Paid Parental Leave scheme - speech in Parliament

Mr GILES (Scullin) (16:54): Thank you. I will do my best to speak in accordance with that injunction. In starting off I make it very clear that I am rising to speak in opposition to the Paid Parental Leave Amendment Bill 2014. I note in doing so that this is not the first time this House has had to deal with this aspect of paid parental leave legislation as the government previously introduced the measures that are the substantive component of this bill as part of the Social Services and Other Legislation Amendment Bill 2013.

 I note that the Senate made some very sensible and welcome amendments to that original bill to remove the requirement for employers with fewer than 20 employees to have to pay their employees' paid parental leave instalments. This is consistent with the promise Labor took to the last election to get the balance right in this important area of public policy. I understand that amendments to similar effect will be again moved in the Senate to give effect to that promised balance.

Labor's approach to this issue strikes the sensible balance between an employee's need to maintain a relationship with their employer whilst they are on maternity leave on the one hand and giving small businesses the option—the choice, the freedom, we might say—of having their PPL administered by Centrelink on the other. However, the legislation that is before us takes this some several steps further. It abolishes the role of the employer in its entirety. Members opposite seem almost wilfully blind to this when speaking of small-business concerns. It is interesting that, before the election, the then Leader of the Opposition repeatedly said in this place and in others that he wanted paid parental leave to be treated 'as a workplace entitlement, not just a welfare one.' Not for the first time, the effect of this statement seemingly expired at 6pm on election night.

Moving administration of all paid parental leave to Centrelink regardless of a business's size clearly encourages the view, to say the very least, that paid parental leave is a welfare entitlement, and this is the inconsistency that lies at the very heart of the coalition's scheme. It goes against its very rationale. Indeed, so do almost all the public utterances of seemingly its only sponsor, the now Prime Minister. I guess this was made very clear in the contribution of the member for Banks, whose contribution about different treatment of sick leave and annual leave from Labor's position on paid parental leave in the current debate shows how fundamentally members opposite are missing the point.

In his second reading speech, the minister alluded to the administration of paid parental leave as unnecessary red tape which hinders innovation, investment and job creation. I encourage the minister to demonstrate any specific examples or provide evidence of where administration of the scheme has actually done any of these things. I think he will struggle. The ideology of red tape reduction warms the heart of members opposite and of all of us in this place. For the benefit of the member for Banks, we oppose unnecessary regulation, but it is a very rare thing to see evidence to match the government's rhetoric.

Again on the contribution of the member for Banks: he talked about the very different attitudes to red tape reduction. We do have a different attitude to members opposite: we support evidence based regulation. Last year the Institute for Social Science Research at the University of Queensland conducted a survey of 501 employers for the Department of Families, Housing, Community Services and Indigenous Affairs. Members opposite may be interested in these findings. The research found that 54 per cent disagreed with the statement that organising payments for PPL has been time consuming. Only 29 per cent of employers stated additional costs were involved in implementing the scheme; and, of those reporting additional costs, 94 per cent stated this arose from extra workload they took on themselves rather than from purchasing a new payroll system or hiring extra administrative staff. In terms of staff hours required to process paid parental leave, 25 per cent of employers reported one to two hours were needed, 24 per cent said it required three to five hours and 22 per cent reported it took 15 hours or more. Costs to organisations implementing paid parental leave were minimal, with estimates ranging between $1 and $250 for 45 per cent of employers, between $250 and $1,000 for 21 per cent of employers and over $1,000 only for 20 per cent of employers. Seventy-four per cent of employers agreed that PPL under Labor had been easy to implement. This research entirely undermines the government's already very weak case supporting this legislation. So much for that. So much for all the contributions of members opposite.

Indeed, so much for the assertions of letting small business decide. The member for Deakin in his contribution called the suggestion by Labor members bizarre that these arrangements that are the subject of this bill might somehow impact in a negative way on a mother's connection to her workplace. He said he did not know where the evidence was. I would simply say that he did not look very hard. Similarly, the member for Banks misunderstands the importance of this fundamental connection. The member for Hotham, criticised by the member for Banks, understands this much better. Regarding employers making paid parental leave payments, I remind the House that Labor acted on the recommendations of the Productivity Commission, which in 2009 found:

… the more that parental leave arrangements mimic those that exist as part of routine employment contracts, the more they will be seen by employers and employees as standard employment arrangements.

The Productivity Commission, a body that members opposite are generally pretty keen on when it comes to matters of workplace relations reform, suggested this would benefit employers in two ways. Firstly, it would promote employment continuity and workforce retention. Secondly, it would signal that a genuine capacity to take a reasonable period of leave from employment to look after children is just a normal part of working life.

In a later submission to the Senate inquiry into the exposure draft of the bill that introduced the PPL scheme, the AI Group was also supportive of the employer paymaster role—as it has been named and criticised since—arguing that it:

… understands the logic behind the Government-funded parental leave payments being channelled through employers, for employees who are not short term and who remain attached to the enterprise. Such an approach should reinforce the employee's link with the workplace, and achieve better return to work outcomes.

We are already seeing that sort of outcome through the experience of over 340,000 women who have been participants in this scheme.

It is opportune to remind members that in January 2011, Labor introduced Australia's first ever paid parental leave scheme and, as I said a moment ago, since then not only have 340,000 families benefited from the Paid Parental Leave scheme, but an additional 40,000 dads and partners have done so since it began in January last year— unfortunately, a little too late the birth of my second child. Labor's scheme was designed to benefit all Australian families but in particular those on low and middle incomes, many of whom are in casual or part-time work. We cannot forget nor gloss over the fact that around 55 per cent of working mothers had no access to any paid parental leave before Labor's scheme was introduced. In occupations like hairdressing, people had very limited choice but to return to work at a time that did not give them a full range of choices around the birth of their children. Labor's scheme fundamentally changed that, and I think it is changing how Australian society, as well the Australian economy, is functioning, since today access to paid parental leave stands at around 95 per cent of all working mothers It is interesting again to reflect that the median income of those women is around $45,000. As the member for Jagajaga said in her second reading speech in 2010, Labor's scheme was:

… fully costed and funded by the government. It is fair to business and fair to families.

That statement was true then and remained so, but the same cannot be said of the coalitions scheme.

When members of this government talk of tough choices, fairness does not feature. It never features. In the policy incoherence at the heart of this bill—the welfare versus the workplace entitlement confusion—there is a golden thread that we can trace through the government's decision making; and this is the perverse insistence that those least able to should contribute the most. This is the 'shared sacrifice' members opposite talk about. While some women will, of course, benefit from this scheme, how does it sit against other budget impacts on Australia's women such as the sustainability questions we so often hear about in this place? Fundamentally, how tough was the choice? I think about a non-means tested payment of up to $50,000 versus very large imposts on women who are much less well-off. When it comes to affording fairness to women in Australia, it is clear that this government has failed. I think also of the disproportionate impact on women of the repeal of the low-income superannuation contribution, the impact of the cuts to the rental affordability scheme on housing security for women and the increased cost of family day care and the disproportionate impact of cuts to income support and freezing indexation payments on women. Was it a tough choice to go ahead with this scheme in that context? Sadly, it does not seem it was very difficult at all.

One matter that has not been much touched upon in this debate is the consideration of the Joint Parliamentary Committee on Human Rights, which sought advice from the minister on the impact of the coalition's scheme on employees with salary sacrifice arrangements currently in place. The question is whether the removal of the requirement for employers to provide government funded parental paid leave may limit the right to social security and the right to just and favourable conditions of work; and, if so, whether such limitations are permissible. The Human Rights Committee noted the minister's statement of compatibility for the bill:

… does not address the question of whether the bill's potential to result in reduced after-tax income for employees with salary sacrifice arrangements may indirectly discriminate against women, given that the majority of paid parental leave recipients may be women.

I look forward to the minister's response to this question.

There is an enduring sense that this legislation is not just incoherent, but is ill-conceived and not fit for purpose. The fact that last time it was buried in the middle of an omnibus bill where it rated a few short paragraphs by the Minister for Social Services is indicative of this slipshod approach to a fundamentally important area of public policy making. This time, of course, the minister has devoted slightly more attention to this matter, but ultimately it is a re-hash of the same bad, unfair policy and he still has not got the details right. When I had the opportunity to speak about this policy previously, I thought it might be a good time to raise this fundamental question of fairness in the allocation of the finite resources of the state according to need and broader social purposes. In the aftermath of this cruel budget, when the coalition is cutting so much for so many, it raises many questions about the priorities of this coalition government. So the coalition's Rolls Royce, gold plated paid parental leave scheme, which would replace a perfectly good paid parental scheme that is already doing so much for so many, is a $5.5 billion extravagance and will cost more than $21 billion over the forward estimates. So much for the rhetoric again of sacrifice!

Pensioners, schools and hospitals could all do with these funds, but this government is cutting funding to these and many other areas of need—for example, to child care, most obviously in relation to this debate, which is of course the real key to our employment participation challenge now that we have paid parental leave on the statute books. Why is there a budget emergency for low- and middle- income earners but not for high-income earners, which seems to me to be the fundamental proposition underpinning the government's insistence on returning again and again to this legislation? It seems that the age of entitlement, whatever is said by members opposite, remains alive and well, while that age of opportunity that was briefly a figure of coalition sound bites is just that, a sound bite at odds with mean short-sighted policies directed at those doing it tough through no fault of their own.

The coalition seemingly has been happy to break every promise it made before the election, sometimes with much enthusiasm. But the one it seems obsessed with keeping is the one which involves paying the wealthy up to $50,000, with no means test, for having children. It is paying the rich and taking from the poor. There is no excuse for this. It is unjust and unfair. Labor stands opposed to this bill for the practical reasons that I have outlined in this speech, for the fact that the minister has not acquitted all his responsibilities, particularly those arising from the human rights committee, in terms of the evidence base that is presently before us, but fundamentally because it is unjust and unfair.

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