Chapter 2Views on the bill
2.1This chapter discusses inquiry participants’ views on the provisions of the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023 (the bill).
2.2Throughout the inquiry, submitters and witnesses expressed strong support for the bill’s expansion to the Paid Parental Leave (PPL) scheme. However, a number of inquiry participants called for the reforms to go further to align with international best practice. The committee heard various suggestions in relation to:
the maximum PPL period;
the reserved period;
the rate of pay;
superannuation;
eligibility requirements;
the use of gender neutral language;
provision for independent review of the scheme; and
administration of the scheme.
2.3This chapter outlines the broad support for the bill as well as key issues raised by inquiry participants. The chapter concludes with the committee’s view and recommendation.
Broad support for the bill
Expansion of the PPL scheme
2.4Inquiry participants roundly supported the intent of the bill to expand the PPL scheme, with many submitters highlighting the importance and urgency of parental leave reforms to improve women’s workforce participation and gender equality.
2.5Australia’s rates of women’s workforce participation are ‘peculiarly low, ranked by the World Economic Forum in 2022 as 38th out of 153 nations’. Impact Economics and Policy, a group of economists and policy specialists, cited research demonstrating that ‘women in Australia have similar levels of labour force participation to men, until they have children when they fall behind and never catch up’.
2.6The Diversity Council of Australia pointed to a prediction of the Women’s Economic Equality Taskforce that:
… if current working patterns continue, the average 25-year-old woman today who has at least one child can expect to earn $2 million less over a lifetime than the average 25-year-old man who becomes a father.
2.7The committee heard that PPL encourages more equitable division of caregiving and supports women to re-enter the workforce after having children. In this way, the Australian Council of Social Service (ACOSS) argued that PPL is ‘critical in fostering a fair and inclusive society, promoting gender equality and removing workplace barriers for primary caregivers’.
2.8Further, several inquiry participants espoused the economic benefits of a more generous PPL scheme. The Business Council of Australia welcomed the enlargement of the scheme, stating that ’increasing the workforce participation of women is one of our nation’s biggest economic and social opportunities’.
2.9The availability of PPL was also said to enable businesses to recruit and retain high performing employees. For instance, the Australian Chamber of Commerce and Industry (ACCI) submitted that:
When more women are empowered to be able to return to the workforce, all businesses benefit. … Under this legislation businesses are set to benefit by ensuring that fewer productive employees end up leaving workplaces permanently and more women remain in the labour market.
Improvements to existing policy settings
2.10Inquiry participants were of the view that the bill makes substantial improvements to existing PPL policy settings.
2.11The Parenthood, an advocacy organisation representing over 80,000 Australian parents, carers and supporters, expressed support for the bill’s ‘overdue and welcome reform’ to the PPL scheme, describing it as a 'commendable step toward supporting Australian families'.
2.12The Equality Rights Alliance (ERA), a network of not-for-profit organisations and social enterprises advocating for gender equality, viewed the amendments made by the bill as 'equality enabling' and 'significant advances in the promotion of Australian women's economic security'. Ms Helen Dalley-Fisher, Convenor of the ERA, testified at the hearing that:
The federal Paid Parental Leave Scheme is an excellent example of good quality structures for gender equality which was created in bipartisanship and it is heartening to see that there are improvements being made to the scheme. The bill will promote women's economic security and women's participation in the workforce. It will also promote the redistribution of care work between the genders which is critical for this bill.
2.13In addition, Dr Leonora Risse, an academic economist specialising in gender equality, observed that:
The amendments in this Bill are an undisputable and significant improvement from previous policy settings and are strongly welcomed. The expansion of entitlements to 26 weeks, with the inclusion of a reserved allocation for fathers and partners, is a historic milestone for women’s rights and economic standing, and for gender equality in our country.
2.14Dr Risse noted that, compared to former policy settings, the bill’s proposed changes are ‘well informed by the academic evidence, research and international best practice’. Likewise, the Diversity Council of Australia acknowledged that:
Many aspects of a ‘best practice’ government-funded parental leave scheme are included in these amendments: flexibility, gender-neutrality, and promoting shared-care through ‘use it or lose it’ provisions.
2.15The ERA remarked that the extension of the PPL period to 26 weeks aligns with the World Health Organization’s recommended 26 weeks of leave for ‘optimal infant breastmilk feeding’.
2.16Additionally, several submitters mentioned that the bill’s extension of the reserved period for partnered claimants is important to promote shared care and ‘redistribute unpaid caring responsibilities across genders’. The Shop, Distributive and Allied Employees’ Association (SDA), for instance, noted that the experience of countries such as Norway and Iceland which provide PPL on a shared basis has shown that ‘getting fathers to participate in the care of a child in the first [two] years is critical to providing a shift in the sharing of ongoing care and housework’.
2.17At the public hearing, Dr Risse emphasised that the bill’s increase to the reserved period is a vital improvement to the scheme:
… the feature of including the nontransferable use it or lose it component, fathers and partners, I don't think we can emphasise enough how important it is to include that, and that it has been extended beyond the two weeks.
2.18The bill’s increase to the concurrency limit was also welcomed by the SDA as it would enable fathers and partners to spend more time bonding with their child(ren) and supporting their partner after the birth or adoption. Further, the ERA stated that the concurrency limit would ‘encourage fathers and partners to take on independent caring responsibilities’.
2.19The committee also heard support for the bill’s clarification of eligibility criteria for PPL claimants in exceptional circumstances, and the extension of the exception to the work test for fathers and partners where there was a premature birth or pregnancy-related complications or illness.
Issues raised by inquiry participants
2.20Despite the strong support for the bill, inquiry participants identified several potential reforms to further strengthen the scheme.
2.21Many inquiry participants pointed out that although the reforms under the bill would be a significant positive step, Australia’s PPL scheme would remain ‘amongst the least generous schemes internationally’. According to the Australian Council of Trade Unions (ACTU), the fully implemented reforms would only lift Australia’s PPL scheme from the second worst position amongst Organisation for Economic Co-operation and Development (OECD) countries to the fourth worst position, based on 2022 data.
2.22The Department of Social Services (the department) submitted that Australia’s PPL policies are ‘informed by international research and best practice’.
2.23The department stated that it is difficult to compare Australia’s PPL scheme to international examples because of ‘difference[s] in funding and structure’. The department explained that Australia has a fully taxpayer funded ‘hybrid’ scheme whereby employers may offer paid and/or unpaid parental leave in addition to government-funded PPL, whereas in many other OECD countries employers and/or employees are required to make contributions in order to access PPL.
The maximum PPL period
Timing of the extension to 26 weeks
2.24Various inquiry participants suggested that instead of incrementally extending the scheme by two weeks each year from 1 July 2024 to reach a 26-week scheme by 1 July 2026, the maximum PPL period should be extended to 26 weeks from the bill’s commencement on 1 July 2024.
2.25Dr Leonora Risse argued that moving straight to a 26-week scheme would ‘accelerate the pace of progress’ towards international best practice, and warned that:
The longer that the country stalls the implementation of expanding this policy, the longer that it stalls reaping the benefits of this investment and making meaningful progress on gender equality.
2.26Dr Risse also argued that extending the scheme to 26 weeks in one go would ‘provide a more stable policy landscape in which employers can operate and calibrate their own policy arrangements’ and minimise the ‘efficiency costs’ associated with implementing incremental changes.
2.27Mr Matt Flavel, Deputy Secretary of the Social Security Stream at the department, gave evidence at the public hearing that the increase of the maximum PPL period to 26 weeks by 1 July 2026 still represents a ‘sizeable expansion of the government footprint in relation to PPL in a short space of time’ and that the phased expansion is ‘a pragmatic application from the government taking into account the increased fiscal cost’.
Extension beyond 26 weeks
2.28Numerous inquiry participants called for an extension of the maximum PPL period beyond the bill’s proposed 26 weeks.
2.29The ACTU, for example, stated that a 26-week scheme does not provide enough time to meet all the objectives of the Paid Parental Leave Act 2010 (the Act) and satisfy the needs and expectations of parents.
2.30A suggestion commonly made by submitters was to incrementally expand the scheme to 52 weeks in order to align with international standards and the advice of the Women’s Economic Equality Taskforce. The Parenthood, amongst others, drew attention to the fact that, on average, OECD countries offer over 50 weeks of paid leave for mothers.
2.31The Northern Territory Working Women’s Centre (NTWWC), in recommending a 52-week PPL scheme, stated that:
Extending the leave period beyond what is proposed [in the bill] would not only provide parents with more time to bond with their newborns but also contribute to their overall well-being and development of a strong parent-child relationship, and ensure greater financial security whilst doing this.
2.32The committee also received evidence that longer PPL is associated with long-term improved maternal mental health; higher rates of breastfeeding; an increased proportion of household income earned by women; and more equitable sharing of housework.
2.33The department pointed out that the PPL scheme is ‘intended to complement and supplement employer provided leave entitlements’, and that around 61.8 per cent of employers in Australia offer parental leave in addition to the government-funded scheme. Therefore, the bill’s proposed 26 weeks of Parental Leave Pay would be the minimum entitlement that claimants would receive.
The reserved period
2.34Several submitters and witnesses told the committee that the bill’s proposed increase to the reserved period from two weeks to four weeks of Parental Leave Pay is insufficient.
2.35Some submitters recommended that the reserved period for a 26-week scheme should be five or six weeks, while the Centre for Future Work (CFW) and the Nordic Policy Centre (NPC) suggested an eight-week reserved period for a 52-week scheme.
2.36Inquiry participants contended that longer reserved periods are beneficial for mothers’ post-birth recovery. Dr Leonora Risse argued that a six-week reserved period would be appropriate because ‘the International Labour Organization [ILO] Maternity Protection Convention … recommends a specified period of maternity leave of [six] weeks after childbirth’.
2.37In addition, the committee heard that longer reserved periods encourage men to take parental leave, thus enabling families to share caring responsibilities more equitably. Men’s uptake of PPL in Australia is very low, with fathers taking ‘less than 20 [per cent] of the paternity leave days their global peers take and receiv[ing] just 0.04 [per cent] of all publicly-provided PPL’.
2.38The CFW and NPC observed that men’s uptake of PPL is much higher in Nordic countries where reserved ‘use it or lose it’ periods are longer and rates of Parental Leave Pay are higher. Sweden’s PPL scheme, for instance, offers 16 months of parental leave in relation to a child, with three months reserved for each parent. Most of the leave is paid at a rate based on the parent’s previous income. According to 2022 figures, 46 per cent of men in Sweden take this leave.
2.39However, in addition to the policy differences across countries, there are also differences in societal cultural and gender norms that contribute to the higher uptake in Nordic countries. The committee heard the importance of any future reforms translating the international experience to the Australian social and cultural context for any successful shift to occur.
2.40Ms Petrou of the Northern Territory Working Women’s Centre (NTWWC), in challenging the notion that the ‘use it or lose it’ provision on its own will shift the corresponding cultural issues with uptake, stated that:
But I think the issue is about the culture that's in these workplaces. We're seeing our clients still having issues and still experiencing discrimination as the birthing parents, despite the fact that they're expected to be the ones caring for children as part of societal expectations. If that's still an issue for the birthing parents, the mothers, what then of the fathers? If they're in an environment that doesn't support that, how do we make employers accept that this is normal. We can't just expect parents who have these entitlements to go to their workplaces and say, 'I want to take this leave,' because they're still going to experience the same issues around: 'Are you not serious about your career? Isn't your wife going to do that?' We had an example the other day where a worker told her employer that she was pregnant and the comment from her employer was, 'Are you going to keep it?' That is not an appropriate conversation to have with your worker.
2.41Chief Executive Women highlighted the specific changes that may be required for such a shift to take place in the Australian context:
Truly innovative policy change must account for social norm change and provide a supportive environment to accommodate it. Australia must also shift its structural influences and gender norms of masculinity to ensure that even with improvements and an extended paid parental leave, they are taken.
2.42The bill’s Regulation Impact Statement (RIS) notes that the department considered whether to increase the reserved period to four, five or six weeks for a 26-week scheme. The RIS explains that a longer reserved period carries the risk that:
… some families may not claim the reserved period, leaving them financially worse off than if either parent were able to claim the full entitlement. The longer the reserved period is, the more a family may forfeit if they do not access the reserved period or do not use the full reserved portion.
2.43Additionally, the department remarked that the Women’s Economic Equality Taskforce recommended a four-week reserved period for a 26-week PPL scheme.
Rate of pay
2.44A number of inquiry participants argued for an increase to the rate of Parental Leave Pay, currently set at the national minimum wage.
2.45The committee received a range of suggestions, for example:
the ACTU argued for replacement wage or full-time minimum wage, whichever is greater;
some argued for replacement wage or average wage, whichever is lesser;
the SDA argued for replacement wage or average wage, whichever is greater; and
some argued for a full replacement wage.
2.46The ERA and ACOSS highlighted that the ILO Maternity Protection Convention sets a full replacement wage as the benchmark for PPL schemes.
2.47Various inquiry participants indicated that raising the rate of Parental Leave Pay would encourage more men to access the scheme. As the CFW and NPC explained:
With men being the higher-earning parent in most female-male couple families, there is little incentive for men to take paid parental leave, as this is likely to entail a greater loss of household income … Increasing the rate of parental leave pay will reduce the current disincentive for men to take parental leave.
2.48Submissions frequently mentioned that the jurisdictions with the greatest uptake of PPL amongst men, such as the Nordic nations and the Canadian province of Quebec, pay parental leave at high income replacement rates and provide other incentives for fathers to take leave.
2.49While acknowledging that there is evidence to suggest that higher payment rates of parental leave contribute to increased uptake of PPL, the bill’s RIS states that:
The impact of lower rates of payment, relative to some international models, are partially mitigated by the PPL scheme being designed to complement paid leave provided by employers. In addition to providing paid maternity and paternity leave, employers can also choose to ‘top-up’ the government-provided PPL scheme to bridge the gap between the PLP [Parental Leave Pay] rate and a person’s regular wage.
2.50Mr Matt Flavel of the department reiterated at the public hearing that there are employers who choose to top up government-funded PPL payments to replacement wage.
Superannuation
2.51A range of inquiry participants expressed support for paying superannuation on PPL.
2.52Several submissions drew attention to the significant disparity between men and women’s superannuation balances in retirement, and echoed the recommendation of the Women’s Economic Equality Taskforce that the payment of superannuation should be legislated on all forms of PPL.
2.53The ERA argued that PPL should not be treated differently from other types of workplace leave:
… PPL is both the only type of workplace leave directed predominantly at women and the only type of workplace leave that does not include superannuation guarantee payments. By permitting this discrimination, the Australian PPL scheme inadvertently reinforces the unconscious devaluing of women’s work and contributes to a sense that women’s retirement incomes are unimportant.
2.54In a similar vein, the Brotherhood of St. Laurence told the committee that the absence of provisions in the bill to require the payment of superannuation on PPL means that ‘a crucial measure to progress gender equality and support women's long-term economic security is missing'.
2.55Mr Matt Flavel of the department, told the committee that the Government has indicated it would like to pay superannuation on PPL if fiscal circumstances permit. The Australian Government stated in its September 2023 White Paper:
The Government will focus on narrowing the gap in superannuation balances between women and men. … We will look to pay the superannuation guarantee on Government-funded Paid Parental Leave when fiscal circumstances permit, boosting the superannuation balances of those taking paid parental leave.
Eligibility requirements
Work test
2.56The SDA and ACTU called for the work test to be amended so that Parental Leave Pay is ‘available to every worker who needs it’. This includes workers on casual, temporary or fixed term contracts; workers on any period of paid or unpaid leave; and parents of children on permanent care orders.
2.57The SDA explained that many workers in the retail, fast food and warehousing industries are ‘missing out on the paid parental leave payment due [to] the nature of their employment, particularly when employed on an insecure or precarious basis’. SDA members in these industries reported that poor working time security is a common issue, resulting from ‘poor workplace practices, such as rostering’.
2.58The SDA argued that workers should not be found ineligible for Parental Leave Pay on the basis of not satisfying the work test because of their employers’ poor working time practices. Accordingly, the SDA and ACTU recommended that the work test period should be removed or shortened to enable claimants who have worked less than 10 months out of the 13 months prior to the child’s birth or adoption, or less than 330 hours in the 10-month period, to access Parental Leave Pay.
Australian residency requirements
2.59The NTWWC pointed out that many migrant workers are ineligible for Parental Leave Pay ‘despite their considerable contribution to the community and economy’, because of the requirement that a claimant must satisfy the Australian residency test.
2.60The NTWWC argued that eligibility criteria for the PPL scheme should be broadened to enable people on temporary working visas to access the scheme as this would ‘ensure that all parents regardless of visa status have access to benefits they need to support their families’ and ‘address disadvantage experienced by women from marginalised backgrounds’.
Gender neutral language
2.61The ERA and ACTU called for the use of more inclusive, gender neutral language in the bill. The ERA noted that gendered language can ‘contribute to gendering parenting roles in a manner which reinforces an unequal distribution of unpaid care between men and women’.
2.62Further, the ERA explained that the use of gender neutral language would allow the bill to:
… reflect the diverse nature of families in Australia, including same sex couples, grandparents with primary care of a new baby, and couples with one or more non-binary, gender diverse or non-gendered person.
2.63The ACTU argued that all occurrences of the words ‘birth mother’ in the bill, Explanatory Memorandum and Act should be replaced with ‘birth parent’ to acknowledge transgender, intersex, and gender diverse parents.
2.64Mr Matt Flavel of the department stated at the public hearing that ‘the Government has been very clear in its intention to have a scheme which is more gender neutral in the way it operates’. Mr Flavel pointed to the changes that have already been made under the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Act 2023 to make the PPL scheme more gender neutral by combining Dad and Partner Pay with Parental Leave Pay, making it easier for partners to access and both parents to share care.
Review of the scheme
2.65Some inquiry participants argued in favour of amending the bill to include provisions for reviewing the scheme.
2.66The Australian Industry Group (Ai Group) recommended that there should be a statutory requirement to conduct a review three years after the bill’s commencement to evaluate:
the adequacy of the PPL Act’s impact and support for maternal health as a stand-alone policy objective;
the adequacy of the PPL Act’s support for infant development and bonding with parent(s);
the impact on the retention of birth parents in the workplace and overall workforce participation; and
the impact on the proportion of partners and non-birth parents accessing periods of parental leave.
2.67Dr Leonora Risse recommended ‘independent ongoing evaluation and reviews’ of the PPL scheme, including tracking the uptake of the scheme by fathers and partners.
2.68The department’s submission indicated that the ‘Government will conduct an evaluation of the amended PPL scheme’ to:
… identify the short-term outcomes experienced by parents and employers, including whether the scheme is increasing gender equality in the care for children after a birth or adoption … [and] inform potential improvements to the scheme and future policy directions.
2.69Mr Matt Flavel of the department expounded that the Government evaluation would be ‘comprehensive’ and adopt a ‘multi-pronged approach’ over four phases:
… to firstly get an accurate baseline as to people's understanding and use of pre-existing or current PPL and what may be inhibitors, and then through the remaining three phases, through various sort of analytical and consultation mechanisms, to get a sense of what take-up rates are and what further policy changes could be made to enhance the effectiveness of the scheme.
2.70Mr Flavel indicated that the review of the scheme would entail data collection and engagement with parents and employers.
Administration of the scheme
2.71The committee received a range of evidence on the administration of the PPL scheme, with some inquiry participants arguing that PPL payments should be administered by Services Australia on behalf of small businesses, while the majority of submitters who commented on the administration of the scheme argued that employers’ role in administering the scheme should remain unchanged.
2.72The ACCI and the Motor Trades Association of Australia (MTAA) proposed that the bill should be amended to require Services Australia to pay Parental Leave Pay directly to employees of small businesses, except where a small business opts to administer the payments.
2.73The ACCI and MTAA pointed out that this was recommended by the Senate Education and Employment References Committee’s 2023 report on its inquiry into the potential impacts of the PPL scheme on small businesses and their employees.
2.74The ACCI remarked that administering the scheme imposes a significant burden on small businesses:
By imposing an obligation on small businesses to act as a financial intermediary between Services Australia and an employee, small businesses are forced to wade through lengthy payroll and administrative processes to ensure the employee receives the Commonwealth funds.
2.75This was echoed by the MTAA who noted that a 2023 survey of its members found that:
… 96.1 [per cent] of respondents preferred Services Australia to make the payment directly to staff — with 91.8 [per cent] reporting that it was an increased administrative burden; 90.8 [per cent] reporting that it added to payroll processing time; and 32.1 [per cent] finding that it created cashflow problems for their business.
2.76The ACCI and MTAA told the committee that administering the scheme does not help to maintain employer-employee relationships while employees are on leave. Instead, they claimed that administering PPL can create tension between the parties because employees might blame their employer for any delays in receiving PPL payments.
2.77On the other hand, numerous inquiry participants argued that the PPL scheme should continue to be administered by employers, including small businesses.
2.78A range of inquiry participants argued that the current administrative arrangements are important for preserving the integrity of the scheme by signalling to employers that PPL is a workplace entitlement rather than a welfare payment.
2.79Equality Rights Alliance emphasised the importance of maintaining the current administration arrangement, by specifying that shifting it:
…may undermine the goal of normalising PPL and encouraging employers to develop their own schemes. Administering PPL centrally through government could result in small and medium businesses viewing PPL as the business of government only.
2.80Further, the Australian Services Union (ASU) emphasised the employer role as a ‘critical part of the design of the scheme’, outlining the significant impact on workplace cultures and uptake of parental leave more broadly:
Employers paying paid parental leave helps normalise the taking of parental leave in workplaces and helps contribute to a culture where access to the entitlement will increase for both women and men, reduce stigma, and ultimately result in more gender-equal workplaces.
2.81Mr Ben Peoples, Acting Group Manager, Participation and Family Payments at the Department of Social Services, explained that the Productivity Commission report that informed the original design of the scheme recommended that employers should be responsible for making government-funded PPL payments to their employees in order to:
… create that workplace culture that supports working parents normalising taking time out to care for children and promoting values of returning back to employment following periods of leave.
2.82This was echoed by representatives from the ACTU and ASU at the public hearing, who pointed out that ‘the employer role was a key part of the design of the scheme by the Productivity Commission’ as it aimed to ‘normalis[e] parental leave in the workplace, like any other kind of leave that the worker will take in their working life – something that we’re all entitled to and can all access if we need to’.
2.83Ms Helen Dalley-Fisher of the ERA drew attention to the risk that changing employers' role in the scheme may send the wrong message to businesses:
If we start to tell small businesses, 'This isn't your job. You don't need to worry about women's care work,' then that sends a signal that I think is very unhelpful and could have ramifications across the economy.
2.84Moreover, the committee received evidence from several submitters that the administrative burden on employers is minimal. The department noted that it conducted an evaluation of the scheme between 2010 and 2014 which found that:
75 per cent of employers agreed or strongly agreed it was easy to register for the PPL scheme;
81 per cent agreed or strongly agreed that organising payments was easy;
81 per cent agreed or strongly agreed with the statement that the PPL scheme has been easy to implement in their organisation.
2.85The ACTU reiterated that these findings demonstrate ‘the vast majority of employers do not object to administering PPL payments’. Instead of changing employers’ role in administering the scheme, the ACTU suggested that:
… further efforts should be made to assist and support small business to be able to perform this important function, and to provide administrative fixes to systems that may be onerous to interact with …
2.86The department drew attention to the support offered by Services Australia to make it easier for employers to administer the scheme, including information on its website, a dedicated phone service, and an Employer Toolkit. At the public hearing, Mr Tony Piazza of Services Australia, noted that ‘a range of communication products’ are available on the Services Australia website and promoted through social media to help both employers and employees understand their obligations and entitlements under the scheme.
2.87The committee also heard that employers’ administration of the scheme has benefits for staff retention because it:
… provides an employer with multiple opportunities to maintain contact and connection with employees on parental leave. This ongoing connection is instrumental in the maintenance of the employment relationship … For employers who do not offer any paid leave of their own (which would include most small businesses), it’s the only formal mechanism by which an employer can maintain a consistent connection with the employee.
2.88The ACTU contended that employers’ administration of the scheme means that employees on parental leave remain ‘front of mind’ for employers and are more likely to be consulted about any changes to their role while they are on leave.
2.89Additionally, the United Workers Union argued that:
Employer-administered payments have the potential to encourage employers to top up these payments, whether it be to extend the timeframe or to replace any shortfall in their usual wage or salary. Any change that reduces the occasions that employers would administer the payments would hamper this.
Committee view
2.90The committee notes the overwhelming support from submitters and witnesses for the bill’s expansion to the Paid Parental Leave (PPL) scheme. Inquiry participants unanimously acknowledged that the proposed reforms would be a significant improvement to existing policy settings, and yield a range of benefits for women, families, employers and the broader economy.
2.91In particular, the committee is conscious that the bill would advance gender equality in Australia by improving women’s economic outcomes and encouraging more equal distribution of caring responsibilities between parents.
2.92The committee recognises that the bill’s proposed reforms would build on the reforms enacted by the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Act 2023 and fulfill the Government’s commitment to expand the scheme to 26 weeks, as announced in the 2022–23 October Budget.
2.93The committee also recognises that the provisions of the bill are informed by international evidence and thorough consultations, including advice from the Women’s Economic Equality Taskforce that the optimal settings for a 26-week scheme would entail a four-week reserved period and four-week concurrency limit.
2.94While there was strong support for the bill, the committee also heard that there are ways that the scheme could be further improved.
2.95The committee acknowledges the suggestions from inquiry participants to further increase the length of the scheme, including the reserved period; raise the rate of payment; add superannuation on PPL payments; expand eligibility to the scheme; include more gender neutral language in the bill; and include provisions for review of the scheme.
2.96In respect to these suggestions, the committee notes that the government-funded PPL scheme is designed as a minimum entitlement to complement employer-provided leave. Employers are encouraged to top up these payments, and a large proportion offer parental leave entitlements in addition to the government scheme.
2.97Further, the committee notes that Australia’s PPL scheme differs from the schemes in most other comparable OECD countries. Australia’s scheme is funded entirely through general taxation revenue without any employer/employee contributions, in contrast to the ‘contributory’ schemes in many other countries. The committee therefore considers that these differences in funding and structure make it difficult to directly compare Australia’s scheme with overseas examples.
2.98The committee also notes that the Government has stated it will conduct a ‘post-implementation review’ of the amended scheme to assess whether the scheme is effectively increasing gender equality and to inform potential further improvements.
2.99Some inquiry participants also suggested requiring Services Australia to administer payments on behalf of small businesses unless they opt in to administer payments. However, the committee notes that inquiry participants disagreed on this point, with many submitters and witnesses arguing that the scheme should continue to be administered by employers, including small businesses.
2.100The committee is of the view that employers play an important role in administering the scheme. Evidence to the committee demonstrated that any administrative burden on employers is outweighed by the substantial benefits to employers and employees alike. The committee notes that Services Australia provides a range of resources and support to help employers understand their obligations under the scheme.
2.101The committee is heartened by the Government’s commitment to expanding and investing in the PPL scheme to deliver better outcomes for gender equality, women’s economic participation, the health and wellbeing of families, and the Australian economy.
2.102The committee believes that the bill represents a significant advancement in PPL policy in this country, and encourages the Government to continue striving towards international best practice.
2.103The committee recommends that the Senate pass the bill.
Senator Marielle Smith
Chair