Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Hansard source

I rise to speak on the Paid Parental Leave Amendment Bill 2014. Chris Richardson, from Deloitte Access Economics, described this budget as the toughest since 1997. There is $27 billion in spending cuts and $8.3 billion in increased taxes. This is from a Prime Minister who said when in opposition that there would be no cuts to education, no cuts to health and no changes to pensions. Certainly he said almost solemnly that there would be no increase in taxes without an election.

The now Treasurer says that everyone has to do the heavy lifting. In fact, they do not. This proposed paid parental leave scheme is a clear demonstration of how they get their priorities out of whack. In fact, the National Centre for Social and Economic Modelling shows that the top 20 per cent of income earners have in effect a 0.3 per cent reduction in their incomes—and only for a short period of time, for only a few years. The bottom 20 per cent of income earners, in contrast, have a five per cent reduction in their income. In a budget which has been described by Annabel Crabb as having 'a complicated relationship with some of humanity's most ancient themes: birth, life, and growing old', this legislation is something that the Labor Party does not agree with. It demonstrates that, as part of their whole package, paid parental leave is not understood by those opposite. Nor do they understand what the Productivity Commission recommended to the former federal Labor government. For the benefit, education and edification of the member for Lindsay, the Productivity Commission, commenting on replacement wage schemes, said the following in their report:

Full replacement wages for highly educated, well paid women would be very costly for taxpayers and, given their high level of attachment to the labour force and a high level of private provision of paid parental leave, would have few incremental labour supply benefits.

What is so outrageous and so wrong about the paid parental leave scheme of the coalition is this. Under their proposed scheme, women on $100,000 or more would receive $50,000 in taxpayers' money while a woman on a minimum wage would get $16,000. So they get about $2,000 per week and a woman who is on a minimum wage gets only $16,000 in total. Even millionaires will be given $50,000 to have a baby for the six-month duration. This is a huge gap inequity in this country—and it is fundamentally unfair. It is money that belongs to the taxpayers and, like so much of the rest of this budget, it is unfair.

We brought in a paid parental leave scheme in this country. It was designed firmly on the footing of the recommendation of the Productivity Commission. In 2008 the Productivity Commission reported that a flat-rate, minimum wage payment was the fairest, the most equitable and the most effective way to design a paid parental leave scheme. The Productivity Commission is not an affiliated body to the Australian Labor Party. It is made up of economists. We on this side hold it in fairly high esteem, but we do not agree with every decision it makes.

It would have few incremental benefits to bring in the paid parental leave scheme those opposite propose to bring in. According to ABS statistics, more than 80 per cent of high-income earners already have access to employer-funded paid parental leave scheme. In this country now, as a result of Labor's reforms when in office, 340,000 families have benefitted—for the very first time—in having a paid parental leave scheme. We have also seen 40,000 dads and partners benefit from the Dad and Partner Pay since it began in January last year. Before Labor brought in a paid parental leave scheme, only about 55 per cent of working mothers had access to paid parental leave, and about 95 per cent of working women now have access to such a scheme.

So, on the grounds of it being taxpayers' money, on the grounds of equity and on the recommendation of the Productivity Commission, Labor's scheme is better, fairer, more effective and in accordance with the best practice and the recommendations of the experts. Those opposite are not keen on listening to experts, whether it is economists, the Productivity Commission or climate scientists. They are just not interested in listening to the experts—because apparently they know best.

The arrogance and inequity of the budget are demonstrated by their paid parental leave scheme. When you claim that there is a budget emergency and a budget crisis, why would you spend about $5.3 billion on a paid parental leave scheme when you have already got one that is operating in accordance with the recommendation of the Productivity Commission and which is supported already by 340,000 Australian families? Why would you do it? It is because you have your priorities wrong and you do not understand it. Years ago this Prime Minister said that he would bring in a paid parental leave scheme over his dead body and he would fight against it when he was a minister in the Howard government.

The government proposes to amend the Paid Parental Leave Act to remove the requirements for employers to make payments to employees under the National Paid Parental Leave Scheme from 1 July 2014. The payments of parental leave will then be made by Centrelink directly to eligible employees, unless the employer chooses to opt in to manage those payments and their employee agrees for their employer to pay them. The government claim—and they make great claims in the budget and in here—that this will 'ease administrative burdens on business' while costing government $7 million over five years.

According to the Abbott government, removing employers from the paid parental leave scheme will reduce the average annual compliance cost on business by $44 million. But, as with many of the government's numbers, there is no evidence at all of how this was arrived at. This bill removes employers from the current PPL scheme and it signals the beginning of the government's very dramatic changes, as I said before, to the very successful scheme that Labor brought in. It is the first step on their wrong priorities gold-plated scheme.

Currently, in most cases, the Commonwealth funds employers to provide instalments of paid parental leave to their eligible employees. An employee's eligibility is determined by Centrelink. Labor provided a role for employers in their current PPL scheme partly to help employers retain skilled staff—and we did it on the recommendation of the PC. A role for the employer helps sustain the ongoing connection between women and their workplace when they take time out of the workforce to have a baby or adopt a child. It helps make sure that these women are able to return to work following their leave. The Productivity Commission in its report recommended the current scheme and said that it would promote ‘employment continuity and workforce retention’; and, second, it would signal that ‘a genuine capacity to take a reasonable period of leave from employment to look after children is just a normal part of working life’. Further, it said:

... the more that parental leave arrangements mimic those that exist as part of routine employment contracts, the more they will be seen by employers and employees as standard employment arrangements.

The Productivity Commission could not have been more crystal clear in its statements. As I said, the Productivity Commission was sceptical about claims from some employer representatives about the perceived administrative burden of the scheme—which the Labor government continued to monitor following its introduction.

We listened to business and we heard the challenges they faced. We understand small business much better than those opposite give us credit for. We understand that small businesses have scarce resources. I know that personally, because I ran one for 20 years before I was elected in 2007. We know that small business needs to grow. It needs to be profitable, it needs to engage with its workforce and it needs to work hard and well for the benefit of the country. That is why, during the 2013 election campaign, we announced that, if we were successful, we would amend the PPL scheme to remove the requirement that employees—

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