Paid Parental Leave- Government and Opposition policies

The Opposition released their revised Paid Parental Leave Scheme on  Tuesday August 3. The media release states: "The Coalition's Paid Parental Leave scheme will:

1. provide mothers with 26 weeks paid parental leave, at full replacement wage (up to a maximum salary of $150,000 per annum) or the Federal Minimum Wage, whichever is greater;

2. include superannuation contributions at the mandatory rate of nine per cent;

3. allow two out of the 26 weeks to be dedicated paternity leave to be used simultaneously or separately to the mother's leave, paid at the father's replacement wage (up to a maximum of $150,000 per annum) or the Federal Minimum Wage, whichever is greater, plus superannuation.

4. use the same work test and eligibility conditions as the Government's recently legislated scheme;

5. be funded by a 1.5 percent levy on company taxable incomes in excess of $5 million; and

6. be paid and administered by the Family Assistance Office and will not impose an unnecessary administrative burden on employers, unlike Labor's scheme."

It is to be introduced in July 2012, should the Opposition win Government, and the current Government Scheme will start in January 2011 as promised.

While the two schemes have very similar objectives ( "enhance child and maternal wellbeing, boost workplace productivity by keeping some of our most productive workers more engaged in the workforce" according to the Opposition), the Opposition will make payments through the Family
Assistance Office, while the Government Scheme is designed to enhance work-force attachment by making payments through the employer, and only through the FAO when this isn't possible).

The Opposition media statement is silent on how the proposal will work with self-employed workers, contractors and rural and farm workers. The Government Scheme is designed to include these workers.

The Opposition has accepted, it seems, the argument from NFAW that its more generous scheme should build onto the base-line of the Government Scheme, and guarantees the adult minimum wage for low income workers- as many casual and part-time workers, and minors have lower take home pay than this.

The Opposition policy says it will bring Australia into line with Paid Parental leave programs in a wide range of European countries, paying at income replacement levels (up to $150,00.00 pa) yet these countries all make payments through employers.

Generally proponents of a national scheme have argued for a minimum of 16 weeks paid leave, together with the compulsory superannuation guarantee.

The Government has established a review of the scheme to report in 2 years on whether the scheme meets its objectives, and on the introduction of superannuation.

Media commentators have generally dismissed the idea of income replacement- although this is the case for all current Australian private and public sector schemes, of whatever duration.

While the Opposition media statement contains no references, Mr Abbott appears to have made some off-the-cuff references to bringing the Commonwealth employers superannuation scheme ( fully Government funded)into play.

The mode of financing is also subject to media criticism. The original NFAW proposal for was a 0.5% of wages levy across all employers- easily managed by both small and large enterprises. The Coalition proposal is for a company tax/levy, and ultimately public sector funding.