Parental leave scheme falls way short

May 17, 2009

On May 10, federal treasurer Wayne Swan announced that Australia will finally join the overwhelming majority of developed countries in implementing a national paid parental leave scheme. But the plan falls way short of what women need.

The proposal is to pay primary carers earning less than $150,000 per year the minimum wage (currently just under $544 per week) for 18 weeks.

This will be welcomed by women workers in low-paid and non-unionised workplaces with poor job security and no existing paid parental leave. However, on average, full-time women workers earn twice the minimum wage. So it will still be a dramatic pay cut for many.

Either parent may take the 18 weeks' leave, or it can be split between them. This is better than only offering maternity leave, which reinforces the idea that it should always be the woman who takes time out from paid work to raise children.

However, this is undermined by not including any provision at all for partners' leave — not even the two weeks proposed by the government's own Productivity Commission.

It also fails to take into account that women need time off to recover from childbirth.

The Labor government has delayed the start of the scheme until January 2011, blaming the global economic crisis.

This means the scheme won't start until after the next federal election. It raises serious questions about whether paternity leave will actually come at all.

Many women will be denied access to the plan. Unemployed workers and full-time mothers won't be eligible. Those who do receive the payment won't have access to the baby bonus or family tax benefit part B while they are on leave.

The taxpayer-funded leave will be paid on top of any leave already provided by employers. However, there is no compulsion for bosses to maintain existing parental leave provisions won by workers and unions.

Even in capitalist economic terms paid parental leave is "good for the economy", not just for workers. It helps keep experienced, skilled workers in the work force.

But as usual, big business wants only the benefits as long as someone else pays. Under corporate pressure, the Rudd government rejected the proposal from the Productivity Commission for employers to pay superannuation contributions for workers on parental leave.

Despite business getting such a good deal, Peter Anderson, the head of the Australian Chamber of Commerce and Industry, wants employers to be compensated for administering payments under the scheme.

Under the plan — if it actually arrives in 2011 — women workers on maternity leave will continue to fall way behind male colleagues in lifetime earnings.

On May 12, ABC Online spoke to the OECD's Willem Adema, who said that while it was a step forward for Australia to finally introduce universal paid parental leave, the proposal is inferior to schemes in Europe.

In Europe, all women are eligible for paid leave regardless of income. In some cases they are paid their full wage. In Sweden, paid leave is given for 16 months. In Estonia, mothers can have 18 months paid leave.

A fair scheme would provide at least 12 months' paid parental leave at a decent rate, entirely funded by a levy on all employers. The levy would be applied progressively so that the major contribution came from big business.

This would remove the temptation for bosses to discriminate against women when hiring staff. It would also go some way towards cutting the gender pay gap and giving women more control over whether and when they wish to have children.

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