Reading the policies: the Coalition’s parental leave consultation document

My attitude to the vast bulk of elections, including the 2010 Federal election, is “I don’t like any of this, please get me out of here”. I usually intend to make an informed decision based on policies and then have trouble even following the news coverage. So, in the spirit of public acts helping enforce private commitments, I’m going to review a few policies for Hoyden.

a screenshot of the title page of the Coalition's consultation document titled Direct Action on Paid Parental LeaveFirst up, Direct Action on Paid Parental Leave, the Coalition’s consultation document: a final policy is yet to come.

This has been fairly well publicised, but the basics are that it provides paid parental leave for 26 weeks following the birth or adoption of a child. The leave will be subject to a work test, and be paid ranging from the minimum full-time wage, for any person paid at or below this rate, to a maximum of matching a $150 000 per annum salary (that is, a carer will receive somewhere from $14 000 to $75 000 gross while on leave depending on their previous earnings). The current Baby Bonus will be paid to carers who don’t meet the work test, or to anyone who chooses it over the Paid Parental Leave scheme. It will be funded by an additional corporate tax on a small set of seemingly unidentified companies.

The big news about this policy yesterday (Coalition accused of leaving dads out of parental leave plan, pressured on costings, Dads cut out of full-pay parental leave scheme) was that male primary carers would be paid their female partner’s (presumed) lower wage if they took the leave. This was quite incoherent, and evidently is going to be a change in the final policy, because in this document, fathers weren’t going to be eligible for more than 2 weeks of leave at all. The document itself is a little internally inconsistent, beginning with a nod to primary carers in general:

The Coalition’s Paid Parental Leave scheme will provide primary carers (in the vast majority of families, mothers) with 26 weeks paid parental leave…

But later, the “carers (let’s face it, probably mothers)” phrasing is dropped, in favour of:

… fathers will be able to use two weeks of the 26 weeks of Paid Parental Leave that will be available, either simultaneously with the mother’s leave or separately.

A family can lose one of its two incomes for a period of time as the mother gives up or reduces paid employment to care for the child.

The Coalition is committed to protecting and improving the well-being of families, particularly that of the mother and child, by ensuring a mother can afford to stay at home during the early stages of her child’s development… In recognising this, the Coalition’s Paid Parental Leave scheme will assist mothers to take the recommended minimum of six months leave.

I’m genuinely unclear from this about whether they originally intended provision for fathers or any other primary carers to actually take the leave.

They have quite a few nods to postpartum recovery and especially the need for mother-child contact to establish breastfeeding:

The proposed Paid Parental Leave scheme will enhance child and maternal well-being by providing financial support to mothers while they are outside the paid workforce recovering from childbirth, establishing breastfeeding and bonding with their newborns… Six months is also the minimum period of exclusive breastfeeding recommended by the Australian National Health and Medical Research Council and the World Health Organisation.

But it’s a long way from separating the idea of paid parental leave into maternity leave for recovery and establishing breastfeeding and primary carer leave for, possibly, a different carer.

Purely in terms of entertainment, we have some Labor’s-big-debt snark:

The Coalition would prefer to fund our Paid Parental Leave scheme from a Budget surplus, but this is not possible due to the large debt and deficits run up by the Rudd Labor Government.

And is this some WorkChoices nostalgia I see before me?

The [Howard Government] also supported women’s choice by… introducing more flexible workplace conditions which provided parents, particularly mothers, with the choice of working part time or flexible hours.

Observations:

  • This is a generous scheme, as the document points out, both in comparison to Labor’s scheme, which has a maximum payment of under $10 000 gross and which does not provide any option to share even 2 weeks of the leave with another carer, and in comparison to most other schemes worldwide, which mostly are either shorter or pay less.
  • It’s especially generous to carers already earning a higher income, although this is fairly typical of worldwide schemes: either you get a payment linked to the minimum wage, or you get a payment linked to your recent income.
  • The implementation of the policy in the context of any family that’s not built around a female-male couple who are both legal parents of the child is not at all clear from this document. It’s especially unclear how the payment works if the baby care is shared by more than one household.
  • I do not know why it is emphasised that a carer who passes the work test could still choose to receive the Baby Bonus. The current Baby Bonus is valued at just over $5000 tax free, and is no longer paid as a lump sum, but is also paid over 26 weeks.The only case I can come up with where that’s going to be better than the Coalition’s scheme involves higher order multiples (since the scheme will not pay multiple times for a multiple birth).


Categories: economics, parties and factions, work and family

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10 replies

  1. Re multiples: under the Labor scheme you get maternity leave provisions, if you choose them, for the first child and the baby bonus for the second, third, fourth etc child from the same pregnancy. I suspect that the Liberal scheme will be similar once they get themselves sorted. It will be interesting to see how they get around the idea that taxing the top 1% (or so) of businesses which includes Coles and Woolies will put up the cost of groceries for everyone. It’s a bit of ‘everyone is paying for people’s choices to have kids’ but also ‘even though you get the maternity payment, you still pay more for disposable nappies and food’ etc.

  2. As a father I’d like to see more capability to share parental leave while the mother is taking maternity leave, even if it is unpaid leave (just want the job return guarantee). With a 6 month scheme its pretty much inevitable that the majority of the leave will be taken by women so both are really a maternity leave scheme rather than parental leave scheme.
    Mindy – re: putting up costs. I’ve been wondering a bit about that. With the taxpayer funded scheme, the money has to come from somewhere anyway – eg extra taxes, fees etc which will either reduce income or increase costs. It doesn’t really matter if you explicitly have a bit of business/personal income tax reserved for it. So I don’t see a big difference on cost pressures – except for the actual cost of the schemes with the Lib one costing a whole lot more.

  3. @ Chris, I have to admit that as a woman unlikely to be utilising this leave I haven’t paid much attention to it, aside from being glad that it is happening at last. I think Labor have the easier sell because their scheme is cheaper and isn’t seen to be rewarding high income earners. I think the Labor scheme also allows transfer of the payments from one parent to the other (assuming a neat two parent/hetero arrangement) if the mother returns to work, and the father takes the balance of the maternity leave.
    From the Essential Baby website:

    What if I want to go back to work?
    You can’t go back to work and continue to receive paid parental leave. If you return to work, the payments will stop. So if this is something which is likely, then have a chat with the FAO about whether you should apply for the baby bonus instead.
    Alternatively, you and your partner can “share” the paid parental leave. For example, you might decide to take 10 weeks off, and your partner might take 8 weeks off after that. You can arrange through the FAO to change the nominated primary carer and thus share the paid leave.

  4. From the Fair Work website:

    What is parental leave?
    Parental leave is an unpaid period of time off that employees get when they become parents. This entitlement covers the birth of children and also adoption.
    When are employees entitled to parental leave?
    Full-time and part-time employees can take 12 months of unpaid parental leave to be the primary carer of a new born or newly adopted child, if they have worked for you continuously for 12 months.
    Casual employees are also entitled to take 12 months parental leave if they have been employed with an employer on a regular and systematic basis for at least 12 months.

  5. Mindy – I think Labor’s scheme is better than nothing so I support its introduction from that point of view. Just a couple of points on what you mentioned
    I think it’s fairly rare that a mother goes back fulltime straight away so unless I misunderstand the way Labor’s scheme works it exacerbates other problems:
    – You can’t share the parental leave concurrently – eg. father and mother both work half a week adding up to 1 fulltime job and still get the parental leave. My experience is that both parents working part time can work really well.
    – Some women (mostly will be women) will be faced with a decision of going back to work part time, which is often the preferred situation) but ending up with less pay than just staying at home because their part time salary will be well that the “fulltime” parental leave which they lose.
    Having to make the decision about taking the baby bonus or parental leave to get around some of these problems is not great either as parents often change their mind once the baby arrives – my wife was originally only going to take 3 months off but eventually took 12 for example and I’m sure it wouldn’t be hard to find example of the reverse.

  6. @ Chris – I think the idea was that with the maternity leave provisions women wouldn’t need to work part time to make ends meet, as they would still have a wage. Allowing parents to both work part time sort of negates the purpose of the policy which is to allow mothers to stay home longer with their child to promote bonding and breastfeeding. Also, presumably parents wanting a quick return to work are a smallish minority and would, you’d think, be better paid than the minimum wage otherwise there is no impetus to return (perhaps?).

  7. Mindy – I think you’re pretty much right – some women may want to go back to work part time earlier but they’d be in the minority. But if Labor were a bit more honest about their intents they’d have called it maternity leave, not parental leave :-)
    I think we’ll be waiting a very long time before we get even (broadly useful) unpaid parental leave let alone paid parental leave.

  8. We already have unpaid parental leave. Under Fair Work Australia you are entitled to take 12 months unpaid leave and still return to your job. There is nothing stopping a woman taking maternity leave and her partner taking unpaid parental leave at the same time.

  9. Mindy – her partner can’t. If you look at the fine print of what you quoted, in order to take the unpaid parental leave you have to be the primary carer which they will not be able to demonstrate if their partner is on maternity leave. Its also has to be a single contiguous period which causes some of the problems described above too.
    My wife had plenty of leave so we sort of considered that I could take parental leave and she could take normal leave, but decided that trying to demonstrate that I’m the primary carer (especially with her breastfeeding) was going to be too hard.

  10. Ah, well that changes everything then. Sorry I had thought that they had dealt with that under the new laws. I suppose that fathers have to do what my hubby did then and take holidays instead which isn’t ideal either.

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