Earlier this week, Independent senator Nick Xenophon and his team effectively stymied the government’s plan to begin reduced paid parental leave payments from 1 January 2017. While that represents a battle won, PPL advocates warn the war is far from over.
“In all honesty, despite coming out quickly and opposing the January start date and their pre-election commitment to Fair Agenda not to diminish the current scheme, I’d say NXT currently pose a greater risk to paid parental leave than Scott Morrison does,” The Parenthood’s executive director Jo Briskey told Women’s Agenda.
“Whilst they will not support the legislation as currently proposed they do intend to negotiate with the government to amend the legislation to achieve a “fairer” and “more equitable” scheme that may fundamentally alter its purpose.”
As it stands, the NXT’s pledge to Fair Agenda during the election campaign that they would ‘vote to protect the current paid parental leave system and oppose any diminution of the current system’ is keeping the government from undermining the existing scheme.
On Friday NXT will meet with Social Services minister Christian Porter to negotiate what constitutes a “more equitable” scheme.
Briskey says Senator Xenophon’s public comments about means-testing household income, as opposed to a woman’s individual income, are alarming.
“I am concerned. Means testing on household income would completely alter the concept of paid parental leave – no longer would it be a work related payment but a social welfare payment. It would be like a larger baby bonus to help someone stay home, rather than a recognition of the time women have to take time out of work to have a child.”
The Chair of the social policy committee of the National Foundation for Women, Marie Coleman echoes Briskey’s sentiments.
“We sincerely hope that NXT has carefully explored the discussion of all the options that were in the 2009 Productivity Commission report. We are very concerned at suggestions floating around of applying a family income test to eligibility for PPL because it will adversely affect many low to medium income households,” Coleman says.
“What we have seen in recent years is steady growth – which is highly desirable – of employer provided benefits but, of course, they are mostly associated with people working for larger companies or sectors. It’s desirable because it builds on the minimum platform the government provides. It’s worth remembering we are far from having a generous scheme.”
Indeed. Let’s start with some context. Forty-six years ago, in 1970, an average of 17 weeks of paid leave was available to mothers across OECD countries. By 1990 this had increased to 39 weeks, while by 2014 the OECD average stood at just over one year.
Here, in 2016, in Australia, mothers receive 18 weeks paid at the minimum wage. That means almost half a century on, Australian families receive just one week more than the OECD average back in 1970.
Chances are you might not know that because it’s a fact that is notably absent from the public discussion around paid parental leave.
It is one reason why, rather than progressing forward, we are regressing in this policy realm.
It’s one reason why PPL is variously couched as an unnecessary extravagance, a “first world problem” (according to the Treasurer Scott Morrison), a luxury and a ‘rort’.
It is very rarely explained as a legitimate public investment with rich – social and economic – rewards.
In 2009 Labor introduced Australia’s first paid parental leave scheme. It offered the primary carer of an infant up to 18 weeks’ of the minimum wage, that could be received in conjunction with any parental leave paid by the parent’s employer. It had twin objectives of enhancing child and maternal well-being and supporting parental work force participation.
It was designed to get as many new parents as possible close to 26 weeks of paid leave, the standard recommended by the World Health Organisation for optimum long term health benefits. It was a welcome safety net and split the cost between government and business.
Contrary to what you may have read, paid parental leave is not merely a concoction of bleeding hearts or greedy mums. It is paid by governments around the world because economically and socially it makes sense.
The Productivity Commission Report on Paid Parental Leave in 2009 noted that there is compelling evidence of health and welfare benefits for mothers and babies from a period of postnatal absence from work for the primary caregiver of around six months.
Governments save money on health because of the proven long-term benefits of mothers being able to spend time with their new babies. And they stand to make money because it enables more women to continue participating in the workforce, thus increasing the pool of taxpayers from whom they earn revenue.
In Australia the latter is a legitimate economic priority: the inter-generational report handed down by the then Treasurer Joe Hockey in 2014 made it clear that because of our ageing population we need as many women working as possible.
Far from being a waste of money, on many levels, paid parental leave is a legitimate investment in Australia’s future.
Five years ago, Tony Abbott famously proposed the introduction of a very generous paid parental leave policy. Under his policy the government would pay a baby’s primary carer 26 weeks’ of their salary, as opposed to 18 weeks of the minimum wage.
It proved divisive. Within his own party it was ridiculed as out of step with the government’s narrative of a budget crisis. Cynics believed it was merely a grab for women’s votes, an attempt to address Abbott’s “women problem”. Others argued the investment would be better spent on increasing access to childcare. Plenty of everyday Australians found the idea of paying women to have babies repugnant.
At the beginning of 2015, after surviving a leadership spill, Abbott relented and ditched his signature policy. In May of 2015, on Mother’s Day no less, the then-Treasurer Joe Hockey went one step further and proposed cuts that would mean 80,000 women miss out on some or all of their government entitlements.
It attracted universal condemnation from those with an understanding of the existing scheme. It was the “mother of all insults” according to Sydney University professor and one of Australia’s pre-eminent academics in this area, Marian Baird.
Within days of the announcement 34 leaders from corporate, academia and health and representatives from a further 21 organisations wrote a letter demanding a policy reversal.
In 2015 the Turnbull government modified the unpopular cuts but the consequences remain the same: they will reduce the entitlements of new parents. Analysis conducted by the Women and Work Research Group at the University of Sydney, commissioned by Fair Agenda, showed almost 80,000 families will be adversely affected by the proposed changes.
Nurses, ambulance service workers, teachers and retail workers are among those who will be hit the hardest, with some families losing up to $12,000. In real terms this translates to between 4 and 6 weeks of their family’s average living costs: meaning they will only have enough income to cover 7 – 13 weeks of living costs while caring for their new baby.
That’s less than half the 26 weeks experts recommend for both a mother and newborn’s health and welfare outcomes.
Six months paid parental leave remains a pipe dream for most Australian families. Having the government scheme operate in conjunction with what employers are already paying, helped more families get closer to that 26 week mark of paid leave. Cutting that entitlement, so families only get paid leave from either their employer or the government is counter-intuitive as it undermines the purpose of the scheme.
“It was a deliberate choice designed to help lengthen the period women could take off work,” Professor Baird explained. “Taking this government leave time away from women – when our scheme is still not providing a long enough period of leave as it is – is a massive step backwards.”
For a Prime Minister as future-focused as Malcolm Turnbull it is difficult to reconcile his government’s outdated stance on this issue. At this point the NXT remain Australia’s best chance at fighting the wind-back.
“Any amendment that results in women who currently have access to the full government leave, no longer having that, would result in a broken election promise by Xenophon’s team,” Jo Briskey says.
