Tag Archives: Paid Parental Leave

Thousand Dollar Babies

There’s a big difference between the Labor Party’s Paid Parental Leave (PPL) scheme and the Coalition’s Paid Parental Leave policy, in more than just the simple monetary figures. Have a scan over the policies and see if you can find the disparity:

Coalition –
The Coalition’s Paid Parental Leave scheme will:
1. provide mothers with 26 weeks paid parental leave, at full replacement wage (up to a maximum salary of $150,000 per annum) or the Federal Minimum Wage, whichever is greater;
2. include superannuation contributions at the mandatory rate of nine per cent;
3. allow two out of the 26 weeks to be dedicated paternity leave to be used simultaneously or separately to the mother’s leave, paid at the father’s replacement wage (up to a maximum of $150,000 per annum) or the Federal Minimum Wage, whichever is greater, plus superannuation.
4. use the same work test and eligibility conditions as the Government’s recently legislated scheme;
5. be funded by a 1.5 percent levy on companies with taxable incomes in excess of $5 million. The levy will apply only to taxable income in excess of $5 million.
6. be paid and administered by the Family Assistance Office and will not impose an unnecessary administrative burden on employers, unlike Labor’s scheme

Labor –
Paid Parental Leave:
* is government funded
* is for eligible working parents of children born or adopted on or after 1 January 2011
* can be transferred to the other parent
* is paid at the National Minimum Wage – currently $570 a week before tax*
* is for up to 18 weeks
* can be taken any time within the first year after birth.

*The 2010 national minimum wage order has been set at $569.90 per week, calculated on the basis of a week of 38 ordinary hours, or $15 per hour. The PPL scheme payment is calculated at the hourly rate of $15.

You see, with the Coalition’s policy those in high-paying jobs (earning up to $150,000 P.A.) who become parents will receive their normal wage from the government, and those earning much less (eg. $40,000 P.A.) will receive their normal wage from the government for 6 and a half months (26 weeks). Now, if I were in the higher income bracket I would be pretty darn happy, whilst if I were in the lower income bracket I would be feeling pretty ripped off. This is because, essentially, the Coalition has put forth a policy that favours the (upper) middle to upper class over those in the so-called “working class” (I cringe to use such general terms, but they are necessary to make a clear point). In other words, the Coalition’s policy unintentionally sends a message that the relationship between a newborn child and its mother (and/or father) from Toorak is worth more money than the relationship between a newborn child and its mother (and/or father) from Dandenong. And the farce of it is that we will all, as consumers, be paying for the Coalition’s PPL policy when big businesses put up the price of their products to cover the 1.5 percent hike in company tax rates.

It will be paid for with a modest levy of 1.5 percent levy on companies with taxable incomes in excess of $5 million, which will be offset by a 1.5 percent cut in the company tax rate from 1 July 2013.

And as the SMH reports, “taxpayers will supplement the scheme to cover parental leave for Commonwealth public servants.”

One cannot deny the logic and practicalities of the situation: that businesses (who feel the pressure from their shareholders) will not allow their annual profits to reduce as the bottom-line is everything and instead we will all share the burden. So why then should the middle and upper classes profit more from this PPL policy, if we all have to pay for it? And even if the most staunch advocates of this policy deny that the burden will be passed on to consumers, why still should one family be paid more than another by the government?

The Coalition’s policy is in stark contrast to the Labor Party’s Scheme which pays every mother (or father) the same amount of money, the minimum wage of $569.90 per week, for 4 and a half months (18 weeks) – parents will be able choose to receive paid parental leave or the baby bonus when their child is born (same as the Coalition). Labor’s policy is fairer, more equitable and does not favour (monetarily) any family or parent-child relationship over another. This policy avoids discriminating between low, middle and high income earners, unlike the Coalition’s policy which, by providing different amounts to people in different income brackets, will reinforce pre-existing class barriers and the financial burden already felt by those earning a lower income. Now I’m not advocating for the reverse either (a Robin Hood-approach), I am merely advocating the position that monetary assistance from the government, especially when it relates to the relationship between any newborn child and its parent, should be given equally.

Paid Parental Leave is one of the most important policies to be put forth by both parties in this election and they should both be commended for bringing Australia into the 21st century on this issue as we are well behind many other countries like Italy, Canada, Austria, Belgium and France.

But when you are judging both policies, ask yourself these three questions:

1. Would you expect all consumers to (indirectly) fund a Paid Parental Leave scheme?
2. Do you then deduce that it is reasonable that these payments should foster and ensure that the rich maintain the lifestyle that they are accustomed to, whilst the poor continue to struggle with the costs of living?
and so, when it comes to a Paid Parental Leave scheme for all Australians
3. Should your parent-child relationship be worth more (or less) than someone else’s?

RELATED LINKS:
The Coalition – Real Action on Paid Parental Leave policy
Australian Labor Party (Australian Government, Family Assistance Office) – Paid Parental Leave scheme
SMH Online – ‘Abbott delays start of paid parental leave scheme, eases blow on business’, Phillip Coorey, 3 August 2010

FURTHER READING:
Productivity Commission – Paid Maternity, Paternity and Parental Leave
Business Spectator – ‘Abbott’s MPs to fight parental leave plan’ 6 August 2010
The Greens MPs – ‘A Strong Paid Parental Leave Scheme’ 25 May 2010
Liberal Party – Full policy document on Paid Parental Leave – will open as a PDF file

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