Joe Hockey’s Mother’s Day gift — budget cuts for families

Issue 
In exchange for cuts to parental leave, the Coalition has promised to raise subsidies for childcare.

New mothers will be pushed to return to work sooner and non-working families will be punished by having childcare subsidies reduced in the government’s latest budget.

Treasurer Joe Hockey chose Mother's Day on May 10 to announce that almost 80,000 women will have their existing paid parental leave slashed, saving $1 billion.

At the moment the government provides 18 weeks of paid parental leave at the minimum wage of $600 a week.

Almost half of expectant parents also have access to an employer-funded scheme. For many large employers such as Westpac and ANZ, the average length of the scheme is 9.7 weeks and is paid at an employee’s existing wage.

Labor took this into account when it introduced paid parental leave in 2011, and designed it so workers could access both schemes.

Hockey described people receiving payments from their employer and the government as “double dipping” and "basically fraud".

In reality, it allows new parents, mostly women, to be able to afford to take longer leave from the workforce to care for their children. An evaluation of the existing PPL scheme found it “improved maternal and child health, [led to] less stress and greater breastfeeding duration; led to a greater acceptance of fathers taking leave following a birth and a small but significant increase in the duration of leave some fathers take after a birth”; and increased “the rate at which mothers return to work by the time their child is one year old.”

This is a huge backflip on the Coalition’s election promise to provide six months’ parental leave at an employee’s replacement wage.

Not only is the government’s scheme far less than the 26 weeks parental leave the World Health Organization recommends to allow parents to bond with their child and breastfeed, but it also does not pay superannuation, penalising women for leaving the workforce.

Paid parental leave is a workplace entitlement that is part of a worker’s contract, along with sick leave and holiday pay. If workers are forced to choose, it is likely to mean that employers will drop their scheme, with no guarantee workers will be compensated and at the same time denying the government any savings.

In exchange for cuts to parental leave, the Coalition has promised to raise subsidies for childcare, up to 85% for lower income earners.

It is a policy that is designed to encourage both parents to return to work. If one parent is not working, childcare subsidies will be removed.

The government will also spend $246 million on a two-year trial of nannies for shift workers who cannot access regular childcare. These nannies will not have to meet the same education qualifications as childcare workers.

In a move designed to pit families against each other, funding for childcare subsidies will come from cuts to Family Tax Benefit B, which will hit single income families hard. Up to $150 a fortnight was paid to single-income households with children up to the age of 16. It will now cut out when the youngest child turns six.

Community Child Care Association spokesperson Anne Kennedy said: “With the additional funding for this package linked to changes to Family Tax Benefit B and the National Paid Parental Leave scheme being scaled back for parents with access to employer funded parental leave, the $30 a week some families may save in child care fees in 2017 seems unlikely to leave many families in a financially better off position.”

Whether this package is passed by the Senate is a big question. Many of the government’s proposals in last year’s budget have stalled, and with Labor, the Greens and several Independents signalling they will vote against it, there is no guarantee this package will pass.

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