Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

The Paid Parental Leave (Reduction of Compliance Burden for Employers) Amendment Bill 2010 seeks to remove the unnecessary and unjustified administrative and compliance burden that the Gillard government wants to impose on employers as part of the Paid Parental Leave scheme. In June 2010, the parliament passed a paid parental leave scheme, which will come into effect from 1 January 2011.

The PPL scheme provides for eligible recipients to receive up to 18 weeks paid parental leave per child, paid in instalments, at the national minimum wage. Under the government’s scheme, payments will be administered by Centrelink’s Family Assistance Office for the first six months, after which employers will be obliged to receive payments from the Commonwealth for on-forwarding to eligible employees. This government imposition produces needless costs and risks for employers which include the need for employers to become familiarised with their obligations and responsibilities under the government’s scheme; necessary changes to payroll and accounting systems and software; staff training; the receipt, handling, processing and timely payment of instalment amounts; compliance, verification and reporting requirements; and the opportunity costs of the displaced effort and resources all this involves. Significant fines may be imposed on employers who fail to comply with the numerous obligations and compliance requirements imposed under the scheme.

This bill aims to amend the Paid Parental Leave Act 2010 to remove the ability to impose pay clerk responsibilities on employers. The bill seeks to deliver on the coalition’s election promise to relieve the administrative and compliance burden of Labor’s PPL scheme by ensuring that ‘government will be the paymaster, not business’. This will have the effect of indefinitely maintaining the role of the secretary to administer payments to eligible recipients, via Centrelink’s Family Assistance Office, beyond the first six months of the scheme. Taxpayers are already investing in establishing the PPL scheme machinery to enable Centrelink’s Family Assistance Office to administer the scheme and make payments to eligible recipients. The bill seeks an ongoing benefit from this investment of public money and not just from what the Gillard government characterises as a transitional period designed only to ‘help employers prepare for the scheme’.

The coalition believes that the government expenditure incurred to establish the Centrelink administered PPL system should continue to deliver benefits to the Australian community well beyond the six-month shelf life the Gillard government has arbitrarily determined. It is not surprising that there has been such an outcry against the Gillard Labor government’s demand that employers, both big and small, relieve the government and Centrelink of their responsibility to administer the paid parental leave system. The Australian Chamber of Commerce and Industry’s 12 October 2010 media statement captured the key concerns with the government’s approach. ACCI chief executive, Peter Anderson, said:

The industrial relations system is already complex enough … without the government adding an unnecessary level of red tape on parental leave.

Mr Anderson went on to say:

It would be simpler and cleaner for the Australian paid parental leave scheme to be wholly run through the Government’s Family Assistance Office, as in New Zealand.

ACCI adds that the benefits of the scheme are not evenly spread and that the ‘three-way merry-go-round’ of eligibility assessment, information exchange and payment handling is not supported by any payment or rebate, unlike the UK system, where ‘the government provides 104.5% of the payment to employers as compensation for administering the system on behalf of the State’.

The Chamber of Commerce and Industry in Western Australia called for reimbursement for the paymaster role as part of its criticism of the government’s PPL pay clerk imposition on employers. The New South Wales Business Chamber CEO, Stephen Cartwright, said in a 12 October 2010 statement that the government funded PPL is ‘social policy that should be run by government and not incorporated into the costs of business’. The Chamber of Commerce and Industry Queensland president, David Goodwin, shares the coalition’s view that the Centrelink Family Assistance Office should continue to administer the scheme, saying that ‘any other arrangement would simply be needlessly adding a layer of regulatory burden on businesses that sidetracks them from employing and growing’. The Australian Retailers Association executive director, Russell Zimmerman, hit the nail on the head when he said, ‘For a small retailer, administering the government’s Paid Parental Leave scheme is a costly, time-consuming administrative nightmare.’

The particular concerns about the government’s approach to smaller employers has been emphasised by the Victorian Chamber of Commerce and Industry. VECCI CEO, Wayne Kayler-Thomson, said: ‘Small businesses are not an extension of the federal bureaucracy and it is unreasonable to expect them to administer federal government programs. Small businesses in particular simply do not have the resources to devote to bureaucracy.’ COSBOA executive director, Peter Strong, astutely picked up how the government’s decision to impose the PPL pay clerk responsibilities on smaller employers shows that the government ‘does not value the time and effort put into the economy by small business by continuing with this’.

The government itself recognises the additional burden it is imposing and how it lands most heavily and disproportionately on small business people. The needless costs, red tape burdens and compliance risks are particularly problematic for smaller employers without dedicated payroll staff and settled software and systems where upgrades are rare or not routine. The Gillard Labor government’s justifications and explanations for the imposition of the PPL pay clerk role on employers are simply feeble and completely unpersuasive.

Minister Macklin told this parliament in June that the employer as PPL pay clerk element of the government’s scheme:

… was recommended by the Productivity Commission as it sends a very strong message that taking leave from work around the time of a birth is a normal part of work and family life.

This opportunity and the need for time to be spent with a newborn is not new or contested. Relevant leave provisions have been available for some time and paid parental leave is commonplace in many larger workplaces in the public sector. Was Ms Macklin’s remark targeted at smaller employers? Robert Mallett, the Executive Director of the Tasmanian Small Business Council, in his 17 June 2010 statement, said:

Small business owners know their staff very well and don’t need this contrived mechanism to ensure that their pregnant staff are more connected with the business.

Mr Mallett added:

It is the owner and their family who will visit the mother and baby in hospital, it is the owner and family who will provide presents for them and it is the owner and their family who will watch their staff members family grow up.

Employees in small business are not numbers, they are people yet the Government can’t seem to grasp this basic concept.

Even more remarkable is the ACTU claim that relieving employers of the red tape cost and compliance burden of the PPL pay clerk role will somehow ‘weaken women’s connection to the workplace’. What a nonsense argument. Nebulous Gillard Labor government attempts to frame PPL payments in some kind of way that ignores workplace reality is no justification for the very real and costly red tape burdens and compliance obligations this government seeks to impose on employers.

The Productivity Commission’s analysis and cautious on-balance conclusion that the government seeks to rely upon for support is framed in a ‘staying close’ and ‘signalling benefits’ argument which has been hotly contested by employer groups in the commission’s final report. The government has not even included any compensation for employers doing the government’s job that is a feature of some of the schemes that were referred to as case studies. Only Labor would think a compliance burden, costly red tape and needless bureaucratic distractions would be more likely to bring an employee with a newborn closer to their workplace than messages of congratulations, bouquets and gift baby baskets from employers and colleagues.

Without the common good sense that this bill seeks to inject, the government’s administrative arrangements for this system show Labor spin triumphing over substantive concerns. Even Centrelink’s own employer implementation consultations appear to have given up trying to argue that this burden is not substantial. Now it seeks to argue that there will not be too many employers affected by it and that somehow this makes it okay. Well, it does not. Allowing the government to develop payment and administrative arrangements that drop small business right into the paid parental leave obligations and duties simply sets up the machinery to fit up small business to pay the cost of fixing the shortcomings of Labor’s flawed scheme. This is a downstream risk for employers carrying out this PPL paymaster role.

The bill that the coalition provides was originally agreed to by the Senate and was part of the coalition’s small business election policy. The government refused to accept the Senate’s mind and will, imposing its own bullying tactics to ram through this system under the threat of the whole PPL scheme not progressing unless the government got its way. The only certain way of reducing the compliance burden pay clerk costs and the risks of additional payroll related expenses is for the parliament to pass the coalition’s bill.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

In accordance with standing order 41(c), the second reading will be made an order of the day for the next sitting.