I rise to speak about the advent of paid parental leave in Australia and the benefits it will provide to workers, children and businesses. I was proud to be in the Senate on the historic occasion last week when Australia adopted its first national paid parental leave scheme. Up until that day, Australia was in the embarrassing situation of being one of only two countries in the OECD to have not adopted a paid parental leave scheme—the other being the United States. Other OECD countries have adopted schemes providing, on average, 18 weeks paid leave for working parents.
The Rudd government’s scheme provides a minimum of 18 weeks parental leave paid at the minimum wage to at least one working parent following the birth or adoption of a child. The entitlement can, however, be shared between both parents and may also be supplemented by employer funded schemes. Contrary to the claims of Senator Fielding in this place last week, we are still looking after stay-at-home parents by continuing to offer the baby bonus and family tax benefit to those not participating in a paid parental leave scheme.
It is vital that parents do not have to suffer financial stress just to have the opportunity to look after their children. Paid parental leave gives working parents the opportunity to develop a relationship with their child during the early stages of its life, to take the time to make future arrangements for their care and for mothers to recover from pregnancy and childbirth. It has been a tradition in the recent past that parents, usually mothers, have had to leave the workforce to care for their newborn child. Paid parental leave offers the opportunity to working parents to take time off yet maintain their connection with their working life.
While it is a much-deserved benefit for working Australians, a more important outcome of paid parental leave is the benefit it provides to the child. We all know the first year of a baby’s life is such an important stage in their development. Paid parental leave recognises that while raising a child has in the past been deemed a personal responsibility, the care of our children is actually a national responsibility. It is a national responsibility because the outcomes of childhood development have implications for society as a whole.
Paid parental leave not only has benefits for babies and workers; it is also good for businesses. It reduces the financial impost on businesses if they want to retain employees but still offer them time off to care for their baby. These flexible staffing arrangements are especially important for small business, the engine of Australia’s economy. This is an example of how the Rudd government is looking after small business, and these flexible arrangements will help boost the productivity of our workforce. In conjunction with our income tax cut for small business from 30 to 28 per cent by 2012-13, paid parental leave will help to grow jobs and investment.
The Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, is to be congratulated for developing this scheme and introducing it to the parliament. The union movement in particular has been lobbying for paid parental leave for 30 years. I personally have pushed for employer funded paid parental leave schemes to be included in enterprise agreements on behalf of the workers I represented as an industrial officer for the Australian Services Union. But paid parental leave has much broader support, with representatives of women and business also determined to see a scheme introduced. So it is not surprising to see that the government’s scheme has been welcomed by a broad cross-section of the community.
The President of the Australian Council of Trade Unions, Sharan Burrow, said:
A new national standard that gives all women the right to take a period of paid leave will also be a major benefit to maternal and child health and development.
The Chief Executive of the Australian Industry Group, Heather Ridout, said:
.. the Federal Government’s paid parental leave legislation marks the achievement of a hard won and important reform which will work well for families and work well for business.
In noting that the leave can be shared between parents, federal Sex Discrimination Commissioner Elizabeth Broderick said it was also a historic day for fathers.
Sensibly, the opposition supported the passage of our scheme through parliament. However, they say they have a better scheme, a claim I would like to address. The first thing to be questioned about the opposition’s cobbled-together scheme is whether the Leader of the Opposition truly believes in it. Let us not forget his famous address to a Liberal Party function in Victoria back in 2002. Mr Abbott’s words were:
… compulsory paid maternity leave, over this Government’s dead body, frankly ..
It seems that the commitment the Leader of the Opposition demonstrates towards paid parental leave is reflected in the haphazard fashion in which he has put his scheme together. It is little wonder it was roundly rejected by stakeholder groups when first announced. The opposition have failed to win the support of business groups, despite claiming to look after business, who are often regarded as their core constituency.
The opposition’s scheme has been opposed by the Business Council of Australia, the Australian Chamber of Commerce and Industry and the Australian Industry Group, with AiG chief Heather Ridout describing the scheme as flawed, unrealistic and a deterrent to investment in Australia. Even the federal Sex Discrimination Commissioner, Elizabeth Broderick, who obviously would be expected to embrace paid parental leave, was cautious in her support. Ms Broderick said:
However the scheme is funded, it can’t be in such a way so as business says, well we won’t employ women.
The opposition’s scheme has even been attacked by Australia’s longest-serving Treasurer, Peter Costello. It is very unusual for former senior political figures to attack their own parties so publicly, but Mr Costello described the opposition’s paid parental leave scheme as ‘silly’. The scheme is so on the nose that the Liberals’ junior coalition partner cannot even bring itself to support it. A report in Sunday’s Age newspaper quoted a number of unnamed members of parliament, who were speaking at the Nationals federal conference on the weekend, as saying they would oppose the opposition leader’s plan. One MP was quoted as saying:
I would be surprised if anyone in the National Party saw it as a positive.
Hardly a resounding endorsement! The MP went on to say:
We won’t campaign against it, but we just won’t mention it.
It reminds me of the episode of Fawlty Towers where Basil tells his wife, ‘Don’t mention the war,’ and then continually drops references to it while serving their guests. Does that mean Nationals MPs will just stay mute when a journo pops a question about the opposition’s scheme? It really begs the question—and this is something I think the Australian people deserve to know—is it the coalition’s paid parental leave plan or just the Liberals’? Or is it just Tony Abbott’s? Is he a general leading the charge without his army behind him?
One of the problems with the opposition’s scheme is that it is clearly inequitable. Recipients receive their full pay, regardless of income. As one of the Nationals MPs at last weekend’s conference said:
Why should a woman in the city be paid $75,000 when a part-time nurse in a regional area would only get $25,000?
Another major flaw in the opposition leader’s plan is to fund the scheme with a 1.7 per cent levy on the profits of businesses with a turnover of more than $5 million. This proposal creates a strong disincentive for companies to grow and add jobs if their current turnover is just under that $5 million threshold. It also creates a disincentive for companies to merge if the merger lifts their turnover above $5 million.
The Rudd government have plans to reduce the tax burden on business to support investment and jobs, and we will do this by cutting company tax from 30 per cent to 28 per cent. When it comes to the next election, the employees in the 3,200 Australian companies who will be paying the opposition’s levy should consider that under a Rudd Labor government they will pay almost four per cent less tax than they will if Mr Abbott becomes Prime Minister. The opposition leader’s quixotic, slapdash, on-the-run approach to policy development demonstrates that he has no serious plans for the future of Australia. I made reference to Fawlty Towers earlier. Well, to quote another John Cleese classic, Monty Python’s pet shop sketch, the opposition may insist that their leader’s credibility is not dead but merely ‘resting’.
When it comes to paid parental leave, the Rudd Labor government is getting the balance right. We are delivering for children, delivering for working families and delivering for business. The federal opposition seems to be delivering a slapstick comedy routine.