Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to 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.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Paid Parental Leave Amendment Bill 2014. In the time allowed, I would like to address two specific issues: firstly, the importance of this change to small business and, secondly, why paid parental leave is important, especially for the future.

In the six years of the previous Labor government, we had no fewer than six small business ministers—six separate ministers in charge of small business in this country, coming in through a revolving door. The chief of the Council of Small Business of Australia, COSBOA, Peter Strong, had a media release on his desk which said, 'I am extremely disappointed that once again we will have a new small business minister.' He had that media release on his desk because he knew that every couple of months he would need to use it again because there would be another change of small business minister.

Let us have a look at what Labor actually did to small business in that six years, how small business was smashed by the previous Labor government. We know that the unemployment queues, over the six years of Labor government, lengthened by 200,000 people, but the biggest hit was on small business, where 412,000 people lost their jobs. You could fill up the MCG four times with the number of people who lost their jobs in small business under the previous Labor government. We also saw a shift from small business to big business during that time. In private sector employment, we saw, for the first time in our nation, the proportion of small business fall to under 50 per cent. At the end of the Howard years, 53 per cent of people employed in the private sector were employed in small business. After six years of Labor government, that had declined to 43 per cent. So we had six years of failure from six small business ministers under Labor—complete and utter, hopeless, hopeless failure.

Why did that failure occur? We know that Labor, with their central planning ideology, have the idea that they know better than the small business community how things should be done. We know that almost every policy they had was an attack on small business, from the carbon tax on. One of the attacks they made was forcing small businesses to act as pay clerks to administer their Paid Parental Leave scheme—just more red tape for small business.

The difference between the coalition and the Labor Party could not be any clearer than in their approach to this issue. The Labor Party saw the small business community as a group of people that could just be there and carry out extra work and deal with extra red tape, and they imposed this extra paperwork burden on them. We in the coalition want to take that red-tape burden off small business, because we want those small business people to be out there using their creativity and their entrepreneurial skills to drive innovation and to create the new jobs in our society, rather than sitting down dealing with red tape.

Labor simply do not understand the basis of small business. They do not understand that history has shown that small business are the best innovators. Throughout history, it has been shown that the new jobs in the economy, the new innovations, are all driven by small business. Some of the largest companies in the world today started off as small businesses. We just have to look at a few. Amazon is one of the most famous companies in the world. It was only back in 1995 that it was started by one guy working at home in his garage. It is the same with Apple computers. It was started by two guys working at home in their garage. And of course everyone knows about Google, one of the wealthiest and most prosperous companies in the world today. It was only in 1998 that that company was started by two guys working in their garage. That is why small business is important, because it is the small businesses of today that will create the innovations and drive the jobs of tomorrow. But what we saw under Labor was a complete attack on that sector, with 412,000 jobs lost in the small business sector because they smashed them with red tape.

This bill takes away that red tape burden, that extra pay clerk burden, from the small business and passes it on directly to the Department of Human Services. Of course, it is not compulsory. If the employer wants to provide that Paid Parental Leave scheme that the government has mandated then they are able to do that, but they are also able to pass that paperwork burden on to the Department of Human Services. That is exactly what this coalition wants to do: to cut that red tape, to free the hands of our small business people.

Also, this is important for our migrant communities. Throughout the great history of migration to Australia we have provided our migrant communities with the opportunity to go in and start their own small business. That has been an essential mechanism which has given millions of migrants who have come to this country the ability to enter the mainstream of Australia—our economic mainstream and our social mainstream—by giving them that opportunity to go into small business. That is why it is important. And that is why removing the burden of being pay clerks and processing the government's Paid Parental Leave scheme is just one of the many important steps that we in the coalition are taking.

In the time remaining, I would also like to talk about why Paid Parental Leave is necessary. Many of my constituents have come up to me and said, 'I was never given any paid parental leave. I had to raise my kids without the government giving me anything. Why is it necessary today? Isn't it just a great handout?' Well, we have to look at the demographic changes and what is down the track for this country, because the decisions that we make here in this parliament today will affect the prosperity and the welfare of our children and our grandchildren and our great-grandchildren.

When I was born, back in 1963, the fertility rate was 3.5—the average woman was having 3.5 kids. That is what it was back in 1963 when I was born. But we have seen a decline since then, and today we have actually fallen below the replacement rate for our population. Our fertility rates in this country are down to 1.87. So we, as a society, are not even having enough babies to keep up our population; we are declining. We cannot go on like this. Also we have an ageing population. Because of the many great medical breakthroughs that we have seen, because of our prosperity and because of improvements in the environment, we have been able to increase the lifespan of Australians. So at one end we have increasing lifespans and an ageing population, and at the other end we are not even getting a replacement rate of children being born.

If we continue with this low rate of fertility in our country, what are we going to see in 30 years time? We know that the number of people aged over 65 will double—it will go from 3½ million people to seven million people; that is another 3½ million people over the age of 65. And that will actually be 25 per cent of the population. So we are looking at a future where we will only have 2.4 people of working age to provide the income and lifestyle support for people over 65 who have not funded their own retirement. So if we add that burden on top of the debt burden that is growing every day and every week—and which will keep growing unless the changes are made which the coalition has started in this budgetary process—we are going to condemn our future generations to a lower level of prosperity and a lower level of opportunity and to lower levels of freedom than we inherited in this country. So we have to look at what policies we can come up with to increase the fertility rates of this nation.

It is easy for the member for Jagajaga—and, I am sure, the other members of the opposition who will speak on this bill—to take a cheap political shot and say that the coalition's policy gives $50,000 to wealthy women, and to go down the class-warfare line. That might resonate within some pockets of the population, but it does our nation's future a great disservice.

The reason for what the coalition plans is this. We are not handing $50,000 to anyone. What we are doing is to address a specific issue, to attempt to increase the fertility rates of this nation. One of the reasons for our low fertility rate is the high cost of living in our major cities—mainly, our house prices. Most young couples today simply cannot afford a mortgage unless they have two incomes. They rely on those two incomes to service that mortgage. The wife might decide that she wants to have time off to have a baby, but many couples are putting that decision off because they say, 'How will we continue to service our mortgage during that period of time?' That is one of the reasons why women are putting off the decision to have kids. So the government is saying that we want to treat Paid Parental Leave in the same way as we treat sick pay and holiday pay. We are saying that during that period you are entitled to a replacement wage, and that is what we are doing. Up to a cap of $100,000, you will be paid that replacement wage—in exactly the same way as if you were sick or on holidays. That way, we are saying to women who are considering being mothers, 'You can have six months off and you will continue to get your wage paid for a period of six months, up to a limit of $100,000.' That is what we are doing, with the entire aim of increasing the fertility rate.

Secondly, the way in which this scheme will be paid for will, perhaps, be the greatest boost to small business that we can give them. We have a very lopsided and inequitable system at the moment. Depending on what sector of the economy you work for, females can get different levels of paid parental leave. So if you are a government employee or if you work for one of the larger companies, you are getting much more generous paid parental leave than if you are in a small business. The coalition's scheme actually levels that playing field. There will be a 1.5 per cent increase in the company tax for only our largest companies. That will actually help, because that will give us a two-tier company tax rate, one for larger companies, one for smaller companies. That, again, is a great boost for those entrepreneurs, those small business people who actually drive the economy.

It will also allow for the first time for many years, when a young talented female who is looking at going out into the workforce and contributing to our society, for her decision not to be distorted by what paid parental leave scheme a larger company has or the Public Service has. A small business will be able to go out there and bid for the services of that talented young female. That woman will know that she will get the same paid parental leave scheme, whether she works for the largest firm in town, the Public Service or a small business. I commend the bill to the House, which takes away the obligations of small business of being a 'pay clerk'. The proposed amendment, to be moved by the opposition, with respect to businesses with fewer than 20 employees, should be rejected. It should be for all businesses. There should not be a cap. I commend this bill to the House.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the first bill which will surely become the Prime Minister's biggest personal policy failure, his signature policy failure: his Paid Parental Leave scheme.

The bill under consideration, the Paid Parental Leave Amendment Bill 2014, is the first part of a botched policy job that will not be good for working women, our economy or our society.

It takes the previous Labor government's carefully constructed Paid Parental Leave scheme and it strips it of its balanced approach. It is another example of a lack of policy know-how in this increasingly blunder-prone government. Effective policymaking does not happen by luck or serendipity; it requires careful planning, wide consultation and an appreciation of how a single policy fits into a wider framework.

The Labor Party understands how effective policy is implemented. From Medicare to the introduction of HECS, we have guided Australia through some of the most significant reform periods in our history, to effective policy measures, which, I might incidentally add, are currently under attack by the Abbott government in the light of their recent budget.

When the need became clear for a mandatory paid parental leave scheme, to ensure that Australia's working women were being provided with the support that they needed when taking time off to start a family, Labor took a considered approach. We decided upon realistic objectives, explicitly seeking to establish a paid parental leave that would 'signal that taking time out of the paid workforce to care for a child is part of the usual course of life and work for both parents'. And, secondly, 'promote equality between men and women, and balance between work and family life'.

We undertook two years of policy development consultation, referring the issue to the Productivity Commission so that we could get an independent analysis of what would work best in this policy area. The Productivity Commission report on this matter was thorough. It received over 400 submissions and held 16 public hearings. After this thorough period of policy analysis, in May 2009 the Productivity Commission released its final report. It concluded that the most effective paid parental leave scheme would be for 18 weeks, paid at the minimum wage and would only be available to parents earning less than $150,000.

This scheme would not only strike the best balance for getting Australian women back into work but also have the least impact upon business and the overall economy. In the 2009-10 budget Labor implemented the recommendations of the Productivity Commission report and allocated funding for a national paid parental leave scheme. After a careful implementation process, the scheme was introduced in January 2011. The impact of Labor's Paid Parental Leave scheme on the lives of thousands of working women around Australia is undeniable. Before the scheme was introduced, only 55 per cent of working mothers had access to paid parental leave. Today, this figure has increased to 95 per cent. That is 40 per cent more working women who are able to take the appropriate time off needed after having a child before heading back to the workforce. Moreover, the scheme implemented by the Labor government has, overwhelmingly, helped women on lower and middle incomes, who are often in casual or part-time work. The median income of workers now covered by the Paid Parental Leave scheme is $45,000 a year. Many of these women are in casual or part-time jobs whose employers would not voluntarily provide any form of paid parental leave. These women needed government to step in to ensure that they received a fair go and could take time off from the workforce while having a baby. But Labor was not satisfied with the successful rollout of the Paid Parental Leave scheme. As with all good policy processes, the previous Labor government demanded feedback and consulted on the scheme, once it had been implemented. Labor initiated a formal review of the Paid Parental Leave scheme process. It consulted and listened to the community. It heard the voices of small business, which found that the burden of administering the scheme was too significant. It understood that, when trying to grow a small business, there is less time to spend on administrative activities. The previous government realised that government, too, can play a role so that these administrative costs are not too steep and that employees can still access the paid parental leave that they deserve. So the previous Labor government made changes to the Paid Parental Leave scheme, a key part of the 2013 federal election campaign, proposing a scheme administered by Centrelink for businesses with fewer than 20 employees.

This would have allowed employees of small businesses to receive paid parental leave without small businesses suffering under the current administrative burden. It also would have ensured that, for most businesses, employers continued their payments to employees on maternity leave. It allowed the connection between employer and employee to remain open during the maternity leave process, making it easier for the new mother to transition back into the workforce. Anyone who has managed staff in the private sector would understand the importance of this direct connection between managers and staff, ensuring the return of women to the workforce.

But the legislation before us today destroys the balance constructed by the previous Labor government by removing the role of the employer entirely from the Paid Parental Leave scheme process. It takes legitimate criticisms from small business and then goes too far, applying a one-size-fits-all solution. It gives no thought to how the changes will impact larger businesses where the administrative costs of the PPL scheme are diminished due to their size. Labor will move to amend this legislation in the Senate so that only small businesses with less than 20 employees will have access to the government administered scheme, as originally intended. But such a ham-fisted move occurring as the coalition begins to roll out its own Paid Parental Leave scheme should not be surprising, because every aspect of the coalition's Paid Parental Leave scheme has been an example of blunderous policymaking.

I wrote recently in the Australian about Anthony King and Ivor Crewe's excellent new policy study The Blunders of Our Governments. In this book Anthony King and Ivor Crewe examine cases of 'horror policymaking' which not only fail to achieve their aims but also do so at significant economic cost. What is clear about the Abbott government's vaunted Paid Parental Leave scheme, or perhaps I should say the Prime Minister's Paid Parental Leave scheme, is that it falls into every one of the traps that King and Crewe identify in this book. Let us start with the blunder of a policy rooted in 'cultural disconnect', or ignorance of how others lead their lives. The lack of gender, cultural and economic diversity within the Prime Minister's inner circle leaves him particularly vulnerable to this kind of blundering. Perhaps for the Prime Minister $150,000 a year may seem very typical as an income for a working woman and so a government subsidy of half this amount may seem perfectly justifiable. But in reality a woman in this income bracket would actually be earning more than 95 per cent of Australians. Even in the Abbott government's revised policy, payments under the scheme are capped at $100,000, which is more than 80 per cent of Australian income earners get paid. It is no wonder that the public reaction to the Paid Parental Leave scheme from interest groups, experts and the general public has been one of overwhelming condemnation.

This condemnation was compounded by the second classic blunder of the Abbott government, a failure to adequately consult with stakeholders or, as authors King and Crewe put it, 'a deficit of deliberation'. Effective policies are those that engage in wide community consultation with the public and interested stakeholders, processes that make sure that the proposed policy reforms are well supported by the community before they are rolled out. If they are not supported, smart governments make changes or engage in the persuasion necessary to ensure that there is buy-in from all stakeholders. Yet the Paid Parental Leave scheme proposed by the Prime Minister is notable for its absence of consultation, even within the party room of those opposite. This policy was announced at an International Women's Day event in March 2010 and took many by surprise. There are allegations that even the shadow cabinet had not been consulted before the Prime Minister, the then opposition leader, made the announcement of this policy. In failing to consult with his party room the Prime Minister was perhaps guilty of another classic policy blunder, that of prioritising symbolism over substance. The timing of this announcement on International Women's Day does lead one to speculate.

This 'deficit of deliberation' continued for more than three years with little consideration of the policy within the caucus room of those opposite. As late as May 2013, three years after the initial policy had been announced, the member for Tangney stated: 'There hasn't been a detailed policy debate on this issue within the party room.' That lack of debate led to a vague policy constantly shifting in its aims and goals. First we saw a six months Paid Parental Leave scheme capped at $75,000 and paid for by a 1.7 per cent levy on companies. This was projected to cost $2.7 billion. By 2010 this policy had shifted to a 1.5 per cent levy on companies and the cost had blown out to $8.8 billion. As late as April 2013 the shadow Assistant Treasurer admitted that the funding plan for the scheme had not yet been finalised. The Prime Minister relaunched his paid parental leave policy in August 2013 now with a projected cost of $5.5 billion. It defies belief that the government can claim to be competent economic managers when their funding model for just a single policy can shift so much in scope.

Adding to those problems was a tendency within the Abbott government to engage in 'groupthink', shutting out the voice of dissenters and thereby ignoring legitimate criticisms of the PPL scheme. We saw this occur to prominent Liberals like the member for Higgins, whose initial opposition to the PPL scheme was quickly stifled and her legitimate criticisms ignored. What this meant was that the flaws in the Prime Minister's Paid Parental Leave scheme were not uncovered while the policy was being developed. The result of this bungled policymaking process was a policy that is unpopular, ineffective and unsuitable for Australia.

Its unpopularity within the business community is widely known. Business groups have long attacked the Prime Minister for the exorbitant cost of the scheme and argued that it would be an ineffective way of getting women back to the workforce. As recently as February of this year the Australian Chamber of Commerce and industry called for a rethink of the scheme. They argued for greater means-testing, saying that this would 'considerably improve both the scheme's affordability and fairness'. The Australian Industry Group too believe that 'the current system works well. There is no need for it to change.'

It is not just business that dislikes the scheme: even key Liberal members have come out from the sidelines to condemn this policy. Peter Costello, the man many Liberals turn to when they think of sound economic management, dismissed the idea as 'silly' in the Sydney Morning Herald when it was first announced. He argued that 'increasing tax would be as foreign to the Liberal Party as voluntary unionism was to the local ALP branch'. Those are important words to remember in the days after parliament has passed the Liberals' deficit levy. He is not the only former Howard government minister who dislikes this policy. Former finance minister Nick Minchin will go nowhere near the scheme. He said last year, 'I have been on the record many, many times are saying that I am not a supporter of Tony Abbott's Paid Parental Leave scheme.' Former Howard government minister Peter Reith too has described the scheme as 'obviously bad policy'.

But it is not enough that the policy has been condemned by those in the Prime Minister's own party; it has been condemned by those in his own caucus room as well. Let us read some of the highlights from last year. From the member for Tangney: 'I do have significant concerns about the scheme.' From the member for Mitchell: 'The question is, is this good economic policy at this time, and my answer is no.' From Senator Eggleston: 'I think it should be supported but there seems to be widespread concern that the cost is pretty high at the current time.' Let us not forget Senator Bernardi and Nationals senator John Williams, who dislike the scheme so much they have canvassed voting against it.

But what is most damning about this policy is that ultimately it will be ineffective. The policy's stated objective when launched in March 2010 was clear. It was to 'enable more women to stay in the workforce and thus boost national productivity'. Yet studies by the Grattan Institute and the Productivity Commission show that the most effective way to get women back into the workforce is to provide them with affordable child care. Indeed, the Grattan Institute stated in their June 2012 report Game changers: economic reform priorities for Australia:

… international experience suggests that government support for childcare has about double the impact of spending on parental leave.

It is a long-term vision that the Abbott government does not seem to understand. We have seen in the latest budget, with the freezing of family tax benefits A and B, that making life easier for Australian families is simply not their priority.

The previous Labor government's paid parental leave scheme was the model of good public policy making. It was a result of an extensive consultation process and the recommendations of independent policy bodies. It was widely supported by the business community, interest groups and the general public. Most importantly, it allowed 40 per cent more working women to take time off when they started their families. Of course, no policy is perfect and necessary adjustments needed to be made, particularly to mitigate the costs of the scheme to small business, but this is no reason to take the one small criticism of the scheme and implement it indiscriminately.

The bill before us today is the beginning of a process that will result in a vastly inferior paid parental leave scheme for Australia's working mothers. It is a scheme that is unpopular, expensive and completely ineffective. It is a blundering policy from a government that is prone to wink first and think later when it comes to women's issues. Perhaps if the Prime Minister had spent less time in opposition reading Fifty Shades of Grey, in a similarly misguided play for the female vote, and more time studying up on the practice of good policy making then the Australian people would be spared such a significant policy blunder in the future.

Lucy Wicks (Robertson, Liberal Party) Share this | Link to this | Hansard source

I rise today in support of the coalition government's Paid Parental Leave Amendment Bill 2014. Paid parental leave is an important productivity measure that is good for families, good for workplace productivity and assists women in the workplace with realistic choices if they want to combine work with family and still continue their career. However, the current paid parental leave scheme introduced by the former Labor government in 2010 is not actually so good for businesses in Australia because in its current form it requires employers to be the pay clerks for a scheme that is government funded for eligible long-term employees.

The coalition government support the provision of paid parental leave, which is why we took to the election a commitment to deliver a genuine paid parental leave scheme that will give working mothers six months or 26 weeks leave based on their actual wage rather than the former Labor government's scheme, which is paid at the minimum wage for 18 weeks. It is a good policy and I support it because it is good for women, it is good for families, it is good for the economy at large and, as such, it is good for families and workplaces in my electorate of Robertson on the Central Coast.

Part of our paid parental leave policy, in contrast to the former Labor government's policy, ensures that paid parental leave can be paid directly by the Commonwealth government and not just via their employer. The bill we are debating today fulfils this commitment by legislating to remove from 1 July this year the mandatory requirement from employers, including small businesses, who struggle under the weight of red tape and regulation that took a stranglehold on this nation over the last six years of the former Labor government, and place it back onto the Commonwealth, through the Department of Human Services, unless there is a prior mutual agreement with both the employer and employee to opt in for the workplace entitlement to be paid for by their place of work.

Labor's scheme has imposed an unnecessary administrative burden on employers and businesses. I know from talking with hundreds of businesses in my electorate of Robertson that the current requirement to act as a pay clerk has increased costs for businesses. Many have had to absorb and wear the costs that have arisen as a result of additional paperwork and doing things like restructuring their businesses and their record-keeping systems to comply. It is no small cost. It has come with a hefty price tag of around $48 million, a price tag that is being worn by our small business sector and our not-for-profit sector for far too long.

In New South Wales alone the estimated cost of compliance borne by businesses for the fiscal year 2012-13 was almost $14.4 million. Many business owners I have spoken with on the Central Coast have shared their frustrations about the additional workload that the current administration of the paid parental leave scheme places on their staff and, often times, on themselves in the absence of being able to absorb the financial or human resource costs of the current arrangements.

This bill is a sensible amendment to the current scheme. Indeed, there is absolutely no reason why the paid parental leave scheme should not have continued to have been administered by the Family Assistance Office, which performed the task for the first six months when the scheme started. The coalition government is determined to cut the red tape and regulatory burden on business in Australia—to get the monkey off the back of business owners, who are the job generators of our nation—and to reduce the impact of the weight of the burden of more than 22,000 new or amended regulations imposed on Australians, Australian businesses and not-for-profit organisations by the former government.

We support better regulation not more regulation, and this bill is a sensible amendment to an important productivity provision for Australia. Perhaps it is because this bill is such a sensible amendment to the current scheme that Labor have previously blocked it—voting it down twice when they were in government and then moving to block the amendment again in the Senate earlier this year. But it is a fact that unnecessary regulation and red tape increase costs on business, which in turn cost families and people in my electorate of Robertson. Too much red tape and too much unnecessary regulation costs jobs.

I point out that this bill does not remove the right of employers to continue to administer the payment of paid parental leave. If they have found this to be beneficial to both their business and their employee or employees, they may continue to do so. What we are doing is creating an opt-in approach, not an all-in requirement. So this bill provides choice. In empowering business owners to make choices that they deem to be best for them and their employees we are empowering them to spend more time building their businesses, supporting their employees and giving them even more opportunity to grow, thrive, succeed and prosper. In doing so, our government is helping businesses create even more jobs and more opportunities for Australians.

Creating more employment opportunities is something I am particularly passionate about, because in my electorate, and indeed across the Central Coast, our youth unemployment rate is just too high and local job opportunities are not where they need to be. Today 30,000 to 40,000 commuters left their homes early this morning and they will return home late at night to their families because their job opportunities require them to work in Sydney or Newcastle. That is why it is important that this bill be supported in the House. We do not want to waste a single minute of opportunity for businesses who may no longer want to be pay clerks because they want to be pay creators. I commend this bill to the House.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to speak on the Paid Parental Leave Amendment Bill 2014 because it gives me a good opportunity to talk about the importance of paid parental leave and the other associated factors with workforce participation of females, particularly childcare assistance. I have a particular interest in this area as my first child, Rachel, has just turned one and my wife and I are very conscious of the importance of government support for new mums and dads as well as the cost of child care.

One of the most significant achievements of the last Labor government was the introduction of Australia's first national paid parental leave scheme. The scheme was created on the basis of recommendations from the Productivity Commission. The commission supported a flat rate minimum wage payment as the fairest and most effective way to design a paid parental leave scheme. Since the scheme was introduced on 1 January 2011, more than 340,000 families have benefited from Labor's scheme, including my own family. Until this scheme was introduced, approximately 55 per cent of working mothers did not have access to paid parental leave. The majority of women who did not have access to this leave were working in low-pay jobs or were casual or self-employed workers. Today, because of Labor's scheme, around 95 per cent of working mothers have access to paid parental leave and Labor can also be proud of the fact that 40,000 dads and partners have benefited from dad and partner pay since that began in January last year. The current scheme is financially responsible and socially fair.

I was bemused by the previous speaker's, the member for Robertson, complaint about the compliance costs of this scheme. There are compliance costs for this scheme, and the previous speaker for Labor, the member for Gellibrand, acknowledged that, but to try to compare the $48 million of compliance costs of Labor's scheme to the $5½ billion that the rolled gold, gold-plated scheme of those opposite will cost the economy every year is just ridiculous and shows how out of touch the coalition government is. And this is a surprise since the Prime Minister, in the past, has stated that a paid parental leave scheme would be introduced in Australia over his dead body. Like many other matters, he is weathervane and he will do what is electorally popular or what he assesses will secure votes from certain segments of the population rather than make good policy.

On the other hand, I am proud that a Labor government introduced this historic reform. It contrasts quite markedly with the coalition plan, which demonstrates the warped priorities of the Prime Minister and the government. Under the current proposal from the coalition, we will see millionaires receive $50,000 of taxpayers' money for having a child while a woman on the minimum wage would only get $16,000. At every level this is fundamentally unfair, and the proposal is a blatant insult to low- and middle-income women and their families. It clearly prioritises and benefits women in high-income jobs at the expense of all taxpayers.

Eighty per cent of women of child-bearing age in Charlton, my electorate, have an income of less than $42,000—this is a very conservative estimation as this $42,000 figure includes government payments—therefore, 80 per cent of my constituents would receive less than $21,000 if they had a baby under the coalition's scheme. In fact it is likely to be well under $20,000. Yet millionaires will receive $50,000. I ask: why is a baby in Charlton worth $29,000 less than a millionaire's baby? The truth is it is not, and it demonstrates the fundamentally inequitable nature of this policy.

This is the type of scheme that has also been criticised by the Productivity Commission, which concluded:

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.

So from an equity point of view and from a policy efficacy point of view, this is an awful policy. And it is an awful policy highlighted by division within the coalition. For example, the member for Mitchell, before the last election, wrote:

Women I have spoken to on high salaries understand that this is a stretch. Their attitude is a quintessentially Australian response: 'If you are offering, I'll gladly take it-but do I think it's right, no. Do I need it, not really.'

The member for Mitchell, in the same article, also noted that the coalition's scheme will cost more than three times Labor's scheme in its first year alone. The member for Dawson has stated:

I have significant concerns about introducing this scheme without a significant policy that would assist stay at home mothers.

And the Deputy Prime Minister has acknowledged opposition to the scheme amongst the Nationals. If their own party room opposes this policy, why should Australia cop it? We should stick with the current tried and true Paid Parental Leave scheme, which gives equity as well as assisting mothers stay at home to look after their babies for a certain amount of time.

I would also draw the attention of the House to the fact that although there is considerable division within the coalition about the Prime Minister's scheme, the Australian Greens support a similar scheme. The Prime Minister has previously stated that the Greens have 'fringe economic policies to put it at its kindest', yet this is a fairly apt description of his leave proposal. It yet again demonstrates the hypocrisy of the coalition—that is, they are prepared to side with the Greens rather than the Productivity Commission in providing an efficient and equitable Paid Parental Leave scheme.

I would also draw the attention of the House to the fact that this scheme is not a workplace entitlement, as the workers' employer is not paying for the scheme. It is taxpayer funded. The proposed increase in the company tax rate will not cover it. As the Parliamentary Library stated:

The designs of both the current and Coalition … [scheme] contain elements that make them as much like an Australian Government welfare payment as they are workplace entitlements. For example, rather than being funded and run privately by employers or funded (as occurs in most OECD countries) through a social insurance scheme, they are:

fully or substantially funded from taxation revenue and

fully or substantially administered by the Department of Human Services.

In fact, in the bill we are debating the, the government is trying to centralise administration of paid parental leave as we speak. Yet again we need to emphasise this point. This is not a workplace entitlement; this is a form of welfare, and why should a family in Charlton received $29,000 less welfare for having a baby than a millionaire in the Treasurer's seat of North Sydney? It is fundamentally inequitable and based on faulty principles.

If I can come to the cost of the scheme, the coalition has long talked about Australia facing a budget emergency and the need to drastically cut government spending. It should be stated that this is a false and confected budget emergency. Leaving that aside for a second, why then, if they believe their own rhetoric, would they want to introduce a $5 billion a year parental leave scheme which overwhelmingly benefits those people who are employed and in relatively high-paying jobs? This huge cost should be seen in the light of cuts that have already been made as well as those proposed by the government. They have abolished the schoolkids bonus for working families; they are cutting the payments of Australia's 2.3 million aged pensioners; they want to impose a GP tax on all Australians, which will mean the end of universal health care in Australia; they are cutting $80 billion from schools and hospitals; and they are attacking families through their draconian revisions to the family tax benefit B arrangements. Contrast this with the $5½ billion they are going to be spending on the Paid Parental Leave scheme each year.

The Treasurer has famously declared that 'the age of entitlement is over'. Given the introduction of this scheme, this statement should be qualified: the age of entitlement is over for everyone except the wealthy. In his age of entitlement speech the Treasurer stated:

The road back to fiscal sustainability will not be easy. It will involve reducing the provision of so called "free" government services to those who feel they are entitled to them.

What an insult to the millions of Australians who rely on Medicare, on public hospitals and public schools, as well as the aged pension, they should be on notice that the Treasurer believes that these government services need to be reduced but that wealthy families are entitled to unfair Paid Parental Leave scheme. In the same speech, the Treasurer also declared:

As a community we need to redefine the responsibility of government and its citizens to provide for themselves, both during their working lives and into retirement.

Given the proposed scheme, the Treasurer is clearly of the view that this re-defining means wealthy Australians get extra support from government, whilst everyone else needs to provide more for themselves. It is unconscionable to be drastically cutting funding to health, education, the aged pension and family support at the same time as giving extra support to the most well-off Australians. This is why we need a general debate on the Paid Parental Leave scheme and this bill offers a good opportunity to start that.

I would like to draw to the attention of the House, recent comments by the Treasurer that women will only qualify for paid parental leave if they guarantee that they will return to work. While we are yet to see concrete details of this thought bubble, it is clearly impractical, as child care is still a luxury in some areas and we need to be providing more resources to child care. I would also say, by contrast, that the current scheme, places no obligations on the 95 per cent of women who access it to return to work. They can access the leave if they qualify for it. This is only fair. This is an entitlement to help, usually, young mums, but often fathers, spend time with their baby before returning to the workforce if they choose. That is an equitable and efficient way of administering a scheme rather than draconian the provisions that the Treasurer has highlighted, which would see money being clawed back from people after they receive payments.

This leads to my next point around child care funding. This is a very important aspect in this debate—whether we have Labor's tried and true Paid Parental Leave scheme, which we are debating now, or the rolled gold unconscionable scheme that the coalition is proposing. In the debate you need to look at the child care provision that accompanies it. Labor has a proud record on child care. The last Labor government increased the Child Care Rebate from 30 per cent to 50 percent of out-of-pocket expenses up to $7,500. In contrast, the Abbott government will freeze the child care benefit threshold, which will cut access to child care. Indexation of the child care rebate will also be stopped. The heartless budget we saw delivered a fortnight ago has cut over $1.3 billion in support for child care. Under their ridiculous scheme, how can mums return to the workforce if they cannot find child care?

Importantly, in her submission to the Productivity Commission's inquiry into child care and early childhood learning, my colleague the member for Adelaide requested that the commission examine whether the funding for the government's Paid Parental Leave scheme could be distributed through an alternative scheme to achieve its objectives more effectively and equitably, and whether some of these proposed funds could be better utilised in the childcare sector. This is a very important point. A study by the Grattan Institute has demonstrated that childcare funding is twice as effective as paid parental leave in promoting workforce participation amongst women. If those opposite were really serious about increasing workforce participation amongst women they would maintain a Labor's tried and true Paid Parental Leave scheme and invest the excess money into child care. But they won't, because it is all rhetoric. Their scheme was designed to try and lock in the vote of women and families before the last election rather than really tackle serious problems.

Their scheme is a clear example of an out-of-touch government introducing an expensive new entitlement at the same time as it is attacking Medicare, putting up fuel excise, and cutting pensions and support for families. The feedback from my constituents in Charlton is abundantly clear: they oppose the government's unfair and inequitable Paid Parental Leave scheme. They would rather keep Labor's scheme. The contrast is even more marked as we have seen the impact of the budget. As I said earlier, the coalition scheme would pay a millionaire $29,000 more to have a baby than 80 per cent of women in my electorate. When we add into that the draconian cuts to family tax benefit, where we see a family on $60,000 a year losing over $6,000 of family income, which represents 11 per cent of their income, we see what this government really is about. This government is about attacking low- and middle-income Australians, attacking pensioners and people who want to go to doctors and instead supporting the wealthy by paying them $50,000 to have a baby.

Labor stands for fiscally responsible and socially fair paid parental leave scheme. The current scheme delivers this. The coalition's proposal is an outrageous and ideological scheme being introduced at a time when the government is cutting services and telling us we need to provide more for ourselves. Labor will continue to oppose the unfair scheme and support our equitable and efficient scheme.

Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

It is with great pride that I rise this afternoon to speak in support of the Paid Parental Leave Amendment Bill 2014. Paid parental leave has featured as a signature policy of the Abbott government at both the 2010 and 2013 elections.

Lindsay is the fourth youngest electorate in Australia, with a median age of just 34. As a young woman I am proud to support this bill that also supports young families right across my region. This makes me think about all the conversations that I have had, during these two elections, with so many young and talented women right across the electorate. I think about a young woman by the name of Tracey who was newly engaged when she found out that she was pregnant. The pregnancy was unplanned but she was very excited about it. Not having the financial or economic position to take on the responsibilities of a young family, Tracey was forced back to work in three months. Like so many people in my electorate—two-thirds of my electorate have to commute every single day—Tracey, three months after giving birth, had to commute to Parramatta to resume her duties as a PA, which is not a highly paid position, so that she could help support her family.

Tracey and Phil were really lucky because their mothers could both step in and help babysit their young son. But I recall seeing Tracey at train stations. She would be in tears because she had to leave her baby behind to go back to work. She was also forced to make a vast array of family choices that she really did not want to make. She wanted to breastfeed for six months. She could not do that; she had to go back to work. All of a sudden she was looking at options like expressing and using baby formula. She had to put in place all of these different things when she really just wanted to be at home with her son.

Tracey's and Phil's experience is not unique. We see this right across our country. And this paid parental leave scheme is about providing fairness and equity. Providing for a young family is a challenge that keeps families up late at night. This bill is designed to give these families a leg-up and support them at a really critical time. This bill will give mothers six months of paid leave based on their actual wage—not a minimum wage. They will not be penalised for having a child, as they will receive their actual wage.

This afternoon I also want to tell the story of Nicole, a very talented accounts clerk that I met when I was door-knocking in Jamisontown. For five years Nicole had enjoyed her job working with a local small business. When she wanted to have a family her employer did not have the capacity to pay her paid parental leave at her salary. So Nicole made a decision: she would change employer. Rather than working for the local small business she got a job in North Sydney as an accounts clerk.

Nicole was a huge loss to her employer, who now does not have the ability to compete on an even playing field within the Labor market. This paid parental leave scheme gives small businesses right across the Lindsay electorate—and right across our country—the ability to compete and have talented employees stay within their businesses. So this is about fairness.

I would like to give credit where credit is due. Early today we heard from the member for Gellibrand, who pointed out that the opposition did, in fact, introduce Australia's first paid parental leave scheme. But it was not fair and, quite frankly, it did not go far enough. It is a bit rich for the party which made outrageous claims against our Prime Minister to devalue women across our nation to the minimum wage. The member for Gellibrand used phrases to describe the opposition scheme as a 'balanced approach' and setting 'realistic objectives'. Let me ask this: how balanced is it when we are replacing the salary of a young working woman with the minimum wage? How realistic is it for a family that has to manage their budget—something the opposition clearly knows nothing about—to be paid at the minimum wage? Quite frankly it is not fair. It is just not fair.

This bill also supports small businesses. It will reduce the burden of red tape—another key priority of the Abbott government. By taking control of the administrative process, small businesses will be free to get on with the job of doing what they do best. I would like to applaud the vision in the design of this measure to ensure that it does not—I repeat this: it does not—increase the administrative burden on small businesses. Under this legislation, employees would be paid directly by the Department of Human Services. Doing this ensures that there will be no additional paperwork for employers or cash-flow problems for small businesses.

I would like to reflect on the paid parental leave scheme introduced by the former, Labor government. In contrast with our plan, Labor's paid parental leave scheme imposes an unnecessary administrative burden on employers, particularly small businesses. Under Labor's scheme, with few exceptions, employers are required to act as paymasters after receiving an employee's entitlement from Centrelink. This system is unnecessarily complicated and forces small businesses to bear the cost of restructuring their payroll and accounting systems. But, unsurprisingly, the now opposition just do not care about the impact their measures and policies have on small businesses right across our country.

These businesses are the engine room of our economy. This measure will save businesses in Australia $44 million a year, and will further save the not-for-profit sector $4 million a year. As a result, the coalition's policy has broad-ranging support from the industry. The Australian Chamber of Commerce and Industry conducted a survey of its members on the paid parental leave scheme in May 2013. In the survey, 84.3 per cent of the businesses either agreed or strongly agreed that the government should not require employers to be the paymasters for the paid parental leave scheme. I also take the opportunity to echo the sentiments of John Osborn, the chief operating officer of the chamber, who has welcomed the Abbott government's scheme. He said:

Small business people should not be forced to be the unpaid 'pay-clerks' for government schemes. This responsibility should be funded and administered by government.

The Abbott government is trying to do the right thing by small businesses in cutting red tape, and the opposition should support this. I echo these sentiments. There is no reason why businesses should have to act as the pay clerk when the family assistance office, a part of the Department of Human Services, can do this job like it did when the scheme first started.

Labor' resistance to this measure proves that they just do not get business, and they have no understanding of how unnecessary costs adversely affect jobs and business viability. It is imperative to kick-start the economy. We need to release the handbrake that hinders our national prosperity and cut the red tape that previous governments have placed on our small businesses.

We need to support working mums, and this is a crucial reason why I am proud to rise here today in support of this amendment bill, because it will actually deliver a genuine paid parental leave scheme to give mothers six months leave based on their actual salary.

My community is made up predominantly of young families and young professionals. Unlike our more densely populated neighbours closer to the city, the people in Lindsay, Penrith, St Marys, Glenmore Park, Colyton and even in Cranebrook enjoy the benefits of living in a regional hub that is close to one of the best cities in the world. Young families choose to live in Lindsay. They choose to make Lindsay their home. They choose to take advantage of its accessibility and, if I do say so myself, the availability of a region where it is great to live, work and play—but, even more importantly, to raise a family. This amendment bill will finally give families the chance to get ahead and it will give women a more realistic choice so that, if they so choose, they can combine work and family and continue in their careers and in their jobs and make real choices about supporting their family income. I hear these concerns every single day. For the last four years I have heard these concerns from so many families right across my region.

Under the coalition's scheme mothers will be provided with 26 weeks of paid parental leave at their actual wage or at the national minimum wage, whichever is greater, plus superannuation. In contrast, Labor's paid parental leave scheme is at the minimum of 18 weeks. According to the Australian Bureau of Statistics, around 80 per cent of Australian women earn less than $62,400 and the average salary for women who work full-time is around $65,000. This means that those women who earn the average full-time salary will be more than $21,000 better off under the coalition's scheme because they will receive their actual wage over 26 weeks—around $32,000—instead of the minimum wage for 18 weeks, which is around $11,200. For families with a mortgage and bills to pay, and who understand the importance of managing a budget, receiving their actual wage will make a significant difference. It will reduce the financial pressure that can come with raising children.

It is also important for Australia to remain competitive internationally. Of the 34 countries in the Organisation of Economic Cooperation and Development, the OECD, 33 offer paid parental leave schemes. Of these 33 countries, Australia is one of two that fails to pay leave based on a replacement wage. By offering only minimum wage, Australia is left economically behind major OECD competitors. Due to this, we risk losing the productivity gains that come from greater participation by women in the paid workforce. There is no doubt that a ready way to increase Australia's productivity is to increase the participation of women, both part-time and full-time, in the paid workforce, which is why paid parental leave is an economic driver. I commend this bill to the House.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to 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—

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour, and the honourable member will have leave to continue his remarks at a later hour.