Paid Parental Leave
Setting the argument right – short term vs long term economic benefits of Paid Parental Leave
BPWA submission SenateCommittee PPL Dec2016 final.pdf
The Inquiry website is at http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Community_Affairs/FairerParentalLeave2016
An historical perspective on Paid Parental Leave:
BPW Australia has had a long involvement in lobbying for Paid Maternity Leave, spanning some 30 years or more.
In 2000 when BPW Australia researched paid parental leave provisions internationally we found most countries across the world, including most developing nations, had paid maternity leave and the majority had such policies in place for decades. In only two of those countries was paid maternity leave required to be paid exclusively by employers; in all others it was a government benefit or a shared responsibility.
Australia’s response to a 1921 ILO Convention concerning the Employment of Women before and after Childbirth, which was ratified by Australia in 2000, was to provide a family tax benefit. BPW regarded this as an inadequate implementation of the Convention requirement for maternity leave of not less than 14 weeks with cash benefits at a level which ensures that the woman can maintain herself and her child in proper conditions of health and with a suitable standard of living.
In 2006 when New Zealand legislated for PML, most USA states had paid maternity leave provisions, but only Australians who worked for major corporations, governments and universities had access to PML as an employment benefit. This meant that Australia was then the only developed nation where no woman had a statutory right to PML but had to rely on the generosity of their employer.
Our research found the greatest obstacles to paid maternity leave were that Australians didn’t know that
- the great majority of countries around the world had paid maternity leave as a long-standing policy, that usually governments paid those benefits, and that in those countries businesses had not gone under as a result and women were still being employed
- no other country in the world has long service leave, which was originally intended to permit Commonwealth public servants from Britain to visit their family after 10 years’ service (3 months for the return boat trip to Britain allowing for 4 weeks to spend with their family) but had become part of working culture – and was being used as de facto paid maternity leave by working women
- although Australia passed the Sex Discrimination Act in 1984 as a response to the UN Convention on the Elimination of all Forms of Discrimination Against Women, Australia had a reservation against the clause that required maternity leave with pay or with comparable social benefits.
BPW Australia’s Maternity Leave Policy Statement, which arose from a resolution passed in 2004, advocated for government funded paid parental leave set at the minimum wage. Because Australia already had a sporadic waged-based scheme available to government employees, some universities and women working in large corporates, we advocated for a standardised government payment that could be supplemented by employers to maintain incomes for higher paid women, which is the paid parental leave scheme that Australia has now.
BPW Australia’s Statement was provided to Sex Discrimination Commissioners Susan Halliday and Pru Goward, and to Senator Natasha Stott Despoja. Excerpts from it have found their way into many speeches and reports, and BPW made submissions to inquiries. Legislation finally passed Parliament but it was 2011 before Australian women had access to paid parental leave (PPL) – and it was in line with our policy statement.
BPW believed that PPL should be government funded – not paid for by business. We were very concerned that businesses would not employ women of child-bearing age if they would be forced to pay them paid maternity leave [note in those days our focus was paid maternity leave not paid parental leave].
However, business paying parental leave to their employees is different from businesses paying for Paid Parental Leave through a government levy. This disconnects the payment from the person being paid and eliminates this risk. Now there is a different policy being canvassed: one that replaces a universal government payment of the minimum wage of $606 per week for 18 weeks paid through employers, with 26 weeks at full salary (capped at $50,000) paid by government from a levy on big business. A safety net of the minimum wage will still be in place for casual and part-time workers who meet the employment test, including women working in family businesses or on farms but who don’t receive an actual wage, and are ‘deemed’ to have worked the minimum hours.
The arguments for each scheme are compelling:
- the welfare of the child argument: the purpose of PPL is to ensure the child has care for the first few months; however children of high-earning women are just as valued as children of low-earning women, so all women should be entitled to the same amount of taxpayer funds.
- the employment benefit argument: a wage-based scheme recompenses the mother for lost income and enables the family to maintain their standard of living; this is justified by the need to ensure that the mortgage or rent could continue to be paid to keep a roof over the child’s head.
BPW membership includes employers and employees, corporate women and small business women – all with different perspectives on this issue.
At its National Conference in 2013, BPW Australia resolved to release an updated policy on which aspects of these two schemes best represent the interests of business and professional women.