Paid Parental Leave: Policy and Politics in Australia - Dr Marian Baird (The University of Sydney)

Paid Parental Leave: Policy and Politics in Australia - Dr Marian Baird (The University of Sydney)

Date: 11 December 2015 Time: 11.00 am

The legacy of a strong and effective male breadwinner paradigm in Australian industrial relations has affected the way in which women’s interests are represented and responded to in the policy arena. This paper begins with the proposition that the Australian industrial relations system has an uncomfortably ambivalent relationship with women - especially women workers as mothers and carers - and that the ongoing tension between women and work and family is problematic for policy making. The ‘system’ has tended to cast women as either ‘ungendered’ workers (or equivalent to the male worker ideal type), or the ‘other’ type of worker (encumbered with care responsibilities outside of work). As a result, in policy terms there is uncertainty about where women’s work and family interests should be settled – that is, through workplace entitlements or through welfare measures. This quandary is further complicated by the legacy of a social assistance system rather than a social insurance system. The most recent and obvious contest illustrating the policy dilemma is that which revolves around paid parental leave.

Australia introduced the Paid Parental Leave Act in 2010, eight years later than New Zealand.[1] This belated introduction followed years of public debate and political controversy, culminating in a Productivity Commission Enquiry (2008-09) commissioned by the Rudd-Macklin Labor Government. The architecture of the current scheme closely follows the recommendations of the Productivity Commission’s report.  The scheme is funded from general revenue and provides 18 weeks’ pay to eligible parents at the national minimum weekly wage, currently set at $656.90.[2]  Eligibility is broad, covering full-time, part-time and casual employees and the self-employed with approximately one day of work per week for the ten months preceding the birth. Another important feature of the scheme is the employer role. Employers pay the government parental leave pay through their own payroll, as per regular pay receipts. This feature was included to encourage workforce and employer attachment.  In addition, employers may top-up the scheme through extra wages to replacement levels or extended leave. The stated objective of this approach was to increase the duration of paid parental leave mothers had access to, and to encourage employer participation with the scheme.

The independent evaluation of the government’s scheme demonstrates the success of the scheme to date. Working mothers have been able to stay off work for longer but are also returning to work in slightly higher propositions. Employers have not reported undue disruption as a result of their pay administrator role and some employers have increased their own paid parental leave entitlements.

Complicating the policy picture however, the previous Prime Minister, Tony Abbott, campaigned on a considerably more generous scheme. His party offered working women 26 weeks’ pay at full income replacement wages, up to $50,000 (equal to an annual salary of $100,000) plus superannuation.[3] Then in a surprise announcement on Mother’s Day this year, the Government announced they were cutting the current scheme by disallowing parents from receiving government parental leave pay and their employer entitlements. Estimates show that approximately 50 per cent of recipients will lose up to $11,500 as a result of the change. These parental leave policy tensions have occurred against a backdrop of another set of related policy debates: the first being the explicit goal to increase female workforce participation rates; and the second to restructure the child care system in Australia. The compatibility of these three policy areas must therefore be questioned.

The paper uses the paid parental leave policy debates to highlight the tensions between industrial relations polices and welfare policies as they impact on women. It begins with an overview of the labour market changes in the past 40 years, explaining the labour market context in which work and family issues have risen on the policy agenda and why moving policy formulation away from the male breadwinner paradigm is necessary. The paper then moves to policy developments, with a focus on the paid parental leave policy debates, including commentary on the positions of the three main industrial relations actors: government, employers and unions. The paper concludes with some options and speculation about future policy development in relation to women and work, in particular the option of making paid parental leave a National Employment Standard of the Fair Work Act rather than a welfare benefit in the social security portfolio.