What do Garfield Barwick and Josh Frydenberg have in common? Let me give you a clue: paid parental leave. The notorious Cressida Wall explains.
Oh my god.
A week after the Budget, it’s becoming increasingly clear why Hockey announced the Paid Parental Leave changes on Mothers’ Day … because he honestly thought it was a rort and that people would be rejoicing that the Government was clamping down on those harpies who were ripping off “The System”. The conservatives saw it as a public good to stop the economic lady-vandals.
(On the other hand, women perceived it as the equivalent of ripping money out of Catholic School funding on Christmas Day.)
But then, whoops, Josh Frydenberg revealed to David Speers on Sky that his wife accessed both the government scheme and her employer scheme – because that’s what you do with entitlements. (In much the same way Tories laud Sir Garfield Barwick’s pronouncement that you are under no obligation to maximise your tax; so too, we Labor types are under no compulsion to avoid getting benefits. Nor it seems is Josh Frydenberg’s wife.)
You’ll be unsurprised to learn that this change gets my goat intensely.
The fact that Laurie Oakes reported it on Budget Night with big red capital letters on screen spelling “CRACKDOWN” just goes to show how little anyone has paid attention once again to what has been cast as a wimmin’s issue.
The Government has glossed over a few interesting points:
- Parental Leave Pay is currently $641.05 per week before tax for a maximum of 18 weeks. This is the hourly rate of the National Minimum Wage x 7.6 (hours in a standard working day) x 5 (days in a standard working week). Not exactly a bounty.
- Fewer than 5% of Australians earn the minimum wage so from the get go, 95% of women in employment are completely out of pocket when they become primary caregivers.
- Given that the average length of parental leave is 32 weeks [http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4102.0Main+Features10Nov+2013] even this money runs out well and truly before most mothers go back to work.
- Employer schemes are entirely voluntary on the part of employers. They are a point of difference or selling point for employers that enables them to differentiate. Vive le market, Mr Hockey!
- Around 6% of employer schemes merely cover the gap between the government scheme and the employee’s normal wage. The remainder are on top of paid parental leave. But is this double dipping? Hell no. The average payment period for employer schemes is 9.8 weeks which still leaves them well short of the total amount of time women are off work (18 + 9.8 = 27.8). And let’s not forget, for 18 weeks of that period, they were only getting the minimum wagenottheir full wage. The highest reported period was Alcoa with 16 weeks but the majority [https://www.wgea.gov.au/sites/default/files/2013-05-10_branded_ppl.pdf] were well below this level.
- There is nothing illegal or immoral about taking an employer entitlement at the same time as a government entitlement.
- None of the schemes pays super so whatever happens, women are still 9.5% worse off than their male counterparts over the period of primary care. Even a woman on the minimum wage who rushes back to work after 18 weeks for economic need.
Mothers having babies are not doing it easy in the economic stakes. Over a third (37%) of mothers who worked during pregnancy had started maternity leave one week or less before the birth of their child and mothers in the private sector were twice as likely to leave it til the last week as mothers in the public sector.(a)
Why are we still having to defend women getting basic financial assistance when they are creating the Australian economy in the form of babies who will later buy – and make – stuff?
Seriously, this Government has a brain the size of a caraway seed and a heart the size of a pea. Hockey says changes to entitlements will provide $1 billion in savings. Who is paying this $1 billion?
If the Government genuinely wanted to stop people who were getting more than their fair share, they could simply have legislated that it was illegal to get more during parental leave than you were previously getting as your wage. The fact is, such a Bill would have netted them tuppence because no woman is actually in this position.
And now, what are the likely consequences of the change? Well, the Australian Chamber of Commerce and Industry says [http://www.afr.com/news/policy/budget/budget-2015-employers-will-dump-parental-leave-business-leaders-say-20150512-ggyq2d] that employers will probably respond by getting rid of their own schemes, denying the government the $1 billion in savings it anticipates but making women significantly worse off because they’ll be back to minimum wage only and only for 18 weeks.
For a government that promised the most generous scheme ever at the last election, they didn’t do things by half when they decided to volte-face. The only thing worse would have been a claw back of payments already made.