David Pocock (ACT, Independent) Share this | Hansard source

This bill, the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, provides another welcome step toward improving the PPL scheme so that parents and caregivers can spend more time with their new babies. I would like to acknowledge the work that the committee did, in looking into this bill, and to thank the secretariat. In particular, I thank Senator Kovacic for her focus on small business, as she has just outlined, which I will come to later in my remarks.

I think an important part of this which we need to acknowledge, and which is very welcome, is the continued focus on supporting dads to take more time out of work to share the care. When you look at the Nordic countries—leaders in PPL, globally—you see that it is rare for fathers to skip parental leave; they have no incentive to do so. And the benefits that have been delivered to those countries have been massive. The employment rate for women in those countries is significantly higher than it is in Australia. It has been shown to not just increase women's participation in the labour market but also to decrease discrimination in the workplace and in recruitment processes. That's not to say that the Nordic economies are perfect, but, from the available research, it's clear that a well-designed PPL scheme pays an economic dividend.

PPL also has important social benefits. OECD research shows that fathers who take care of their children at an early stage tend to stay more involved with their children as they grow up. Fathers also report greater satisfaction and better physical and mental health. At a time when we are continuing to grapple with rising chronic disease, including mental illness, it's a wonderful thing to be looking at something that could fundamentally make Australians happier and healthier—in this case, time spent with a brand-new family member.

Of course, the design of the schemes over in Europe is far more generous than that of our scheme and what was available after the bill was passed. In many Nordic countries where these dividends have been realised, benefits are paid for longer and as a replacement wage. I acknowledge that previous governments and the current government are charting a different approach where employers play a voluntary role in the PPL system through top-ups and other mechanisms, but it seems inevitable that this will lead to a fairly inconsistent experience of PPL throughout the economy, and I would suggest it's going to be those at the high-earning end that will see their employers contribute more to PPL over the coming years. Notwithstanding this, I really welcome the improvements being made here today and would urge ongoing evaluation so that we aren't locking ourselves into a 'set and forget' for this scheme.

I will say that it is a great shame not to see the government move on paying superannuation on paid parental leave. There is very rich evidence showing this is contributing to women retiring with an average of one third less super than men. People shouldn't be penalised for taking a small amount of time out of the workforce to raise the next generation. The government has at various times said it would make this change, that it would consider the need in each budget. I have to say: it's pretty galling to see budgets passed that have billions of dollars allocated to fossil fuel subsidies, yet governments cry poor when the community asks for $200 million to address the retirement savings gap for women. We can only hope we will see that changed in this year's budget.

I want to raise some concerns about small businesses. Every small-business person I've spoken with is supportive of more generous paid parental leave entitlements. People are proud to live in a country where this kind of support is made available by the government, where we all agree that new parents should not be financially punished for being with their children. What small-business owners don't understand is why they are required to administer a government payment instead of having Services Australia deliver payments directly. This isn't an issue of job security for new parents; the Fair Work Act protects the jobs of parents who, if they've been in a job for at least 12 months, are entitled to 12 months of parental leave. So why do we expect small business to act as a go-between, receiving funds from Services Australia often with lengthy delays before passing them on to their staff?

Last year a Senate inquiry considered this question. All the small-business owners and representatives who participated in that inquiry were concerned about the administrative burden of the current arrangement. The department's own submission to the inquiry reported that requiring small businesses to play this go-between role would cost them an average of 15 hours per employee. Those hours are utterly wasted, and, during a productivity crisis, you'd think the government would act on this. Of course, small businesses aren't compensated for those hours; they are expected to absorb the costs of all the time spent on the phone with Services Australia, with their accountants and with their staff, trying to figure out the nuances of the convoluted process. I will be moving a second reading amendment, co-sponsored by Senators Lambie and Babet, calling on the government to compensate small businesses for their time.

But there is a far simpler solution here. Services Australia can make the payments directly, and already do so; in almost 40 per cent of the cases they are making these payments directly. We heard evidence at last year's inquiry that the confusing three-way relationship demanded by the current legislation creates tension between small businesses and their workers. We also heard testimony from frustrated mothers who run small businesses that it just does not make sense to force them to administer a Commonwealth payment. Unfortunately, the government has chosen to ignore that testimony, to ignore the voices of female small-business owners who, when they have children, often have no choice but to continue devoting time to running their businesses. They'd love to be in a position to take parental leave, but that's just not possible for most small-business owners who, even when they have an infant at home, often have to continue keeping the books, coordinating staff and even filling in for shifts.

We've been told the small-business role in administering this government payment helps maintain a relationship between the employer and the employee. I suppose the assumption is that having the small-business's name on the payslip instead of Services Australia's is important to the relationship, but my conversations with small-business owners suggest they have far stronger relationships with their staff than a name on a payslip. As one witness pointed out during the inquiry, all senators' staff are paid by the Department of Finance. Does that diminish the relationship between senators and their staff?

Last year's inquiry recommended exempting small businesses from having to administer this government payment, allowing them to opt in if they choose to with their employee's consent. It's a simple solution, and this is a perfect example of red tape that needs cutting. Really, it's the smallest amount of tape the government could have chosen to cut. You're not really cutting tape; you're just not adding another layer of complexity. I really fear that instead the government has taken an ideological stance on this issue, proving—unfortunately and yet again—that it does not understand the experience of small-business owners. I fear going against some of the very strong words and warnings from Commissioner Holmes in delivering the robodebt royal commission. From what I read, she's talking about how the way that we talk about social security in Australia really matters. It matters.

I think we should be proud that we live in a country that does have a social security system, that has a safety net and things like paid parental leave. We should be proud that that's actually from taxpayers. That's us as communities and societies saying, 'We think that you should be able to stay at home and look after your newborn, and we're going to pay that.' What the government's trying to do is make this seem like some sort of work entitlement, which I think diminishes the fact that it is paid for by taxpayers. We should be proud that this is coming from taxpayers and that we have Services Australia that administer these payments to a range of people for a range of circumstances. If the claim is that dealing with Services Australia is too burdensome for new parents, let's fix that problem. I acknowledge the government has done a lot of work in that area when it comes to wait times, but let's shovel a problem with Services Australia onto small-business owners. Let's fix the actual root cause of this problem, which is that it's currently difficult to navigate the system.

The crossbench is proposing a range of models for this small-business exemption, with different definitions of 'small business' all the way down to microbusinesses, where the argument around 'maintaining the relationship' just doesn't hold up. If you've got five employees in your business, I assume you're working together all the time and relationships are pretty good. That's very different to working for a big supermarket with thousands and thousands of employees.

I will be moving a range of amendments of different variants where the parent leads the decision-making process so that employees can choose to have Services Australia make the payment to them directly if they prefer not to have the small business between them and the government. This is putting choice in the hands of the people taking paid parental leave, and I really hope that the Senate will be supporting these sensible solutions to this problem that has been acknowledged and looked at, and that a Senate committee has reported on.

To sum up, I call on the government to support these solutions, to set aside the ideology and ease the strain on small-business people. We've heard a lot about boosting productivity—this is the way. Fifteen hours per employee is totally unnecessary because Services Australia can and do administer this payment directly. We can do this and continue to give parents the entitlements they deserve, and celebrate the fact that this is coming from taxpayers—this is coming from the Commonwealth, not from the business. We should sort out any administrative issues with Services Australia. With that, I, and also on behalf of Senator Lambie and Senator Babet, move:

At the end of the motion, add ", but the Senate calls on the Government to compensate small businesses for the time required to administer the payment of instalments of parental leave pay under the Paid Parental Leave Act 2010, whether by direct payment or tax offset".