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The Productivity Commission has now released its draft report and recommendations on paid parental leave. As expected, the Commission has proposed a taxpayer funded paid parental leave scheme with the main features being:
- 18 weeks taxpayer funded postnatal leave to be shared by eligible parents, with an extra 2 weeks of paternity leave for the father (or same sex partner);
- leave to be paid at the adult minimum wage rate (currently $543.78 per week, subject to tax);
- all workers would be eligible including casual employees, contractors and the self employed;
- a broad range of family types will be eligible including conventional couples, lone parents, adoptive parents and same sex couples;
- business will be responsible for paying the leave from their own pockets subject to government reimbursement;
- employees on paid parental leave will be entitled to continuing superannuation contributions by their employers subject to a cap.
The Commission estimates its proposal will cost around $530 million annually (with taxpayers contributing around $450 million and the balance by business). Reduction or abolition of existing payments such as the "baby bonus" will help fund the scheme. The 20 weeks total leave proposed by the Commission is greater than the 3 months submitted by the primary union and employer organisations although several stakeholders are still arguing the leave should extend for up to 6 months and be calculated on average wage rates rather than the minimum wage. There is also clearly a concern for small business in being expected to pay parental leave "up front" with later reimbursement. The government has left its options open sraying it is looking forward to a "fantastic" debate but it is clearly a case of "when" and not "if" a paid scheme will be introduced. Further submissions and public hearings are to take place with the Commission releasing a final report for consideration by the government at the end of February 2009. It is likely the scheme will be in place by the end of 2009.
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2008 Bulletins