Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Hansard source

It is a great pleasure to rise and speak on paid parental leave again in this House. It is a policy area that has been very close to my heart for many years. Of course, it was Labor that introduced this country's first-ever national paid parental leave scheme, in January 2011. I was very pleased to be the minister responsible at the time.

A fair and affordable paid parental leave scheme is one that serves the interests of working women right across the country and based on solid economics—solid economics and policy design by the Productivity Commission and extensive consultation.

It seems extraordinary now but before 2011 Australia was one of only two OECD countries without a national paid parental leave scheme. That is why, when Labor came to office in 2007, I was determined to examine ways of improving the lives, particularly for working women so that they could better balance work with the important job of adjusting to parenthood, and bonding with their newborn child. Remember that at this time the now Prime Minister was known to have said paid parental leave would only occur 'over his dead body'.

In 2008 it was Labor that asked the Productivity Commission to look at the economic, productivity and social costs and benefits of paid maternity, paternity and parental leave. The Productivity Commission looked at the evidence from Australian surveys and international research. It undertook far-reaching public consultation on proposals for the scheme. This included a process of public submissions and public hearings.

The Productivity Commission recommended the introduction of a government funded statutory scheme of paid parental leave, paid at the level of the national minimum wage for up to 18 weeks. The commission recommended a scheme based on comprehensive evidence, designed to be fair and affordable—and that is exactly what we introduced.

Since the introduction of Labor's scheme, more than 340,000 families have benefited from Labor's paid parental leave scheme. An additional 40,000 dads and partners have benefited from Dad and Partner Pay since it began in January last year.

Of course it is not just about the number of families benefiting but the types of families. Labor's scheme was designed to benefit all Australian families, but in particular those on low and middle incomes, many of whom are in casual and part-time work—and the paid parental leave scheme is doing precisely that.

Around 55 per cent of working mothers had no access to paid parental leave before Labor's scheme was introduced, and the mothers who previously missed out were typically lower paid and in insecure work. The only choice available to these women was to take unpaid leave. Too often, mothers were forced to leave the workforce altogether when they had a baby.

Today I am pleased to say that access to paid parental leave now stands at around 95 per cent of all working mothers. The median income of these women is around $45,000. This is no accident.

It is hard to think of a reform that better demonstrates Labor values. Labor's scheme ensures the majority of taxpayers' money goes to those who need it most. Our scheme ensures women who did not get paid parental leave now do. They can now have a baby with financial security.

As the Productivity Commission report stated:

The design of the Commission's proposed scheme (particularly the setting of the payment rate at the adult federal minimum wage) will provide proportionately greater financial relief for women on lower incomes (especially those working part time) and should elicit the greatest extension of leave duration from that cohort.

The same certainly cannot be said for the government's unfair and unaffordable paid parental leave scheme. The Prime Minister's scheme lacks all of the hallmarks of Labor's scheme and, most notably, it lacks fairness. Whereas Labor's scheme gives every eligible woman 18 weeks of leave at the minimum wage, the Prime Minister's scheme will give up to $50,000 to very wealthy women to have a baby—$50,000 to women earning over $100,000; $50,000 to women earning over $200,000, and so it goes on. The unfairness is astounding.

There is no evidence, as the Prime Minister claims, that this proposal will support more women back to work. In fact, we know from ABS data that more than 80 per cent of high-income earners already have access to employee-funded paid parental leave. This scheme will simply be more money in the pockets of these high-income earners.

The Prime Minister's claim that this is a participation measure for these women is frankly rubbish. It is not only that the scheme is unfair; it is economically irresponsible. The Prime Minister's scheme comes at a cost of around $5.5 billion a year—that is $21 billion over the next four years.

The gross expenditure on the Prime Minister's scheme more than anything highlights the hypocrisy of this government as they cynically claim a budget emergency. If there were a budget emergency, they would scrap this unfair and unaffordable paid parental leave scheme entirely. Instead, the Prime Minister seems determined to move ahead with what can only be described as an unfair and unaffordable scheme.

This legislation seeks to transfer the responsibility for the administration of paid parental leave from the employer to Centrelink. This is just the first step in the government unwinding the solid, evidence based scheme that Labor introduced and transforming it into an unfair and unaffordable cash splash for high-income women.

The Prime Minister's Paid Parental Leave scheme is bad policy and it is unfair. It certainly shows in stark relief the twisted priorities of what can only be described as 'a cruel government'—a government that is cutting the age pension, cutting the disability support pension, cutting the carer payment, cutting support to young jobseekers under 30 and cutting family tax benefit. The Prime Minister has just delivered a horror budget for many ordinary Australians, a budget that will hurt those people. But true to form, at the same time the government is determined to proceed with a paid parental leave scheme that will give $50,000 to wealthy women to have six months off to have a baby. The reality is that Tony Abbott's Paid Parental Leave scheme goes to the core of Liberal values—prioritising the wealthiest in our community.

When we came to government there was no income limit on family tax benefit B or on the baby bonus. It took a Labor government to introduce income limits for these payments and, when we did, those opposite fought us every step of the way. The Prime Minister likened the means testing of family tax benefit B to 'class warfare'. What hypocrisy in the face of cuts to family tax benefit B in this budget! Carers, people with disability and age pensioners on about $20,000 a year are going to have their payments cut, at the same time as this government proceeds to give very wealthy women up to $50,000 to have a baby. You would have to say it is taking from the poor and giving to the rich.

That we are still debating this government's Paid Parental Leave scheme I find extraordinary. Just about everyone agrees that it is wrong and unfair, including friends of the government, people in the business community. I gather former Liberal Treasurer Peter Costello personally advised the Treasurer to scrap the scheme. The Chamber of Commerce and Industry has slammed the coalition scheme and called for greater means testing. Chief Executive of the Australian Industry Group said, when talking about paid parental leave:

They talk about the end of the age of entitlement and we can't see how that entitlement stacks up. We don't believe this is the way to go. It doesn't make sense on any real policy level that we can see.

There's questions about its equity. There's questions about its value to the economy as a whole and there are other ways that you can bring women into the workforce.

Heather Ridout, the then chief executive of Australian Industry Group, said that on any measure 'this is bad parental leave policy and it's bad tax policy'. Among his own coalition colleagues, the Prime Minister's signature paid parental leave policy is even less popular. National Senator John Williams has refused to rule out crossing the floor to vote against the legislation in the Senate. The Liberal member for Mitchell, said:

The question is, is this good economic policy at this time, and my answer is no.

Criticism of the Prime Minister's scheme is not just limited to current members of the coalition. Former Liberal minister Peter Reith said:

It is obviously bad policy.

Former finance minister Nick Minchin said:

I have been on the record many, many times as saying that I'm not a supporter of the paid parental leave scheme.

They know, just as Labor knows, that this scheme is fundamentally flawed. Nobody seems to support it, except the Prime Minister. The only thing the government should do on paid parental leave is not bring to the Australian people the legislation before us today; rather, the government should scrap their unfair scheme. But instead, today the government is moving to change the scheme that Labor designed by removing the employer role. They have decided to start amending a scheme designed by the Productivity Commission, after a comprehensive investigation and extensive consultation, so that the employer role was included to help employers retain skilled staff.

When in government, Labor's commitment to consultation with key stakeholders was one of the reasons for the strength of our scheme. During 2009, 32 consultation sessions were held with over 200 key stakeholders, including major employer groups and trade unions, representatives of small business, family and community stakeholder groups and tax professionals. We listened to what all these people had to say and they provided valuable feedback. Our scheme is fair to business. That is why business supports Labor's Paid Parental Leave scheme, which is fully funded by government and does not apply any new taxes to Australian business, unlike the scheme proposed by the Prime Minister. Significantly, Labor's scheme was designed to complement family-friendly arrangements that have been put in place by many employers. Labor listened to the community, we adopted an evidence based approach and analysed how best to balance the interests of parents, employers and the wider community. The end result is that today we have a fair and affordable scheme that has improved the lives of hundreds of thousands of Australian families.

A central feature of our scheme was to ensure we found a way of enabling women to remain connected to work and their careers when they take time out of the workforce to have a baby or adopt a child. Overwhelmingly, employers have said that they support the employer role. They support it because it helps them retain a connection with their staff. It helps them to support that staff when they are ready to return to work.

That is why we designed it that way. Both women and business have overwhelmingly supported this aspect of the design. Labor understands that small businesses need to be able to devote their scarce resources to expand their businesses. That is why we listened to the concerns of small business and why during the 2013 campaign Labor took to the election a policy to enable businesses with fewer than 20 employees to streamline administration and have Centrelink make paid parental leave payments to their employees while on maternity leave. This was a sensible balance between the need to maintain a relationship with their employers while they are on paid parental leave and the need to give small businesses the option of having their paid parental leave administered by Centrelink.

This legislation takes this a step further, abolishing the role of the employer in its entirety. It does not strike the right balance. Rather, it cuts the crucial link between an employer and its employees. It is not good for parents, it is not good for employers and we will not be supporting it. It stands in complete contradiction to the rhetoric of this government. It seems that at the heart of this government's proposed amendments to the Paid Parental Leave scheme is a transfer of responsibility from business to government. This Prime Minister is actually planning to force government to adopt greater responsibility for the management of businesses' employees. When has the Liberal Party ever said that a government bureaucracy can do better than business?

Labor will introduce amendments in the Senate which will make sure that only employers with fewer than 20 employees can have their paid parental leave administered by Centrelink. This is sensible. It reflects the evidence as outlined by the Productivity Commission and the consultation that Labor did when we designed our Paid Parental Leave scheme. That is how Labor develops policy, based on solid economics and consultation. This bill is based on neither, and we will not support it.

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