Parental leave at last—but Labor won’t ask business to pay

In late June the government passed Australia’s first paid parental leave scheme, finally leaving the company of the US as the only other developed nation without one.

However, Labor’s scheme of 18 weeks leave is modest. The World Health Organisation recommends 26 weeks leave. Labor even allowed itself to be outflanked by Tony Abbott’s proposal of six months leave and complete replacement of the parent’s wage—refusing to consider taxing business to pay for it.

While this would have disadvantaged those earning less than the minimum wage, most would have benefited. The Liberals proposed to fund it by increasing company tax on medium to large businesses by 1.7 per cent. Abbott’s proposal is opportunist—he has opposed parental leave in the past. But Labor’s response revealed why their scheme is so weak. Treasurer Wayne Swan’s declared Abbott’s scheme, “should send a chill down the spine of every business in this country.” Clearly business profits rate are more important than working women for the government.

From January 2011 one parent will be able to take 18 weeks pay at the minimum wage. This means many people will be paid less than if they returned to work quickly. Women who work in casual and part-time work will be eligible if they have worked 330 hours in ten continuous months of the 13 months before their child’s birth or adoption. The scheme is open to men and women—meaning it does not discriminate against same-sex couples and may encourage more men to relieve women of the burden of raising children.

Labor’s scheme compares unfavourably to those of many others overseas. Sweden continues to lead the world in the length of leave and amount paid to parents. It pays an impressive 13 months or 56 weeks at just over 80 per cent of the parent’s pay, and another three months at the minimum wage. The government even provides eight weeks leave for each parent to encourage men to play more of a role in raising children. Denmark pays 50 weeks at 100 per cent to the mother and two weeks to the father. Norway, Slovenia, Finland and Lithuania all have very similar schemes. Even the UK pays 90 per cent wages for 39 weeks.

Finally having a parental leave scheme is a step forward—but bringing Australia into line with other developed nations will mean forcing business to pay for it. Again Labor has bulked at this hurdle.

By Rachael Cramp


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