Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

Over the course of question time in the last fortnight, honourable members have been treated to a discourse of recitation of various comments I have made on the public record over time. So it seems only fair to begin this speech on the Paid Parental Leave Amendment Bill 2014 by quoting a set of words from 2002: 'Compulsory paid maternity leave? Over this government's dead body, frankly.' That was the now Prime Minister in 2002. Since that time Mr Abbott, the Prime Minister, has shifted his views on parental leave. It is not improper for someone to shift their views on an issue—indeed, I have shifted my views on GP co-payments to now adopt the same position as that of health experts across the spectrum and the Medical Journal of Australia's editorial today. It is, however, noteworthy that the Prime Minister has shifted his view from supporting no parental leave to supporting an unfair parental leave scheme.

The nation of course already has a parental leave scheme. It was put in place in January 2011 and since then more than 340,000 families have benefitted from it, as well as an additional 40,000 benefitting from Dad and Partner Pay since it began in January last year. Ours is a scheme which benefits those on low and middle incomes. It ensures that people who are worried about whether or not their financial position will allow them to have a child are able to have a child with the knowledge that there is a scheme that supports low- and middle-income earners. This is not that scheme.

The government's scheme is a scheme which is neither fair nor reasonable nor fiscally sustainable. It is a scheme which gives the most to those who have the most, which gives $50,000 to millionaires but merely minimum wage to those on minimum wage. It is at odds with Australia's carefully targeted social safety net—one of the most carefully targeted in the OECD. A typical developed country gives twice as much in government assistance to those in the bottom quintile as to those in the top quintile. Australia gives 12 times as much to those in the bottom quintile. That is why Australia has been able to sustain a government share of GDP ratio, with the federal government being about a quarter of national income and the overall government share being about a third—in marked contrast to countries like the UK, where the government share is 40 per cent or many parts of Europe where the government is effectively half the economy.

This is a European style social program, but the government intends to finance it with a Mexican style level of taxation to GDP. That means that so many in the rest of the community have to bear the burden. If you want to pay for a European style social program with American style levels of tax, you have to make savage cuts to other parts of the community. We have seen analysis from Ben Phillips and NATSEM—part of which I tabled last week—which has shown that in 2017-18 a couple with children in the bottom quintile see a 6.6 per cent drop in their disposable income while a couple with children in the top quintile see a 0.3 per cent rise in their disposable income. That redistribution from bottom to top is the result of a 'knights and dames' approach to social policy. This is a budget for the cigar chompers and for the knights and dames, but a budget that leaves middle and lower Australia behind.

The question of a wage replacement parental leave scheme was considered by the Productivity Commission when it did the investigation that underpins the current scheme. As the member for Griffith noted in a terrific opinion piece in Women's Agenda:

The 2009 productivity commission report into paid parental leave expressly disapproved of a scheme like Mr Abbott's, instead recommending for the option that Labor implemented—parental leave at the minimum wage.

The member for Griffith then went on to quote from the Productivity Commission:

Payment at a flat rate would mean that labour supply effects would be greatest for lower income, less skilled women—precisely those who are most responsive to wage subsidies and who are least likely to have privately negotiated paid parental leave.

Full replacement wages for highly educated, well paid women would be costly for taxpayers—

the report said—

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.

The report also noted that high earners 'usually have better access to resources to self-finance leave.'

As a result, the Productivity Commission recommended a scheme in which 18-weeks postnatal leave could be shared by parents, an additional two weeks of paternity leave would be reserved for the father or same-sex partner and a broad range of families would be eligible as long as they met the eligibility test. The Productivity Commission noted that such a paid parental leave scheme would generate child and maternal health benefits, promote important social goals, help establish parental leave on the arrival of a child as the normal course in the paid workforce, increase retention rates for business and reduce training and recruitment costs. Such a scheme has now been operating very successfully, and many families—including our own—have taken advantage of this scheme.

It is fair, I think, in a household like mine—which is a higher than average income household—that, when we have a child, that child is not regarded as being of greater worth than any other baby born in Australia. But the government's scheme does not do that. Their scheme effectively provides a gold plated, diamond encrusted baby bonus to millionaire households when they have a child and yet it says to minimum wage families—to the families of cleaners, checkout workers, tradies and bricklayers—that, when they have a child, that child will receive less government assistance. This is unfair and utterly at odds with the targeted social safety net that has characterised Australia. If the Prime Minister were arguing for moving us to European style structures, the way to begin would not be to start by increasing expenditure, particularly when he is cutting back on so much assistance.

The government has struggled to find a respected economist who agrees with the government's claims that this scheme—moving from a fair parental leave scheme to an unfair one—will increase productivity or participation. Saul Eslake, hardly a cheerleader for this side of the House, has noted that in his view moving to an unfair parental leave scheme, a wage replacement parental leave scheme, will not have any impact on productivity or participation.

The Prime Minister has changed his view. He is certainly entitled to shift from the view he held a decade ago, when I note he was a government minister rather than a university student, but he has made the wrong choice. He has made a choice which sees the government implementing a scheme which is being criticised left, right and centre. The Motor Trades Association of South Australia has said:

… employers must play a role in the provision of paid parental leave. … MTA SA supports the employer obligation to act as paymaster and guarantee employment.

Innes Wilcox, from the Australian Industry Group, says:

The current system works well, there's no reason it to change.

Peter Anderson, the then CEO of ACCI, said in May 2013:

It is an excessive paid parental leave scheme.

Heather Ridout, former CEO of Australian Industry Group, said:

… on any measure this is bad parental leave policy and it's bad tax policy.

And that is before we go to the many government backbenchers, the brave ones who have been willing to put their names to their critiques, and to the many anonymous coalition backbenchers who have backgrounded journalists when speaking about the flaws in the government system. The member opposite asked me to name one. The member for Tangney has said:

I do have significant concerns. I think there are better ways to attack the overall problem: having affordable and easy access to childcare.

Now there is a member who should have been happy when Labor raised the childcare rebate from 30 to 50 per cent. Senator Williams refused to rule out crossing the floor and said:

I'm gong to have discussions with the PM to see what the final plan will be.

He is a member of the Nationals who is naturally concerned at the unfairness in this scheme and at the fact that rural and regional families will, by and large, not be getting the $50,000. The member for McMahon last week addressed the National Press Club and made the point that the government's extravagant Paid Parental Leave Scheme will cost more than the budget proposals that we will oppose over the forward estimates. So if the government is concerned about fiscal sustainability, it could start by dropping its promise to implement an unfair parental leave scheme. The member for McMahon, when looking at the proposals of a government which wants to send cheques of $50,000 to millionaires when they have a baby, while cutting the pension, freezing young people out of Newstart, reducing family payments, and cutting health and education, said:

This is just wrong.

I could not agree more. This scheme is replacing a fair parental leave scheme with an unfair parental leave scheme. It says that this is the Prime Minister's signature policy. While I fully understand that the Prime Minister might have shifted his view on an issue over the past decade, and I do not fault him for doing a 180 degree turn on a position he held while he was a government minister, he has made the wrong choice. He has shown himself to be the nation's first DLP Prime Minister by putting in place a scheme which is at odds with the means-tested social safety net which has characterised Australia.

The government rails against the 'age of entitlement'. The Treasurer is happy to beat his chest about the age of entitlement, yet when it comes to making a real policy decision that would show that the government is actually willing to pass bills that uphold that 'age of entitlement' rhetoric, the government falls at the first hurdle. Indeed, the government sold this policy going in to the last election on the basis that parental leave is an entitlement. Put another way, entitlements like a reasonably indexed pension are being taken away from older Australians while for millionaires who are having a baby it is a case of: welcome to your new age of entitlement; welcome to an age of entitlement that will see $50,000 go to millionaires to have a baby while 20-somethings who lose their job are forced to go six months without Newstart—a period during which those of them who have cars might well sleep in their cars and those who do not have cars will be homeless and looking for handouts and charity from the rest of the community.

This is a scheme that has been critiqued up hill and down dale, not just by those of us on this side of the House. And that is what should have given the Prime Minister a hint as to what a poor policy it was. Those of us on this side of the House oppose it because it is unfair, but many on the other side of the House oppose it because it is fiscally irresponsible. Senator Alan Eggleston said, 'I think it should be supported, but there seems to be widespread concern that the cost is pretty high at the current time.' In August 2010 the Australian Financial Review quoted an unnamed National Party member who described the scheme as a 'heap of …'—I will not finish that sentence there. Peter Costello disapproves of the scheme, Peter Reith has said that it is 'obviously bad policy' and Nick Minchin has said, 'I've been on the record many, many times as saying that I am not a supporter of the paid parental leave scheme'.

This is a government whose budget increased the deficit this year, increased the deficit next year, increased the deficit over the forward estimates. So, for all the talk about this being a budget that does the heavy lifting, it is anything but. This is a budget that increases the deficit but then sets it out redistributing in a most un-Australian way. And after a generation when battlers have done worse than billionaires, this is a budget that redistributes from battlers to give to billionaires. This is bad policy, and it should be dropped.

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