As expected Tony Abbott has walked away from his signature paid parental leave policy and will instead target an investment in childcare to lift the workforce participation rates of women. In the speech he delivered at the Press Club in Canberra earlier today he said this:
“I support better paid parental leave to maximise young people’s choice to have a career and a family too. I accept though that what’s desirable is not always doable, especially when times are tough and budgets are tight. As the productivity commission has said, and as mum and dads right around Australia have reminded me, the focus really does have to be on child-care if we want higher participation and a stronger economy. “
He continued.
“More affordable and more available child care means less pressure on the family budget. More parents in the workforce means that more people will make a bigger economic contribution as well as a social contribution to our country. Women after all are our country’s most underutilised source of skills and entrepreneurship and if female participation in this country was 6% higher at Canada’s level, our GDP would also be higher by 25 billion dollars a year. So a better child-care policy is a good economic policy as well as a fairer family policy. We’ll now consult widely on ways to improve the multiple payments to keep costs down and to put more money into parents’ pockets.”
Regular readers of Women’s Agenda are likely to be familiar with the fact that a 6% increase in female workforce participation would generate a $25 billion boost to our annual GDP. It is likely to be familiar because it is cited so often – and not just here. It was contained in a report by the Grattan Institute looking at “gamechangers” for the economy in 2012 and very clearly highlights the substantial economic potential in addressing childcare.
In logistical terms childcare remains a far bigger barrier to the workforce than paid parental leave according to the Diversity Council of Australia’s chief executive Lisa Annese.
“In a survey of our employer member organisations in 2014, nearly 95% of employers said access to and availability of affordable childcare presented difficulties for their employees. There is no doubt that this is a major disincentive to women participating more fully in the workforce,” Annese says.
“The existing government funded PPL scheme provides a very important safety net for new parents. However, as suggested by the Productivity Commission and in line with feedback from our members, we support the Government’s plan to direct funds allocated for the expanded PPL scheme towards improving accessibility and affordability of childcare as this is likely to have a greater positive impact on the workforce participation of women.”
Other issues, like access to flexible working arrangements and supportive workplace cultures are also critical to improving women’s workforce participation.
“The DCA encourages the Government to ensure that an emphasis on workplace flexibility is promoted and supported as a critical part of maintaining progress on workplace gender equity and supporting parents – especially those with younger children – to remain in paid work,” Annese said. Clearly, more needs to be done to support the cultural shift in Australian business necessary to mainstream flexibility to the benefit of Australian parents.”
In many respects it is a welcome shift in policy from the government but it’s hardly a substantial victory. In 2009 the Productivity Commission released a report indicating that a more generous paid parental leave scheme would not garner any sufficient increase in women’s workforce participation.
Just about every commentator – male and female – in Australia has cited this when referring to Abbott’s unpopular PPL because it explains in crystal clear terms why the policy is so unpopular. It will cost $5.5billion to achieve very little. It’s taken two elections for Abbott to reach that conclusion himself.
Today, promising to “consult widely” on childcare feels like a hollow victory too. IN 2009 the Productivity Commission was asked to inquire into the sector and in 2013 the Abbott government asked the Productivity Commission to undertake another review of the sector. At the time, there were calls for the review to be considered in tandem with paid parental leave but to no avail. The report was handed down last year.
It seems the time for consulting with childcare is done. It is time for action.