Paid parental leave coming?

The Productivity Commission released its draft report into a comprehensive paid parental leave scheme for all Australian employees last week. Earlier this year, the Rudd Government requested that the Productivity Commission conduct a public inquiry into the economic, productivity and social costs and benefits of providing paid parental leave for all employees. Although there is widespread support for a paid parental leave scheme amongst Labor ranks, the Productivity Commission’s draft findings will provide the Rudd Government with the impetus and legitimacy to actually introduce a paid parental leave scheme in the very near future.

Australia currently has no uniform paid parental leave program. Although all employees currently covered by the federal system are entitled to 12 months unpaid parental leave, only a very small proportion of employees have access to paid parental leave (dependent upon the generosity of their employer). The current state of play means that Australia is only one of a handful of advanced democracies which does not have such a scheme in place.

The draft report released by the Productivity Commission recommends that Australia introduce a government-funded scheme which would give all eligible employees access to 18 weeks of paid parental leave after the baby is born. The 18 weeks could be shared by both eligible parents, with an additional two weeks of paternity leave reserved for the father (or same-sex partner). A fairly broad range of families would be covered by the proposed scheme, including nuclear families, single parents, same-sex couples and adoptive parents. During the duration of the leave period, an employee would be entitled to the federal minimum wage (which is currently $543.78 per week).
Reaction to the draft findings has generally been positive. Employer groups have raised some concern about the fact that under the terms of the proposed scheme, employers would be required to initially pay the employee during the period of leave, and later claim the amount back from the Government. The Australian Council of Trade Unions has raised a downright bizarre objection, stating that the paid parental leave scheme should be extended to also cover stay-at- home mothers.

The Productivity Commission estimates that the scheme would cost taxpayers about $450 million annually, which is a fairly modest amount when the benefits of keeping women in the workforce are considered. Let’s hope that the Rudd Government strikes while the iron is hot.

There is widespread support for paid parental leave.