Paid parental leave in doubt - again

By Dani Barley

“It’s time to bite the bullet on paid maternity leave” after “12 years of neglect”, Prime Minister Kevin Rudd stated in September. But the Rudd Labor government is now trying to renege on a national parental leave scheme in the forthcoming federal budget — citing the global financial crisis as the prime excuse.

Finance minister Lindsay Tanner was back-pedalling furiously on April 9, telling the Australian Associated Press that there were “a lot of tough priority choices … The global financial crisis has knocked a huge hole in our revenue. We are committed to introducing paid maternity leave, the question of timing are [sic] matters still yet to be determined.” Workplace relations minister and deputy PM Julia Gillard told ABC TV’s 7:30 Report on April 29: “We’ve had huge downgrades in the amount of revenue available to the government. That means that when we’re working on this budget, we are taking a line-by-line, conservative, prudent approach.”

The Productivity Commission’s draft report, Paid Parental Leave: Support for Parents with Newborn Children, recommended that 18 weeks of maternity leave be paid to all working mothers at the adult minimum wage of $544 per week, which would be counted as taxable income. Women who had worked an average of at least 10 hours per week for the previous 12 months would be eligible, extending eligibility to casuals, contract workers and the self-employed. An estimated 140,000 women would be eligible each year. Fathers or same sex partners would be eligible for two weeks of leave. Those who did not qualify for the scheme would still be eligible for the tax-free $5000 baby bonus (formerly known at the maternity payment).


Productivity commissioner Robert Fitzgerald told the April 9 Australian that there was “no question” of the feasibility of providing 18 weeks’ leave, despite the souring national economy. “The commission is acutely aware of the difficulties for government and business. We certainly put a scheme to the government we think is implementable. The proposals we put couldn’t possibly harm business too much.” The estimated cost to taxpayers is $450 million per year, with a further $75 million from business in superannuation payments and administrative costs.

Fitzgerald continued: “Our view is that the investment … would pay dividends. If you can support parents being home with a child for at least the first six months, there are benefits to the children and the parents. It allows a mother to breastfeed her child. It allows greater bonding between the parents and the child in a more stable environment.”

The AAP reported that an Auspoll survey of more than 1700 Australians found that 67% supported taxpayer-funded maternity leave. Eighty per cent preferred government-funded parental leave over tax breaks for high income earners in the federal budget. The Greens intend to introduce a bill proposing just that: six months’ leave paid at the adult minimum wage, to be funded by scrapping the high income tax cut scheduled to take effect from July 1. Australia and the United States are the only developed capitalist countries without a national parental leave scheme, though there are some individual US states offering paid leave. For other developed capitalist countries, the average is 14 weeks of paid leave.

ACTU vacillates

The ACTU has vacillated on its position of favouring the immediate introduction of 14 weeks’ paid maternity leave. ACTU president Sharan Burrow told ABC Radio on March 2: “There’s only one real question for the government: can they afford to put it in this budget as a whole?” She added: “If indeed you can’t afford it in one hit, then talk to Australian women; if it needs to be phased in over a couple of years, well that’s a discussion that can be had.” Burrow told the April 29 7:30 Report: “I’m absolutely certain it will be in the budget, and women across the country will be breaking open the champagne, notwithstanding the economic circumstances”. The question remains: will the champers be poured for another short-sold promise, perhaps like the one from the Rudd government to “tear up” Work Choices?

In the same program, reporter Heather Ewart outlined maternity leave systems offered by private companies, specifically Woolworths. Under its scheme, which includes Woolworths and Safeway supermarkets, Dick Smith Electronics and Big W, employees who have worked with the retail giant for at least two years on a permanent basis are entitled to up to eight weeks’ leave (an initial six weeks with two “bonus” weeks upon return to work) with full pay and up to two years without pay. Covering some 85,000 women nationally, this is the largest private maternity leave system in the country.

Gillard explained to Ewart the government’s desire to “make sure paid maternity leave works so that private firms that have already stepped up to the plate to offer paid maternity leave continue to do so … [and] other firms will step up to the plate and offer it as a workplace benefit”. Ewart aptly responded, “In other words, the government appears to be saying it’s no longer the time to bite the bullet on this, and it wants to see the private sector do its work for it instead”.

This is not the first time a federal government has backed away from a paid maternity leave scheme. When then PM John Howard introduced the “maternity payment” (later known as the “baby bonus”) on October 5, 2003, he argued that this one-off payment was superior to paid leave because it was “not restricted to working women”. Costing more than $700 million in its first year alone (when the payment was only $3000), the non-means-tested payment was of greater benefit to those who already had one parent remaining at home. Furthermore, it did nothing to protect a woman’s right to continuous employment.

On April 1, the AAP cited an AMP Financial Services report showing that a 25-year-old man’s potential earnings over the next 40 years are $2.4 million, compared with $1.5 million for a similarly aged woman. A man with children who holds a bachelor degree or higher will earn around $3.3 million, compared with $1.8 million for a woman with children.

Some 70% of part-time workers in Australia are women. Those who don’t qualify for the current unpaid maternity leave must resign their positions and start from scratch when they re-enter the work force. In those years, they lose the opportunity for promotion, training and financial security. Couple this with the extremely high cost and low availability of safe and appropriate child care and you’re talking about a heavy burden being borne by (mostly) women. Paid maternity leave would not force women to return to full-time work, but would allow them the flexibility to choose what is best for them and their children, a basic right that should be available to anyone, not just those with financial means.