Paid maternity leave: the
unfolding debate
"Not if ... but
how: A Victorian perspective on paid maternity leave" forum
Speech Delivered by Pru Goward, Federal Sex Discrimination Commissioner at RMIT University, 31 May 2002
- When the interim
paper Valuing Parenthood: Options for paid maternity leave was launched
the most we thought we could hope for was government agreement to economic
modelling of the options.
- Wow, weren't we
aiming low!
- That modest dream
has been more than surpassed as baby talk has dominated politics and
the media. The support of major political parties and the careful consideration
being given to it by Government is a great bonus.
- Why has the issue
taken off in this way?
- There is not any
one reason. It's not just that motherhood is hard to oppose.
- Let's just say
the timing has been right. The community is worried about how we can
keep juggling work and family without falling off the perch. Some are
worried about declining numbers of grandchildren, they're worried about
babies in child care because Mum has to go back to work. They're worried
about young women continuing to do a double shift. Their mothers did
it and are prematurely aged - they don't think it needs to be like that
- and its not right.
- In addition to
this, the Government has made clear that the money is there. The announcement
of a Baby Bonus scheme, costed at ½ a billion dollars in a full
year, says so. $500 a year for women to stay at home for 5 years - I
don't think so - but that $1/2 billion is certainly a handy sum for
a paid maternity leave that has been costed at $300m.
- Nobody seems to
like it much.
- Paid maternity leave has been brought onto the national agenda at a time when we're hungry for future solutions. Treasury finally caught up with us by releasing the Intergenerational Report on Budget Night, 3 weeks after our report hit the streets. It had no solutions but at least it admits there is a problem.
- Women no longer
want to single-handedly perform a dual role as mothers and workers.
- They are starting
to say 'enough is enough.'
- They know the
juggle is thankless and demanding, and many are no longer prepared to
do so.
- As a result women
are having fewer children, later in life, if at all.
- The macro outcome
is the sum of each woman believing she can choose to both work and have
children.
- This is of concern
for the future of Australia.
- The issue has
taken off as global and Australian marketplace competition grows.
- Employers need
to hire best people for the job - and they need to keep them there.
- The Australian
economy needs their skills and experience and it is for this reason
that economists and business leaders now recognise the importance of
enabling women to have the choice of a decent job, decent income security
and a decent family life as well.
- Tax payers also
need to think about it.
- Every year the
Australian Government invests public funds into education and training
programs.
- In 2000 women
made up 46 per cent of all Australians with post school qualifications.
- Women are spending
years studying and training to enter the workforce - Women are attending
university, entering TAFE and doing other a variety of other training
courses.
- They are qualifying
as lawyers, accountants, chefs, beauticians and aroma therapists.
- And just when
they've got that far, they reach an age when you can't feasibility put
off children any longer.
- The majority of
women are having children between the ages 30-34.
- It is when women
have committed at least 10 years to their field, in study and/or experience,
and are often on their way to becoming leaders in their fields, that
they leave the workforce.
- Australia fails
to maintain its most skilled labour force, crucial in the increasingly
competitive global market.
- Business case
arguments show that paid maternity leave can reduce attrition rates
and encourage women to return to the workforce earlier - AMP reported
an increase in retention rates from 52% in 1992 to 90% in 1997, following
the introduction of paid parental leave. [1]
- There is recognition
that the introduction of paid maternity leave may assist in ensuring
the attachment to the workforce of this skilled, experienced and therefore
scarce commodity.
- Employers realise
that paid maternity leave may potentially cut down staff recruitment
costs. Another reason why this issue has taken off in the current climate
of economic instability.
- A major retailer
found that it costs a minimum of $3800 to recruit a new full time employee.
[2] This does not include calculations for training
or loss of experience. It can go higher - for a bank teller, it's estimated
at eighty thousand dollars and for a qualified lawyer, hundreds of thousands
of dollars.
- These are the
reasons why all state public servants and 23 percent of women in the
private sector currently get paid maternity leave.
- The issue has
also taken off as people find it unacceptable that from July, when New
Zealand introduces its paid parental leave scheme, Australia will remain
one of only two nations in the developed world failing to provide a
national scheme of paid maternity.
- I think we can
say paid maternity leave is under active consideration.
- The main thing now is to decide - what scheme of paid maternity leave do we introduce? How it will be funded? What will it provide?
OPTIONS
- The interim paper
sets out five possible options for funding paid maternity leave.
- These are largely
based on schemes that have been successfully implemented in other countries.
- They are worthy of meaningful consideration and include:
1. Government funded universal payment: payment through the welfare system to all women who give birth.
2. Government funded employment based mode: Flat payment to women, made via either the tax or welfare system. Alternatively paid by employers who are reimbursed by the government.
3. Social insurance/superannuation style scheme: Government, employers and employees contribute to a fund from which maternity leave would be paid.
4. Employer levy: Employers pay a levy based on total salaries to avoid men being hired over women. Small businesses may be exempt.
5. Individual employer funded payment: Women have their maternity leave paid for by their employers with 'top up' payments to encourage their return to work.
- Let me say from
the outset - as stated in the options paper and reiterated in every
public comment I have made on this topic - this fifth option, mandatory
payments of maternity leave by employers to employees is not a preferred
option. It's not preferred by the ILO, among others.
- It is a third
world scheme - it exists in Bahrain and Burundi. No where in the developed
world is paid maternity leave funded through mandatory direct employer
payments.
- The Federal Government
has shown no support for such a scheme. Nor the Opposition, nor the
Democrats.
- Women would be
disadvantaged under this scheme. As employers and employer group spokespersons
keep telling us, employers - especially small business - would stop
employing women of child bearing age to avoid this cost.
- Any scheme which would further disadvantage women in the workforce is obviously unacceptable and must be avoided.
- So let's not
focus the debate on this option.
- There are four
other options outlined in the options paper worth considering - and
no doubt an array of other options in your minds.
- In deciding which
option to support, it is necessary to consider which option best meets
the objectives of a paid maternity leave scheme.
- So what are the objectives of a paid maternity leave scheme?
OBJECTIVES
- There are many. I would like to outline two here today.
- Objective 1: Addressing the declining fertility rate.
- The current fertility
rate is 1.75. This figure sits well below the replacement rate of 2.1
and even further below the 1961 of 3.6 children per women or the 1990
rate of 1.9 children per women.
- We need a next
generation to financially support Australia's increasingly aging population.
- More importantly,
we need a future generation to ensure that we continue to be a functioning
society - we need a next generation of consumers, innovators, creators
and workers.
- At the moment
this is far from guaranteed.
- Let me show you what I mean.
- Overhead 1:
The current age structure (or spread of ages in Australia). Based on
the total fertility rate in 2000, 1.75, and migration of 80,000 persons
per annum.
- As you can see
we have a nice beehive shaped structure, with a slight bulging in the
34-44 age groups.
- Now let's look
at age structure projections for Australia in 2050.
- Overhead 2:
A standard projection for the year 2050. Assumes that the total fertility
rate falls to 1.65 in 2005 however remains stable at this rate.
- Assumes also that
the number of migrants remains constant.
- What do we get?
- Perhaps a few
more queen bees and a few less worker bees as we see the bulge rise
slightly, to the 44-64 years age groups, however our beehive structure
still exists.
- Overhead 3:
This projection assumes our fertility rate continues to decline.
- It falls to 1.65
in 2005 and then to 1.3 in 2015 where it remains constant. Again, immigration
remains constant.
- The result?
- A grim projection.
- The bulge moves
to cover the 50-70 year old age groups.
- Our beehive age-structure
is now replaced by a coffin.
- I am not suggesting
that paid maternity leave alone can rectify this trend and ensure the
existence of a next generation.
- A period of paid
leave following the birth of a child does however respond to some of
the financial concerns discouraging women from having babies.
- Why?
- 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.
- Objective 2: Supporting women in their choices - in turn supporting families.
- Last financial
year, the Federal government committed over 10 billion dollars to direct
family assistance, including the maternity allowance, family tax benefits
A and B and a maternity immunisation allowance.
- Add the amount
spent on child care and parenting payments and this amount increases
to 16 billion.
- Another half a
billion dollars will be spent on the baby bonus tax when it is introduced.
- What this says
is that we always have, and continue to, support families.
- Now the family
has changed, the sort of support we give them has got to change.
- Paid maternity
leave however, does something that not one of these other schemes does
- it enables women to CHOOSE to stay home with their babies for the
first 14 weeks of that baby's life.
- It means they
don't have to get a doctor's certificate to go back to work at 4 weeks
because there's a mortgage to be paid.
- Offering women
a period of paid leave after the birth of a child is simply a sensible
and effective way of supporting women - and therefore supporting Australian
families today.
- We've got options; we've got objectives that a national scheme of paid maternity leave will go some way in addressing - what next?
NEXT STEPS
- Through public
submissions and a series of informal nationwide consultations with employee
and employer groups, business organisations, unions and experts in the
field we debate the feasibility of the each of the options.
- We can begin by
considering the options for a national scheme of paid maternity leave
scheme as set out in the paper. We also welcome submissions outlining
other options for funding paid maternity leave.
- The submissions
will form the backbone of the final report on the options for paid maternity
leave due out towards the end of this year.
- Submissions are
due by 12 July. During this period the nationwide consultation process
will take place.
- It is already
underway - last week, forums were held with employer groups, unions
and women's groups in Queensland. The process continues this week in
Melbourne.
- Every meeting
has included critics - but every meeting has been constructive give
the moral dimension that appears to underlie this issue.
- I'd like to think
the final report will be critic proof. That we've locked the stakeholders
up - and then in behind us.
- Paid maternity
leave itself is not an option. As the title of this forum so aptly puts
it - it is not an if but a how.
- Our challenge
now is to make sure the public support for the issue gets heard by those
with the power to make it happen.
- I look forward to your submissions and input in consultations, your thoughtfulness and your ideas. It is rare for Australians to have a chance to directly contribute to policy debate, let's make sound and intelligent use of it on this occasion.
1.
[1] George Trumbell "Creating a culture that's good for business"
in E.M. Davis and V. Pratt (eds) Making the Link: Affirmative Action and
Industrial Relations No. 8 Labour-Management Studies Found Sydney 1997,
31 -33 at 32.
2. [2] Human Rights and Equal Opportunity Commission consultation
with Phil Naylor, CEO Australian Retailers Association 19 September 2001;
Australian Retailers Association, Department of Employment and Workplace
Relations and Equal Opportunity for Women in the Workplace Agency Balancing
the Till: Increasing profits and building a better workforce Commonwealth
of Australia Canberra 2002, 11.
