I haven’t been shy about supporting Prime Minister Tony Abbott’s original paid parental leave scheme. It is, of course, a much better deal for Australian families.
The problem is the economy can’t afford it right now. According to December 2014’s MYEFO, our budget deficit is $40 billion, federal government receipts will reduce by $31.6 billion over the next four years and employment growth is weakening. It’s not an optimal time to lump business with a 1.5% levy.
Yet paid parental leave is critical to ensuring that mothers have time to recover from childbirth, establish breastfeeding and bond with their babies, without having to worry about mortgage stress or paying the bills. The current federal government scheme of 18 weeks at minimum wage just isn’t enough time. If a woman finishes working 4-6 weeks prior to their due date and their baby arrives 1-2 weeks late (as babies often do), that leaves not even three months’ of PPL support.
The current scheme’s lack of superannuation payments punishes women who have left the workforce to rear children and future-proof our economy. This is unconscionable and goes a long way towards explaining why, according to WGEA, women are 2.5 times more likely to retire into poverty than men.
As I’ve noted previously, getting more mothers back to work after childbirth will provide a massive and desperately needed boost to our nation’s productivity and tax receipts. As Treasury’s Intergenerational Report warns, our nation’s birth rate must sustain a rapidly ageing population, along with rapidly growing public health and aged care expenditure. We need incentives for women to have more children. Accessible, flexible and affordable childcare is a huge part of that equation, something the government keenly recognises and is in the process of reforming. But PPL is important too.
Effectively forcing many new mothers to return to work for financial reasons exactly at the time when they are struggling to nurse newborns and are majorly sleep deprived is not the answer. Indeed, it can produce new health and wellbeing issues which further burden the public health purse, creating a false economy.
I offer a compromise solution, one befitting the current state of our economy but which balances the health benefits of time at home with the revenue benefits of returning to work: increase the current federal government scheme to 30 weeks, at minimum wage, plus superannuation also paid at minimum wage, with the same eligibility criteria that currently exists.
This way, mothers are provided with a full six months of pay, as well as superannuation. Six months is time to recover from childbirth, establish breastfeeding and begin solids, and return to some semblance of normal sleep. Great Britain, Denmark, Canada, Ukraine, Venezuela and Iran all offer at least six months paid parental leave, with many countries reserving a portion of paid parental leave for fathers only, most famously Sweden.