Employers and unions are demanding that the government reconsider its policy policy on paid parental leave.
As a major measure of this year’s federal budget, the Abbott government announced that Australian mums would no longer be able to access both their employers’ paid parental leave allowance as well as the taxpayer-funded allowance. The government’s paid parental leave scheme allows each parent $11,500 – the equivalent of 18 weeks leave at minimum wage – and was established to act as a complement to paid leave provided by employers.
But the government has now announced that parents will only be allowed to receive one or the other, referring to women who have used both in the past as “double dippers”, “scammers” and “rorters”. The government proposed that by taking away the taxpayer-funded leave allowance from 34,000 double-dipping mothers, it would save $968 million over four years.
But employers and unions have said unequivocally that not only will the policy not work as it is intended, it will also not generate the savings it is designed to generate. A group of employers and unions will hold talks in coming weeks to discuss how to get the government to back down on the new policy.
“There’s an early agreement that employers and the unions will get together and discuss how this can be changed,” the president of the Australian Council of Trade Unions, Ged Kearney, told Guardian Australia.
Kearney said if the current policy is passed, employers will likely compensate by offering other employee benefits in the place of the extra $11,500 of paid leave. If this does eventuate, Kearney says it will be a “lose-lose”.
“It just won’t work the way it has been announced. Employers will offer other things instead of paid parental leave, like a return-to-work bonus, so their employees continue to benefit. And unions will obviously bargain for those kind of things and for pay increases rather than additional paid parental leave.
“That makes it a lose-lose – families will get less paid parental leave in total and the government won’t get its savings either.”
The Australian Chamber of Commerce and Industry’s CEO Kate Carnall agreed, saying the likelihood of employers replacing paid leave with alternative benefits means the projected savings from the policy are unlikely.
“Of course employers will pay their benefits differently. They won’t walk away, they will just find a different way to pay the benefit, they will act in the best interest of their company and their staff, so their staff don’t just lose $11,500.”
Carnall said that in the private sector at least, the new policy is unlikely to result in substantial savings.
“This policy might achieve savings in the public sector, but in the private sector it won’t work as a savings measure,” she said.
AI Group’s chief executive reinforced this possibility again, telling the ABC that employers would find “other ways to retain and incentivise their workforce”.
The new policy will take effect in July of 2017 if it passes through the Senate. However, significant push back from political parties as well as employers and unions mean the measure may havetrouble getting passed at all.