Parliament Updates

Zali Steggall MP speaks on Paid Parental Leave Amendment

25 February, 2020


I rise in support of the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020. This bill will amend the Paid Parental Leave Act 2010 to introduce measures to make paid parental leave more flexible. This is needed for modern workers as they balance challenging careers—often self-employed or running small businesses—and raising young children. Previously, workers have only been able to access parental leave in a single 12-month period and this bill be allow workers to take blocks of leave over 24 months. These new measures could increase workforce participation and provide a boon to the economy. It's a step in the right direction and shows that the government is conscious of the barriers women and families still face in the workplace.

In Warringah, there are 38,000 families with children under the age of 13 that will benefit from fixing these issues. We have a high proportion of young working families and many dual-income families. The issues of closing the pay gap and increasing childcare subsidies are ones of primary concern when I speak to families around Warringah. Despite numerous previous efforts, we need to be frank about where we are at. Women still face a 14 per cent pay gap, retire with 40 per cent less super and still account for 68.7 per cent of all part-time employment. Working mums seeking to increase their hours of work still face extraordinarily high effective marginal tax rates. To rectify this we need to increase paid parental leave. The government should consider increasing paid parental leave, not just for flexibility of the leave. According to the Workplace Gender Equality Agency, it's during the years when many women are balancing paid work with unpaid caring responsibilities at home that the gender pay gap begins and it widens considerably. By increasing the Paid Parental Leave scheme we can increase female workforce participation and decrease the pay gap.

Australians are currently able to access up to 20 weeks parental leave. This is below the recommended amount as suggested by the World Health Organisation of 26 weeks and it is well below OECD average of 55 weeks. A 2013 global study found that increasing the duration of leave not only increased female workplace participation but it also increased female working hours. Both would be huge boons to the Australian economy and would go to the heart of two major issues—saving for super and moving women from pat-time to full-time work. Parental leave itself must be more equitable.

One of the big problems is of course that 99.74 per cent of parental leave is taken by women. We need policies that support men who want to take time off and take care of their children. We should look to examples in other countries, like Iceland and Canada. In Iceland, the male parental leave participation rate is at 45 per cent. Since Iceland introduced its nine months of parental leave with three months dedicated to fathers, its parental leave participation has increased by 50 per cent. That's opposed to the two weeks of leave that Australian fathers are granted under our current policy. It's simply not enough. Other countries mandate bonus parental leave to both partners if, in the initial months following the birth of a child, both parents take their allotted leave. This has had demonstrable and positive benefits on measures of family cohesion and wellbeing, and in countries like Canada it has significantly increased male parental leave participation rates.

Another way to overcome pay and superannuation gap differences would be to legislate increases in childcare subsidy, which commenced in July 2018. The subsidy has been effective in improving workforce participation. It is the main way in which the government assists families with childcare costs. Childcare subsidies work by overcoming the strong disincentives built into the system that penalise women who increase their participation in the workforce. The more that women work, the more they lose the benefit of several allowances, such as the family benefit and the Medicare levy. There are many in my community in Warringah who feel and experience this. It makes little sense, because they still need this extra support when juggling both work and raising a family.

The OECD has reported that Australian parents pay 31 per cent of their combined income towards child care. This is not good enough. We have to do better. The benefits of increasing the subsidy would be disproportionate to the cost. Increased workforce participation has not been specifically modelled for this exact policy, but the Grattan Institute and KPMG have both approximated that similar policies would show an increase in annual GDP of $25 billion to $60 billion. I urge the Treasurer and the government to consider this.

While this bill is a step in the right direction, I look forward to conversations to do more, and I hope this government will introduce more legislation to keep addressing this problem. Many families in Warringah, as well as around Australia, would benefit hugely from further support from this government along the lines outlined. Thank you.