Paid Maternity Leave Debate

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Comment by Admin on March 31, 2009 at 1:58pm

Australia’s mums deserve innovative thinking on maternity leave

By Jo-anne Schofield

Jo-anne Schofield is a mother of two and Executive Director of Catalyst Australia (www.catalyst.org.au) a not for profit network supported by trade unions and progressive researchers and individuals.

It’s crunch time for the Federal Government on paid universal parental leave. Within weeks the Government will need to decide whether a scheme will be included in this year’s budget or whether Australia will remain one of very few developed nations without a mandated scheme.

It's a good thing for our communities if working parents are able to take time out to spend with children. This should be the guiding principle for the Federal Government as they wrestle with whether to include a universal parental leave entitlement in this year’s budget.

The second principle is to accept that many parents want or need to participate meaningfully in work while raising a family. However many lack choice, and face barriers such as a lack of affordable good quality child care, limited employment opportunities, inflexible work and gender bias in the framing of entitlements.

Catalyst has argued for a new policy option for parents: the creation of 'leave accounts' that roll up long service and annual leave into a portable leave accounts that can banked and drawn down by parents for the first five years of a child's life.

The Catalyst submission to the Productivity Commission inquiry into parental leave advocated for this initiative and was well received, however it remains to be seen what form a universal scheme will take in the budget and indeed whether a scheme will be included at all.

Today's labour market provides a weak foundation upon which to build an enduring policy framework for parents.

Although there is a system of universal entitlements to leave for parents, these policies are poorly aligned with how most people work, because they only apply to workers that are in secure, permanent employment. However, women are more likely to be casuals, have poor job security and/or work in second-rate part time employment.

Consequently many women never build up enough time in a job or employer goodwill to access even the most basic right to unpaid leave. Similarly the vast bulk of women working in private sector employment don't have any paid maternity leave entitlement.

At the same time, full-time male workers are often working longer hours with little scope to participate in life outside the workplace. This has a lot to do with workplace culture, which doesn't acknowledge men's roles as fathers, and does little to encourage men in their public lives to increase their share of the parenting load.

Importantly, when men do take paternity or parental leave it is usually from a pool of paid entitlements.

Child care costs
Child care and family payments are also critical in influencing whether women return to work after child birth. Australia's complex family payment system, the high cost of child care and a lack of regulation of fees can create a disincentive for women especially when their wages do not compensate for these costs.

Increasing child care subsidies will not work because these increases are inevitably absorbed into higher fees.

Public surveys show that this policy malfunction is causing a widespread and depressing amount of dissatisfaction across families and causing high levels of stress.

As well as taking some of the stress out of the work-life juggle, paid parental leave has been promoted by labour market economists as a way to retain women’s skills in the labour market and boost our shrinking labour supply rates as the population ages.

Australia has a very weak participation rate of women with children and we are unique across OECD nations in our low levels of full time employment among mothers.

The global economic crisis has reduced some of the short term urgency here, but during a period of downturn or recession, it is even more critical that paid parental leave policies help women stay in employment.

One solution: Leave Accounts
To address some of these issues, Catalyst argued for a system of 'leave accounts' of banked leave that could be established for all workers.

Leave accounts would roll up long service leave and accrued annual leave into an account that moves with workers from job to job over the course of their working life. Leave could be drawn down to provide paid breaks from work for parents, or for other purposes in the case of people who did not have children.

This is not a new employment right as it is the same as existing long service leave entitlements.

Similar schemes of portable long service leave schemes have operated successfully in the construction industry for years. They are also finding favour in other sectors, such as contract cleaning in some states. These schemes are not difficult to administer, and because people move from job to job the costs are minimal as they are spread across firms. Schemes can become self-funding over time which makes them an even more cost-effective option.

Crucially for women, any system that helps them take periods of leave will also help them to return to work which benefits employers and government and boosts local labour supply while retaining skills in the labour market.

A leave account scheme may have the added benefit of equalising caring responsibilities. Because men are more likely to work unbroken patterns of full time work, their leave accounts will prosper. This should allow more access to paid leave for men and hopefully increasing choice and equality in child-rearing within households. It would also help the household to maintain a higher male wage for a period following childbirth.

Such a scheme was put forward by Catalyst as one option open to our Federal Government. Ultimately the Productivity Commission did not embrace this approach in its draft report. It also rejected similar social insurance type models that were suggested by other organisations.

Instead, the Commission has opted for an 18 week payment to families at the rate of the federal minimum wage. A major strength of the draft report is its attention to low paid women whose needs are elevated in the proposed scheme.

Irrespective of what sort of system applies, a universal paid parental scheme must be a feature of this year’s Budget.

We encourage all Australian parents in the next few weeks to contact their local member of parliament and make clear that this country has waited long enough for a universal parental leave scheme.

The rumours are strong that the global financial crisis will be the pretext for delaying the introduction of a scheme in the upcoming budget. The only thing that will stop that happening is pressure from the public over the next few weeks.

In the longer term however, we should continue to talk about a truly revolutionary scheme like leave accounts, so that public policy can give people greater choice and flexibility in how they live and work in the future.

Comment by Kylie on March 5, 2009 at 12:59am

when i told my boss my exciting news i was all of a sudden put back to part time then got no shifts what so ever.... forcing me to move back in with my parents as my partner and i are no longer together.... i had no money and it made me so angry that they can get away with it....... maternity leave should be paid to everyone.... and you should never be left jobless because it wasnt planned. i wouldnt change having my amazing little girl for a second. i love being a mum

Comment by Julie on October 1, 2008 at 12:02am

My daughter came as a surprise and I am so grateful for the government's help which enabled me to stay home with my daughter for as long as I thought was necessary. I believe the first couple of years of the child's life should be spent predominantly with his/her mother (or father) and I think we as a society are losing sight of this as we strive for financial security and material wealth. Therefore I fully support paid maternity leave, and think that salary sacrificing is a great idea. In this day and age, we women have a tough job trying to hold onto careers while still being the heart and soul of our families and need all the help we can get!

Comment by Kelly Trudgen on September 30, 2008 at 4:52pm

While I was lucky enought to be entitled to paid maternity leave for all of my children, it was only 12wks, and usually began before confinement. I found it a very short time, and usually had to return to work early due to financial constraints anyway. I like the models from overseas that extend the time, even with reduced rate of pay. I believe I would have been able to breast feed longer, and not feel so exhausted if I had the extra time. As for the money...well we all need more, but somehow we always manage, don't we? Perhaps a combination of paid leave at a reduced rate AND a baby bonus that is paid in fortnightly instalments while you are on leave would make life easier????

Comment by Mulligag on September 30, 2008 at 3:04pm

I agree this is an emotive topic. As a NSW public service employee however, I reveived 14 weeks paid leave with the birth of my daughter earlier this year. This was wonderful as it allowed me to spend precious time at home without worrying about the finances. I believe some sort of scheme should be implemented so all women can access such a benefit.

Comment by Tricia Bougoure on September 30, 2008 at 2:50pm

Wow. This is such an emotive topic.
I personally would prefer to receive the baby bonus. As with the new rules, we would also lose out on Family Tax benefit B.
I also think if some sort of salary sacrifice is not implemented - employers will not hire women because of this.

Comment by Tracey on September 30, 2008 at 2:39pm

It is such a tough issue! But in our situation I had to return back to work (part time) after 5 months due to financial strain. My employer does not offer any paid maternity leave and having a mortgage and the usual bills relying on the one wage was just not possible. Having said that though the baby bonus ($4177) contributed greatly in allowing me that time home with my child. We still needed to save and prepare financially for his arrival but, that along with the baby bonus was enough. So, on one hand I do agree with helping families financially but, I do also believe it is the responsibility of the parent to also prepare financially.

Comment by Mum&Crew on September 30, 2008 at 2:32pm

As a women with children I believe that we deserve more for having children. Some employers think just as H&T suggested that if your not "at work" you do not deserve payment.
I think that by changing the way maternity payment is made could be a good idea ie: rather than giving a huge once off payment maybe the payment should be given over a certain amount of weeks.

Comment by Helen&Tiger on August 29, 2008 at 5:32pm

It should be mandatory or at least private employers should give people the option of salary sacrificing to a specific account when they start their employment there. I only found out when I got pregnant this year (after five years working there) that my employers (and they are in healthcare!!) don't give paid maternity leave! Their attitude is well your not here so why should we pay you for "not" working!! Its attitudes like this that make government payments even more important to the private sector!