Paid Parental Leave : Support for Parents with Newborn Children

Key Points extract: • The Australian Government’s statutory paid parental leave scheme should be taxpayer-funded, and should: – provide paid postnatal leave for a total of 18 weeks that can be shared by eligible parents, with an additional two weeks of paternity leave reserved for the father (or same sex partner) who shares in the daily primary care of the child – provide the adult federal minimum wage (currently $543.78) for each week of leave for those eligible, with benefits subject to normal taxation. • All those employed with a reasonable degree of attachment to the labour forceshould be eligible, including the self-employed, contractors and casual employees. • A broad range of family types should be eligible, including conventional couples, lone parents, non-familial adoptive parents, same sex couples, and non-parental primary carers in exceptional cases, so long as they meet the employment test. – Those families not eligible for paid parental leave may still be eligible for paternity leave, the baby bonus ($5000) and other financial support through the social transfer system. • Employers should participate in the scheme by: – acting as paymasters where the employee had sufficient workplace tenure, with the government prepaying employers by instalment to avoid cash flow impacts – providing superannuation contributions for long-term eligible employees, though this measure should be deferred for at least three years and reviewed at that time. • • Such a scheme would meet a range of commonly agreed objectives. It would: – generate child and maternal health and welfare benefits by increasing the time parents take away from work. The Commission estimates that the average absence will increase by ten weeks. Many more families would have an increased capacity to provide exclusive parental care for children for six to nine months – promote some important, publicly supported social goals, and in particular, that having a child and taking time out for family reasons is viewed by the community as part of the usual course of work and life for parents in the paid workforce – counter some of the incentives against working posed by the tax and welfare system — potentially contributing around six months of net additional employment for the average woman over her lifetime – increase retention rates for business, with reduced training and recruitment costs