One of the strongest messages coming from the Jobs and Skills Summit was the economic and social benefits of expanding paid parental leave to a minimum of 26 weeks. Economists, women’s organisations, unions, and the Business Council all agreed that fairer, gender-neutral, flexible paid parental leave will unlock women's workforce participation and help to close the gender pay gap. It will encourage more equitable sharing of care between parents, and it will give children the best start to life.
We welcome the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 (the Bill) as an important advance towards those goals.
However, the submissions to this inquiry reiterate what was said at the Jobs and Skills Summit, and what has been said loudly and clearly by so many for so long. More needs to be done.
In the decade since paid parental leave was first introduced in Australia in 2011, the issue has at times been treated as a political football, rather than being acknowledged as an essential component of Australia’s social and economic infrastructure.
Australia has one of the weakest parental leave schemes in the developed world, especially for fathers. Many comparable countries now provide much longer periods of paid parental leave, averaging 52 weeks, paid at higher rates and with incentives for shared care. Over a decade of inaction has meant Australia is now playing catch up.
The case for change could not be clearer. Australian parents should have access to a minimum of 26 weeks of paid leave to allow recovery from birth, maximising options to establish breastfeeding, and allowing parents to spend time with their infants. Extended leave provides the best chance of a good start for children in the early years, and healthy patterns of shared care.
Evidence to this inquiry from the Parenthood, the ACTU, the Australian Human Rights Commission, Dr Leonora Risse, and Mindaroo Foundation, among many others, support the view that this Bill does not do enough. Parents who have been calling for fairer leave entitlements are being asked to wait until 2026 to get the 26 weeks accepted as an international minimum standard.
There is no reason to delay the implementation of good policy. This Bill presents a critical opportunity to move towards best practice and should start with an immediate increase to 26 weeks paid leave. Further the government should create a pathway to 52 weeks of paid leave by 2030 or soon after.
Australia has also fallen behind other countries in the rate of pay and how leave is allocated between parents. Australia's paid parental leave rate is one of the lowest in the OECD. For some people, full-time minimum wage is an increase on their previous earnings. But for many parents, the minimum wage is well below their normal wage. This forces difficult decisions about how long they can afford to take leave for. Without a change in the payment rates or longer ‘use it or lose it’ allocations, parental leave will continue to be taken predominantly by the partner earning the lower wage. More often than not, this is the woman.
As many witnesses pointed out, continuing to pay parental leave at minimum wage is not an effective incentive to induce more fathers to take leave. The Greens support full wage replacement, including incentivising employers to top up the government scheme. We note alternative models proposed by witnesses, including lifting the rate to the average wage or a liveable wage, and call on the government to review these options through the Women’s Economic Equality Taskforce.
We also know that periods of parental leave, and part time work on return from leave, have been a contributor to the superannuation pay gap. It has been a long-standing policy of the Greens, unions and women’s economic security advocates to pay superannuation on parental leave. This was also formerly the policy of the Labor party.
While the Department has argued that paying superannuation on parental leave would have only a marginal impact on retirement income, it is an important equity measure and should be implemented as part of this Bill. This was supported by the majority of witnesses to this inquiry, including NFAW, Parents at Work and the Australian Institute of Family Studies.
Co-parents, specifically fathers, need encouragement to take up more responsibility for the direct care of babies and children. The experience in other countries puts beyond doubt that more equitable parental leave, coupled with free child care, improves women's workforce participation and helps shape the long-term sharing of care work. Use it or lose it provisions in Scandinavian countries saw a huge jump in the number of fathers taking leave, and that fairer sharing of care has been sustained for more than a decade.
The Greens support the introduction of a ‘use it or lose it’ component to paid parental leave under this Bill. However, the Greens agree with the evidence of Chief Executive Women, NFAW, Dr Leonara Risse and the ACTU that the two weeks ‘use it or lose it’ allocation in the Bill is inadequate to provoke the necessary cultural shift towards shared care. The Greens strongly support a significant expansion of the use it or lose it allocation and look forward to the recommendations of the Women’s Economic Equality Taskforce on this issue being implemented.
The Greens welcome the measures in the Bill to increase the flexibility in how and when PPL can be taken. This flexibility will be important to allow parents to juggle work and caring responsibilities in the two years following birth or adoption. In order to be effective, the flexibility in the PPL scheme must be complemented by further workplace reforms to support flexible work arrangements, and more affordable and accessible early childhood education and care.
The Greens support proposals to expand eligibility for PPL by relaxing the work test and residency requirements so that people are not unfairly excluded from leave. It is important that all families are supported to take leave in the early years of parenthood, regardless of their circumstances.
Finally, we acknowledge the legitimate concerns raised by the NT Working Women’s Centre and Women’s Legal Services Australia that parents experiencing family and domestic violence, including controlling patterns of behaviour, could be coerced to consent to sharing arrangements and PPL access with abusive partners. We support measures to ensure that Services Australia staff are trauma-informed and able to identify and respond to coercive behaviour.
The Bill is a positive step towards a fairer paid parental leave system. But there are equitable measures which could be taken by this government to align Australia’s paid parental leave scheme with world’s best practice now, rather than waiting for later. The families of Australia deserve it.
Recommendation
That the Bill be amended to provide for:
Paid parental leave entitlements of 26 weeks from 1 July 2023
Superannuation to be paid on parental leave
Recommendation
That the Women’s Economic Equality Taskforce be asked to investigate and make recommendations regarding the rate of pay of paid parental leave.
Senator Janet RiceSenator Larissa Waters
Deputy Chair
Senator Barbara Pocock