Why Labor is Better on Paid Parental Leave?

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This is an archived copy of an article. It is online for informational purposes only.
Claire Moore

Last night, Monday August 20th, I appeared on Capital Hill with Lyndal Curtis on ABC 24, discussing, amongst other things, Paid Parental Leave with Liberal Senator Scott Ryan.

Australia appears to be debating Paid Parental Leave and I’m really glad we have the opportunity to talk about such an important area and two rival policies that I don’t think have been properly explained to the Australian public.

I would like to take this opportunity to correct a few of Senator Ryan’s comments last night and explain in a little more detail the differences between the two policies.

The Coalition will introduce a levy to fund its $5.5 billion Paid Parental Leave scheme. Last night Scott Ryan was unable to tell us how much the levy would actually raise. He said he didn’t have those figures in front of him. Well the Parliamentary Budget office calculated the Coalition levy would not even raise half the cost. It estimate’s the levy to raise only 2.3 billion in its first year.

So the Coalition’s policy sounds generous but without proper costing it’s not worth the paper it’s printed on.
Labor’s Paid Parental Leave scheme gives eligible working parents up to 18 weeks’ parental leave pay at the National Minimum Wage – currently about $622 a week before tax. People must earn $150,000 or less and meet a work test to be eligible. Dads and same sex partners can access an additional two weeks’ pay.

Three years into our scheme, more than 300,000 Australian women have benefited. It’s fair for families and it’s affordable.

It will cost about $2,867,023 which has already been counted in the budget.

The Coalition’s paid parental leave scheme would pay women earning under $150,000 a year their full salary for six months. Shadow Treasurer Joe Hockey claimed the Coalition’s policy would cost about $5.5 billion.
There are two differences between the two schemes: the length of leave and the amount of money paid.

However, to put it simply, Labors’ paid parental leave scheme is better because it is affordable, it’s funded for the long term in a sustainable way and gives the Rudd Labor Government the flexibility to place funding into other areas that support parents, such as childcare, education and health.

Why Labors' scheme is better

The Labor Government chose its scheme on the basis of recommendations from a Productivity Commission report Paid Parental Leave: Support for Parents with Newborn Children released on May 12 2009.

The Productivity Commission recommended 18 weeks of leave despite most mothers preferring to spend at least 26 weeks with their baby before going back to work because those mothers who wished to take extra leave could “co-fund” the extra amount with annual leave or with savings. The Productivity Commission reported 90% of families would find this option affordable. The Productivity Commission acknowledged that more leave might be better this had to be balanced with spending in areas such as higher quality childcare or a better health system which are also factors in women’s participation in the workforce.

Balancing the costs of paid parental leave vs. more funding for childcare for example, is a complex process and may represent a difficult budgetary choice for the government. The $5.5 billion dollars the Coalition claim they will put into Paid Parental Leave won’t make up for the $70 billion in cuts they will take from families. The cuts to the Schoolkids Bonus, for example, that helps families with cost of living pressures or cutting the super increase from 9 to 12 per cent, for two years, for all employees will hit the very women the Coalition say they are trying to help.

So will the Coalition’s Paid Parental Leave achieve its aim of increasing female participation in the workforce? And is it fair?

Tony Abbott appeared on Meet the Press on Sunday to answer, or try to answer, these questions. Mr Abbott was asked what the Coalitions modelling said about increase in the female participation rate. He said:
“Well there are lots of things which can be modelled by governments, but they can’t really be modelled in the same way by oppositions, because we don’t have the same access to modelling that governments do have. But it has been fully costed by the Parliamentary Budget Office, and it is fully funded by offsets and by the levy on big business.”
So as far as the Coalition knows their policy will not produce its stated purpose; that is to increase female participation in the workforce.

Mr Abbott was then asked if his policy was fair because most of the women it would benefit lived in either Mr Abbott’s seat of Warringah or another Liberal held seat. Mr Abbott said, “It’s a fair scheme. Why should public servants get their wage, when they’re on paid parental leave, and not shop assistants and factory workers? So we are providing the same wage justice for everyone.”

Except those families already struggling to make ends meet will have to do without the SchoolKids Bonus, or they will have to pay for their broadband connection under the Coalition plan or they might lose their job.

The Coalition’s Policy of Paid Parental Leave will be costly, ineffective and inherently unfair.

Claire Moore, Senator for Queensland
Tuesday 20th of August 2013

Claire Moore, Senator for Queensland : View Full Profile
PO Box 907, Fortitude Valley QLD, 4006, Queensland Wide
07 3252 7101
Claire Moore, Senator for Queensland

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