November 2018 by the then Minister for Women, the Hon. Kelly O'Dwyer, $119 million in funding was committed to improving workforce participation, economic independence and earning potential. Changes to the Paid Parental Leave scheme were included in that announcement. Schedule 1 of this bill seeks to make amendments to the Paid Parental Leave scheme so families can access their parental leave pay in a way that suits them. As it stands now, parental leave pay can only be taken as a continuous 18-week block within the first 12 month following a child's birth or adoption. However, the families of children born or adopted once the bill comes into effect will be able to split their parental leave pay into blocks of leave taken over a two-year period. This flexible plan allows for periods of work in between leave.
The changes proposed in this bill mean parents can use an initial 12-week block of their entitlement anytime within the first 12 months following the birth or adoption of their child before returning to work. This all-important time gives parents time to recuperate immediately following birth or adoption and supports health benefits for the child. It also allows time to settle into a routine and bond as a family in those first months. This initial time frame is called the paid parental leave period and the rules relating to this block are the same as those for the current 18-week period. Parents will be able to take their remaining entitlement of up to six weeks anytime before the child turns two years old, and can return to work anytime during this period. These periods combined still total 18 weeks, which is the same time currently allowed, but they allow for greater flexibility. This second type of leave is called flexible paid parental leave.
While we anticipate many families will claim their 30 flexible paid parental leave days straight after their 12-week period ends, we know others might want to use their flexible leave to support a gradual return to work. For example, a new mother might want to return to work at reduced hours after her initial 12-week paid parental leave has been used. The mother could return to work part time at three days a week and apply for the remaining two days to be paid as flexible paid parental leave for 15 weeks.
Families will be able to use their paid parental leave flexibly to support whichever approach works best for them. Of course, increased flexibility for claimants means it could work differently for employers, but the scheme will not create an additional or unnecessary regulatory burden for employers. The Paid Parental Leave scheme is fully funded by the Australian government, not by employers. This is consistent with the current scheme.
Eligibility criteria for paid parental leave and accessing flexible leave are generally the same—that is, the person must be on leave or not working, be the primary carer of the child, meet residency requirements and not be in a newly arrived resident's waiting period. However, unlike during the initial paid parental leave period, parents and others will not lose eligibility to claim parental leave pay during the flexible leave period if they don't meet the eligibility criteria on days when they're not claiming payment—that is, days when they return to work or if they stop being the primary carer for a day.
This scheme will start operating from 1 July 2020 and will be applicable to children born or adopted on or after that date. Children born or adopted before this date will be assessed under the current Paid Parental Leave scheme and receive their entitlements in a continuous 18-week block. Parents are only eligible to claim parental leave pay on days they are on leave or not at work. In many instances employees take a period of unpaid parental leave under the Fair Work Act 2009 during the period they are claiming parental leave pay. Eligible employees are entitled to take up to 12 months of unpaid parental leave associated with the birth or adoption of a child, but generally this leave is taken in a single continuous period and starts no later than the birth or adoption of the child. Under the existing framework, once an employee returns to work they usually forfeit any remaining untaken unpaid parental leave.
The changes will help thousands of new parents, many of whom are now returning to work before they have used all of their parental leave pay. Each year approximately 2,300 people access only a portion of their parental leave pay before returning to work. While this means they are losing valuable time with their child at a formative time, it also makes them ineligible to receive further parental leave pay for that child. Primary carers can return to work earlier after the child's birth or adoption without compromising their overall entitlement to parental leave pay under this bill.
We anticipate these changes will particularly support self-employed women and small business owners who cannot afford to leave their businesses for 18 consecutive weeks. For example, they can take their 12-week block of leave and then choose to take the remaining six weeks of entitlement at a time that suits their personal and business needs, such as at a quiet time for their business, like over the Christmas and new year period or during an off-peak season for specific industries.
This change reflects the range of working demands and personal preferences that women may have in relation to their return to work after giving birth or a primary carer may have caring for a child. The increased flexibility will also make it easier for mothers who are eligible for parental leave pay to transfer their entitlement to eligible partners who take on the role of primary carer where it suits the family's circumstances.
The proposed changes to parental leave pay will give parents more choice, allowing them to tailor their payments to meet their family's needs and situation. In addition, increasing the flexibility of parental leave pay could lead to a greater uptake of leave by secondary carers. This contributes to changing Australia's social norms around sharing care of children and encouraging men to take parental leave. It is anticipated that around 4,000 parents will choose to take their parental leave pay flexibly each year.
As the Liberal member for Mackellar, Jason Falinski, told the House of Representatives in February this year:
The time between a parent and their child is sacred, and this government will always fight to enhance that time… Research is now becoming more and more definitive that time parents spend with their children and children's improved developmental markers are highly correlated. As the nature of work changes, our legislation also needs to change.
On the same day, the Liberal member for Reid, Dr Fiona Martin, said: 'the value of the family unit remains central to the wellbeing of society'. Dr Martin went on to tell the House of Representatives that:
Supporting Australian families by empowering them through choice and flexibility strengthens the fabric of Australia as a whole. By making the Paid Parental Leave scheme more flexible, families have more choices. Parents can tailor their payments to their family's needs and circumstances…
This bill allows families to make the choice that best suits their financial and social needs. I commend this bill to the Senate.
In my short contribution to this debate I want to acknowledge that the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 is an important step forward for the economic empowerment of women as well as families who want to spend more time with their newborn children. I want to recount a story from my time with my own family over the weekend. Happily, I was able to see my mother on my birthday, which is not a common experience. I also got to spend the weekend with my own children, and one of my daughters spoke to me about a conversation she overheard with a young mum who was very judgemental about women who were returning to work after six months of paid leave. I really hope we are able to leave those judgements and attitudes behind. I believe raising a family is the greatest work of my life and the greatest joy of my life. But 28 years ago, when I went back to work six months after the birth of my first child, it was a choice that involved much negative judgement from many people. I'm pleased to say that we still have a great mother-daughter bond—and in our family there are pretty good father-daughter bonds as well.
This bill is important in the context of that changing discussion over the decades about what it is to be a great family and to be a great parent, whether you're a mum or a dad or part of the extended family—or indeed part of the community that raises great children, for your own personal satisfaction as a human being and ultimately for the benefit of the society and the community in which we live. That is why the flexibility measures in this bill are actually a really important part of it. The bill will indeed introduce far greater flexibility for parents looking to take time off to care for their newborn or newly adopted child and will allow the role of the primary carer to change as well as allowing them to access six weeks of leave to be taken at any time in the first two years of a child's life. The estimations are that this should help about 4,000 parents per annum.
The specifics of the bill change the paid parental leave rules in three critical ways. Firstly, they split the 18-week period of paid leave into a 12-week paid parental leave period and a six-week flexible paid parental leave period. The 12-week paid parental leave period entitlement will be available only as a continuous block but will also be accessible by the primary carer at any time during the first 12 months—not only immediately after the birth or adoption of a child. The complexity of people's lives and the variety of ways in which families manage—families in business, families in uncertain employment, families in between houses, families managing sickness across their family and all of those complex lived realities—requires a system that meets the messiness of life, and this is an important change that will help. The six-week flexible paid parental leave period will be available at any time during the first two years and does not need to be taken as a block. I can just imagine, if I were to roll back 28 years and have that sense of time available to help me manage my return to work and looking after our daughter and sharing that responsibility with my husband more flexibly, that we would have had an even better time being parents than we already did.
The bill attempts to make Australia's paid parental leave scheme—which is among the least generous in the OECD—somewhat more equitable. In 2010 Labor introduced Australia's first paid parental leave scheme. Until that point we were one of only two countries in the OECD, the other being the United States, that didn't have one. It's important to remember that—an important achievement by a Labor government, led by Julia Gillard, to make sure that we ended up with some access to paid parental leave. Under the Abbott, Turnbull and Morrison governments that scheme was not removed, but it did stagnate. Apart from Mr Abbott's wildly extravagant thought bubble that he carried for five years and then dropped, there has been no real sign of change under this government which is now in its third term.
Australia today still has one of the lowest rates of investment in parental leave, and that stands at just one-third of the OECD average investment in parental leave. Sadly, despite the improvements that this bill will bring into play, the OECD rankings show that we are still one of the lowest with regarding the length of parental leave with 18 weeks being our maximum as opposed to the average of 55 in other jurisdictions. In that, our system provides a flat rate instead of a wage subsidy like most developed nations. Given the significant changes that Australians have undergone in recent times in the context of COVID-19, the understanding of a wage subsidy no doubt will be something that people understand in a very different way now than they did before the calendar turned into 2020. Hopefully, this government might see further reform in this area as part of their agenda.
Australian workers on average receive less than half the average wage as a result of our scheme. Experts have described it as a welfare subsidy for new parents, rather than as an economic compensation for foregone income. A paid parental leave scheme is meant to be fit for purpose as it's a complex and incredibly important reform for the first iteration to have not received a significant update for 10 years. So between 2010 and 2020, 10 years of no reform in this space is really a blight on our nation's advancement with regard to how we support parents and families. Nearly half of all new mothers benefit from the Paid Parental Leave scheme—almost 150,000 new parents in total. We are clearly slipping behind comparable nations, and it's the working families of Australia that are suffering.
Currently, the scheme remains, to a degree, inflexible and out of step with modern work and home practices. The bill, as it's drafted, will allow some tangible flexibility for those families in terms of when and who takes that leave, but it still leaves the rate of pay unchanged. Once again I remind people listening to this debate that the pandemic has shown us that work can indeed be more flexible and that it can be highly productive to work remotely, and this bill is actually a timely connector with that growing reality.
The bill doesn't do anything to change another critical element of Australian life that needs review, and that is the ongoing wound, the festering sore, of the gender pay gap in Australia. Nor does it do anything to address the way in which women's work is remunerated in Australia. The best thing this government could do to address this would be to reverse the penalty cuts that it waved through. These cuts disproportionately affected heavily female workforces and indeed they have exacerbated the pay gap. It's appalling in this day and age that women in Australia still earn only 86 per cent of the same pay as men, and reforms of the Paid Parental Leave scheme should take this glaring problem into account.
These are not normal times. There has never been a more crucial time for this government to focus on the economic and practical needs of women. Last month's ABS jobs data highlighted the detrimental affect the COVID-19 crisis has had on women with regard to the scale of job loss. On top of that, women are overrepresented in jobs affected by the ongoing need for social distancing, such as in the retail and hospitality trades and the high rate of casual employment that is a phenomenon in those sectors. Now the federal government is proposing to end its fee-free childcare relief package on 12 July, and childcare centres will lose access to the JobKeeper wage subsidies. This decision by the government absolutely impacts families with new babies that this legislation is seeking to support. This is the anomaly that is this government: taking with one hand and trying to give with the other. It's hard for people to keep up with which government is in place today: one that's looking to help them or one that's going out to hurt them with things like robodebt and the removal of subsidies that they promised would be with us until September. We know that the government's changing policies have a huge impact on families, with many still struggling financially, and childcare fees that are out of their reach are very much a part of the outlook for many families as they look to their personal financial horizon this year.
It's also incredibly concerning that the government has chosen the female dominated childcare sector as the first sector from which remove to the JobKeeper subsidy. Women—indeed, families, but particularly women—rely on child care to be able to work, and women make up 97 per cent of the employees in the childcare sector. You couldn't have more closely targeted a weapon at women than the government has with regard to the childcare sector and the reversal of their promises to support wages and offer wage subsidies. Child care was already unaffordable before COVID-19, and we've only just started to come out of the crisis. The federal Liberal-National parties are already winding back vital support, which will disproportionately impact the same women that the government will crow about supporting with this particular piece of legislation.
If we make child care unaffordable for women and if we make it unaffordable generally for women to go back to work, their ability to participate in the workforce will be curtailed, impacted in ways that have flow-on effects, particularly in regional areas of Australia, like the Central Coast and all of the regions of New South Wales that I support as a duty senator such as the seat of Parkes, the Riverina, Farrer, Hume and, dare I say, Eden-Monaro, where a battle is underway for a decent representative—in the shape of Kristy McBain, a woman who cares about that community—to come to Canberra and stand up for a community that was ignored during the bushfire crisis and is still suffering from the failure to make policies that put people at the centre that is the hallmark of this government.
Paid parental leave acknowledges that having children and starting a family is indeed a very critical part of the normal cycle of life. Undertaking the great challenge and opportunity of becoming a parent shouldn't leave you economically disadvantaged. It shouldn't leave you locked out of the workforce and it shouldn't mean you have to choose between caring for very young children or having a roof over your head. Yesterday, we had dnata workers outside this building, with many women raising their very real concerns about how difficult a time this is for them because of the government's hard-heartedness. If the government can acknowledge that flexibility is needed in this bill—indeed, if they can headline it 'the Paid Parental Leave Amendment (Flexibility Measures) Bill'—surely the government can find sufficient flexibility with a signature at the end of the pen of Mr Frydenberg to do the same for the dnata workers to ensure they can receive JobKeeper. That impacts families as well.
Finally, with these sensible reforms, 10 years after the initial delivery of paid parental leave under a Labor government, this government has finally come to the point of updating the current act by introducing a degree of flexibility to provisions that are more in keeping with contemporary Australia. However, I hope in my contribution I have made it clear that far more reforms are needed in this sphere to provide more support for working families and that Australians should not congratulate themselves in isolation but should look to our comparator countries in the OECD and acknowledge that we are far from the mark in terms of proper financial and practical support for people who need the support of this nation to do the best they can in raising their families. We must end the gender pay gap. We must ensure that Australia's scheme is first, not last, in the OECD.
I really have missed this place. I've missed the chutzpah that comes from this chamber. I've missed in the last three months the hypocrisy that is given with a straight face so often in this chamber. It's something I haven't had to experience too much in the last few months back home in north Queensland, where you don't really get away with that kind of stuff. You don't really get away with two-faced statements like we just heard from Senator O'Neill. She made some useful contributions, but they were undermined by the fact that she's trying to criticise this Liberal-National government for not doing things that the Labor government that she was a member of didn't do when they were in government.
They introduced the Paid Parental Leave scheme we have. I recognise that, and it was an important reform that we have maintained, but Senator O'Neill just then said: 'Because you haven't changed it from what we did when we were in government, you're culpable. You're worthy of criticism because you haven't done what I'd like to do.' As I said, Senator O'Neill made some useful contributions, but her arguments would be much more forceful if she applied the same test to the government that she was a member of not that long ago—six or seven years ago. So it's a bit late now to start criticising just one side about those things.
Fortunately, from what I heard there, Senator O'Neill and the Labor Party will support these sensible changes. This is a commonsense bill really; you could sum it up in those words. They're commonsense changes to a system that is a good one; it's good that we offer and provide paid parental leave. I recognise we can't provide it as far and as expensively as Senator O'Neill would like. These things are always a balance—a balance that the Gillard government had to weigh up and that all governments have to weigh up in terms of government spending and the welfare we can provide to Australians. But these changes are very sensible, because they will ensure that mothers and fathers who are seeking to take paid parental leave can do so in a flexible way over the first 18 months of their child's life. My understanding is that currently the paid parental leave has to be taken in a block, so to speak, of 18 consecutive weeks. These changes will allow mothers—primarily mothers, I presume, are taking the paid parental leave—to do so in a block of 12 weeks within 12 months of the birth of the child. The remaining six weeks can then be used within two years of the birth or adoption, in blocks as small as a day at a time to allow flexible working arrangements. That's all a commonsense change. It's the kind of change about which we say: 'Why didn't we think of that earlier? Why didn't we think of that when it came in?' Some of these things can be missed, but it seems to be well supported across this chamber, which is very good.
I think it is very important that we do support family formation in this country, that we do support people having children in Australia. We are fortunate not to have the seriously low fertility rates of European countries, but our fertility rate is below replacement level, and keep in mind that over the next few years our migration program will be very much curtailed. It's important that Australians continue to have children and we continue to grow and develop our country and our nation. We should support families to do that.
We should also support those families that are in the workforce and have to juggle that. This scheme helps do that. But I do want to stress that I think the most important reason to provide paid parental leave, to provide this assistance, is the child, not the parents, not the mother or the father. The reason I strongly support schemes like this is that it's incredibly important for the children's welfare to spend time with their mother or father—particularly their mother, obviously, for reasons of breastfeeding et cetera—in those early years of life. I am fortunate to have had five children. It never gets tired and it's always a journey. It's been a more interesting journey in the last few months, spending more time with them, but we were very fortunate for my wife to be able to take time off work for her first two children, and then after that, she was staying at home anyway. I shouldn't say that, because I will get in trouble; she was working at home, not staying at home—very much hardworking at home, looking after our children. It was very important I think to spend that time.
It is not just from personal experience; this is laid out in evidence. There was an OECD report. It's a little dated now, but I don't think children have changed much since 2007. The OECD said:
Taking stock of the evidence, it seems that child development is negatively affected when an infant does not receive full-time personal care … for at least the first 6 to 12 months of his/her life.
A study by the Productivity Commission in 2009 into child care and paid parental leave issues—actually I think it was the study that helped lead to this scheme—said:
Most of the more recent evidence tends to support the view that the use of nonparental care/child care (usually necessitated by maternal employment) when initiated within the first year of a child's life can contribute to behavioural problems and, in some contexts, delayed cognitive development.
The Productivity Commission quoted a range of different scientific studies there to back that evidence up. It is important that we try to support parents to be able to look after their children. I think that's the primary purpose of getting behind these schemes.
I find sometimes the debate seems to be more about encouraging more female participation in the workforce. I think that that is important, but sometimes the claims for the need for that are overblown in the Australian context. We have average female labour force participation rates across developed countries in the OECD. Countries that have higher females labour force participation rates almost solely are countries with much lower fertility rates than us. Of course countries that have higher fertility rates are going to have lower female workforce participation because parents are going to choose, because of the evidence I just read out, to spend time with their children.
There are a couple of exceptions. Canada and New Zealand have higher female workforce participation rates, although Canada has a lower fertility rate—not as low as some of the European countries but lower than us. The one thing that is never actually mentioned that I think is really important is that the way we count female workforce participation is very different to almost every other country in the world, including Canada and New Zealand, who are often held up as comparators to our workforce participation rates. When a mother is on paid or non-paid parental leave in Australia they are not counted as being in our workforce. In Canada and New Zealand, as is the case in most other countries in the world, if a mother is on paid or non-paid parental leave they are counted as being in the workforce. That gap, difference and statistical quirk accounts for apparently, according to a different Productivity Commission study, about a two to three percentage point difference. About half of the gap between Australia and Canada and New Zealand is accounted for in that.
When you drill down further and look at female workforce participation rates in child-rearing age groups—from memory, usually from about 18 to 45—it is about the same between Australia and New Zealand. We depart when it's above 45. No-one can really explain that. But, possibly, if we increased paid parental leave schemes, that gap would close because we've already got the same gap for the years mothers have children.
I think Senator O'Neill made some useful contributions, albeit partisanly applied. It would be good to support families to take more time off to look after children, particularly at very young ages—particularly below the age of one, as was stated in those studies I mentioned. The question here though is: who should fund that? Who can we call on to pay for that benefit? Yes, there is a role for government, as we're doing through these schemes, but I also think it would be better if we could help support families themselves to help fund those choices in life, because they're in the best place to make these choices. All families are different. Some families have great grandparent support and don't necessarily need to take time off work. Others have other support mechanisms. Others don't. All families are different. It would be a good thing if we could provide more choice and flexibility at the family level. Unfortunately, in our country with the way our tax system works we don't provide particularly easy choices for families that would like to take more time off to look after a child. Our tax system is based on the individuals, not families, who put in a tax return individually and are taxed individually. About half of other OECD countries actually have a family based taxation system. They have certain arrangements that allow for the spreading of income between parents or between partners to allow for the fact that, really, most families do their budgets and spend their money on a collective basis. A lot of our welfare schemes are based on that. The family income is the test for the HomeBuilder scheme that's coming in. Family income is the test for family tax benefit, at least for family tax benefit A, but for the tax system it's on an individual basis.
An OECD study from 2012 showed that Australian single-income families pay more tax and have a greater gap between the tax that they pay and that a double-income family pays, which is the fifth highest gap in the OECD. Only four other countries have a higher gap between the effects of our tax system on single-income and double-income families than in Australia.
I just updated some calculations. I did quite a lot of work on this in the past, and I just had a look. I got out the ATO tax calculator before and had a look at what the current situation is. For a single-income family, if you're a family with a couple of kids and only one of the parents is working—let's say they earn $100,000 just for round numbers—according to the ATO that family would be liable for $24,497 of tax in a year. Their take-home pay would be about 75 grand. For a family with a couple of kids and both parents working—let's just say they earn $50,000 each—which is $100,000 in total, which is the same family income as the other family, they would individually pay $7,797 worth of tax. In total as a family that's $15,594 for a take-home pay of about $85,000. That's an $8,900 difference between those two families. They're on the same family incomes. They're on 100 grand a year, which is not much more than the average full-time wage currently, so it's about that for an average family in this country and it's a $9,000 difference in tax. That's a lot of money and it doesn't particularly support families making choices to look after their own children and potentially have just one breadwinner, at least for a period of time while they have young children in the household. If they make that choice, if they decide, 'Yes, one of us should stay home and look after the child,' they are at a $9,000 disadvantage a year. When you've got a young child and you've got the costs of having a new family, that is a big, big hit. That is a massive hit, and it's going to influence and change decisions.
While I support Senator O'Neill's sentiment that we should help support more families in these times of their lives, I think it would be better if we tried to move to a family paid parental leave scheme rather than a government paid parental leave scheme, because that would help support a family choice and that would help support potentially better outcomes for children's development, based on the best interest of that family and the choices of those mothers and fathers, not the government and not some bureaucrats. It would give families the flexibility to make those decisions. We could and should have a better tax system based on family needs, not just on individual needs.
I rise to support the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020. This bill seeks to further support Australian working mothers and families by providing for more flexible access to paid parental leave arrangements. This bill will allow the mother of a newborn or adopted child to elect to initially use 12 weeks of their 18-week paid parental leave entitlement prior to using the remaining six weeks at any time over the preceding two years. In contrast to the current scheme, this amendment to the provision of paid parental leave entitlements ensures that those mothers who wish to re-enter the workforce before the expiration of their 18 weeks can do so whilst also retaining access to the remaining period of their entitlements. Once passed by the parliament, this bill will give parents of children born on or after 1 July 2020 access to these new flexible arrangements. These changes add to the amendments already made by the coalition government to the Paid Parental Leave Act late last year.
Further, this bill will also allow mothers who choose to return to work the flexibility to transfer their remaining entitlement for paid parental leave to their partner who takes on the role of the primary caregiver or alternatively to use their remaining paid parental leave entitlements to support their return to part-time work by, for example, returning three days per week and receiving paid parental leave for the other days of the week when they would not be working.
The new provisions outlined in this bill are focused on outcomes from the Women's Economic Security Package released in 2018, specifically to increase female participation in the workforce. Presently, almost half of all new mothers are accessing paid parental leave in our nation every year. That's 179,000 mothers, and it is expected that approximately 4,000 of these will now access this new flexible option. This is critically important, because we all know that no two families are the same. Our support for working mothers and families must be accessible to each and every Australian family's individual circumstances. That is why the provisions of this bill are designed to encourage a greater uptake of paid parental leave entitlements by secondary carers, who but for this support would likely not have the opportunity to spend quality time with their children during those important formative years.
In my view, there is nothing more important than family, howsoever it is defined. Family members provide the unconditional support and comfort necessary for the nurturing of a child. In reflecting on the intent of this bill, I am reminded of what Haniel Long wrote in his book A Letter to St Augustine After Re Reading His Confessions:
So much of what is best in us is bound up in our love of family, that it remains the measure of our stability because it measures our sense of loyalty. All other pacts of love or fear derive from it and are modeled upon it.
The Liberal Party firmly believes that the family is the foundation stone of a strong and vibrant Australian society. Even as we face the unprecedented times of the present, family remains a constant upon which those of us fortunate enough can rely. That is why, by enabling working mothers, including those who are self-employed or who own a small business, to access a more flexible paid parental leave arrangement, the coalition government is supporting mothers to manage the responsibilities of work and raising a family.
I want to pay special tribute to those working women who run a small or family business. This bill will allow them to tailor their paid parental leave to their own circumstances and enable the business they have worked so hard to build to continue to operate. It provides further support for families who face the competing pressures of parenthood and enterprise, because these two important endeavours, wherever possible, should not be mutually exclusive.
I remind honourable senators of the attempt some years ago by those opposite at a paid parental leave scheme which resulted in significant additional workloads for those thousands of businesses as they struggled to work their way through myriad regulations and red tape. The coalition government is committed to providing an important safety net for Australian mothers, supporting the health and wellbeing of their children and providing the flexibility to allow families to decide how best to care for their children. Not only do the changes outlined in the bill provide more flexible arrangements for families; they assist businesses to retain their valued staff in the workforce. I commend the bill to the Senate.
I rise today in support of the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020. This bill introduces changes to the Paid Parental Leave scheme aimed at better supporting working mothers and families—and working fathers—to access their payment more flexibly. There are around 300,000 births in Australia each year, with nearly half of all new mothers accessing paid parental leave. Our government understands the important role of paid parental leave in supporting the health and wellbeing of mothers and babies and in encouraging workforce participation.
To this end, the measures in the bill introduce greater flexibility to support working women, including self-employed women and small business owners who cannot afford to leave their businesses for 18 consecutive weeks. The Paid Parental Leave scheme provides an important safety net for nearly half of all new mothers, supporting them to take time off work to spend with their newborn or newly adopted children. Under this measure, we will continue to support the important objectives of the Paid Parental Leave scheme whilst offering families flexibility and choice about when to access their payment, in order to support them to find a better balance between family and work.
These changes support thousands of working women and men who cannot afford to leave their employment or business for 18 consecutive weeks. Currently, if a parent returns to work before they have received their full entitlement of parental leave pay they lose eligibility for the remainder of the payment. That is fundamentally unfair. We will continue to support women to rest and recover in the months immediately after the birth of their child by allowing them to use 12 weeks of their entitlement within 12 months of the birth of their child. Then the remaining six weeks can be used flexibly any time within two years of the birth or adoption in blocks as small as one day at a time. These measures will provide much greater flexibility and will benefit in particular self-employed women and women who are small business owners by providing greater flexibility as to when they can take time away from work. This increased flexibility and ability to balance work and caring responsibilities will, I am sure, encourage greater uptake of leave by secondary carers, in turn contributing to changing social norms around sharing care and also encouraging more men to take parental leave.
We know that not all families are the same, and this bill makes important improvements to the Paid Parental Leave scheme that provide inherent and much greater flexibility to ensure that we can continue to support that great institution in our society, the family, no matter what form or shape each person's family comes in. So I commend these changes to the Senate and, of course, it reflects the ongoing work of our government in improving women's economic security, which has been a very key focus of the Liberal and National government for the last six and more years.
As we know, we're in the middle of the coronavirus pandemic and it's a very challenging time for so many families. But our government is working around the clock to ensure that we focus on saving lives and livelihoods and, of course, on rebuilding our economy as soon as we possibly can. There has been a bit of discussion in the Senate this morning about the gender pay gap, which I am pleased to report is moving in the right direction—down to a record low of 14 per cent from 17.2 per cent under the previous Labor government. While, of course, 14 per cent is not good enough, we didn't hear from Labor senators this morning any acknowledgement that it was actually quite considerably worse under Labor when it was in government and that we are in fact making some real strides under our government.
Despite this progress, there are of course some significant challenges. There are still around two million working-age women not in the labour force. Women are more than twice as likely to work part-time as men and, as they near retiring age, there is around a 32 per cent gap in superannuation balances. The new childcare subsidy is making child care more accessible and affordable for around one million parents. That's obviously a very important change that we have brought about, providing much greater equity and much greater support for families. And, of course, at the moment we know that we're offering, as a government, free child care.
The childcare subsidy has been suspended during the coronavirus pandemic, and that is, of course, to support as many families and childcare centres as possible at this very difficult time. But I do want to place on the record that the Morrison government is investing record funding of something in excess of $8 billion this financial year and increasing this investment to $10 billion in the coming years to support child care. This has seen, on average, a 4.2 per cent reduction in out-of-pocket costs since June 2018 for families who use child care. The typical family is around $1,300 better off per child per year.
There are a number of other very significant ways in which we are supporting women in particular. The ParentsNext program is supporting vulnerable parents, mostly women, to break the welfare cycle and get back into work. There has been enormous investment in women's safety, and we are very, very proud of our incredible investments in women's safety. Some $852 million has been spent since 2013 to support women and children—and, I acknowledge, some men—who are victims of, or at risk of, domestic violence. That comes in a whole lot of different ways—from improving frontline services to supporting and funding specialist domestic violence providers.
There is a very significant investment in our National Housing and Homelessness Agreement. There are huge investments in improving the legal system, including in a very important initiative—one that I was a huge supporter of—and that is banning the direct cross-examination of family law proceedings where there are allegations of family violence. There have also been enormous investments in the better use of technology to keep principally women and children safe. We now have the National Domestic Violence Order Scheme as well. So an enormous amount of investment has gone into supporting women and children, and I don't want to be gender specific on that. Of course, some men also suffer family violence. But enormous investment has gone into this issue to really improve the lives of all families.
I also want to acknowledge that our government has guaranteed a minimum entitlement of five days unpaid family and domestic violence leave per year for six million employees covered by the Fair Work Act. So it's my great pleasure to support this bill. This is a very significant change, which will obviously bring about much greater flexibility and support for working parents. I commend this bill to the Senate.
I thank senators for their contributions to the debate. The Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 introduces reforms aimed at better supporting working mothers and their families to access paid parental leave more flexibly to support choice about balancing work and family. Currently, parental leave pay can only be taken as a continuous 18-week block within the first 12 months after the birth or adoption of a child. From 1 July 2020, families will be able to split their paid parental leave into blocks of leave over a two-year period, allowing for periods of work in between.
Parents will be able to use an initial 12-week block of their entitlement anytime within the first 12 months after the birth or adoption of their child. This gives parents a period of recuperation and bonding in the months immediately following the birth or adoption. Parents will then be able to take their remaining entitlement of up to six weeks anytime before their child turns two years old and can return to work anytime during this time. This measure preserves the total of 18 weeks that is currently allowed, but offers much greater flexibility in how it is used. The changes will help thousands of new parents who currently need to return to work before they have used all of their paid parental leave. Instead of losing unused leave, these families will now have greater flexibility to take their leave at a time that suits the needs of their family.
The government recognises that not all self-employed women and small-business owners can afford to leave their businesses for 18 consecutive weeks. The increased flexibility will also make it easier for mothers who are eligible for paid parental leave to transfer the entitlement to eligible partners who take on the role of primary carer where it suits the family's circumstances. Importantly, this increased flexibility and ability to balance work and caring responsibilities may encourage greater uptake of leave by secondary carers, in turn contributing to changing social norms around sharing care and encouraging men to take parental leave. We know that not all families are the same, and this bill makes important improvements to the paid parental leave scheme that gives families more flexibility to balance work and caring responsibilities in a way that best suits their needs. I commend the bill to the Senate.