Paid Maternity Leave

In an historic move, the federal government will commit to paid parental leave from January 2011 for those earning less than $150,000 a year.

Federal Treasurer Wayne Swan announced the scheme yesterday (Mother’s Day) as part of Tuesday’s federal budget.

It is believed the Government has already drafted legislation for the full 18-week paid maternity leave scheme recommended by the Productivity Commission, and are considering it as both a short-term economic stimulant and a long-term reform.

Babble brings you the breakdown on the new scheme, from how it will work to the reaction so far.

The details

• It will starts on January 1, 2011, which the government says will give businesses time to prepare;
• It will be funded by the government, not business, although Employers may run their own paid parental schemes over and above what is offered here.
• The primary carer will receive 18 weeks post-natal leave, paid at the adult federal minimum wage (currently $543.78 per week);
• High income primary carers earning over $150,000 will not be eligible. The means test will be based on the primary carer’s income not on the household income.
• Baby Bonus and Family Tax Benefits A and B will continue to be available for stay-at-home mothers,
• Recipients of the parental leave scheme will not be eligible to also receive either the Baby Bonus or Family Tax Benefit Part B.
• The cost of the scheme will be approximately $260 million per annum;
• The government will not mandate paid paternity leave at this time;
• Employers will not be required to pay superannuation on paid parental leave entitlements.

The reaction

The news has been welcomed by most, although some are disappointed at the delay in implementation. 74% of respondents to an online poll by The Age thought that the scheme was generous enough, although it lags behind entitlements in many other OECD nations.

Former Democrats leader Natasha Stott Despoja has welcomed the Government’s announcement but is frustrated at the slow movement of this debate.

“It’s almost seven years to the day that I tabled Australia’s first paid maternity leave legislation … which is essentially the model that the government adopted today, albeit means tested and with a delayed start period.”

“However, I’m frustrated at the slow movement of this debate.

The Opposition has criticised the announcement, saying announcing a federal paid parental leave scheme so far in advance may stop employers introducing their own measures in the interim.

“My fear about this being stretched out to 2011 is that the employers that want to continue, or do implement maternity schemes, will just simply pull up stumps,” treasury spokesman Joe Hockey told ABC Television.

Australian Industry Group (Ai Group) chief executive Heather Ridout says it is an important economic and social reform.

“The means testing of paid maternity leave is consistent with the need for fiscal caution and is supported by Ai Group – as too is the delay in its start date which will give time for businesses to prepare and understand the scheme.”

NSW Commissioner for Children Gillian Calvert welcomed the scheme, saying it would give parents time to care for babies at an important stage of their life.

“Research shows the continuous interaction between baby and parents in the baby’s first 12 months of life shapes the brain wiring – affecting how a child regulates emotions, communicates, solves problems, thinks logically and reacts to the world,” she said.

She said the scheme would also help the workforce retain the skills and labour of female workers.

Federal Families Minister Jenny Macklin said it was important for new parents – mothers and fathers – to spend time with the baby when it comes into the family.

“As a mum myself I know how critical those early months are to a child’s life,” she said.

Independent senator Nick Xenophon says the scheme was long overdue, and should go ahead immediately, despite its effect on an already difficult budget.

“I think it’s a question of can we afford not to do it right now,” he said.

“When you consider the social benefit in giving mums paid maternity leave, I think … it’s a good thing to do right now, irrespective of the fact that things are relatively tough.”

ACTU president Sharan Burrow said the scheme comes after 30 years of campaigning by women across Australia.
She said the 18 week paid leave was about “dignity and respect for women”.

“If you are an older mum like me, then it’s a present for your daughters and granddaughters – because this is all about dignity and respect for women,” Ms Burrow said.

Activist organisation Getup.org says, “While it’s not everything we called for, it’s a huge step forward for Australian families.”

Twitter talk:

skitchum 16 weeks maternity leave for new Mums – great for Mums but even better for babes. Recognising the need for each other – well done PM xx

lauralanigan Australian government introduces an 18 wk paid maternity leave scheme, unbelievable and about bloody time:) Hooray.

alexhorwood Maternity leave entitlements for Australian women (oh, and working families)! Kevin is back in the good books!

jack_fung Australia finally gets 18 Weeks Paid Maternity leave in 2011. Compared to countries like Sweden 18 Months leave!

liedra Paid maternity leave is total win! Great job @kevinruddpm — us Gen Y’ers will appreciate not having to send a tiny baby to daycare.

Forum chat:

Members of online community Essential Baby were more critical of the scheme, concerned about the means-testing element.

MsD wrote:
“I think the idea of it being mean tested on the main carer is a direct attack on women. In some household, the women are the primary earner and if they have to take no paid leave just because they earn $150k+ then that means they will be forced to return to work earlier – definitely not fair.”

Meelamay said:
“In putting a means test on this proposal, it is moved from being a discussion about working rights and womens participation in the workforce, to a discussion about welfare.”

Ruffles opined:
“On the whole, I am overjoyed that it is finally on the table. Having a government program will also encourage big business to invest in their own systems, as BHP Billeton announced they were doing this week. And there are already many companies out there providing paid maternity leave – that won’t change. But once it becomes a common part of the business landscape, any company that wants to be seen as progressive will have to come on board.”