Senate debates

Wednesday, 28 February 2024


Paid Parental Leave Amendment (More Support for Working Families) Bill 2023; Second Reading

11:07 am

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) Share this | | Hansard source

It gives me great pleasure to rise today to speak about the Paid Parental Leave Amendment (More Support for Working Families) Bill. The coalition supports this bill, but my intention is to move a substantive amendment calling on the government to amend the act to require the secretary, as defined by the act, to pay paid parental leave instalments directly to employees of small businesses, except in cases where a small business opts to pay the PPL instalments directly to the employee.

The coalition has had a strong record of supporting government funded paid parental leave and has seen women's workforce participation reach highs when it was in government. In March 2022, as part of the Women's Budget Statement, the coalition underlined its commitment to PPL by announcing enhanced paid parental leave. Enhanced paid parental leave would have seen an investment of $346.1 million over five years to expand PPL, giving working families full choice and control over how they would use 20 weeks of taxpayer funded paid parental leave. It was pleasing to see Labor adopt key elements of the coalition's enhanced paid parental leave in the last tranche of PPL reforms, which the coalition also supported. Today the coalition continues to support the expansion of PPL but will move a substantive amendment to the Paid Parental Leave Amendment (More Support for Working Families) Bill to support small business.

This bill expands the scheme by two weeks each year until it reaches 26 weeks in 2026 through two parts. Part 1 extends the PPL scheme by two weeks each year from 1 July 2024 to reach 26 weeks by 1 July 2026. It extends the reserved period for certain claimants who are partnered at the time of their first effective claim by one week each year from 1 July 2025 to reach four weeks by 1 July 2026. It increases the number of days that can be taken concurrently by multiple claimants in relation to the child to four weeks by 1 July 2025 and amends part 2-3 of the PPL Act to clarify the eligibility criteria for claimants in exceptional circumstances, including claimants who are gaining parents in a surrogacy arrangement, and it makes consequential amendments relating to the measures described above.

Part 2 deals with the application of amendments to claims made before, during and after the transition period from 26 March 2024 to 30 June 2024.

Under section 60 of the PPL act a person can make a claim for parental leave 97 days before the expected date of the birth of the child. The minister can also make rules with respect to matters of a transitional nature. As we know, the PPL scheme includes a mandatory employer role, which requires employers to pay government funded paid parental leave to eligible long-term employees. Employers are required to provide PPL taken by the employee only in continuous blocks—at least 40 consecutive weekdays—at the beginning of their entitlement, and Services Australia provides any PPL days taken outside of this block.

According to the government, the purpose of the employer role in administering the scheme is to maintain the connection between employees on paid parental leave and their employers. The coalition believes that the current Paid Parental Leave Scheme disproportionately impacts smaller businesses, imposing an additional red tape burden on small businesses by making them the pay clerk for a government scheme. The coalition calls on the government to amend the Paid Parental Leave Act to require the secretary, as defined by the act, to pay paid parental leave instalments directly to employees of small businesses except in cases where the small business opts to pay the paid parental leave instalments directly to the employee.

Small businesses with no human resources department are drowning in red tape already. Administering these payments increases the administrative burden on resource-poor small businesses and adds to payroll processing times. Under the coalition's proposal, small businesses could opt in to administer the scheme or have Services Australia administer the scheme to small business employees, reducing the regulatory burden on the small business sector. With many small business employers finding no benefit to their relationship with employees while administering the scheme, it's time this unnecessary burden is lifted from small businesses, the engine room of our economy.

While supporting the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, the coalition will move these amendments seeking to remove the red tape burden from small business at the appropriate time. I commend the bill and hope that this chamber will see fit to approve and support our amendments.

11:12 am

Photo of Larissa WatersLarissa Waters (Queensland, Australian Greens) Share this | | Hansard source

I rise to speak to the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023. This bill is a step towards a fairer paid parental leave system—but it's a baby step, if you'll pardon the pun, and it leaves parents, particularly women, waiting. There is no reason to delay the implementation of good policy. This bill is a critical opportunity to move towards best practice, and it should start with an immediate increase to 26 weeks of paid leave, and it needs to include a pathway to 52 weeks of paid leave by 2030. The bill does neither of those things, which is why I'll be moving amendments to do both of them.

Parents should not have to wait until 2026 for 26 weeks of paid parental leave. Parents should have immediate access to a minimum of 26 weeks of paid leave to allow recovery from birth, to maximise options to establish breastfeeding and to allow parents to spend time with their infants. The only reason given by the government to delay full implementation of the increase to 26 weeks of PPL is financial: they can't afford it. Yet billions of dollars are wasted on other things every day. Women and parents should not be asked to wait while, with things like nuclear submarines and tax cuts, which still disproportionately benefit men—they're not asked to wait.

Australia has also fallen behind other countries in the rate of paid parental leave as well as in how leave is allocated between parents. Australia's paid parental leave rate is one of the lowest in the OECD. For some people, a full-time minimum wage is an increase on their previous earnings, but for many parents the minimum wage is well below their normal earnings, and this forces difficult decisions about how long parents can afford to take leave and who takes that leave.

Now, we know that continuing to pay paid parental leave at minimum wage is not an effective incentive to induce more fathers to take parental leave. The reintroduction of the 'use it or lose it' provisions in this bill to encourage shared parenting is welcome, but we need a replacement wage to ensure that there are not financial barriers adding to the cultural barriers which, sadly, still exist for fathers to take PPL.

We've seen time and time again in Scandinavian countries how the replacement wage and shared care provisions cause a huge increase in the number of dads taking leave and how the fairer share of caring that gets established in those early months is then sustained for over a decade. Australian parents deserve parental leave paid at replacement wage, with incentives for employers to top up the government scheme. We're not asking for government to pay the whole replacement wage; we're asking for a partnership approach whereby the worker receives the same amount they otherwise would, because government is paying the basic and employers are topping that up.

Without that replacement wage it's the parent on the lower income—which, sadly, is often the mother—who is too often forced to leave employment. As I mentioned before, this sets up a domino effect of women not only retiring with 23 per cent less super—that retirement wage gap—and many older women retiring into poverty; it also sets up that disproportionate distribution of unpaid domestic work. We know that mothers and women are still doing far more than their share of the unpaid labour, which is crucial and which helps our economy. We need to do everything we can to incentivise fathers to pull their weight at home, and one of the ways of doing that is by making sure that paid parental leave is a financially attractive option for men. That's why a replacement wage, as well as shared care, is crucial.

Paying parental leave at replacement wage was one of the recommendations of the government's own Women's Economic Equality Taskforce last year, for the reasons I've just outlined. The taskforce also recommended expanding PPL to 52 weeks, which one of the amendments that I'll move in the committee stage would achieve. That taskforce also recommended paying superannuation on paid parental leave. Those are the changes that are collectively needed to unlock women's workforce participation and to help close the persistent gender pay gap and the retirement income gap, and the super gap for that matter.

By failing to put superannuation on paid parental leave, which the government says is their policy yet they are somehow still not doing, the government is increasing the risk that women will retire into poverty. Paying super on PPL has been a longstanding policy of the Greens. It has been a longstanding policy of many unions. It has been a longstanding policy of women's economic security advocates. It's also, technically, meant to be the Labor Party's policy. The Albanese government have repeatedly said that they'd like to pay super on PPL, but only when budget circumstances permit. That's at the same time that they're using those budget circumstances to prioritise nuclear submarines and prop up the fossil fuel industry, for example, not to mention the tax cuts that just passed this chamber last night, which, again, still disproportionately benefit men, to the tune of about 58 per cent.

Parental leave is the only form of leave that is paid without superannuation, and it's predominantly taken by women. So leaving superannuation off parental leave is actually an act of discrimination that directly undermines the purpose of parental leave, which is to encourage people to take leave to look after their kids, give them the best start to life and keep that connection to the workplace. The Albanese government has a series of opportunities to pay super on PPL, and the Greens will continue to work with the government to find any and every opportunity to do that. Eligibility for PPL should also be expanded by relaxing the work test and residency requirements so that people are not unfairly excluded from leave. All families should be supported to take parental leave, regardless of their circumstances.

I will be moving amendments to this bill, firstly to increase paid parental to 52 weeks by 2030. The Women's Economic Equality Taskforce, many peak bodies and unions—the ACTU in particular—have highlighted that that's the international standard. Fifty-two weeks of paid parental leave is the international standard that Australian families deserve, and they deserve it as soon as possible, so I invite the chamber to give serious consideration to supporting that amendment. I'll also be moving an amendment to achieve an immediate increase to that 26 weeks by 1 July of this year so that women and parents don't have to wait until 2026 for the support that they deserve. I would urge the chamber to consider that amendment also.

This bill is a baby step to support parents in the first crucial few months of parenthood. We will be supporting this bill, but so much more needs to be done if we are to truly tackle gender inequality in this country and truly ensure that parents and kids have the best start in life. We also need more support for parents, including accessible and affordable child care; making that free should surely be a budget priority for a Labor government. We need longer paid parental leave now, we need it paid at a higher level of income replacement, we need super included and we need the scheme design to support a better share of parental care. The case for change could not be clearer.

11:20 am

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party) Share this | | Hansard source

Australia has a paid parental leave scheme that federal Labor is very proud of putting in place. It's a scheme that supports Australian families regardless of marital status or the gender of parents. It's flexible, fair and positive. But, as we know, it requires continual improvement. This bill, the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, does just that. It gives families access to more paid parental leave, provides parents flexibility in how they can take that leave and encourages parents to share care and support amongst the family. It's good for parents, good for kids, good for employers and good for the economy.

Reflecting on my own life: when my son was young I had just left the Senate, and I didn't qualify for paid parental leave because of the income that I had had the previous year. But I was delighted that my son's father, who I'm not married to, was able to take that paid parental leave himself. I can see from my own experience, therefore, the importance of having flexibility embedded in the scheme. I'm glad to see that more mums will now qualify; it was in fact discriminating against mums because if they had earned too much money it had implications inside the policy scheme for who was able to take time off with their children. The better interchangeability of this scheme among parents is really important, as is increasing the length of the payment from 20 to 26 weeks, increasing the period reserved for each parent from two to four weeks and doubling the period where parents can take paid parental leave at the same time from two to four weeks. It's terrific to see that, starting in the middle of this year, two weeks of additional leave will be added till we reach 26 weeks.

I'd like to see us continue as a nation to lift this scheme and make it better for families. I was listening to the radio this morning talking about the declining birthrates in Japan and Korea. Australia addresses its declining birthrate largely through migration, but if you look in other countries where there are better paid parental leave schemes they can have a positive impact on people's decision to have children and on employers' ability to retain and attract staff.

One of the issues I raise in the context of this debate, that intersects with it, is more around the industrial relations rights of people who are pregnant. If you get a job with an employer, you don't start trying to get pregnant because you haven't accrued the right to return to your job yet—so you will delay ending using the pill, or whatever, and you will delay starting a family so that you are confident you've got a job to go back to. For many people, falling pregnant doesn't happen all that easily and they find themselves in the position where they've been in a job for three years, they're still not pregnant but they don't want to leave that job and end up with another employer where they have to spend a year in the job to have the right to paid parental leave or even the right to unpaid parental leave, which is the right to return to the job that they left. In these kinds of examples, Madam Acting Deputy President, you can see real barriers, as discussed in some of the other debates we've had this week, to gender pay equity, because women have a more limited ability to be mobile in the workforce.

In this context it's really good to see that many major companies in Australia are now doing away with the need to wait a year to accrue the right to return to your job post your pregnancy. It's no longer legal for a prospective employer to ask someone if they intend to get pregnant, but we know that discrimination against pregnant women in the workplace is rife in Australia. From the work of the Human Rights Commission we know that, alongside disability, it is one of the most frequent forms of discrimination that people experience.

When we look at the issue of government sponsored paid parental leave, it's really important that we look holistically at what we need to do as a country to better support women to take paid parental leave, to take leave so that they can have a child. That's because there's a cost in this space if you end up waiting until you're financially secure enough to think, 'Okay, I can survive for 26 weeks on just the minimum wage,' or, 'I've got a partner who can support me during this period.' If you wait all that time to say, 'Right, my ducks are lined up; I can now take time out of the workforce to try to get pregnant,' and so make that decision at 35 or 36, then actually you are much more likely to need reproductive technology to get pregnant. So we really do need to look holistically at the kinds of expenses we have around paid parental leave. I, for one, believe you should be able to choose the age at which you fall pregnant, but, sadly, that is not the reality of life. People need to consider the biological window for falling pregnant and, at the very least, be mindful and aware of the consequences of making a decision to delay parenthood. I was very privileged to be able to have a child at the age of 42—my beautiful son is now nine—but it was an expensive road of IVF, especially had I not had the workforce security et cetera. I would like to see women able to make better decisions, in the context of their family, as to when and how they are going to have children.

Seeing paid parental leave move to 26 weeks and seeing people being able to make well-informed, positive choices about their family formation, the structure of their household, their working life, their relationship with their partner in terms of who works and who stays home, and their time together with a new child is critically important. But it is also critically important in the context of our industrial relations scheme and the rights that attach to that so that we're not discriminating against women in the workforce in unintended ways. I draw on the example I gave before, of women delaying having children because they need to spend time in a particular job for a particular time to acquire the right to return to that job, for the sake of job security.

In addition, if women are delaying having children, I don't think it would take much maths, really, to go away and look at the level of IVF cross-subsidy, which is probably around $2,000 a cycle at the moment—I'm not entirely sure what it is currently. If you have three or four IVF cycles and also look at your own out-of-pocket costs, it doesn't take long to do the maths and ask whether we can we actually look at having a paid maternity leave scheme that really helps women make decisions around how they want to create their family at a time in their life where they can make the most of their fertility window without worrying about whether they will have a job to return to, and without worrying about how they're going to pay the mortgage and keep a roof over their head; and in full knowledge that they will keenly return to the workforce if they want to, and will keenly seek to maximise their workforce participation if not with the employer that they return to after their maternity leave then with a new employer. I would really like to see pregnancy discrimination and paid parental leave looked at in a much more integrated way in our nation.

I very much support this bill because it is a very good step in the right direction. 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 more opportunities for women. I commend the bill to the Senate.

11:33 am

Photo of Maria KovacicMaria Kovacic (NSW, Liberal Party) Share this | | Hansard source

I have had the privilege of sitting on both the Community Affairs Legislation Committee, which looked at the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023; and the Education and Employment References Committee, which my colleague Senator O'Sullivan chairs, which recently looked into the impacts of paid parental leave on small business.

Before I discuss what we heard during both of these inquiries, it is important to note that it is a good thing that both sides of this chamber agree that 26 weeks of paid parental leave is the right thing for working Australian parents. In fact, in 2010 and 2013 the coalition took 26 weeks paid parental leave to the election, and I'm glad that we are now in a place where paid parental leave is available to Australian parents. But it is also important to highlight that it has been a decade, and in the past 10 years a great deal has changed, especially in the way small businesses operate and in the way they need to manage their payrolls. This is something we heard from small-business owners and their representatives during both the EEC hearings into the potential impacts of the Commonwealth Paid Parental Leave Scheme on small business and their employees and the Community Affairs Legislation Committee hearings into this bill.

As it stands, the way PPL works under the current system is that all employers, regardless of their size, have a mandatory role which requires them to pay government funded parental leave to eligible employees. The purpose of this is to ensure that there is a continuous connection between the employer and the employee; however, this is a system that is oriented around large corporates and institutions who have sufficiently sized payroll teams and infrastructure to be able to manage this and who also have a reliable cash flow. It doesn't consider small and family businesses.

In evidence given at the EEC's inquiry we heard the following testimony from one small-business owner:

It's putting this burden on a business. Now, you know, a big business, they just have to set up a system, I suppose, and it's all automatically done by pressing a button. But … we're a small business, so there's learning about it, which we all have to do anyway, but it would have been so much easier if they had … said, look, this is like a social security payment that we're paying to the recipient.

The reality is that for small businesses that comprise of 20 employees or fewer there is a significant amount of administrative burden that is placed on them in this process.

During the hearing for this bill, Ms Heazlewood from the Australian Chamber of Commerce and Industry spoke about the additional burden that the PPL scheme places on small businesses. She said:

We have heard from our small-business members that having them as the middlemen in the payments process creates a significant administrative burden on payroll processing time. When problems arise with payments, not at the fault of the employer, it can take a lengthy period of time to resolve, often causing the most distress to the employee and create unnecessary tension.

This evidence was backed up by a survey provided by the Motor Traders' Association in their submission on the impacts of paid parental leave on small business. They found that of the 246 automotive businesses that completed their survey, PPL added to the payroll processing time for more than 90 per cent of respondents. It increased the administrative burden on the business for almost 92 per cent of respondents. And it created cash flow problems for over 32 per cent of respondents. We need to think about that: it's adding a cash flow burden to small businesses administering a government payment. The MTA said 96.1 per cent of respondents stated that, given a choice, they would prefer Services Australia to pay the paid parental leave directly.

These survey results were matched by the Australian Chamber of Commerce and Industry survey results, which also found that 88 per cent of small businesses overwhelmingly believe that PPL should be administered by Services Australia, and that 97 per cent of businesses surveyed that had previously administered the system said, if given a choice, they would prefer for the payments to be administered by Services Australia. ACCI's research also found that 90.7 per cent of small businesses who administered the payment reported an increased administrative burden in managing the payment process.

ACCI also found that many small-business employers administering leave payments found no benefit to their relationship with their employees because doing so does not actually involve or require any proper communication. Some of the suggestion is that these payments must be made by the business in order to maintain a connection. If you have a small business of five or six employees and one of your key people is on parental leave, you don't forget about it. You notice it. You know that they're gone. It's very different in a large organisation that may have hundreds or thousands of employees as somebody could fly under the radar in that regard.

This is a really important distinction to understand why this is perhaps appropriate for large businesses and institutional businesses and not for a small or family based Australian business. That is why the coalition is moving a substantive amendment calling on the government to amend the Paid Parental Leave Act to require the secretary, as defined by the act, to pay PPL instalments directly to employees of small businesses, except in cases where a small business opts to pay the instalments directly to an employee. This is giving the small business a choice, if they can manage it, to actually do it or, if they can't, to opt to have Services Australia manage the payment. As we know, under the current system, there is already an opt-in system. An employer who is not legally obliged to make the payment to an employee—for example, if the recipient has been an employee for less than 12 months—can opt in to do so with the agreement of their employee. In the 2021-22 year around 38 per cent of employers had opted in to pay other employees not covered by the legal obligations.

What we also discovered at the committee hearings for this bill was that there is also an opt-out option. During the hearing, when asked about challenges and complexities small businesses may face with administering the system and why they may choose to opt out, Mr Flavel of the Department of Social Services said:

It's more a case that the current opt-out arrangements are not done on the basis of the size of the business, but rather on the basis of the administrative cost, particularly with respect to an employee who wants to take their entitlement in the form of a few days here and a few days there—in other words, anything less than 40 days—the employer has the ability to opt out of that arrangement. Clearly, for any sort of fixed cost, it's always going to be borne more by small business …

Those aren't my words. They're the words of the Department of Social Services. We know small businesses are impacted the most by this scheme, and the department knows this too. Given an opt-out option already exists for employers of any size if their administrative burden is proven to be too costly, why can't this simply be extended to all businesses of 20 people or fewer, who we know do not have the capacity to be the government's payment facilitator?

What makes the refusal to address the administrative burden more worrying and perhaps ironic is that many small businesses are run by women—the very demographic this matter was first designed to assist. During the EEC's hearings, one small private sector employer stated, 'It was just a real headache to set up. I feel that it was actually a really negative thing for both of us—for our business and on the life of the young girl that took advantage of it.' We also heard that, on average, it can take anywhere between four and six hours to set up a small business's first employee. That's just to have it in the system so as to be able to start the processing of that first employee. That's a lot of time. That's time that a small-business operator isn't in their shop, isn't talking to their clients, isn't working on building their business but is actually managing an administrative function of a federal government department. This comes at a considerable cost and also places strain on the employer-employee relationship, which is contrary to the intent of this scheme. The intent is for it to build relationships, not damage them.

By addressing this administrative burden and simply cutting small businesses out of being the middleman for government payments, the government has an opportunity to make this scheme better for everyone. First and foremost, it will save small businesses productivity loss in being an administrator on behalf of the government. More importantly, it means new parents will have their payments managed by Services Australia, who have the capacity to address their changing needs, the cash flow to ensure that they are paid correctly and on time and the institutional knowledge to address any of their questions and concerns on a payment that is being administered by them. The coalition knows that simple changes can be made to this scheme to make life easier for small businesses and new parents. We have the track record to prove that, in terms of our deep engagement with small-business owners.

In government, we saw women's participation in the workforce reach record highs, and we are really proud of that. We amended PPL legislation so that there are special circumstances which allow a person to meet the work test if they have been impacted by family and domestic violence, or a natural disaster, or a severe medical condition, which means we didn't stick to the prescriptive rules that said, 'You have to meet these seven checkboxes, in order to get this payment.' We actually said, 'There can sometimes be circumstances that mean that you don't always fit the test, but you should be eligible for this payment.' We want to take that same approach to ensuring that small businesses are not unnecessarily burdened in making this payment to their staff, instead of having Services Australia manage the payment for them.

In the same way, we made sure women did not miss out on PPL because of circumstances that were beyond their control. We allowed JobKeeper and COVID-19 disaster payments to count towards the work test for PPL to prove a genuine connection to the workplace. Again, these were simple, pragmatic solutions to make sure that the intent of this policy and payment worked in favour of parents. We indexed the income threshold for the first time since the scheme had been introduced, ensuring again that more women did not miss out on these payments—that more families did not miss out on these payments.

We support the transition to 26 weeks paid leave, as we did in 2010 and 2013. But we know that this scheme is unsustainable for small businesses in its current form, and that is why this bill should be passed with our suggested amendments. They would reduce the red-tape-compliance burden on small businesses and allow them to focus on their core work: actually running their small business—ensuring that they have a strong, robust and successful small business for their employees to return to when that time comes.

11:47 am

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

This bill, the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, provides another welcome step toward improving the PPL scheme so that parents and caregivers can spend more time with their new babies. I would like to acknowledge the work that the committee did, in looking into this bill, and to thank the secretariat. In particular, I thank Senator Kovacic for her focus on small business, as she has just outlined, which I will come to later in my remarks.

I think an important part of this which we need to acknowledge, and which is very welcome, is the continued focus on supporting dads to take more time out of work to share the care. When you look at the Nordic countries—leaders in PPL, globally—you see that it is rare for fathers to skip parental leave; they have no incentive to do so. And the benefits that have been delivered to those countries have been massive. The employment rate for women in those countries is significantly higher than it is in Australia. It has been shown to not just increase women's participation in the labour market but also to decrease discrimination in the workplace and in recruitment processes. That's not to say that the Nordic economies are perfect, but, from the available research, it's clear that a well-designed PPL scheme pays an economic dividend.

PPL also has important social benefits. OECD research shows that fathers who take care of their children at an early stage tend to stay more involved with their children as they grow up. Fathers also report greater satisfaction and better physical and mental health. At a time when we are continuing to grapple with rising chronic disease, including mental illness, it's a wonderful thing to be looking at something that could fundamentally make Australians happier and healthier—in this case, time spent with a brand-new family member.

Of course, the design of the schemes over in Europe is far more generous than that of our scheme and what was available after the bill was passed. In many Nordic countries where these dividends have been realised, benefits are paid for longer and as a replacement wage. I acknowledge that previous governments and the current government are charting a different approach where employers play a voluntary role in the PPL system through top-ups and other mechanisms, but it seems inevitable that this will lead to a fairly inconsistent experience of PPL throughout the economy, and I would suggest it's going to be those at the high-earning end that will see their employers contribute more to PPL over the coming years. Notwithstanding this, I really welcome the improvements being made here today and would urge ongoing evaluation so that we aren't locking ourselves into a 'set and forget' for this scheme.

I will say that it is a great shame not to see the government move on paying superannuation on paid parental leave. There is very rich evidence showing this is contributing to women retiring with an average of one third less super than men. People shouldn't be penalised for taking a small amount of time out of the workforce to raise the next generation. The government has at various times said it would make this change, that it would consider the need in each budget. I have to say: it's pretty galling to see budgets passed that have billions of dollars allocated to fossil fuel subsidies, yet governments cry poor when the community asks for $200 million to address the retirement savings gap for women. We can only hope we will see that changed in this year's budget.

I want to raise some concerns about small businesses. Every small-business person I've spoken with is supportive of more generous paid parental leave entitlements. People are proud to live in a country where this kind of support is made available by the government, where we all agree that new parents should not be financially punished for being with their children. What small-business owners don't understand is why they are required to administer a government payment instead of having Services Australia deliver payments directly. This isn't an issue of job security for new parents; the Fair Work Act protects the jobs of parents who, if they've been in a job for at least 12 months, are entitled to 12 months of parental leave. So why do we expect small business to act as a go-between, receiving funds from Services Australia often with lengthy delays before passing them on to their staff?

Last year a Senate inquiry considered this question. All the small-business owners and representatives who participated in that inquiry were concerned about the administrative burden of the current arrangement. The department's own submission to the inquiry reported that requiring small businesses to play this go-between role would cost them an average of 15 hours per employee. Those hours are utterly wasted, and, during a productivity crisis, you'd think the government would act on this. Of course, small businesses aren't compensated for those hours; they are expected to absorb the costs of all the time spent on the phone with Services Australia, with their accountants and with their staff, trying to figure out the nuances of the convoluted process. I will be moving a second reading amendment, co-sponsored by Senators Lambie and Babet, calling on the government to compensate small businesses for their time.

But there is a far simpler solution here. Services Australia can make the payments directly, and already do so; in almost 40 per cent of the cases they are making these payments directly. We heard evidence at last year's inquiry that the confusing three-way relationship demanded by the current legislation creates tension between small businesses and their workers. We also heard testimony from frustrated mothers who run small businesses that it just does not make sense to force them to administer a Commonwealth payment. Unfortunately, the government has chosen to ignore that testimony, to ignore the voices of female small-business owners who, when they have children, often have no choice but to continue devoting time to running their businesses. They'd love to be in a position to take parental leave, but that's just not possible for most small-business owners who, even when they have an infant at home, often have to continue keeping the books, coordinating staff and even filling in for shifts.

We've been told the small-business role in administering this government payment helps maintain a relationship between the employer and the employee. I suppose the assumption is that having the small-business's name on the payslip instead of Services Australia's is important to the relationship, but my conversations with small-business owners suggest they have far stronger relationships with their staff than a name on a payslip. As one witness pointed out during the inquiry, all senators' staff are paid by the Department of Finance. Does that diminish the relationship between senators and their staff?

Last year's inquiry recommended exempting small businesses from having to administer this government payment, allowing them to opt in if they choose to with their employee's consent. It's a simple solution, and this is a perfect example of red tape that needs cutting. Really, it's the smallest amount of tape the government could have chosen to cut. You're not really cutting tape; you're just not adding another layer of complexity. I really fear that instead the government has taken an ideological stance on this issue, proving—unfortunately and yet again—that it does not understand the experience of small-business owners. I fear going against some of the very strong words and warnings from Commissioner Holmes in delivering the robodebt royal commission. From what I read, she's talking about how the way that we talk about social security in Australia really matters. It matters.

I think we should be proud that we live in a country that does have a social security system, that has a safety net and things like paid parental leave. We should be proud that that's actually from taxpayers. That's us as communities and societies saying, 'We think that you should be able to stay at home and look after your newborn, and we're going to pay that.' What the government's trying to do is make this seem like some sort of work entitlement, which I think diminishes the fact that it is paid for by taxpayers. We should be proud that this is coming from taxpayers and that we have Services Australia that administer these payments to a range of people for a range of circumstances. If the claim is that dealing with Services Australia is too burdensome for new parents, let's fix that problem. I acknowledge the government has done a lot of work in that area when it comes to wait times, but let's shovel a problem with Services Australia onto small-business owners. Let's fix the actual root cause of this problem, which is that it's currently difficult to navigate the system.

The crossbench is proposing a range of models for this small-business exemption, with different definitions of 'small business' all the way down to microbusinesses, where the argument around 'maintaining the relationship' just doesn't hold up. If you've got five employees in your business, I assume you're working together all the time and relationships are pretty good. That's very different to working for a big supermarket with thousands and thousands of employees.

I will be moving a range of amendments of different variants where the parent leads the decision-making process so that employees can choose to have Services Australia make the payment to them directly if they prefer not to have the small business between them and the government. This is putting choice in the hands of the people taking paid parental leave, and I really hope that the Senate will be supporting these sensible solutions to this problem that has been acknowledged and looked at, and that a Senate committee has reported on.

To sum up, I call on the government to support these solutions, to set aside the ideology and ease the strain on small-business people. We've heard a lot about boosting productivity—this is the way. Fifteen hours per employee is totally unnecessary because Services Australia can and do administer this payment directly. We can do this and continue to give parents the entitlements they deserve, and celebrate the fact that this is coming from taxpayers—this is coming from the Commonwealth, not from the business. We should sort out any administrative issues with Services Australia. With that, I, and also on behalf of Senator Lambie and Senator Babet, move:

At the end of the motion, add ", but the Senate calls on the Government to compensate small businesses for the time required to administer the payment of instalments of parental leave pay under the Paid Parental Leave Act 2010, whether by direct payment or tax offset".

11:59 am

Photo of Marielle SmithMarielle Smith (SA, Australian Labor Party) Share this | | Hansard source

I also rise today to speak on the Paid Parental Leave Amendment (More Support for Working Families) Bill. The Community Affairs Legislation Committee, which I chair, completed our inquiry into this bill in recent weeks. On behalf of all the members of the committee—and I acknowledge those here today and who have already spoken on this bill—I want to thank the witnesses who contributed to our inquiry and all those who made submissions in support of our work.

Paid parental leave is the proudest of Labor legacies. It was introduced by the Gillard government in 2011. I was working in this building when it was brought in, and I saw firsthand the impact this scheme had, not just on the women who would be immediately able to access it but on young women, like myself at the time, who, because of paid parental leave, were able to recalibrate their career trajectories, rethink the industries that they could work in and relook at the pathways they could take because this important pathway would be in place. For women in low-paid or insecure work especially, it has been transformational. It was and remains a policy reform which made history in this country for mothers and fathers, for their children and for their employees. It is a truly game-changing Labor reform.

In the decade since we brought that in, paid parental leave lay neglected until the first tranche of our paid parental leave reforms was legislated at the start of last year. Those changes gave more families access to the payment and more flexibility in how they could take leave and encouraged the sharing of care—critical reforms that worked to change culture and change the support available for both mum and dad in those critical early months.

Now, with this bill, we get to go even further in this massive journey of reform. Here, we are laying the pathway for our expansion of paid parental leave to 26 weeks—an investment of half a billion dollars to the scheme by 2026, representing the largest investment in paid parental leave since its introduction in 2011. This bill encourages fathers and partners to play a more active role in the care of children, a role they want to take. It supports the maternal health of mothers, and it supports the health of their babies. It supports women's workforce participation. It reflects our commitment to improve the lives of working families, to support better outcomes for children and to advance economic equality for women. As I said before, this bill expands the paid parental leave pay maximum entitlement from 20 weeks to 26 weeks by 1 July 2026. Reflecting the advice of the Women's Economic Equality Taskforce, it increases the reserved 'use it or lose it' period for each parent from two weeks to four weeks by 1 July 2026 and increases the concurrency limit from two weeks to four weeks by 1 July 2025.

These reforms are critical—critical for families, critical for women, critical for fathers and critical for our economy. This expansion will provide additional support to families and additional support to mums after childbirth, supporting them and their children's wellbeing while also encouraging dads and their partners to take more leave to spend more time in those crucial and critical early weeks, not just for that child but for that family and for their partner as well. I know that these changes will make a tremendous difference to families in my home state of South Australia as they make all those judgements and all those decisions about their little ones' lives—how much time they can spend at home, what that first year looks like for their families, what those few weeks and months in those early days look like for their families, how much time they can spend together as a family, and how much support they can offer each other. Nationally, over 180,000 families will benefit from these changes.

I cannot overemphasise how much this means. As we all know, parenthood is a wonderful, beautiful, miraculous, life-changing gift. It is the joy, meaning and purpose of my life, as it is for any parent. But that doesn't mean it's easy for either mum or dad. And, crucially, in the weeks and months after the birth of a child, it can be incredibly hard. Many mothers have said to me that it's harder than the birth itself, and I would share that view. The need for care and support doesn't stop when a woman leaves the birthing suite, especially for those women who have experienced loss, trauma or the mental and health impacts that we know can come with bringing a new child into the world. Those needs can be acute, and the right supports are essential to have a healthy mother, a healthy child and a healthy family.

That's why it matters so much to make sure that women have the space, the time and the financial support to have those early weeks and months with their children. But that's also why it matters that we do everything we can to change the culture to encourage more dads to be involved and present. It's not just a baby who needs caring for in those first few weeks and months; often it's mum, and it's also often dad. This is as much about the mental health, the physical health and the wellbeing of children and families as it is about economic participation. It truly is going to make a massive difference in the lives of South Australian families.

As we debate this bill in the chamber, I want to draw the attention of my colleagues to what our inquiry found. The participants who submitted to our inquiry all broadly supported and welcomed the intent of this bill to expand paid parental leave. We know that in Australia women have similar levels of labour force participation to men until they have children. And then what happens? Collectively, women fall behind. They never catch up. As a committee, we heard from many submitters on the importance and urgency of parental leave reforms, particularly when it comes to women's workforce participation and gender equality. While the reforms received widespread support from submitters to the inquiry, the committee did hear suggestions to go further, and I acknowledge those suggestions. I want to emphasise that we are on a pathway of reform that started a decade ago that was massive and nation changing. There are reforms in front of us that are nation changing too. I want our ambition to remain high here, as I do across the spectrum of women's health, maternal health and women's economic participation.

It is really important to acknowledge and reflect on the fact that this scheme is designed as a minimum entitlement. It's meant to complement employer provided leave. We want to change the system. This is part of that. We want more employers jumping in here, providing extra support where they can, because there's a benefit for them. There's an acute benefit for them if they provide generous schemes which allow them to retain their exceptional female talent and bring them back into the workforce in a well-supported way. That is a critical component of it. It's also really important that business remains involved in the administration of the scheme. This is the part of the scheme I think it is important to preserve. Particularly, Services Australia should continue the role it's playing and small businesses should continue the role that they are playing. This bill doesn't change the role of an employer in administering the scheme.

The majority of submitters who commented on the administration of the scheme argued that the employer's role in administering it should remain unchanged and that paid parental leave should continue to be administered by employers, including small businesses. We know that employers play an important role in the administration of this scheme. It was in fact a key part of its design. When it was designed, the Productivity Commission said at its inception, and I quote, 'It's to normalise parental leave in the workplace, like any other kind of leave that the worker will take in their working life—something that we're all entitled to and can all access if we need to.' We heard from submitters like the SDA, who noted that changing the role of employers directly contradicts the objectives that the payment be viewed as a workplace payment rather than a welfare payment. The Equality Rights Alliance also emphasised the importance of maintaining the current administration arrangement by specifying that shifting it:

… may undermine the goal of normalising PPL and encouraging employers to develop their own schemes … Administering PPL centrally through government could result in small and medium businesses viewing PPL as the business of government only.

That is something we do not want. The overall evidence to our committee demonstrated that any administrative burden on employers is outweighed by the substantial benefits to employees and employers alike. For small businesses, it enables them to compete on a more even playing field with medium and larger businesses. That's a fundamentally good thing if you're a small business in Australia.

We also heard that Services Australia provides a range of resources and support to help employers understand their obligations under the scheme. As a government, we want this to be easy for small businesses. We want this scheme to work for everyone. The work on that can continue in government. The work can continue as we legislate this bill, I hope, this week. But having that role for business in the administration of the scheme was part of its design, and it's part of what's going to make it work. It's part of what's going to lead to the broad cultural and societal economic changes we need to embed the idea that paid parental leave is valuable not just to the women and dads who take it and their children but for the economy and our productivity as a whole. We have to think about that in the design of the scheme. We have to think about that in the way we reform the scheme, because we're not just introducing new policy here, we're seeking to change behaviours and cultures which persist and pervade. I think it's a really important part of the scheme, which should stay.

I whole-heartedly commend this bill to the Senate. This is a significant reform, which will have an incredible impact on the lives of mums, dads and children in my state. It'll have a big impact on the way our economy and businesses in our community all work together to advance women's economic participation and to take care of each other and take care of our most precious Australians in those critical early weeks, months and years. I know what it meant to me as a young woman when this was put on the table in 2011—how it changed the way I thought about my future, how it changed the way I thought about my career, what I could do, what I could achieve, what my economic future and security looked like. It did that in 2011. It changed a generation of young women's approach to their workplace, careers and families. With this reform, we take that a step further. A whole new generation of women gets to reimagine that in a way which they haven't always been able to before.

We do these reforms; we spark change. Hopefully, by doing these reforms right, we change a broader culture, which will enable more to happen—more generous schemes across the private sector and more participation from dads in the early care of their babies and the early and critical care of their partners. I think they're tremendous reforms. They are part of a broader, critical package of work we must do not just to advance women's economic participation but also to support women's health objectives at that time of life, which, while beautiful, miraculous, and perfect as it may be, can also just be bloody, bloody tough. This will help them. This will make a difference there. And it's not just good for those women; it is good for their precious babies and their families. We know that when all of those things are working well—when women, their children and their partners feel supported—our whole country benefits from that. I commend the bills in their current form to this chamber.

12:12 pm

Photo of Barbara PocockBarbara Pocock (SA, Australian Greens) Share this | | Hansard source

I rise to speak to the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, and, just as Senator Smith has laid out, I am one of the many women across our country for whom paid parental leave really changed my own parenting and my participation in the workforce, and it certainly benefited me, my children, my partner and my family. The Greens welcome the extension of paid parental leave and the scheme. Increasing availability of leave to 26 weeks is a positive step towards ensuring parents are supported in the crucial early months of parenthood and motherhood. Australian parents, at an absolute minimum, should have access to 26 weeks of paid leave to allow for recovery from birth, to maximise the chance of establishing breast-feeding, to cope with that intensive early parenting and caring and for the development of connection between parents and their infants.

Extended leave provides the best chance of a good start for our kids in the early years and healthy patterns of shared care and good maternal health and wellbeing. But Australian parents should not have to wait another two years to get access to 26 weeks of paid leave, which is an international minimum standard. Supporting new parents and the wellbeing of children and advancing economic equality for women has to be at the centre of decision-making around paid parental leave in Australia. It's vital that the employer role in administering this scheme is preserved. There is extensive research from Australia's researchers about the benefit of maintaining and building the connection between a woman and her workplace at the time of birth and, vice versa, of maintaining and keeping that connection of the employer to their employee at the time of having children. Let's remember that all our businesses, including our many small businesses, are the beneficiaries of the reproductive work of women in the workforce. Without women having children, there is labour force of the future. We all have a contribution to make in supporting the reproductive work of new parents, and small businesses have a role to play. It's tiny, the administrative requirement for small businesses to pass on to women the payment taxpayers think those workers should get when they have a baby. It's an important part—

Photo of Andrew McLachlanAndrew McLachlan (SA, Deputy-President) Share this | | Hansard source

Sorry, Senator Pocock; we've reached the 12.15 hard marker. You'll be in continuance.