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A Time to Value - Proposal for a National Paid Maternity Leave Scheme

FAQ

What is the HREOC model for paid maternity leave?

Which women will benefit?

What is the business case for paid maternity leave?

What is the cost?

How does it fit in with other existing family support mechanisms?

These are crucial questions to an understanding of the Paper. Here is where you will find detailed information on the following aspects of the Paper:

Isn't government funded paid maternity leave going to be extremely expensive?

The model proposed by HREOC has been costed by respected independent analysts NATSEM at $213m in 2003-04. In 2005-06, paid maternity leave would cost the Government $217m, which is $293m less than the Baby Bonus which relates only to one child per family and in which the full benefit cannot be reaped until five years after the birth of the child.

The costs for paid maternity leave in Australia are not huge compared with other social policy measures.

The issue has generated an enormous amount of debate since the release of the Options paper in April this year. The expenditure of public money in other areas (eg $120 m Commonwealth sugar industry rescue package, plus State budget support) generated nowhere near this much attention.

Recent research by AMP-NATSEM has reminded us of the high financial cost of raising children in Australia to teenage years and the physical and emotional burdens this can place on families: The Cost of Children report released in October 2002, found that the total cost in today's dollars of raising two children from birth to age 20 is $448,000, or $322 a week.

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. It is a debate about the future direction of the nation.

Why has HREOC supported a government funded rather than an employer funded scheme for paid maternity leave?

The proposal is for a basic payment that has been available to women in most other countries for decades.

It is appropriate for the Government to fund a national scheme that would enable a basic payment for women, given:

A national scheme of paid maternity leave in Australia in 2002 is not a radical social policy initiative. Australia is one of only two OECD countries without paid maternity leave.

Many employers and employer associations have asserted that a directly employer funded scheme would have an adverse effect on women's employment, with some employers freely admitting they would discriminate against women if such a scheme were introduced.

Regardless of those claims, many employers already provide paid maternity leave. The Equal Opportunity in the Workplace Agency can supply further information - www.eowa.gov.au. However, HREOC has not proposed a compulsory employer contribution, but instead encourages employers to top up a government funded system through enterprise bargaining.

See Chapter 13 on funding and Section 19.4 on employer provided top ups.

Who will be eligible for paid maternity leave?

HREOC believes that all women in paid work should be covered, subject to reasonable eligibility criteria, including a requirement to have been in paid work for 40 of the last 52 weeks.

Permanent full time and part time employees who have worked for their employer for 12 continuous months are already entitled to 52 weeks unpaid leave. A recent Australian Industrial Relations Commission decision has granted access to unpaid leave for casual employees under a federal award, subject to certain conditions and to the provision being included in individual awards. Some States now have similar provisions.

Commonwealth public servants are already entitled to paid maternity leave (12 weeks) as are many State public servants, whose entitlement varies between 2 weeks on full pay in South Australia to 14 weeks on full pay in the Northern Territory. (Note that Western Australia currently does not have a standard provision for paid maternity leave, but has committed to introducing 6 weeks paid maternity leave on full pay for State public servants within the next two years).

Eligibility criteria for HREOC's proposal are outlined in Chapter 15.

The evidence so far shows that current paid maternity leave provisions have been enjoyed mostly by professional women. Isn't the idea of government-funded paid maternity leave just a form of middle class welfare?

The idea of paid maternity leave is not middle class welfare. The people who will benefit most from a national scheme are the families of women in low paid, low skilled jobs. They are the least likely to have it now and generally have less bargaining power that would enable them to negotiate it with their employers.

Under our current system of paid maternity leave - funded by employers on an ad hoc basis - professional women with high education and skill levels in full time work have greater access to paid maternity leave.

The ABS Survey on Employment Arrangements and Superannuation, compiled in 2000, confirms that it is women with lower skills, in more marginal employment, in part time or casual work who are more likely to miss out.

Union representatives also commented that low income earning women, with no access to paid maternity leave, often return to work well before the end of the 12 month period of unpaid leave. In fact, for financial reasons many are back in paid work six weeks after the birth of their child.

A number of women's groups have called for paid maternity leave to be paid at a rate up to Average Weekly Earnings. Why did HREOC decide to cap the payment at the Federal Minimum Wage?

HREOC considers that the ideal payment rate for paid maternity leave is 100% of a woman's previous earnings.

However, HREOC considers that the Government should provide a minimum entitlement. Payment up to the Federal Minimum Wage provides a reasonable standard of living, is set annually by an independent authority and has a reasonable level of community support.

Payment at the rate of the Federal Minimum Wage would mean that between 35 per cent and 48 per cent of women would receive full wage replacement. It would also provide the greatest proportional benefit to lower income women.

There was a significant degree of support amongst submissions to HREOC and in consultations for government funding of paid maternity leave up to the rate of the Federal Minimum Wage.

HREOC considers that payment up to the Federal Minimum Wage meets the level of payment established under Article 6 of the International Labour Organisation Maternity Protection Convention.

See Chapter 17.

Doesn't government funded paid maternity leave for women in paid work discriminate against women who choose to stay at home full time with their children?

There is a gap in current government payments and workplace entitlements that mean that many women in paid work do not get proper support at the birth of their child. (See Chapter 3).

Women in paid work face a loss of income and workplace career disadvantage and often discrimination as well as a direct result of the birth - factors not acknowledged by current government payments.

The Maternity Allowance, Family Tax Benefit Parts A and B and the Baby Bonus do not meet the objectives of paid maternity leave in their own right.

HREOC believes that if government funded paid maternity leave were introduced, women who received paid maternity leave should not be eligible for the Maternity Allowance, the first 14 weeks of Family Tax Benefit Parts A and B and the first 12 months of the Baby Bonus. This would help to equalise the level of government payments to women in paid work and those not in paid work.

Why not support paid parental leave for either partner? Isn't that fairer in allowing family choice in who will be the primary carer during paid maternity leave?

There are four key considerations:

In recognition of these indisputable facts, HREOC received many submissions supporting the payment of maternity leave specifically to women. The majority of employer groups supporting a paid leave scheme agreed, as did many women's groups, unions, academics and health professionals who have been engaged in this debate.

Many people commented that any new scheme should challenge existing gender roles in the home and workplace, allow families more choice in determining the primary caregiver, and give fathers an opportunity to be more closely involved in nurturing their children.

The HREOC proposal for a paid maternity leave scheme deals with the existing reality first. A national system for women should precede a paid parental leave scheme.

International experience shows there is an extremely low take up rate by men where paid parental leave is available to either parent, particularly where this leave is paid at a rate below full income replacement. In addition, the majority of countries provide leave specifically for women in the weeks around childbirth, with the option for men to take parental leave only commencing after this recovery period. (See Section 14.2.2 of the Paper).

Paid maternity leave would also address the disadvantage and discrimination that women experience in the workforce as a result of being the childbearers, a reality which was recognised in submissions from employers and unions.

However, the paper makes special mention of circumstances where the leave should be paid to the woman's partner, including when the mother has died or the mother is not medically able to care for the child or when the child has been adopted. It also calls for the Government to consider introducing two weeks supporting parents leave, in addition to, and to be taken concurrently with, paid maternity leave.

See Sections 14.2 and 14.3.

Is paid maternity leave going to really have any effect on Australia's declining fertility rate?

Every year, slightly fewer women of childbearing age in Australia decide to have children. The national fertility rate has declined to below replacement rate.

The community and policy makers need to look carefully at the range of issues facing young people, and young women in particular, to understand just what might be influencing their decisions about having children. Our research and the submissions during the consultation process indicate quite complex factors at work. These include fears about employment security, the need for women to maintain their skills in a world moving quickly towards contract work, the cost of housing and the ability to secure mortgage finance, the pressure on relationships and the cost of raising children.

There will always be some women and men for whom parenthood is not a priority or a possibility. However the rapid increase in the size of this group reflects the fact that women who are in paid work and choose to have children know they must manage dual careers - as mothers and workers.

The community's task is to make this choice viable for them should they wish to make it. Paid maternity leave alone will not make it possible for women to manage dual roles. It will however respond to some of the financial concerns discouraging women from having babies, 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.

Every OECD 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.

See Section 9.5.

An OECD report on work and family life (released in November 2002) argued that it was important to get the right family policies in place over the life of a child, not just having the early stages covered by paid maternity or parental leave. Isn't this a critical and valid point?

HREOC believes government funded paid maternity leave is a crucial linchpin in a suite of measures required to deal with the complex issues of balancing work and family life in the 21st century.

Australia already financially supports families. Last financial year, the federal Government committed over 10 billion dollars to direct family assistance, including the Maternity Allowance, Family Tax Benefit Parts A and B and the Maternity Immunisation Allowance. Add the amount spent on Child Care Benefit and Parenting Payments and this amount increases to $16 billion. The Baby Bonus, when full implemented, will add another $500 million.

So, should a government funded national scheme of paid maternity leave be introduced, there will still be work to do in ensuring a proper work-family balance. Employers - who are encouraged to top up maternity leave payments - also will have a major role to play in creating family friendly work practices. See Chapter 11.

What are the benefits to individual businesses, specific industries and the economy?

Benefits to individual businesses: a reduction in staff turnover costs, including direct recruitment costs and the costs of retraining staff, and increased staff loyalty. (See Section 10.2)

Benefits to specific industries: facilitating the retention of highly trained staff, particularly in industries employing a majority of women, such as education and nursing. (See Section 10.3)

Benefits to the broader economy : attraction and maintenance of a highly skilled, competitive workforce, and maximising community investment in education and training. (See Section 10.4)

Some employer groups have claimed that a government funded scheme of paid maternity leave will result in increased industrial pressure for employers to top-up the government payment to full wage replacement. As such, they are calling for paid maternity leave to be removed from the list of allowable matters in the Workplace Relations Act. Does HREOC agree with this recommendation?

HREOC does not agree that the introduction of a government funded payment should reduce women's industrial rights. Such a reduction would be deeply resented by Australian women and their families. It would further confirm to Australian women the difficulty of combining work and family responsibilities.

It is not clear that unions would make a case for top-up of paid maternity leave before the Australian Industrial Relations Commission, given other priorities. Even if the unions did mount a test case, it is not a foregone conclusion that they would win such a claim. Employers would be given the opportunity to present their arguments against employer top up, which would be considered by the AIRC.

How extensive were community consultations?

There were 257 submissions in response to the interim options paper, released in April 2002, which have been used to inform and shape the final report.

Between May and July 2002 the Sex Discrimination Commissioner and her staff held 27 consultations with employers, employer groups, unions, women's groups and the community - in all capital cities and some regional areas. The majority of consultations were group discussions. Forums were also held and there were two roundtables.

See Chapter 1 for an overview of the process followed in preparing the paper.

See page 273 for a full list of consultations.

See page 267 for a list of submissions.

From the submissions HREOC received during the policy debate what is the level of support for and opposition to paid maternity leave?

Seventy-three per cent of submissions supported the introduction of a national system of paid maternity leave. A much smaller 16 per cent opposed it. Another 11 per cent were undecided or neutral. The main ground for opposition was concern that employers may be forced to pay for maternity leave.

It should be noted that these figures do not, however, indicate the complexity of submissions in which support or opposition was sometimes conditional on other factors. They have also not been weighted to reflect the fact that some submissions were made by individuals, where as others were made by larger representational bodies.