A Time to Value - FAQ
A Time to Value - Proposal for a National Paid Maternity Leave Scheme
FAQ
What is the HREOC model for paid maternity leave?
Which women
will benefit?
What is the
business case for paid maternity leave?
What is the
cost?
How does it
fit in with other existing family support mechanisms?
These are crucial
questions to an understanding of the Paper. Here is where you will find
detailed information on the following aspects of the Paper:
- Summary of the HREOC model for government-funded paid maternity leave (Section
12.3) - Detailed costings
for the proposal (Appendix) - The relationship
between paid maternity leave and existing family support mechanisms
(Section 3.4 and Chapter 21) - The arguments
for paid maternity leave for women in paid work (Section 14.4) - Health benefits
of paid maternity leave (Chapter 5) - Workplace equity
and economic security issues for women (Chapters 6 and 7) - The benefits
for employers (Sections 10.2 and 10.3) - Social and economic
benefits for Australia (Chapter 9 and Section 10.4)
Isn't government
funded paid maternity leave going to be extremely expensive?
The model proposed
by HREOC has been costed by respected independent analysts NATSEM at
$213m in 2003-04. In 2005-06, paid maternity leave would cost the Government
$217m, which is $293m less than the Baby Bonus which relates only to
one child per family and in which the full benefit cannot be reaped
until five years after the birth of the child.
The costs for paid
maternity leave in Australia are not huge compared with other social
policy measures.
The issue has generated
an enormous amount of debate since the release of the Options paper
in April this year. The expenditure of public money in other areas (eg
$120 m Commonwealth sugar industry rescue package, plus State budget
support) generated nowhere near this much attention.
Recent research
by AMP-NATSEM has reminded us of the high financial cost of raising
children in Australia to teenage years and the physical and emotional
burdens this can place on families: The Cost of Children report
released in October 2002, found that the total cost in today's dollars
of raising two children from birth to age 20 is $448,000, or $322 a
week.
Discussion around
the introduction of a national scheme of paid maternity leave has become
more than just a public debate about a social policy measure. It is
a debate about the future direction of the nation.
Why has HREOC
supported a government funded rather than an employer funded scheme
for paid maternity leave?
The proposal is
for a basic payment that has been available to women in most other countries
for decades.
It is appropriate
for the Government to fund a national scheme that would enable a basic
payment for women, given:
- the social
and economic benefits of paid maternity leave, - the failure
of the existing system to deliver paid maternity leave equitably across
the workforce, and - significant
community support for a government funded system.
A national scheme
of paid maternity leave in Australia in 2002 is not a radical social
policy initiative. Australia is one of only two OECD countries without
paid maternity leave.
Many employers
and employer associations have asserted that a directly employer funded
scheme would have an adverse effect on women's employment, with some
employers freely admitting they would discriminate against women if
such a scheme were introduced.
Regardless of those
claims, many employers already provide paid maternity leave. The Equal
Opportunity in the Workplace Agency can supply further information - www.eowa.gov.au. However, HREOC
has not proposed a compulsory employer contribution, but
instead encourages employers to top up a government funded system through enterprise bargaining.
See Chapter
13 on funding and Section 19.4 on employer provided top ups.
Who will be
eligible for paid maternity leave?
HREOC believes
that all women in paid work should be covered, subject to reasonable
eligibility criteria, including a requirement to have been in paid work
for 40 of the last 52 weeks.
Permanent full
time and part time employees who have worked for their employer for
12 continuous months are already entitled to 52 weeks unpaid leave.
A recent Australian Industrial Relations Commission decision has granted
access to unpaid leave for casual employees under a federal award, subject
to certain conditions and to the provision being included in individual
awards. Some States now have similar provisions.
Commonwealth public
servants are already entitled to paid maternity leave (12 weeks) as
are many State public servants, whose entitlement varies between 2 weeks
on full pay in South Australia to 14 weeks on full pay in the Northern
Territory. (Note that Western Australia currently does not have a standard
provision for paid maternity leave, but has committed to introducing
6 weeks paid maternity leave on full pay for State public servants within
the next two years).
Eligibility
criteria for HREOC's proposal are outlined in Chapter 15.
The evidence
so far shows that current paid maternity leave provisions have been
enjoyed mostly by professional women. Isn't the idea of government-funded
paid maternity leave just a form of middle class welfare?
The idea of paid
maternity leave is not middle class welfare. The people who will benefit
most from a national scheme are the families of women in low paid, low
skilled jobs. They are the least likely to have it now and generally
have less bargaining power that would enable them to negotiate it with
their employers.
Under our current
system of paid maternity leave - funded by employers on an ad hoc basis
- professional women with high education and skill levels in
full time work have greater access to paid maternity leave.
The ABS Survey
on Employment Arrangements and Superannuation, compiled in 2000,
confirms that it is women with lower skills, in more marginal employment,
in part time or casual work who are more likely to miss out.
Union representatives
also commented that low income earning women, with no access to paid
maternity leave, often return to work well before the end of the 12
month period of unpaid leave. In fact, for financial reasons many are
back in paid work six weeks after the birth of their child.
A number of
women's groups have called for paid maternity leave to be paid at a
rate up to Average Weekly Earnings. Why did HREOC decide to cap the
payment at the Federal Minimum Wage?
HREOC considers
that the ideal payment rate for paid maternity leave is 100% of a woman's
previous earnings.
However, HREOC
considers that the Government should provide a minimum entitlement.
Payment up to the Federal Minimum Wage provides a reasonable standard
of living, is set annually by an independent authority and has a reasonable
level of community support.
Payment at the
rate of the Federal Minimum Wage would mean that between 35 per cent
and 48 per cent of women would receive full wage replacement. It would
also provide the greatest proportional benefit to lower income women.
There was a significant
degree of support amongst submissions to HREOC and in consultations
for government funding of paid maternity leave up to the rate of the
Federal Minimum Wage.
HREOC considers
that payment up to the Federal Minimum Wage meets the level of payment
established under Article 6 of the International Labour Organisation
Maternity Protection Convention.
See Chapter
17.
Doesn't government
funded paid maternity leave for women in paid work discriminate against
women who choose to stay at home full time with their children?
There is a gap
in current government payments and workplace entitlements that mean
that many women in paid work do not get proper support at the birth
of their child. (See Chapter 3).
Women in paid work
face a loss of income and workplace career disadvantage and often discrimination
as well as a direct result of the birth - factors not acknowledged by
current government payments.
The Maternity Allowance,
Family Tax Benefit Parts A and B and the Baby Bonus do not meet the
objectives of paid maternity leave in their own right.
HREOC believes
that if government funded paid maternity leave were introduced, women
who received paid maternity leave should not be eligible for the Maternity
Allowance, the first 14 weeks of Family Tax Benefit Parts A and B and
the first 12 months of the Baby Bonus. This would help to equalise the
level of government payments to women in paid work and those not in
paid work.
Why not support
paid parental leave for either partner? Isn't that fairer in allowing
family choice in who will be the primary carer during paid maternity
leave?
There are four
key considerations:
- women give
birth; - women do the
breastfeeding; - women have the
health issues associated with giving birth; and - it is overwhelmingly
women who suffer both immediate and long term economic disadvantage
as a result of becoming parents.
In recognition
of these indisputable facts, HREOC received many submissions supporting
the payment of maternity leave specifically to women. The majority of
employer groups supporting a paid leave scheme agreed, as did many women's
groups, unions, academics and health professionals who have been engaged
in this debate.
Many people commented
that any new scheme should challenge existing gender roles in the home
and workplace, allow families more choice in determining the primary
caregiver, and give fathers an opportunity to be more closely involved
in nurturing their children.
The HREOC proposal
for a paid maternity leave scheme deals with the existing reality first.
A national system for women should precede a paid parental leave scheme.
International experience
shows there is an extremely low take up rate by men where paid parental
leave is available to either parent, particularly where this leave is
paid at a rate below full income replacement. In addition, the majority
of countries provide leave specifically for women in the weeks around
childbirth, with the option for men to take parental leave only commencing
after this recovery period. (See Section 14.2.2 of the Paper).
Paid maternity
leave would also address the disadvantage and discrimination that women
experience in the workforce as a result of being the childbearers, a
reality which was recognised in submissions from employers and unions.
However,
the paper makes special mention of circumstances where the leave should
be paid to the woman's partner, including when the mother has died or
the mother is not medically able to care for the child or when the child
has been adopted. It also calls for the Government to consider introducing
two weeks supporting parents leave, in addition to, and to be
taken concurrently with, paid maternity leave.
See Sections
14.2 and 14.3.
Is paid maternity
leave going to really have any effect on Australia's declining fertility
rate?
Every year, slightly
fewer women of childbearing age in Australia decide to have children.
The national fertility rate has declined to below replacement rate.
The community and
policy makers need to look carefully at the range of issues facing young
people, and young women in particular, to understand just what might
be influencing their decisions about having children. Our research and
the submissions during the consultation process indicate quite complex
factors at work. These include fears about employment security, the
need for women to maintain their skills in a world moving quickly towards
contract work, the cost of housing and the ability to secure mortgage
finance, the pressure on relationships and the cost of raising children.
There will always
be some women and men for whom parenthood is not a priority or a possibility.
However the rapid increase in the size of this group reflects the fact
that women who are in paid work and choose to have children know they
must manage dual careers - as mothers and workers.
The community's
task is to make this choice viable for them should they wish to make
it. Paid maternity leave alone will not make it possible for
women to manage dual roles. It will however respond to some of the financial
concerns discouraging women from having babies, because paid maternity
leave means that there will not be a total loss of income by one, or
sometimes the only income earner in a family at the time of the birth
of a child.
Every OECD country
in the world that's trying to facilitate the choice of women to have
children has done this by providing a package of work and family measures.
In other words they have recognised it is about enabling women to do
both.
See Section
9.5.
An OECD report
on work and family life (released in November 2002) argued that it was
important to get the right family policies in place over the life of
a child, not just having the early stages covered by paid maternity
or parental leave. Isn't this a critical and valid point?
HREOC believes
government funded paid maternity leave is a crucial linchpin in a suite
of measures required to deal with the complex issues of balancing work
and family life in the 21st century.
Australia already
financially supports families. Last financial year, the federal Government
committed over 10 billion dollars to direct family assistance, including
the Maternity Allowance, Family Tax Benefit Parts A and B and the Maternity
Immunisation Allowance. Add the amount spent on Child Care Benefit and
Parenting Payments and this amount increases to $16 billion. The Baby
Bonus, when full implemented, will add another $500 million.
So, should a government
funded national scheme of paid maternity leave be introduced, there
will still be work to do in ensuring a proper work-family balance. Employers
- who are encouraged to top up maternity leave payments - also will
have a major role to play in creating family friendly work practices. See Chapter 11.
What are the
benefits to individual businesses, specific industries and the economy?
Benefits to individual businesses: a reduction in staff turnover costs, including
direct recruitment costs and the costs of retraining staff, and increased
staff loyalty. (See Section 10.2)
Benefits to specific
industries: facilitating the retention of highly trained staff,
particularly in industries employing a majority of women, such as education
and nursing. (See Section 10.3)
Benefits to the
broader economy : attraction and maintenance of a highly skilled, competitive
workforce, and maximising community investment in education and training.
(See Section 10.4)
Some employer
groups have claimed that a government funded scheme of paid maternity
leave will result in increased industrial pressure for employers to
top-up the government payment to full wage replacement. As such, they
are calling for paid maternity leave to be removed from the list of
allowable matters in the Workplace Relations Act. Does HREOC agree with
this recommendation?
HREOC does not
agree that the introduction of a government funded payment should reduce
women's industrial rights. Such a reduction would be deeply resented
by Australian women and their families. It would further confirm to
Australian women the difficulty of combining work and family responsibilities.
It is not clear
that unions would make a case for top-up of paid maternity leave before
the Australian Industrial Relations Commission, given other priorities.
Even if the unions did mount a test case, it is not a foregone conclusion
that they would win such a claim. Employers would be given the opportunity
to present their arguments against employer top up, which would be considered
by the AIRC.
How extensive
were community consultations?
There were 257
submissions in response to the interim options paper, released in April
2002, which have been used to inform and shape the final report.
Between May and
July 2002 the Sex Discrimination Commissioner and her staff held 27
consultations with employers, employer groups, unions, women's groups
and the community - in all capital cities and some regional areas. The
majority of consultations were group discussions. Forums were also held
and there were two roundtables.
See Chapter
1 for an overview of the process followed in preparing the paper.
See page 273
for a full list of consultations.
See page 267
for a list of submissions.
From the submissions
HREOC received during the policy debate what is the level of support
for and opposition to paid maternity leave?
Seventy-three per
cent of submissions supported the introduction of a national system
of paid maternity leave. A much smaller 16 per cent opposed it. Another
11 per cent were undecided or neutral. The main ground for opposition
was concern that employers may be forced to pay for maternity leave.
It should be noted
that these figures do not, however, indicate the complexity of submissions
in which support or opposition was sometimes conditional on other factors.
They have also not been weighted to reflect the fact that some submissions
were made by individuals, where as others were made by larger representational
bodies.