Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Hansard source

I start my contribution to the debate on the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill by seeking to submit a correction to the explanatory memorandum.

Leave granted.

I thank all of those who have contributed to this important debate on this bill, including Senator Polley, who gave a very personal account of the importance of this legislation to her family. Improving paid parental leave is critical, nation building reform. The Albanese government knows this, and we know that paid parental leave is vital for the health and the wellbeing of parents and their children. We know that investing in paid parental leave benefits our economy. And we know that, done right, paid parental leave can advance gender equality.

We heard these messages loud and clear at our successful Jobs and Skills Summit in September, where gender equality and economic reform went hand in hand. Businesses, unions, experts and economists all understand that one of the best ways to boost productivity and participation is to provide more choice and more support for families and more opportunity for women.

That's why paid parental leave reform was a centrepiece of our first budget, with an additional half-a-billion-dollar investment in the scheme. Paid parental leave is a proud Labor legacy, and the Albanese government is building and expanding on that legacy. The number of government and non-government members who have spoken to these reforms over the course of this debate shows how important this issue is to many Australians. We've wasted no time delivering on our budget commitment. The changes in this bill modernise paid parental leave so that it's the right time and right for the future.

We know dads and partners want more time at home with their baby. My oldest daughter is expecting our third grandchild in the next week or so, so I can fully understand that dads and their partners do want to spend more time with, particularly, a new baby. We know parents want flexibility in how they choose to take leave and transition back to work. We know the current eligibility rules are unfair to families where the mother is a higher income earner. Our bill fixes those problems. It gives more families access to the payment, provides parents more flexibility in how they take leave and encourages them to share care to support gender equality.

From 1 July 2023, this bill will improve paid parental leave by combining the two existing payments into a single 20-week scheme, reserving two weeks of leave for each parent to support them both to take time off work, making it easier for both parents to access the payments by removing the notion of primary and secondary carers, expanding access to around 3,000 more families each year by introducing a new $350,000 family income test, expanding access to around 1,500 more dads and partners each year through a new simpler claiming process and, finally, increasing flexibility for parents to choose how they take government paid leave and transition back to work. It's critical that this bill passes both chambers by 9 March to ensure that parents expecting to give birth or adopt on or after 1 July 2023 have the option of preclaiming their entitlements three months in advance.

This bill implements the first part of the government's budget measures. We will separately bring forward legislation to progressively increase the scheme from July 2024 until it reaches 26 weeks in July 2026—a full six months of leave. This is the largest expansion of paid parental leave since Labor established it in 2011. Our half-a-billion-dollar investment reflects our government's commitment to improving the lives of working families, supporting better outcomes for children and advancing women's economic equality.

I'd like to take this opportunity to thank the Senate Community Affairs Legislation Committee for its work conducting the inquiry into the bill and preparing such a comprehensive support. Special thanks go to Senator Marielle Smith, from South Australia, for her significant contribution as chair of that committee. The inquiry heard from a diverse range of voices, including employer bodies, unions, family advocates and general equality experts. I would also like to thank the many organisations and individuals who took the time to prepare submissions on the bill and the witnesses who appeared before the committee to provide their evidence.

As many of the submissions and witnesses noted, the bill is a crucial step towards a parental leave system that empowers the full and equal participation of women. We were pleased to see that the submissions overwhelmingly supported the measures contained within the bill. We were also pleased to see the committee's finding that the reforms proposed by the bill will deliver better outcomes for parents, children, employers and the economy and that the bill will achieve its overarching objective of creating a more accessible, flexible and gender-neutral paid parental leave scheme for Australian families.

The Australian Human Rights Commission and the Australian Chamber of Commerce and Industry, amongst others, welcomed the move towards gender neutrality, removing the presumption that women are always primary caregivers. The National Foundation for Australian Women also endorsed the changes, stating that they send 'an appropriate signal about the direct importance of the role of fathers and partners in the lives of newborns'. Other submissions welcomed the expanded eligibility, especially through the family income test, which will ensure families with equivalent incomes are treated the same regardless of which parent is the higher earner. The Diversity Council, Ai Group and the Australian Institute of Family Studies welcomed this change as well as the changes that enable eligible fathers and partners to claim parental leave pay even when the birth mother isn't eligible.

I also want to highlight the support for the increased flexibility introduced by this bill. The Australian Chamber of Commerce and Industry, in particular, noted that these provisions will support parents to manage work and care, support gradual returns to work and help parents maintain an ongoing connection to the workplace.

I note that there were additional comments from coalition senators. I acknowledge the points they raised about ensuring businesses are supported to understand the changes to the scheme, and I'd like to assure senators that Services Australia will make sure information and support are available to those employers.

In the committee's report, the Greens made additional comments, welcoming the changes and making further recommendations—that the bill be amended to include superannuation on paid parental leave, that the scheme be expanded to 26 weeks from 1 July 2023, and that the Women's Economic Equality Taskforce be asked to investigate rates of payment. In response to these additional comments, I want to make it clear that the Albanese government is firmly committed to increasing the scheme to 26 weeks by 2026. The government committed half a billion dollars in the October budget, and we will legislate it by July 2024. This is the largest investment in the scheme since Labor established it in 2011. Our approach to expansion allows us to make important structural reform in a difficult fiscal situation. We are responsible economic managers; we need to address the inflationary pressures in the economy, and that requires us to be very prudent about any expenditure.

We're also committed to getting the settings right to maximise women's economic equality. The government has asked the Women's Economic Equality Taskforce for advice on the optimal model for a 26-week scheme. The task force, made up of independent experts and chaired by Sam Mostyn AO, is currently considering the right mix of 'use it or lose it' weeks and flexible weeks. Following consideration of the task force advice, the government will bring forward legislation to expand the scheme to 26 weeks by 2026.

Regarding payment of superannuation on paid parental leave, the Treasurer, the Prime Minister, the Minister for Finance, and the Minister For Social Services have been very clear: when we can afford it, we would like to do it. Our first priority has been improving how PPL is structured and expanding the number of weeks. That's our priority, but we will continue to work on issues around pay inequality. The key driver of the gender gap in superannuation is gender pay gaps in working life, and the Albanese Labor government is investing in a range of policies that support women's workforce participation and earning potential.

Regarding the rate of pay, the Productivity Commission recommended it be based on the national minimum wage rather than the proportion of previous earnings. This approach balances the need to provide support to parents with the cost of the scheme to taxpayers. Payment at national minimum wage also means that every family welcoming a new child receives the same financial support. The government does not have plans to change that.

It is worth noting that the changes in this bill mean from 1 July this year eligible parents will be able to claim government paid leave at the same time as any employer paid leave. This will make it easier for families to maintain their income while caring for their newborn. Under the current scheme, this option is already available to mums but not to dads.

During the inquiry, we also heard some concerns from the Greens about the current work test rules, including for people with short or inconsistent work histories and full-time students. While there are no changes to the work test as part of this bill, the current rules are designed to be flexible and are accessible to casual workers, temporary workers, and workers on short-term or fixed-term contracts.

We've heard some questions from senators about the potential for administrative burden on small business. I'd like to assure senators that, in designing the changes, the government carefully considered impacts on business. This legislation does not change the employer role in any way. Evidence provided to the committee's inquiry demonstrated that the more flexible scheme will actually benefit employers and employees without any additional administrative burdens on businesses.

Existing legislation requires employers to administer government funded parental leave pay to eligible long-term employees. Services Australia provides the payment to employers in advance of them passing it on to their employee in accordance with the employer's normal pay cycle. This employer role helps parents stay connected to their workplace while on leave, leading to benefits for business including increased retention and reduced training and recruitment costs. Crucially it also supports women's workforce participation, and we know that time out of the workforce due to caring responsibilities is a key driver of the gap between men and women's economic outcomes. I remind senators that, to reduce administrative burden, employers are not required to administer the payments when employees take the government paid leave days in continuous blocks of less than eight weeks.

I'm pleased that our changes have been warmly welcomed by business. In their submission to the committee's inquiry the Australian Chamber of Commerce and Industry said they strongly support these changes:

These changes should deliver significant benefits to the economy by boosting women's workforce participation, improving flexibility in the use of paid parental leave, enhancing gender equity outcomes, and ensuring businesses continue to have access to a diverse, experienced productive labour force.

Again I thank all senators for their engagement on this important issue, and I commend the bill to the Senate.