THE Abbott government’s about-turn on paid parental leave is a step backwards for Australian families.
Treasurer Joe Hockey’s Mother’s Day announcement that women will no longer be able to ‘‘double dip’’ by accessing both government and employer paid parental leave entitlements represents a significant departure in policy.
Granted, the government had earlier flagged an intention to amend the interaction between employer and government entitlements. But this made far more sense when it was proposing reforms to the existing scheme, which extended the time and level of income replacement.
The proposed reforms that made up Mr Abbott’s signature paid parental leave scheme were dumped in February.
The scheme that is currently in operation was implemented by the Rudd government in 2010 and took effect in 2011. Under this scheme eligible women are paid the minimum wage for 18 weeks. Although it was not designed to replace income fully, it was administered through the employer to maintain levels of employment attachment.
The scheme introduced by the Rudd government fell short of the best practice model adopted in other Organisation for Economic Co-operation and Development countries. It did so because it did not offer a full replacement wage and it did not offer income support for six months, which is said to be the minimum period required to support exclusive breastfeeding if chosen.
Despite its pitfalls, the Rudd government’s scheme provided a safety net for working women at the level of the minimum wage. Importantly, in recognition of its limitations, the scheme did not restrict the capacity of women and their employers to agree to other entitlements beyond this.
In 2010, while still in opposition, Mr Abbott countered with a far more generous scheme arguing that it was superior because it gave ‘‘real time and real money’’.
He initially proposed that a woman earning up to $150,000 a year would be entitled to up to 26 weeks leave on full pay. But in the face of strong party room criticism, the income level was reduced to $100,000. But the policy was completely dropped in February.
Mr Abbott’s proposed ‘‘gold star’’ paid parental leave scheme was always politically confounding. That he pursued it in the face of criticisms from his own party room raised questions about his intentions in pursuing the policy.
The government’s decision to abandon its scheme is perhaps unsurprising. Defending the policy became increasingly difficult in the wake of the austerity measures at the centre of last year’s budget. But the decision to diminish the existing scheme is puzzling.
Veiled criticisms of ‘‘double dipping’’ in Mr Hockey’s announcement on Sunday fly in the face of the original intention of that scheme. The capacity for women to access the government scheme and any employer entitlements was in recognition of the limitations of the 18 weeks at minimum wage scheme.
The government will likely point to its changes to childcare in defence of its watered down paid parental leave policy. But paid parental leave and childcare should not be mutually exclusive.
The 2009 Productivity Commission report on paid parental leave explained the case for it as a workplace entitlement.
A well-crafted policy delivers long-term productivity benefits and increases women’s workforce participation. It was this very rhetoric the government relied upon in justifying the policy position it held only a few months ago when it stated ‘‘we believe it is right for a mother to receive her full wage while on parental leave’’.
Kcasey McLoughlin is a Lecturer at Newcastle Law School