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A Time to Value - Foreword

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

Foreword

HREOC's release of its interim paper, Valuing Parenthood: Options for paid maternity leave sparked an extraordinary community debate about the difficulties of combining work and family responsibilities in modern Australia. I have spent eight months listening to women talking about their struggles; the family that went without birthday presents for a year and the mother without an annual holiday for two years, so there would be enough money and leave saved up for her to have another baby, the young mother back at work with a two week old under the counter because her husband had lost his job and she wanted to breast feed, the countless number of women who explained why they did not have the leave entitlements saved up that would let them have that second child and how they could not stay home for more than two years for fear of losing their skills, adoptive mothers describing how their new children screamed all night for the first six months out of the overseas orphanage, making having a job impossible - and the very sad woman who put her hand on my arm as I left a room to tell me never to forget those who believed they had forever to have children only to find they had left it too late. Their voices, among many, are in this paper. But they could be the voices of many other women. Who has borne children and been able to forget the exhaustion and struggles of those early months, to say nothing of a mother's passionate absorption with her infant and the difficulty so many of us would have in leaving that child to return to work.

Paid maternity leave was debated as part of this broader issue of work and life balance. In particular, discussion focused on the desirability of linking maternity payments with paid work, on how a national scheme should be funded and whether or not the payment should be available to mothers only or whether the other parent should also be eligible.

The national round of consultations I held with employers and employer groups, unions and women's and community groups in every State and Territory addressed these issues. In addition, HREOC received over two hundred and fifty submissions from these stakeholders as well as from government, academics, individuals, health professionals, legal organisations and other interested parties.

The consultations ranged widely and canvassed issues such as the cost of bearing children, the importance of the mother to child development, the status of motherhood and the many other challenges women face in combining paid work with motherhood other than the need for paid leave after the birth of a child. For many women particularly, paid maternity leave was identified as an equity measure that recognised their right to work while meeting their parenting responsibilities. Significantly, the issue of family size and Australia's declining fertility rate was also a common feature of the discussions.

The issue was widely recognised as a concern for women. It is also about children and how we perceive them - are they a personal choice or luxury, or are they to be considered as a public good and a social responsibility.

The Government, of course, has always provided support for families - it is, after all, a primary responsibility of Government to assist in protecting families and reproducing society. Yet we all know that the form Government assistance takes can and does affect behaviour, reflecting Government and, it is to be hoped, social, priorities. Family structures have changed so rapidly in Australia over the past decade that Government social policy is, in some ways, no longer reflecting Australia's social realities. The introduction of a national paid maternity leave scheme would have both symbolic importance in reflecting this shift and be of practical benefit to those women and their families for whom paid work is important.

While support for a national scheme of paid maternity leave was strong, it was not universal. However the difficulties facing young families today was a constant theme of the consultations. Although previous generations were frequently tempted to observe that they managed without paid maternity leave, there was a clear acknowledgement that work and life pressures had changed Australian families, that men's and women's expectations were now different and that support for families needed to respond to these new realities.

The rapidity of social and economic change for Australian families has occurred in a global environment and appears to be irreversible. Extended education and training periods, high home mortgages relative to income and general cost of living pressures, in combination with significant job uncertainty for young workers and a nationally high divorce rate, appear to have contributed significantly to the rise in two income families and delayed family formation. The consultations repeatedly demonstrated that the burden of increasing economic pressure has been most keenly felt by low income families, who are the least likely to be able to access paid maternity leave and other family flexible working conditions.

Under these changing social circumstances a national paid maternity leave scheme answers an emerging and important unmet need; the need for newborn babies to be with their parent instead of being separated through financial necessity. Naturally it is for Governments to decide national priorities but I consider there is a strong case for government funding of this special time for mothers. We received many submissions from mothers' and child welfare groups, breastfeeding associations and health professionals arguing the benefits of mothers being at home full time for the baby as well as the mother during these early months. Many believed a period of fourteen weeks to be the minimum but none suggested a shorter period was desirable. Under current arrangements, it is the children of poorer working women who are the least likely to enjoy access to the paid maternity leave that would facilitate this time out of the paid workforce and poorer working women who are the least likely to recover from the birth at a time and pace best for them.

Paid maternity leave also recognises the disadvantage experienced by women in paid work when they bear children. Not only are they likely to suffer workplace discrimination because they are pregnant or a mother, they frequently find it difficult to combine their new family responsibilities with their obligations to their paid work. Certainly, their lifetime earnings are likely to suffer, and their retirement incomes would be less than if they had not had a child. This was frequently highlighted by women during the consultations. They considered that a work related entitlement such as paid maternity leave legitimised the combination of work and family chosen by many mothers today.

The introduction of a national scheme of paid maternity leave such as I am suggesting would not be a panacea. On its own, it will not address all of the concerns people raised, particularly in assisting women manage their work and family responsibilities. However, as part of a suite of measures, it points to a sea-change in the way we approach these issues. It is a necessary but not sufficient condition to ensuring that our working lives are based upon a realistic recognition that all workforce participants have obligations and priorities outside of paid work.

Although much of the consultation period was concerned with examining the need for paid maternity leave, submissions and consultations have also devoted considerable attention to the detail of such a scheme, were the Government to choose to implement one.

This is not the first time in Australia's history that the issue of paid maternity leave has been on the national agenda. There have been several previous occasions when attempts to introduce a universal scheme have fallen short. In 1999, HREOC recommended in Pregnant and productive: It's a right not a privilege to work while pregnant, that the federal Government undertake economic modelling and analysis of possible paid maternity leave options. I considered that this work needed to be done as a matter of priority if we are to address this issue in a fully informed manner. In addition, since my recommendations are based on an analysis that essentially could have been conducted by the Government and needs to be acceptable to Government, the model I am proposing is a basic minimum standard, that is, a starting point.

The scheme favoured overwhelmingly by those who supported the introduction of paid maternity leave is government funded. There was widespread agreement that a direct impost on employers would be untenable, given employer resistance and the tight profit margins of many businesses.

My final recommendations to Government concerning the nature of the scheme fairly reflect the consultations. In summary, a scheme of 14 weeks paid maternity leave is recommended, to be paid up to the rate of the Federal Minimum Wage to those women who are able to demonstrate that they have been in paid work for forty of the past fifty-two weeks before taking maternity leave. This includes self-employed women, including those in small business, women who have worked for more than one employer in that time and casual workers. The eligibility criteria are slightly more generous than the existing criteria for unpaid leave, reflecting that it is a government payment and the high turnover of jobs in the labour market for younger workers. I am confident that these criteria balance the right of women in paid work to income replacement during maternity against accepted principles of fair and transparent public administration.

The absence of a publicly available and comprehensive costing for a national scheme has hampered debate since community support for such a scheme will clearly be conditional on the cost of this compared with other public policy proposals. Both the Minister for Finance and Administration and the Australian Democrats have released costings for similar schemes of around $400 million a year. Although the Government has declined to provide details of the Department of Finance and Administration's costings to HREOC, the Democrats' estimated cost contained some offsets and the scheme's characteristics broadly conformed to those being proposed in this paper. The Commission considers that women who receive paid maternity leave should not also be eligible for the Maternity Allowance and Family Tax Benefits during that period of leave or the first 12 months of the Baby Bonus.

In the absence of any available modelling or cost estimates, HREOC commissioned the widely respected economic modelling agency NATSEM to provide it with this detail. As you will see from their report, at the Appendix, they have estimated the net cost of such a scheme, once offsets are taken into account, to be $213 million, or less - $207 million - if the paid maternity leave already available to some women is taken into account. I consider this to be an extremely modest cost and believe it would be broadly acceptable to Australian tax payers. It is, for example, the same as the combined cost of the existing Maternity Allowance and Maternity Immunisation Allowance and less than half the cost of the fully implemented Baby Bonus.

The demonstrated need for a national scheme of paid maternity leave and the benefits it would bring Australian families and the nation make a strong case for a national scheme. Ironically, the low wages earned by most women in paid work has meant that the cost of providing such a benefit is low, perhaps lower than most had believed, and further adds to the case for the introduction of paid maternity leave without delay. The wide spread debate has helped engender a broader understanding of current Australian social pressures, but particularly an understanding of the proposal and support for it. Although not an especially revolutionary or morally challenging proposal, paid maternity leave has been exposed to extreme and prolonged public scrutiny. That the issue has continued to be supported despite this demonstrates that for Australian women and their families, it is about time.

I urge the Government to act now and introduce a national scheme of paid maternity leave.

Pru Goward

Sex Discrimination Commissioner

Human Rights and Equal Opportunity Commission.
28 November 2002