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The issue of paid parental leave has been in the news lately. What has occurred is that the new federal government has asked the Productivity Commission to inquire into and report on the economic and social costs and benefits of paid maternity, paternity and parental leave. Core issues to be considered by the Productivity Commission are: a. models of parental leave with reference to eligibility, duration and generosity of benefits, financing options and return to work guarantees; b. family health and wellbeing with reference to breastfeeding, the role of fathers, duration and effects for different families; c. family income and parental employment including reference to the factors that deter fathers from taking more parental leave; d. the broader labour market impacts of parental leave; e. impacts on employers; and f. interaction with social security and other government programs. A draft report is due to be released by September 2008. Further public hearings are to take place before the end of the year and a final report is due to be completed by the end of February 2009. It is possible that paid parental leave could be a reality before the end of 2009. In Australia, legislation currently provides for up to 52 weeks unpaid parental leave, covering maternity, paternity and adoption leave. Australia and the United States (with the exception of California) are the only OECD countries without some form of statutory paid parental leave. In other countries, paid maternity leave is between 14 and 48 weeks in length, which is usually funded through compulsory social insurance schemes split between employer and employee contributions. New Zealand is the only country at the moment with parental leave funded solely through general government revenue. Whilst there has been significant criticism that Australia does not have a formal system of paid parental leave, the reality is that publicly funded family support in Australia is relatively high by OECD standards but it takes the form of targeted support such as the one-off baby bonus and various subsidies. A number of companies in Australia already offer paid parental leave to their employees. Examples are: - Australian Public Service – 12 weeks at full pay after 1 years service;
- AMP – 6 weeks at full pay after 1 years service;
- Holden – 14 weeks at full pay after 2 years service;
- Myer – 6 weeks at full pay after 1.5 years service;
- Aldi – 14 weeks at half pay after 1 years service.
It appears the most likely outcome of the inquiry will be a recommendation for 3 months pay at the minimum wage rate funded by government (most likely at the expense of some existing family benefits). This has been the submission of the primary union and employer organisation representatives.
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2008 Bulletins