Opportunities Lost: Tony Abbott's Parental Paid Leave Scheme

Tuesday 9 March 2010
2pm
Parliament House Canberra
Joint Press conference
Kevin Rudd – Prime Minister
Tony Abbott – Leader of the Opposition
Thank you everyone for coming here today. What you are about to witness is an historic event. In honour of International Women’s Day 2010 and in light of Mr Abbott’s announcement yesterday this government, with the support of the Opposition is going to introduce a Paid Parental Leave scheme of 6 months duration beginning on 1st July 2010.

Mr Abbott and I will co-chair a special committee made up of Ministers and Shadow Ministers as well as representatives from treasury and together we are going to pull out the best of both our proposed PPL schemes to design a scheme for implementation without delay.
While the details are to be worked out at this stage the scheme will be co-funded by Government in line with the commitments announced last year and topped up to full wage replacement by a levy on business in line with Mr Abbott’s announcement yesterday.
Abbott
I congratulate the Prime Minister for taking the opportunity to work with the opposition to implement this policy without delay. I am proud to commit the opposition to support the fast tracking of this bill through both houses of parliament and I am pleased that it is under my watch as Leader of the Opposition that Australia will finally have a Paid Parental Leave scheme to rival other OECD nations.
Today the Prime Minister and I call upon the business community to step up and acknowledge the benefit both to society and to business of Paid Parental Leave schemes. It is time for big business who currently provide private Parental Leave schemes to come out of the shadows and share their positive experiences of this important policy area with their colleagues.
Meantime, back in the real world opportunities were lost.
Abbott’s Paid Parental Leave Scheme
In the most opportunistic announcement in politics since the Mothers Day 2009 launch of the Government’s Paid Parental Leave (PPL) scheme Tony Abbott’s conservative opposition has used International Women’s Day to reveal their own PPL policy.
The announcement caught PPL campaigners by surprise not least because the scheme is remarkably similar to some of the most generous proposals considered and rejected by the productivity commission enquiry in 2008/9.
Analysis of the scheme is being undertaken but a cursory glance at the details reveals improvements on the Government scheme and the only negative unsurprisingly coming from the business community. Perhaps one of the biggest surprises was the overwhelmingly negative Government reaction.
Why now? Why indeed?
The question of motive is the key to all of this for me – the apparent reversal of Abbott’s attitude to PPL which in 2002 as a Government Minister he said would occur “over this Government’s dead body” is somewhat puzzling. Or not. Consider the press when Abbott ousted Turnbull as Opposition leader late last year and the generally accepted view that Abbott would struggle to win the female vote – add this to his recent comments about ironing and you’d be tempted to think this was an ill thought out gesture to win the women’s vote. You’d be wrong.
As early as December 2009 (http://news.smh.com.au/breaking-news-national/abbott-wants-paid-maternity-leave-advice-20091221-l9x5.html) Abbott was laying the ground work for an announcement on PPL that would trump the Government’s much vaunted scheme. In his recent biography “Battlelines” he talks about a PPL scheme paid for by business – so this is not new ground.
My best guess would be that this was a trick he kept up his sleeve until his political apparatchiks indicated it would provide a media focal point to take the spotlight off the Government. The polls indicate that Rudd’s Health Plan was scoring well with the electorate, even with opposition by Labor State Government so Abbott’s operatives scored a home run with the timing of the announcement on International Women’s Day.
The devil they say is in the detail. Details of Abbott’s plan are not yet available so it is difficult to provide accurate analysis or comparison to the Government scheme which came with an inch thick Productivity Commission Report (http://www.pc.gov.au/projects/inquiry/parentalsupport/report).
What’s good?
From a cursory glance at the details there’s not much to complain about. Unless you happen to run a successful business and have ideological issues with making a small contribution that will benefit not only your own business but society as well. But leaving business complaints aside for a moment consider what’s good about the scheme.
” Full wage replacement allows a family to budget with the amount of money they are used to coming in and does not disadvantage families where the primary breadwinner is the woman ” 6 months leave is consistent with World Health Organisation (WHO) recommendations that show that babies’ health is most benefited by receiving only breast milk for the first 6 months of life, and supplemented by solid food until 12 months and beyond. It is extremely difficult to maintain a solely breastfed baby when the mother returns to work before her baby reaches 6 months of age. ” A levy on big business means that those who can most afford to pay for this scheme, and who ultimately (next to parents) have the most to gain from the scheme pay for it. ” The levy is for all big business so there will be no residual discrimination against employing women of childbearing age – every large business will have to contribute the same amount, regardless of the makeup of their workforce.
What’s not so good?
If you were going to complain about the policy (and there are many who will) aside from business concerns which I address separately below you might complain about:
” The regressive nature of the scheme. Women on higher incomes benefit more than those on lower incomes. This will no doubt lead to familiar complaints about “middle class welfare” ” The lack of detail about how single income families where the sole income is that of the father will be treated. Will they continue to receive a “baby bonus” style payment? Will this be means tested? Will this payment be equivalent to existing levels or will it increase?
Business Opposition
In the past 24 hours there has been nothing but complaints from the business community. This in itself is unsurprising. But consider for a moment the benefit to business. The PC enquiry heard in public hearings Joy Buckland, an ANZ employee who trains new staff members. While Ms Buckland was appearing for the Finance Sector Union, and not ANZ she gave some telling statistics. Ms Buckland stated (http://www.pc.gov.au/__data/assets/pdf_file/0010/84862/sydney-20081127.pdf pg 6):
“It costs $60,000 to get a teller up to able to serve competently. A branch manager is $150,000”.
Consider that the average full time bank teller earns under $45K -part timers substantially less. It’s hardly surprising then that the big banks, the cornerstone of Australian capitalism, have embraced PPL schemes with most offering employees 12 weeks full wage replacement (including superannuation payments and the continued accrual of leave). Many allow their staff to take this leave for 24 weeks at half pay and to extend the period of payment by using their accrued annual and where applicable long service leave. Studies have shown that in the finance industry at least retention rates since the introduction of PPL have increased to over 85% (mams.rmit.edu.au/qzihqnxi6nlvz.pdf).
We all know that the big banks do nothing out of the kindness of their collective hearts so they demonstrate the business case to support this scheme. These employers with high proportion of female employees will likely embrace Abbott’s proposal as the payment of a levy may well mean a decrease overall outlay. I just wish they’d break ranks with the business community and speak out about the benefits of this scheme.
What is surprising?
Perhaps the thing that surprised me the most about Abbott’s announcement was the similarity of his scheme to that proposed by Unions NSW to the PC. The Unions NSW submission (http://www.pc.gov.au/__data/assets/pdf_file/0017/81521/sub181.pdf) calls for a levy on all business to fund the scheme (pg 18) but determines which businesses pay by current liability for payroll tax. Those liable contribute, those small enough not to be liable are exempt. The other difference is that the Union NSW scheme calls for a quarantining of 4 weeks leave for the non primary caregiver (usually the father). I have not heard anything about the Abbott scheme that addresses leave for non primary carers.
Also surprising is the virulent opposition to the scheme from the Government. PPL campaigners like myself have been mightily disappointed in the seemingly pig headedness of the Government response. I thought I was in a parallel universe after seeing apparently “left” ministers like Tanya Plibersek defending business while Abbott and Hockey highlight the advantages of a levy which does not discriminate between employers of women, and those of men.
I suppose what is most disappointing is the opportunity lost.
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Angela Budai has worked as a union official for 10 years and is currently on parental leave with her second son. She has been active in the campaign for the introduction of paid parental leave, both appearing and making written submissions to the Productivity Commission Enquiry on this subject in 2008.
She has been an elected member of the NSW Jewish Board of Deputies and is one of the founding members of Jews Against the Occupation. Angela is involved in the work of North Shore Temple Emanuel’s Social Justice Committee and is a graduate of Shnat Netzer. In her free time she is a civil marriage celebrant.
See also.