Paid maternity leave: Supporting Parents; Valuing Children
Speech delivered by Pru Goward, Federal Sex Discrimination Commissioner at Frozen Futures, co-hosted by the Australian Association for Infant Mental Health and National Investment for Early Years, University of Sydney, 14 November 2002
To the organising committee of this conference and David Lonie, Chairperson, thank you for inviting me here today.
I am delighted to be have been given the opportunity to address the Parliamentary Library Vital Issues Seminar.
In a few weeks time, I will be releasing my final report outlining options for the introduction of a national scheme of paid maternity leave.
Since the launch of my interim paper on this issue in April this year, there has been an overwhelming amount of public and political debate about the need or otherwise to introduce such a scheme in Australia.
We have to wonder, is the volume of debate that has been generated around this issue really warranted?
This is not a debate about hard hitting ethical issues. We are not contemplating stem cell technology, the finer points of human cloning or the right to life.
This is a debate about providing women in Australia with a basic payment. A payment that has been available to women in most other countries for decades now.
Introducing a national scheme of paid maternity leave in Australia in the year 2002 is hardly revolutionary thinking!
It is not going to place Australia at the global forefront of innovative social policy measures.
To the contrary - it will simply counteract our lag!
It can hardly be the amount of money required to run such a scheme that has generated this arduous debate.
Public money is continuously spent without this level of debate - just this year, the federal Government announced a no questions asked sugar package, comprising $120 million dollars Commonwealth funding. [1]
The amount required to fund a national scheme of paid maternity leave - considering the objectives and nature of such a scheme - is hardly a figure to raise eyebrows.
The Government, the ACTU and the National Pay Equity Coalition have all suggested that a national scheme of paid maternity leave can be provided for under 500 million.
The most accurate estimate will be published in my report released on December 11.
We also have to ask why the debate around the introduction of this much needed and relatively simple scheme has been marred by such controversy.
We continue to see surveys highlighting the business community's scepticism about paid maternity leave.
Just this week a Dun and Bradstreet survey reported that executives in small and medium sized business firms were not convinced that maternity leave would help retain staff.
This is despite hard evidence that Australian companies record higher retention rates since introducing paid maternity leave.
The Australian Chamber of Commerce and Industry continues to criticise compulsory maternity leave, saying that businesses cannot afford to fund it.
This is despite my continual statements that I have not and will not recommend that employers alone pay for paid maternity leave.
A national scheme of paid maternity leave forcing employers to make payments to employees was included in the options paper because it is just this - an option.
As stated in the options paper it is not however a desirable option.
From my foreword on, that is made clear - but let me clarify.
First, nowhere in the developed world is paid maternity leave funded through a scheme mandating employers to directly pay employees taking maternity leave.
It is a third world scheme.
It exists in Bahrain and Burundi - not countries with similar economic, cultural and social structures as Australia; not countries Australia would be looking to as 'best practice' examples.
Second, women would suffer under an employer pays scheme.
Employers, especially small business, keep telling us they would stop employing women of child bearing age to avoid paying for maternity leave.
That's a view shared by the International Labour Organization - not usually supportive of business.
Any scheme which would result in women being further discriminated against in the workforce is obviously unacceptable and must be avoided.
And why the drama? Why has this nature of this debate become so tormented?
We have one politician declaring that paid maternity leave will be introduced over his dead body.
And another, espousing that it is nothing more than middle class welfare.
Let's take a moment to address this assertion, which could not be further from the truth.
Under our current system of paid maternity leave - ad hoc and employer pays - women with high education and skill levels in full time work have greater access to paid maternity leave.
Women in more marginal employment - with lower skills, and who are in part time or casual work are more likely to miss out. [2]
It is women on low incomes who are therefore least likely to have access to paid maternity leave, and who, along with their babies, would benefit most from the introduction of a national scheme of paid maternity leave.
This was a sentiment echoed in comments made by a union representative at one of the paid maternity leave consultations held earlier this year.
Talking about production line factory workers, the representative commented that these low income earning women almost always return to work well before the end of the 12 month period of unpaid leave.
In fact, many are back at full time work, six weeks after the birth of their child. The report will deal with return to work rates comprehensively but, remember, it is the battlers who have no access to paid maternity leave. They do not work on production lines as a career choice. They are not racing back to positions they love. They are there for financial reasons. They cannot afford to be off work, unpaid. They cannot afford to lose their job.
This is perhaps why discussion around the introduction of a national scheme of paid maternity leave has become more than just a public debate about a social policy measure. This debate really has become representative of a huge journey which Australia is on.
This is because paid maternity leave has been brought onto the national agenda at a time we can no longer put off facing up to some of the profound social challenges emerging in Australia.
Foremost, the challenge of who will have our children.
Every year, slightly fewer women of child-bearing age in Australia, as elsewhere, decide to have children.
We are literally becoming a society without a future generation.
Let me show you what I mean.
Overhead 1 [3]: The current age structure (or spread of ages in Australia). Based on the total fertility rate in 2000, 1.75, and migration of 80,000 persons per annum. Remember, the replacement rate, which keeps the population constant, is 2.1 children per woman.
As you can see we have a nice beehive shaped structure, with a slight bulging in the 34-44 age groups. But the ratio of dependents to supporters remains healthy.
Now let's look at age structure projections for Australia in 2050.
Overhead 2 [3]: A standard projection for the year 2050. Assumes that the total fertility rate falls to 1.65 in 2005 however remains stable at this rate. This isn't difficult. It's already fallen from 1.75 to 1.7 in a single year, 2000 to 2001, the collapse is actually speeding up, not slowing down.
Assumes also that the number of migrants remains constant.
What do we get?
Perhaps a few more queen bees and a few less worker bees as we see the bulge rise slightly, to the 44-64 years age groups, however our beehive structure still exists.
Overhead 3: [3] This projection assumes our fertility rate continues to decline.
It falls to 1.65 in 2005 and then to 1.3 in 2015 where it remains constant. 1.3 is not hard to reach. Germany, Japan and Italy got there without any trouble, Portugal got to 1.1 before they did anything about it.
Again, immigration remains constant.
The result?
A grim projection.
The bulge moves to cover the 50-70 year old age groups.
Our beehive age-structure is now replaced by a coffin. There are more dependents than there are worker-bees.
We are certainly well on our way.
Every year women get older when they have their first child, every year maternity becomes medically more difficult.
More women are having no children, or fewer.
34 per cent of families with children are now one child families- twenty years ago the figure was 21 per cent.
Today, both women and men expect to have small families - if they expect to have a family at all!
A recently conducted survey found that 27 per cent of men and 21 per cent of women aged 18-24 expect never to have children. [4]
Why is the Sex Discrimination Commissioner interested in fertility? Because it is a symptom of a deeper malaise. It's what happens when you don't women in all the combination of choices they make, but only some.
It's what happens when you tell a young woman you'll make sure she gets job as a mining engineer or a police sergeant, and we'll pay her extra dollars to stay at home with children for 5 years, but we won't help her do both, except by subsidising her child care.
Of course a variety of economic, biological and social changes are contributing to this fertility trend.
First - education and training periods are longer, meaning earning capacity begins later in life for most young men and women. You can't begin a family if you can't support yourself first.
Next, having spent those years and that money on getting an education or other qualifications, young women are understandably reluctant to trade this all in for ten years at home, knowing how hard it will be to pick up a job or career again at the end of it. To say nothing of their desire for independence, for options, for security in their retirement years.
Then, the nature of work has changed. Few young people enter the workforce with permanent full time jobs the Bank is going to lend money for a home on. Contract and project work is very common, with the consequence that not only do home mortgage lenders feel understandably uncertain about the young couple's prospects, but so does the young couple! They too, are unwilling to commit to family responsibilities when the job is over in a few months time!
These changes not only have implications for fertility, but for the nature of families. It's the changing nature of families which is forcing our present rethink of family policy, most families today need two incomes to survive. Sure, one parent might only need to work part time, but work they both do.
It's not about saving up for the overseas family holiday, if indeed it ever was.
Today the majority of women will have to work part or full time for at least part of their parenting years.
Why? Because the real cost of living is high. In particular, housing affordability, Australia-wide, has declined by 29% within the space of a generation. You need two incomes to carry the mortgage on the slum of your dreams, forget the 4 bedroom mansion with the spa bath and optional pool room!
Into this heady pressure pack, you can now add the fact that women still bear children and somehow have to cope with all this while juggling a major responsibility that hasn't changed for thousands of years and isn't likely to!
Young women find out, very quickly, that there is considerable workplace disadvantage to be had as a result of their motherhood.
Yes, women do want it both ways. Why shouldn't they? Men work and have children.
Put another way, what's the point of having cake if you can't eat it too!
And so, the modern Australian family is a two income family.
Risk management is emerging as a major reason why we now have two income families, even when the children are less than a year old. The risk of divorce, first of all, and, increasingly significant, the risk of temporary unemployment for the primary income earner.
Currently Australia's divorce rate is just under 50% over a thirty year period, meaning that for 50% of families, the second income earner at some stage MUST become the primary income earner, at least for herself if not herself and her children.
In defacto relationships, the break-up rate, even with children, is even higher. Yes, we can work harder at keeping marriages together, but in the mean time, we need to address the consequences when divorce does occur.
Despite Australia's outstanding child support system, it remains the case that divorce means poverty for women who have not worked in the period before separation. Thus the high percentage of single women on supporting parents' pensions.
This is compounded in the years that follow and results in their greater dependence on welfare for the last part of their lives.
Risk management of divorce is a strong argument for ensuring that women must be able to choose to both work and have children.
Risk management of job uncertainty is another compelling reason for the two income family. Where once skilled workers at least could be confident of continuous employment, downsizing, restructuring, mergers and the need to be internationally competitive means that for many, periods of unemployment are to be expected. Families need to spread that risk by having two in work, not just one. Low wage families have always needed to do this- now the middle class is in the same boat.
So we have no choice but to change - to augment our support for families, because families have no choice.
It's not about selfishness or personal greed on the part of young men and women.
Our task as a community is to make the choice to have a family, their way, viable for them.
Paid maternity leave alone will not make it possible for women to do both.
It will however respond to some of the financial concerns discouraging women from having babies.
Why?
Because paid maternity leave means that there will not be a total loss of income by one, or sometimes the only income earner in a family at the time of the birth of a child.
Because every western country in the world that's trying to facilitate the choice of women to have children has done this by providing a package of work and family measures. In other words they have recognised it is about enabling women to do both. There is no package that does not include Paid maternity leave. Paid maternity leave is a must-have.
Providing 14 weeks of income replacement may, for a start, mean that a couple is able to have that second child or bring forward their decision to have a child by even one year.
What's one year you may ask?
Considering that physiologically fertility begins declining at 27 and the average age of mothers in Australia is 29.8 - this one year maybe the difference between having one child, a second child - or none at all.
Let's briefly consider some of the other possible objectives of a national scheme of paid maternity leave:
First, the health and welfare objectives.
Paid maternity leave will allow women the time needed directly after the birth of a child to recover physically from childbirth and establish a feeding routine without being forced to return to work due to financial necessity.
Many we consulted related accounts of returning to work as early as two weeks after the birth of a child, driven by the need to earn.
Yes, its true that some women breeze through these 14 weeks without a hair out of place, but most of us more ordinary women do find it takes a physical toll. And babies, you'd have to admit, are just not interested in quality time - they want all our time!
Second labour force participation and economic growth.
Employers need to hire best people for the job - and they need to keep them there.
This is only going to increase as the market requires increasing numbers of skilled people, and there are fewer from whom to choose.
At the moment, without paid maternity leave being provided across the board, women often find themselves in a different line of work following the birth of a child. They may go from leading their field in IT to a part time job in a less skilled area - but one that offers more 'family friendly' hours.
The hospitality and retail industries for example, characterised by casual hours and shift work are dominated by students and mothers.
This labour force shift - of our highly skilled experts into low skilled casual work - means that Australia loses part of its most competitive workforce. Something we cannot afford to do in the increasingly competitive global market.
There is conclusive evidence from a number of OECD countries that providing a universal paid maternity leave scheme enhances female labour force attachment - in most countries, mothers are back at work by the time the child is aged three.
It is certainly the British experience, where paid maternity leave, even government-funded, encourages many women to return to work, at least part time.
Third workplace disadvantage.
Women lose their immediate income, often jeopardise career prospects and reduce their lifetime earnings when they leave the workforce to have children.
While it cannot make up for the loss of income over a lifetime, paid maternity leave provides some form of income replacement.
With no universal scheme of paid maternity leave in place, the majority of women lose their entire income for at least the first few months following the birth of a child.
What is more, since its predominately public servants and well paid women who receive paid maternity leave from employers, it's low income families who are most likely to be missing out.
Paid maternity leave will mean that women can afford to be out of the workforce, while recovering from childbirth, establishing a breastfeeding routine and bonding with a child without the stress that they cannot financially afford to be doing this.
Paid maternity leave is also iconic. It is social and industrial recognition that women both work and have children. It means we are working with, not against this reality.
It recognises the non-work related responsibilities of half of the people in the workforce.
Recognising paid maternity leave as an industrial entitlement does not mean that employers have to pay but it means employees are entitled to receive it.
These are some of the objectives that a paid maternity leave scheme may meet.
Are they important? Well the public thinks so, that's why they're writing in droves. The level of public debate surround the issue makes me think that most people agree that we have a problem - and that paid maternity leave is part of the solution.
The question remains, how do we do it?
The interim paper sets out a number of other options for funding paid maternity leave. I have not included full wage replacement as one of my options, although the Government has recently very kindly costed such an option.
Don't worry about all of these options.
Realistically there are a few - really there are only two - with add ons still to be determined.
The model we have examined most closely has been estimated by the government to cost less than $450 million a year, is paid at the rate of the minimum wage for 14 weeks and removes the need for other benefits such as the Maternity Allowance.
The issues remaining to be considered therefore are:
- Should the payment be for all women or only women in work?
- Should there be an employer top up or not?
Remember there is always a windfall for those employers who already pay maternity leave.
The introduction of a national scheme of paid maternity leave can be used by them to extend the schemes they already have in place - they can be made available to more women; they can offer other family friendly work practices. These employers need to think laterally should a government funded national scheme of paid maternity leave be introduced.
The questions that remain to be addressed are contentious.
We all need to think strategically in approaching them, and keep in mind that there is always that window open for industrial action if government does not step up to the plate.
As we discuss these issues, let's bear in mind an important fact.
We already financially support families.
Last financial year, the Federal government committed over 10 billion dollars to direct family assistance, including the maternity allowance, family tax benefits A and B and a maternity immunisation allowance.
Add the amount spent on child care and parenting payments and this amount increases to 16 billion.
Another half a billion dollars will be spent on the baby bonus tax when it is fully implemented.
We can look back much further than last budget to see that we have always supported families.
When we began forming our families we received Commonwealth Bank subsidised home loan rates; We got tax deductible private school fees; We had access to non-means tested child endowment.
Never let it be said we never got support.
Now the family has changed, the sort of support we give them has got to change.
Paid maternity leave acknowledges this.
It rises to the challenge of the day - the challenge of supporting today's Australian families in a sensible and effective way.
1.
The total amount given was $150 million - $30 million from the Queensland
Government and $120 million from the Commonwealth.
2. ABS
6361.0 Survey of Employment Arrangements and Superannuation April
- June 2000 unpublished data.
3. Source Data: Australian Centre for Population Research.
4. Household, Income and Labour Dynamics in Australia
Survey (HILDA Survey) data 2002.
