A Time to Value - Proposal for a National Paid Maternity Leave Scheme
Part B: The Imperative
2. A CHANGING AUSTRALIA: THE NEED FOR A NATIONAL SCHEME OF PAID MATERNITY LEAVE IN 2002
- 2.1 Introduction
- 2.2 History
- 2.3 The purpose of paid maternity leave
- 2.4 Economic and social change in a generation
- 2.4.1 Introduction
- 2.5 The consequences of change for work and family
- 2.6 Conclusion
3. ADEQUACY OF EXISTING ARRANGEMENTS
- 3.1 Introduction
- 3.2 Existing unpaid maternity leave arrangements
- 3.3 Existing paid maternity leave arrangements
- 3.4 Government payments to parents
- 3.5 Conclusion
2. A changing Australia: The need for a national scheme of paid maternity leave in 2002
2.1 Introduction
The purpose of this Chapter is to provide an overview of Australian society and the socio-economic context in which the introduction of a national paid maternity leave scheme for Australia might be considered. The Chapter outlines the key changes that have driven the increased pressure for paid maternity leave. More specifically, it examines the economic and social changes which have led to a significant proportion of mothers with babies less than six months of age returning to the workforce, many out of financial necessity, despite strong health and welfare arguments for their remaining at home with their children during at least part of this period. [20] In these circumstances, a national scheme of paid maternity leave becomes a priority in family policy.
Chapter 3 considers in detail the existing arrangements to assist families. Part C sets out the objectives of a paid maternity leave scheme. These are the objectives identified in consultations and submissions as those that a national scheme should address and be able to meet.
2.2 History
The pursuit of paid maternity leave is not unique to Australia. Internationally, the need for paid maternity leave and other measures that provide maternity protection for women in paid work has a long history of recognition. The International Labour Organization first enacted the Maternity Protection Convention in 1919. [21] This Convention was revised in 1952 [22] and again in 2000.[23]
The issue of paid maternity leave is also not new in Australia. Australia has been concerned with supporting women at the time of childbirth since the time of federation. For example, a Maternity Allowance was introduced on 10 October 1912, abolished on 1 November 1978 and re-introduced in a different form on 1 February 1996. [24]
Similarly, the existence of working mothers is not a new phenomenon. Historically, certain groups of women in Australia have always worked and combined child-rearing in order to meet their families' financial commitments.
Australia has considered and come close to introducing paid maternity leave in the past. Australia reported to the Committee on the Elimination of Discrimination against Women during the International Year of the Family, 1994, that:
… paid maternity leave would become one of the major issues for public debate.The Government was now taking steps to introduce parental leave. [25]
In the event, the then Government instead introduced the Maternity Allowance in 1996, payable to all mothers at the time of the birth of their child. That payment is still made and is now equivalent to less than two weeks of the minimum wage.
However, the consultations undertaken and submissions received in 2002 show a strong level of support for paid maternity leave. HREOC considers that changing social and economic circumstances mean that, now more then ever before, there is a pressing need to introduce paid maternity leave.
2.3 The purpose of paid maternity leave
The case for a national paid maternity leave scheme rests on the importance of replacing family income around childbirth and recognising and partly compensating the financial disadvantage experienced by women in the workforce when they bear children. Recognition of the health and wellbeing needs of mothers and babies is also a significant issue.
While the need to address financial disadvantage and provide income replacement is no less important today, the case for a national scheme of paid maternity leave has now been engendered with an acuteness arising from the large number of women returning to paid work for financial reasons very soon after the birth of a child. [26] A national scheme would enable mothers of newborns to recover fully from the birth and be full time carers for the first few months of a child's life. This is to the benefit of both mother and child. These would be intrinsically desirable goals for individuals and the society.
The design of any policy initiative can, and may be intended to, affect behaviour or to deliver certain outcomes. For example, a recent measure (Family Tax Benefit Part B) was specifically designed to assist women to stay home for lengthy periods (in excess of twelve months) after the birth of a child. Family Tax Benefit Part B provides only modest family income replacement (up to $2 836.05 per annum [27] and although it may be very welcome for families, the number of women choosing to remain at home after the birth of a child in response to this measure is also likely to be modest. What is more, the length of time women receiving the payment are able to afford to be out of paid work is likely to be limited. The steady increase in workforce participation rates for women with children under five years of age may indicate that its effect is marginal.
Another possible form of government assistance which would assist parents to be full time carers, although for a shorter period of time, is a payment that provides a significant proportion of income replacement for a limited period. The more closely the size of the benefit approaches the parent's total net earnings, the greater the number of parents likely to take the benefit and remain at home for its duration. That benefit is commonly called paid maternity leave, reflecting the limited nature of the period of support, an attachment to the labour force and the need for family income replacement rather than family income supplementation. It presupposes that mothers will eventually return to work although the measure is not necessarily tied to this.
2.4 Economic and social change in a generation
2.4.1 Introduction
Economic and social change during the 1980s and 1990s has been extensive. The participation of women in the labour market has risen dramatically, the education and training required of young workers today has also increased significantly. Changes in the nature of work open to women and declining job certainty have social and economic flow-on effects for families and family formation. Australia's rising cost of home ownership and the changing social expectations of women have also had an impact on the modern socio-economic structure of Australia.
2.4.2 Women's labour force participation rates
Women now make up almost half of the Australian work force. Over the course of the past twenty years, women have joined the workforce in increasing numbers. Significantly, the onset of motherhood, once a turning point in a woman's working life, is increasingly being accommodated within the constraints of paid employment. The graph below demonstrates that where once the prime childbearing years were associated with a rapid decline in labour market participation, today the decline is much smaller and for a shorter period of time. Frequently, but not always, family responsibilities are accommodated with part time and casual work. The employment rate for all women of workforce age (15-64) increased from 47 per cent in 1980 to 61 per cent in 2000.[28] For women in the main childbearing years (25-34), the employment rate increased from 50 per cent in 1980 to 66 per cent in 2000.[29]
Graph 2.1: Female labour force participation by age group, Australia, 1985-2000
Source: ABS Labour Force - Participation Rate - Australia (Cat no 6291.40.001), May figures.
The growth in two income families with dependants has been the largest contributor to rising family living standards since the 1970s. In 2000, 63 per cent of couple families with dependants had two incomes.[30]
The contribution of women's personal income to total income for couples with children increased from 25 per cent of total income in 1982 to 30 per cent in 1999-2000. [31]
2.4.3 Education and training opportunities
Not only are more women employed in paid work across all ages, greater access to education and training has meant the nature of the work they do has also changed. Employment opportunities of women have also expanded, partly because of their uptake of education and training. Women with a degree have a full time employment-population ratio that is about two times larger than women who left school at 15 years of age and subsequently have not obtained a qualification. [32]
The rise in the number of women and girls in education and training has occurred at a time when the percentage of men and boys in education and training has also risen, although the increase for women and girls has been more startling, especially in vocational training. The rapid expansion in labour-saving technology and the increasing demand for skilled labour that has accompanied technological change, in conjunction with greater emphasis on Australia's international competitiveness, have contributed to this trend.
The Year 12 retention rate for girls increased from 65.2 per cent in 1989 to 78.5 per cent in 1999. [33] This increase in secondary schooling numbers preceded a large increase in students attending universities and other forms of higher education. In the ten years from 1989, the number of people of workforce age attending an educational institution rose by 28 per cent. [34]
Young people are also increasingly in higher education at older ages. Overall, around one in three people aged 20-24 is still engaged in training. [35] This is an increase of 39.2 per cent of those in this age group. They may also be engaged in paid work, usually part time. [36]
There has also been a dramatic increase in the participation of women in higher education. In 1989 women made up 49 per cent of higher education students aged 20-24 and 47 per cent of those 25-44. [37] A decade later these proportions had increased to 52 and 55 per cent respectively. [38]
The significant investment of a woman's time and money in her education, in addition to substantial Government investment and the expectation of a return on that investment, underpins much of the change in social expectations about women's work choices.
2.4.4 Changes in the nature of work
Changes in the type of work
As in many other countries, the levels and patterns of women's participation in paid work in Australia have undergone substantial changes over the last 50 years. A much wider range of occupations have opened up to women as a result of the introduction of anti-discrimination laws, changes in social attitudes to the roles and rights of women in the paid workforce, the removal from awards of conditions that discriminated against women and equal opportunity policies. Changes in the labour market, in particular the growth of the service industry, improvements in communication technologies and increased mechanisation and computerisation, have also resulted in changes in the kinds of paid work undertaken by women. [39] In the late 1980s and early 1990s, when these labour market changes were most significant, there was an increase in the numbers of women across most occupations. The most significant change was the number of women in professional and para-professional occupations. By August 1992, 42.4 per cent of women were professionals and 46.7 per cent of women were para-professionals. [40]
Despite these changes, Australia continues to have one of the most highly gender segregated labour forces in the industrialised world. [41] Women continue to be concentrated in occupations traditionally dominated by women, for example 91 per cent of the 187 300 nurses and 73 per cent of the 301 100 school teachers in Australia today are female. [42]
Increased uncertainty
Families face rising living costs and continue to expect that they can provide improved living conditions for their children, yet family income today is less certain than it has been for past generations. This reflects, in part, an increasing preference by employers to hire workers on a casual or temporary contract basis. Casual work, defined by the Australian Bureau of Statistics as employment without leave entitlements, increased by 69 per cent overall between 1988 and 1998. For men, the incidence of casual work increased by 115 per cent, and for women, 43 per cent. [43] As at August 2001 workers without leave entitlements comprised 27 per cent of all full time and part time employees. [44]
Some of this increased casualisation reflects the high participation rates of young men and women in post-secondary education and their desire for part time, not full time work.
Overall, the number of permanent full and part time employees has dropped from 79.8 per cent of all employed persons to 62.2 per cent in the space of thirty years (1971-2000). [45] The Australian Bureau of Statistics estimates that only 54.6 per cent of female employees and 55.3 per cent of male employees are now permanent. [46] For full time permanent work this change has been most marked; the percentage has declined from an estimated 76.4 per cent to 53.4 per cent of employed persons. [47] This drop results not only from an increase in the number of casual employees, but also from those self employed and in restricted tenure jobs.
In addition to the decline in permanency, a significant proportion of the workforce is in a job for a relatively short period. Only between 10 per cent and 26 per cent of employees in non-permanent forms of work have tenure of more than two years, compared with 64 per cent of permanent employees. [48] Overall, in 1998 a total of 42 per cent of the Australian workforce had been working for an employer for less than two years. [49]
Job security in Australia is rapidly declining. In 1989/90 when we first asked the "is your job secure" question, the vast majority of Australian workers reported having secure jobs: a total of 73% felt very secure or fairly secure in their jobs. In the next few years this dropped to 63% and by 1996/97 it had fallen further to 56%. [50]
In 2000, almost one in four of those aged 25-34 had changed employer within the previous 12 months, compared with 10 per cent of 35-44 year olds and even fewer in older age groups. [51] Female employees of child bearing age also have shorter periods of continuous employment, with 45.9 per cent of those aged 20-24 and 27.9 per cent of those aged 25-34 having worked in the same job for less than one year. [52]
Historically, high levels of unemployment have been associated with lower rates of family formation and low levels of unemployment with higher rates. While the improving macro-economic conditions of the past 12 years might suggest we should now be witnessing higher rates of family formation, anecdotal and statistical evidence that individual levels of employment uncertainty have risen as the result of changed industrial conditions, mitigate against this. [53]
The deregulation of the labour market and the rise of enterprise bargaining has arguably contributed to Australia's record of economic growth since the 1990s. However, this deregulation appears to have contributed to a higher level of employment uncertainty and has also had unintended social consequences which are outlined below at 2.5.
2.4.5 Home ownership
With greater family purchasing power there is likely to be some upward pressure on demand for family formation goods such as houses and cars. But it is also true that rising populations in urban areas and the Australian tradition of low urban density have also contributed to the rising cost of housing and the perception of the need for the second car. In real terms, construction costs have been a secondary source of rising housing prices. The major contributor to rising house prices has been the cost of land, reflecting an increase in demand for housing per se rather than of luxurious or more expensive houses. BIS Shrapnel data shows a 677 per cent increase in the cost of land in Sydney over the period 1980-2002 but only an increase of 241 per cent in construction costs. [54] Much of this increase is in rising unit costs of materials and labour.
Accompanying these spectacular increases in land prices has been a concomitant decrease in housing affordability for single income earners. Whereas in 1976 the average weekly mortgage repayment was 6.5 per cent of Average Weekly Earnings, it is now 52 per cent. [55] For many families, two incomes are now essential to support the purchase of a home.
The Home Loan Affordability Indicator has decreased from 57.4 in March 1980 to 40.5 in December 2001 - representing a 29 per cent decrease in the affordability of housing in Australia in the last 20 years. [56] In cities such as Sydney the increase has been much more marked. The average loan size for first home buyers in Australia has increased from $73 300 in 1992 to $124 800 in 2002. This is a 70 per cent increase in a decade.[57]
Housing affordability is also closely related to interest rates. Housing affordability is defined as the monthly mortgage repayments for a 25 year loan on 75 per cent of the median house price as a percentage of average total full time earnings. There is no doubt that the high interest rates of the 1980s gave impetus to two income families. The decline in interest rates in the late 1990s appears to have assisted in driving up housing prices, given the greater capacity of two income households to commit to larger mortgages. [58]
The story of housing affordability suggests that the two income family has become necessary for owning a home. The risk now is that were interest rates to rise again, families, already reliant on two incomes, would be further obliged to extract the maximum income from both parents or bear mortgages worth more than the value of the asset.
Access to housing finance is more difficult and expensive for those without permanent work, suggesting that for younger age groups, home ownership, with its implications for family formation, is likely to be problematic.
It is not surprising that among couples under the age of 35, without children, home ownership fell eight per cent in the five years from 1994 to 1999, from 60 per cent to 52 per cent. [59] Home purchase is generally associated with the beginnings of family formation.
2.4.6 Social and cultural change
Introduction
Other factors have contributed to the rise in the numbers of mothers in paid work. Economic, technological and demographic change has been accompanied by cultural and social shifts.
Social expectations
Foremost among these is the expectation that women should be able to be in paid work and to have children. The modern women's rights movement and the increasing recognition of individual human rights by democratic Governments have enhanced the trend for women to choose to be in paid work.
Since the passing of the Sex Discrimination Act in 1984, Australia, like many other countries, has positively promoted the rights of women, in particular their right to be in paid work. The removal of the bar on married women working in the public service in 1966, the ruling of the then Commonwealth Conciliation and Arbitration Commission in 1969 that women should have equal pay and the development of more gender-inclusive education programmes have all played a part in increasing the access of women to paid work. [60]
The availability of reliable contraception since the 1960s has facilitated this by enabling women to manage their work and family formation roles.
The increased likelihood of family breakdown may have encouraged more women to value self-reliance through remaining attached to the workforce during their childbearing years. The reform of Australia's divorce law was marked by the introduction of the Family Law Act 1975 (Cth). Since then, Australia's divorce rate has risen dramatically. In 1997 there were approximately 12 divorces per 1 000 married couples each year. [61] Based on 1999 rates, almost one in two marriages will end in divorce. [62]
Today 19.6 per cent of children are living with only one parent, usually their mother. [63] The expectation that, in these circumstances, a mother will be her family's primary earner may be an additional factor that could incline more young women to pursuing long term work force participation. Although less than half (46 per cent) of sole parents in Australia are in paid work, [64] the majority relying on child support and welfare payments, this percentage is expected to rise under recent Government policy changes. [65]
One of the most significant features of the change in women's expectations over the course of a generation has been the shift from a family centred to a work and family centred approach to life planning, as Catherine Hakim's preference theory demonstrates. [66] However, this shift has not and could not be absolute. In practice there is a wide combination of choices available to and taken up by women. Some women have, for example, decided to become full time parents despite their extensive education and training while others become full time workers as well as mothers, despite the low skilled and low paid nature of their work. In positing three groups of women: work centred, home centred and adaptive women, Hakim's theory is itself a simplification of the myriad of combinations available. The theory also assumes all women have the same capacity to choose whereas for many, their combination of work and family responsibilities will be a matter of necessity. Some choices will simply not be available. Despite this, the theory's policy implications are clear enough. Policies aimed at affecting the decisions women make, including the decision to have children and the numbers of children to have, will be of limited use if based on the assumption that all women will respond in the same way to a policy instrument such as a government benefit.
2.4.7 Work and family
There is also growing recognition of the need to change the structures of work to recognise both women's and men's family responsibilities. [67]
Concern was expressed in every forum in HREOC's consultations that work and life balance was becoming increasingly precarious for Australian families. In addition to this general concern, there was, in particular, recognition that the role of men in their families necessitated more support. This point was raised in several consultations, including a consultation with women's groups and community members in Perth.
Men want to have contact with their children, bond with kids … They want to take a greater role in parenting. [68]
Support for the greater involvement of men with their young families came not only from women in the community but also from men, especially those in union consultations. For example, in a consultation with union representatives in Adelaide one participant stated that "… having both parents at home [following childbirth] obviously supports the family, but in reality men are not taking the leave". [69]
Concern was also expressed about the long hours the fathers of young children worked in an attempt to compensate the family for the mother's loss of income during this stage. Long working hours and its effect on families recently prompted the Australian Council of Trade Unions to run a test case on reasonable working hours in the Australian Industrial Relations Commission. [70]
Women supported the greater involvement of men in parenting because of the greater capacity this provided for women to pursue their own work and family choices but also because they considered this was best for children and their fathers.
2.5 The consequences of change for work and family
2.5.1 Introduction
It is difficult to attribute cause and effect between the various changes discussed above, but together they have clearly contributed to significant changes in family formation and working patterns for women. The main changes are outlined below.
2.5.2 The need for two income families
The combination of rising job uncertainty with declining housing affordability and a rising cost of living has contributed to the increase in the number of two income families. Spreading the risk of losing total family income between a couple is effectively achieved by their both working, while rising living costs also put pressure on families to have a second income earner, especially in families whose primary source of income is a low or medium income earner. Rural families, for example, have long been familiar with the need to minimise the risk of income exposure. In rural households, 80 per cent of off-farm income is earned by women. [71] In addition, couples in two income households are likely to be more attractive to mortgage providers, as the risk of income reduction is lessened.
The number of two income families had risen from 50.2 per cent of all couple families with dependent children in 1987 to 56.3 per cent by 1997. [72] By 2000, this proportion had risen to 63 per cent of couple families with dependent children. [73]
2.5.3 Older parenting ages
The rising numbers of young people, in particular of young women, in non-compulsory education well into their twenties, suggests that young people today will be inclined to commit to relationships and child rearing later than previous generations. The desire of young women and young men to receive a return on the investment they have made in their education and training is likely to further defer this commitment. Young women's increased expectation of workforce attachment and their growing career expectations often also compete with a focus on family formation. In addition, growing job uncertainty is associated with the deferral of partnering by both affecting the capacity of young people to acquire a home and the understandable desire of young people for certainty before committing to support another.
The median age at which women in Australia bear their first child is now 30 years; it is a figure which has risen relentlessly over the course of the past generation. [74] The proportion of women aged 25-29 who had not had a child increased from 40 per cent in 1986 to 53 per cent in 1996. [75] The parenting age for men is slightly higher.
A fast growing group of new mothers is those aged 35 and over. Women aged 35 years and over giving birth to their first child, as a percentage of women aged 35 and over giving birth, was 23.7 per cent in 1999, up from 12.7 per cent in 1991. [76]
The number of births to women aged 30 years and over increased from one in four births in 1979 to almost one in every two births in 1999. [77] Peak fertility was among 24 year old women in 1964 and among 29 year old women in 1994. [78]
For over 35 year old mothers, overall fertility is likely to be lower than that of younger women.
The ability to conceive declines markedly from age 35 years onwards. The proportion of assisted conception pregnancies to women aged 35 years and over in Australia and New Zealand increased from 29 per cent of all assisted conception pregnancies in 1990 to 41 per cent in 1997. [79]
2.5.4 Family size continues to drop
For women aged 30 and over, the mean number of children ever born declined from 2.5 children per woman in 1986 to 2.3 in 1996. [80] There is a decline in this age group of the proportion of women having larger families, with the number of women with four or more children down from 22 per cent in 1986 to 18 per cent in 1996. [81] The proportion of single child families among all families with dependants has risen from 22 per cent to 34 per cent in the 20 years from 1981 to 2001. [82] It has been this reduction in family size, rather than an increase in childlessness, which has contributed to declining fertility rates thus far. In future, significant increases in childlessness will also contribute to falling fertility. Based on estimates for 2000, 24 per cent of women currently in their reproductive years will remain childless. [83]
Graph 2.2: Families and dependent children
Philip Gammage noted that:
[t]his is the era of "the only, lonely child", increasingly born to a mother of about 29 years of age, a mother often necessarily in mid career. There are no support structures available from an extended family. It does not exist. The past traditions and securities have gone, probably for ever. Instead of regretting that loss, and sometimes bowing to the cultural and sexual hegemony of the wishful male (especially, it might seem, elderly, middle-class parliamentary ones) we should, I think, be asserting the need for new models. [84]
Overall, Australia's fertility rate has trended down over the last part of the twentieth century. The Total Fertility Rate was 3.1 during the early 1920s, 2.1 in the 1930s (the Great Depression), 3.4 in 1962 (the Baby Boom), 2.9 in the early 1970s, 1.90 in 1980, 1.91 in 1990, 1.75 in 2000 and 1.73 in 2001. [85]
Graph 2.3: Total Fertility Rate
Source: ABS 4102.0 Australian Social Trends 2002, p13.
Arguably, insufficient support for working families (in the form of paid maternity leave, child care subsidy, lack of access to retraining facilities after time out of the workforce and lack of access to flexible working arrangements) exacerbates the trend to smaller families at older ages. [86] This downward trend in fertility is also, in part, the result of increased age at the time of first birth.
2.5.5 Women returning to work within a year of the birth of a child
Financial pressures and the need for many women to maintain workforce attachment are likely to contribute to the significant number of women with young infants returning to work. This figure is likely to be interest rate sensitive for some women, particularly where the major debt is the household mortgage. The Finance Sector Union, in a survey of its members, reported that nearly half of the 182 respondents indicated that they might have to return to work earlier than they would like because of their financial situation. [87] This was also reflected in a number of the consultations. In a consultation held with women's groups and community members in Brisbane, for example, it was stated that:
[f]inancially you cannot afford not to go back. They say you have the choice to stay at home or go back to work but there really is no choice at the moment. It is a clear financial decision. [88]
More limited tenure has also meant that not all women in the workforce are eligible for the 12 month period of unpaid maternity leave available in Australia. Women are not eligible for unpaid maternity leave unless they have been with a single employer for at least 12 months. Twenty-eight per cent of women workers aged 25-34 have worked in their main job for less than 12 months; for younger women this figure is higher. [89]
This may mean some women take other forms of leave, generally short, in order to retain their position. The declining number of permanent employees, especially in younger age groups, suggests eligibility will continue to be problematic for women while it is based on industrial requirements.
Other women return to work earlier than they might choose because of the shortage of formal childcare and the need to accept a place once offered or return to the end of the waiting list. [90] The decision to return to work is also likely to be affected by personal preferences.
Census figures confirm that 36 per cent of women were in the labour force within a year of the birth of a baby in 2001. [91] This is a substantial increase from 1981, when 26 per cent of women with a child under one were in the labour force. [92] As shown in Table 2.1, a significant number of women with dependent children are in the labour force. There has been a dramatic increase in the labour force participation rate for women in couples with dependent children over the past twenty years. For example, the proportion of women in couples in the labour force women whose youngest child is aged under one more than doubled between 1976 and 1996. The change in labour force participation for sole parents is not as clear, with the 1996 labour force participation rate for women whose youngest child is under one being greater than it was in 1976, but less than in 1986.
Table 2.1: Labour force participation rate of women with dependent children
. |
Age
of youngest child |
1976
(%) |
1986 (%) |
1996
(%) |
Couples |
o |
16.6 |
28.7 |
35.5 |
. |
1-2 |
25.5 |
42.1 |
52.3 |
. |
4-5 |
39.9 |
53.7 |
62.1 |
Sole
parents |
o |
14.9 |
27.6 |
18.4 |
. |
1-2 |
22.4 |
40.5 |
34.1 |
. |
4-5 |
33.5 |
51.4 |
48.5 |
Source: ABS 4102.0 Australian Social Trends 2002, p13.
A 1998 Australian Bureau of Statistics survey found that 69 per cent of female employees with children under the age of six years who took a break from the workforce (using paid and/or unpaid leave) or ceased working at the time of the birth of their youngest child returned to work within a year of the birth of this child. [93] This survey does not include women not employed at the time of the survey and women who did not return to work within six years of the birth. It does confirm that for women with ongoing attachment to the workforce, returning to work within a year is common.
2.6 Conclusion
Women in Australia today are working in increasing numbers, undertaking more study, delaying childbirth and having fewer children. Women with children increasingly are also in paid work, often soon after the birth of a child, to reduce the risk of there being no income earner due to unexpected unemployment, and to assist in meeting the family's cost of living. They also work because they have invested considerable time and investment in developing workforce skills and because there is a greater expectation and need among women for financial independence. Many women also derive considerable enjoyment and a sense of identity from work.
Many families are facing increasing time and financial pressures in a less certain environment. The economic, social and cultural changes that Australia has experienced within the space of a generation mean that now, more than ever before, there is a need to support families and parents combining work and childrearing. The majority of parents with dependent children are now in paid work. [94] Measures that support families therefore need to reflect this change. A national paid maternity leave scheme becomes, in these circumstances, an essential part of such support. HREOC urges the federal Government to act now to support families, women, and babies through the introduction of paid maternity leave.
3. Adequacy of existing arrangements
3.1 Introduction
An important consideration in assessing the need for a national paid maternity leave scheme is the adequacy of existing government and business provisions designed to support women and families at the time of childbirth.
The interim paper, Valuing Parenthood: Options for paid maternity leave, [95] considered the existing provisions to support women and families at the time of childbirth. The interim paper extensively reviewed available data on unpaid and paid maternity leave, and government assistance. The findings of that paper were that while Australia's unpaid maternity leave arrangements are comparable with those of other countries, including Australia's trading partners, they still fail to provide adequate support for families around childbirth as they do not provide financial support for mothers wishing to absent themselves from work for some time immediately following the birth of the baby. [96] Existing paid maternity leave arrangements are limited, haphazard and fall significantly below what could be considered a national system. [97] Similarly, while the Government provides a range of family assistance and income support payments to assist families, none of these meet the key objectives of paid maternity leave. [98] These findings, and particularly the gap in provisions to support women at the time of childbirth, were one of the key starting points for HREOC's examination of the need or otherwise for a national paid maternity leave scheme.
This Chapter provides a critical overview of current financial support and maternity leave arrangements in Australia, including the current system of unpaid maternity leave, paid maternity leave and government benefits to families. This information draws on the findings of the interim paper, together with comments received in submissions and consultations, in order to demonstrate the need for a national system of paid maternity leave.
3.2 Existing unpaid maternity leave arrangements
3.2.1 Introduction
Australia currently provides a reasonably comprehensive system of unpaid leave. Permanent full time and part time employees who have worked with their employer for at least 12 continuous months have a minimum entitlement to 52 weeks of unpaid parental leave following the birth or adoption of a child. [99]
Employees taking unpaid parental leave have a right to return to the position they held prior to taking leave, or to one nearest in status. [100] State legislation generally mirrors the federal provision. [101]
In May 2001, an Australian Industrial Relations Commission decision granted access to unpaid parental leave to casual employees covered by a federal award and employed on a:
… regular and systematic basis for several periods of employment or on a regular or systematic basis for an ongoing period of employment during a period of at least 12 months, and [who have] a reasonable expectation of on-going employment. [102]
This provision will be inserted into federal awards on application by the award parties on an award-by-award basis. Legislation in Queensland and New South Wales also covers casual employees who have regular, continuous service with one employer. [103]
3.2.2 Adequacy of current unpaid maternity leave arrangements
Australia's unpaid maternity leave arrangements reflect international practices. However, in consultations a perception emerged that Australia's unpaid maternity leave standards are the world's best. This is not the case.
Sweden provides a total of 18 months parental leave, of which 14 weeks is maternity leave. Twelve of the 18 months is paid at 80 per cent of the parent's prior earnings, three months paid at a flat rate, and the remaining three months unpaid leave. [104]
Austria provides a total of 27.7 months parental leave of which 16 weeks is maternity leave paid at 100 per cent of the mother's prior earnings, and the remaining two years is parental leave. Eighteen months of the parental leave is paid at the unemployment benefit rate with the remaining six months unpaid. [105]
Germany provides a total of 39.2 months of parental leave of which 14 weeks is maternity leave paid at a rate of 100 per cent of the mother's prior earnings, with the remaining three years classified as parental leave. Two years of this parental leave is paid at a flat rate, although it is income tested, with the remaining year unpaid. [106]
Finland and Norway both provide 36 months of parental leave, all of which is paid. [107]
Clearly, Australia's 12 months of unpaid maternity leave falls short of "world's best". However, the provision of this unpaid leave is still an important support for women in order to enable them to take a period of time out of paid work, without losing the right to return to their previous position.
Consultations and submissions suggested that a significant number of women are not able to make full use of their unpaid leave entitlement.
There is little information available on the duration of leave for those who do take unpaid maternity leave. The information that is available suggests that a significant proportion of women return to work prior to their child's first birthday. A 1998 Australian Bureau of Statistics survey found that 69 per cent of female employees with children under the age of six years who took a break from the workforce (using paid and/or unpaid leave) or ceased working at the time of the birth of their youngest child returned to work within a year of the birth of this child. [108] However, any leave taken was not necessarily unpaid maternity leave. A 1988 study by the Australian Institute of Family Studies found 65 per cent of women who were eligible for, and took, maternity leave [109] returned to work with the same employer within the 12 month statutory period. [110] In 1996, 34 per cent of all women whose youngest child was aged under one year were in the labour force. [111] In the case that women had only one child, and that child was aged under one year, the labour force participation rate in 1996 was 39 per cent. [112] A recent study of 400 pregnant women attending the Melbourne Royal Women's Hospital's pre-admission clinic found that the mean expected period of unpaid maternity leave was 41.6 weeks. [113]
One of the reasons that some women cannot access unpaid leave is the eligibility criteria for this leave, that require a woman to have worked for 12 continuous months with a single employer. The Australian Living Standards Study conducted in 1991-1992 found that three quarters of women in its full time employee sample were eligible for unpaid parental leave, while the number of eligible part time females was less than 40 per cent. Part time employees' lack of eligibility was most likely due to the high proportion of part time employees who worked on a casual basis. Some 47 per cent of full time male employees in the sample indicated that they were eligible for unpaid parental leave. [114]
Women who do not have sufficient service with one employer and casual employees not covered by a federal award or relevant State legislation will have no right to unpaid maternity leave and may be forced to resign in order to give birth to and care for their child. Women's workforce participation is characterised by their part time and casual employment, making eligibility for unpaid leave particularly difficult. The Australian Council of Trade Unions pointed out that:
[n]early one-quarter of women have worked less than 12 months in their main job, compared to only 20.6% of men.
…
Younger women are most likely to have held their job for less than 1 year - 46% of 20-24 year olds have short tenure, 28% of women aged 25-34, and 19% of those aged 34-44. [115]
In addition, it is clear that the lack of financial support during a period of unpaid parental leave, and the need to forego an income from paid work for this period mean that many families cannot afford for a woman to remain out of paid work for 12 months.
Australia's legislated right to unpaid maternity leave does not provide income replacement, which can limit women's ability to access the leave. Some women must return to work because they or their family are dependent on their income. At times this means that a woman returns to work before she or her child are ready. One woman, expecting a child, wrote that her individual circumstances effectively forced her back to full time work.
My position is exceptional as I am not only a shiftworker, but an unpartnered parent with little support in the form of child care. I have grave concerns for the future welfare of my child as I have no choice but to return to full time shift work to maintain a home for my child. Parenting payment and taking leave without pay is not an option as this government supporting parent payment falls short of my minimum mortgage payment. If I had the choice I would be taking at least 12 months leave to care for my child. [116]
Families in the lowest income brackets, including many single parent families, will be least likely to be able to access their full entitlement to unpaid leave.
3.3 Existing paid maternity leave arrangements
3.3.1 Introduction
In the absence of any legislated right to paid maternity leave, such leave may be provided for in awards, agreements or individual workplace policies. [117] This section of the paper reviews current paid maternity leave arrangements.
It should be noted that there are significant limitations with the available data on paid maternity leave. The majority of available data sets only record whether workplaces or agreements provide some form of paid maternity leave. They do not provide information on the number of women who are actually eligible for paid maternity leave. Eligibility criteria, such as the need for 12 months service, mean that many women will not be eligible for paid maternity leave, even though they may work in organisations that provide for such leave. [118] Employees who fall outside of these formal conditions, such as contract workers, will not have access to paid maternity leave at all. Similarly, casual employees' limited access to leave entitlements means that they will generally not have access to paid maternity leave, even where they work in organisations that offer this type of leave. This is highlighted by the Survey of Employment Arrangements and Superannuation which found that only 0.4 per cent of casual employees had access to paid maternity leave. [119] Further, paid maternity leave may only be offered by an organisation on a discretionary basis. This means that the figures outlined in this Chapter are likely to significantly overstate the availability of paid maternity leave.
The available data do not record the number of women who take paid maternity leave. Even though paid maternity leave may be available, this does not mean that women actually use this leave. The take up rate of paid maternity leave is a crucial factor in determining the effectiveness of workplace provision of paid maternity leave. A range of factors, such as workplace culture or fear of affecting career prospects, may mean that women are unwilling to use an employer provided paid maternity leave entitlement.
3.3.2 Adequacy of existing paid maternity leave arrangements
The most recent data on paid leave arrangements found that 38 per cent of female employees reported that they were entitled to some form of paid maternity leave. [120] Therefore, approximately 62 per cent of women in employment may not have access to any paid maternity leave. [121] When these women have children and by necessity take time away from the workplace, they receive no compensation for the income they lose. [122] Others may return to the workforce from financial necessity, leaving very young infants in care.
The 1995 Australian Workplace Industrial Relations Survey (AWIRS) found that 34 per cent of workplaces with more than 20 employees provided some form of paid maternity leave, potentially covering 36 per cent of employees working at workplaces with 20 or more employees. [123]
A nation-wide survey in 2000-2001 by the Equal Opportunity for Women in the Workplace Agency (EOWA) of firms with more than 100 employees found that 23 per cent of employers offered some form of paid maternity leave to employees. [124] The EOWA data suggest some increase in the provision of paid maternity leave amongst Australia's largest organisations, from 15 per cent of organisations in 1997 [125] to 23 per cent in 2000-2001. However the number of firms with more than 100 employees offering paid maternity leave between 1998-1999 and 2000-2001 has remained stable at 23 per cent. [126]
All three of these measures suggest that the majority of women in paid work do not have access to paid maternity leave.
Available data suggest that paid maternity leave is predominantly available in the public sector and larger organisations. [127]
Paid maternity leave also appears to be an entitlement predominantly of highly skilled women in full time work rather than of women in more marginal employment, with lower skills, who are in part time or casual work. Fifty-one per cent of women in full time work, 21 per cent of women in part time work and 0.4 per cent of women in casual employment report that they have access to paid maternity leave. [128]
A recent survey of 400 women attending the Royal Women's Hospital, Melbourne found a high correlation between employee education levels and access to paid maternity leave. Tertiary educated women made up less than 40 per cent of the sample, yet two thirds of those with access to some form of paid maternity leave had tertiary qualifications. No woman with primary level education had access to paid maternity leave. [129]
Data also indicate that there are significant variations between industries and occupations. [130]
An adjunct to the availability of paid maternity leave is knowledge of that entitlement. Of the female employees surveyed by the Australian Bureau of Statistics in 2000, 18.1 per cent did not know whether or not they were entitled to paid maternity leave. [131] More recent data indicate that 22 per cent of randomly selected female employees were unaware of their rights concerning access to paid and or unpaid maternity leave compared to 29 per cent of female employees covered by Australian Workplace Agreements (AWAs). [132] This suggests that female employees employed under AWAs are less likely to know their unpaid maternity leave entitlements than female employees generally. This is alarming given that AWAs are negotiated agreements between employers and individual employees. If such an employee is unaware of her unpaid maternity leave entitlements she is unlikely to successfully negotiate paid maternity leave with her employee.
The inequity of the current system in terms of which employees are eligible for benefits was highlighted in a number of submissions. The New South Wales Working Women's Centre submitted that:
[t]he current approach to paid maternity leave, based on enterprise bargaining, company discretion and legislative cover for some public servants, discriminates against those working women who are less skilled, less educated and with less bargaining power in the workplace. [133]
3.3.3 Adequacy of paid maternity leave provisions in awards and agreements
A review of 100 federal awards with the highest coverage of workers, undertaken by the then Commonwealth Department of Employment, Workplace Relations and Small Business found that only six federal awards included provision for paid parental leave. [134]
The Workplace Agreements Database found that for the two-year period from 1 January 2000 to 31 December 2001 seven per cent of federal certified agreements made in that period contained paid maternity leave provisions, a decrease of three per cent from the 1998-1999 period. [135] Over the same periods the percentage of federal certified agreements made which contained paid paternity leave provisions increased from two per cent to four per cent, while the percentage of certified agreements made which contained paid family leave provisions remained static at three per cent. [136]
Thirty-nine per cent of all female employees covered by federal certified agreements made in the 2000-2001 period potentially had access to an average of seven weeks' paid maternity leave. [137] This compares with 28 per cent of all female employees covered by federal certified agreements made in the 1998-1999 period potentially having access to an average of four weeks' paid maternity leave. [138]
The disparity between the increase in the proportion of female employees covered by paid maternity leave in federal certified agreements and the decrease in the incidence of paid maternity leave provisions in federal certified agreements made in the periods 1998-1999 and 2000-2001 suggests that paid maternity leave provisions were included in a higher percentage of agreements covering very large workforces made in 2000-2001 than in 1998-1999. [139] While the number of employees covered by paid maternity leave provisions has increased, these figures still indicate that the spread of paid maternity leave entitlements through certified agreements may have stalled.
Based on analysis of the first AWA provided by each employer, the Office of the Employer Advocate found that between 1998 and 1999 17 per cent of employees have paid maternity leave in their AWAs. [140] In analysis conducted by the Australian Centre for Industrial Relations Research and Training, less than one per cent of a random sample of AWAs operating at the end of 2001 provided paid maternity leave. [141] The duration of the leave offered was either nine or 12 weeks. [142] This figure is even more negligible when it is considered that AWAs are generally limited to particular industries and apply to more highly skilled workers. At the end of 2001 the number of current AWAs was estimated to be just under 130, 000 agreements, representing 1.7 per cent of the wage and salary earner population in Australia. [143]
Information in relation to State registered awards or agreements is available but not comprehensive. [144]
An analysis of both federal and State enterprise agreements showed that 7.48 per cent of all federal agreements certified between 1997 and 2000 included a paid maternity leave provision. In contrast, only 3.1 per cent of State agreements listed in the Agreement Database and Monitor held by Australian Centre for Industrial Relations Research and Training between 1992 and 2000 contained a paid maternity leave provision. [145]
The available statistics show that paid maternity leave arrangements have not entered awards and agreements in any great numbers and that enterprise bargaining has not significantly increased women's access to paid maternity leave. As stated in a recent article on paid maternity leave, "… enterprise bargaining is only delivering paid maternity leave to a small proportion of Australian women".[146] The limited impact of enterprise bargaining on women's access to paid maternity leave was also supported by comments in submissions.
The Work + Family Policy Research Group of the University of Sydney stated that their research on the spread of paid maternity leave through enterprise bargaining "… shows that progress has been minimal …" [147] Their submission concluded that:
[t]his data provides evidence of the way in which employment and labour market-based mechanisms distribute social and economic outcomes inequitably, thus affecting the well-being of families and children. Those parents who can least afford the income loss of unpaid leave at the time when family costs and needs increase substantially on the birth of a child have least access to a period of paid leave. [148]
Many submissions were critical of the ability of enterprise bargaining to deliver a permanent entitlement to paid leave.
Enterprise bargaining has totally failed to provide adequate maternity leave conditions. Paid maternity leave is a basic human right and it is an outrage to be expected to have to ask for it and try and negotiate for it. [149]
Sectoral differences in the duration of paid maternity leave are also quite stark. In the industries that employ the most women, such as the accommodation, cafes and restaurants sector and the retail and wholesale trade sectors, only four per cent, two per cent and six per cent of agreements respectively provide paid maternity leave. [150] One union provided the following information to support its assertion that "… enterprise bargaining has failed women in manufacturing". [151]
Only 60 certified agreements out of approximately 1 500 agreements (0.25 per cent) that the AMWU [Australian Manufacturing Workers' Union] is a party to contain a provision for paid maternity leave … the level of entitlement to paid maternity leave varies from between 3-6 weeks paid leave thus revealing inequities in the system as the level of entitlement depends on the bargaining strength of the workers.
…
In addition, bargaining factors such as the demographics of a workplace including the ratio of men to women, the comparative age group of the workforce, union representation at the workplace etc. can determine whether the paid maternity leave claim is successful or not. [152]
The lack of bargaining power of most women in the industrial relations setting was seen by many as a reason that enterprise bargaining would not deliver paid maternity leave. The Australian Services Union submitted that:
[w]omen workers disproportionately occupy the lower-paid, precarious and deregulated industries and jobs where they are more vulnerable to employment practices that do not allow the flexibility required to properly balance their work and family responsibilities.
…
[W]ithout legislative supports in place, including paid maternity leave, the gap will continue to widen between those workers with bargaining power and those without. [153]
One individual submitted that:
[e]nterprise agreements on their own are delivering very little to working women in Australia. Enterprise bargaining is delivering benefits to only a small proportion of Australian women. Even when available it is concentrated in certain industries such as the public sector. Other female dominated industries such as hospitality provide virtually no paid maternity leave. [154]
The Australian Nursing Federation was concerned that:
[a] continuation of the current piecemeal approach will result in, at best, incremental improvements for a minority of women who work in areas with the industrial capacity to achieve positive outcomes through bargaining. [155]
The National Pay Equity Coalition considered that enterprise bargaining would not deliver paid maternity leave to the majority of women.
Many women are in sectors of the economy where they are unlikely to be able to bargain adequate entitlements. Enterprise bargaining has delivered a very low incidence of agreements with paid maternity leave entitlements (DEWRSB [Department of Employment, Workplace Relations and Small Business], 2000). Entitlements that have been secured through industrial bargaining to date are well below international standards and are unlikely to be improved in the short-term. Those workplaces that have negotiated paid maternity leave are more likely to be located in industry sectors with higher earnings. [156]
Enterprise bargaining as a means of delivering paid maternity leave was also considered to further entrench the workplace disadvantage of particular groups of women. [157] This issue is taken up further at 7.4.
The enterprise bargaining approach to delivering paid maternity leave for women workers requires that workers covered by the agreement but unlikely to benefit directly from paid maternity leave also need to be persuaded of the efficacy of including a paid maternity leave entitlement in their agreements. One union considered that:
… [p]aid maternity leave is not going to flow to women workers through workplace level bargaining negotiations … Our members have limited access to enterprise bargaining and when they do, they are more inclined to negotiate over more immediate priority issues - such as wages and job security. Parties tend not to negotiate about events which may or may not happen and agreements cannot be easily changed during their lifetime … In collective bargaining agreements, women have to win support for paid maternity leave within their own workplaces and convince those who will not directly benefit such as older women or men or younger women of the value of the claim - as opposed to other claims which might benefit the whole. [158]
Australian Centre for Industrial Relations Research and Training Director Ron Callus has noted the disadvantages of using certified agreements to introduce paid maternity leave.
The problems of relying on agreements to deliver, what in most countries are regarded as basic workers rights, are apparent. The result is some workers have access to paid leave while others remain disadvantaged. Economy-wide minimum provisions and rights really require a macro approach, through legislation or a test case that will ensure that there is some fairness in women's ability to access paid maternity [leave] as a right not simply as a "bonus" granted at the discretion of some organisations. [159]
The Australian Chamber of Commerce and Industry has acknowledged that "[i]t is … clear that most workplaces are not currently choosing to include paid maternity leave in their agreements". [160] However, ACCI contends that the number of workplace agreements that include paid maternity leave has increased over time, that the available data may "... underestimate the incidence of paid leave by agreement in Australian workplaces" [161] and that paid maternity leave may not be a bargaining priority for some employees. [162]
Without evidence, it cannot be assumed that there are widespread demands for paid leave though bargaining which are not being addressed by employers. There are also other approaches available in agreement making to deal with work and family issues, other than a simple focus on "paid maternity leave" or maternity issues - such as working hours flexibility, and training and re-training. [163]
Some commentators have suggested that enterprise bargaining is a more appropriate means of achieving paid maternity leave in contemporary Australian society where work and family imperatives vary greatly and flexibility is highly valued. [164] For example, the National Farmers' Federation considered that "[t]he provision of paid maternity leave should be a decision taken by the individual employer when considering all issues affecting the business" [165] and concluded that:
… paid maternity leave, as a workplace entitlement, should only be implemented by agreement at an individual workplace through existing agreement-making mechanisms. [166]
However a national scheme of paid maternity leave offered at a minimum level, does not prohibit employers and employees from negotiating additional arrangements to suit individual situations. A legislated right to paid maternity leave does however provide basic support for all women in paid work that cannot be removed by bargaining.
HREOC concludes that current provisions for paid maternity leave in awards and agreements are inadequate. The evidence indicates that agreement and award making will not bring Australian women in employment a secure paid maternity leave benefit. In addition, HREOC believes that the industrial processes for negotiating benefits have inherent problems when it comes to securing paid maternity leave. For example, negotiating an entitlement to paid maternity leave as part of a workplace agreement generally requires employees to trade off other benefits, including wages, to secure the new entitlement. This means that female employees are in effect paying for their own maternity leave entitlement by relinquishing other benefits. Paid maternity leave is a basic right for women in paid employment and should be secured as a right rather than negotiated as a tradeable benefit.
3.3.4 Adequacy of paid maternity leave provisions through company policies
Information about the extent and operation of company policies providing for paid parental leave is scant and represents a future area for research. However, research has found that there is a great deal of variation in access to paid parental leave entitlements via company policies not only between workplaces but also within workplaces. [167] One study found that, not surprisingly, employers were more likely to provide access to paid parental leave policies to employees who are highly skilled or in whom they have invested training or other resources. [168]
Company policies are not public documents. There is, therefore, no direct way of ascertaining their content and how they are implemented. As they are discretionary, they can be changed at any time, can be applied to different employees differently and do not necessarily involve any consultation or involvement of employees. However, Australian evidence suggests that the best organisational predictors of company provided paid maternity leave are organisational size and structured management practices, [169] while the best labour market predictors are education and occupational status. [170]
The uneven distribution of company provided paid maternity leave both between and within companies indicates that such a mechanism for providing paid maternity leave does not deliver equity and generally does little for women employed in the non-core business of the organisation, for example in supportive, administrative roles. [171]
Moreover, the conditions attached to paid maternity leave provided by company policy are often onerous. For example, the Victorian Women Lawyers noted that:
[t]here is a significant disparity in the maternity leave policies within law firms. The majority of law firms do not offer any paid leave … when law firms have policies providing for paid maternity leave, there are often quite onerous conditions attached to the entitlement. For example, the woman must have worked for the law firm for a certain period of time, the amount of payment will depend on the woman's length of service with the firm ... [172]
3.3.5 Duration of paid maternity leave
Available data suggest that there are very limited cases in Australia where women receive the international standard of a minimum of 14 weeks paid maternity leave and that in many cases available leave falls well short of this standard.
Analysis by the former Commonwealth Department of Employment, Workplace Relations and Small Business of federal agreements certified from January 1997 to June 2001 found that the average duration of paid maternity leave over this period was approximately six weeks, with the average in 2001 reaching almost eight weeks. [173] Paid maternity leave provisions in Certified Agreements ranged from one day to up to 18 weeks, with the most frequent periods offered being two weeks (39 per cent), six weeks (21 per cent) and 12 weeks (23 per cent). [174]
Research on the availability of paid maternity leave in certified agreements has found that the amount of paid leave varies significantly from two days to 18 weeks. The most frequent duration of paid maternity leave at the federal level was two weeks and six weeks at the State level. The 14 weeks paid leave recommended by the International Labour Organization is available in very few agreements. [175]
Currently operating AWAs provide paid maternity leave of either nine weeks or 12 weeks. [176] However, it is important to note that women with AWAs are likely to be more highly qualified than other women in the workforce and therefore may have increased bargaining power. [177]
For 2000-2001, Equal Opportunity for Women in the Workplace Agency found that, amongst organisations with over 100 employees, 41 per cent of organisations that provide some form of paid maternity leave provided five to six weeks of leave, [178] while another 33 per cent of these organisations provided nine to 12 weeks of paid maternity leave. [179]
As was the case with availability of paid maternity leave, there was also variation across industries in the average length of paid maternity leave offered. Amongst federal certified agreements in 2001, the communication services industry offered on average 12 weeks, finance and insurance offered on average seven weeks, while retail trade and accommodation, cafes and restaurants both offered an average of four weeks. [180]
In the public sector, the length of paid leave varies considerably from four weeks in South Australia to a maximum of 14 weeks in the Northern Territory. [181] Eligible federal public servants are entitled to 12 weeks.
Comprehensive statistics on the duration of paid maternity leave provided for in State industrial relations instruments or in individual company policies are not available.
3.3.6 Conclusion
It is clear from the available data that the majority of women do not have access to employer provided paid maternity leave. The most recent data suggest that over 60 per cent of female employees do not have access to paid maternity leave. [182]
While paid maternity leave is provided through some awards, agreements and company policies, none of these measures has delivered paid maternity leave for the majority of women. Even where paid maternity leave is provided, it often falls well short of the international standard of 14 weeks of paid leave. In addition, the rate of increase of paid maternity leave provisions mean that it is unlikely that the proportion of women in paid work receiving employer funded paid maternity leave will significantly increase in the foreseeable future.
It is also clear that those women in more vulnerable employment and less able to bargain for improved work standards are the most likely not to receive paid maternity leave under the current system. Women who work in smaller organisations, in particular those with small profit margins, or who are in part time or casual work, or who have lower skills, are far less likely to have access to employer funded paid maternity leave.
HREOC is strongly of the view that a continuation of the current system of market and enterprise bargaining for paid maternity leave will leave a significant proportion of women vulnerable at the time of childbirth. In contrast, a national scheme of paid maternity leave would ensure more evenly spread access to paid maternity leave and assist in ensuring that women are able to have a period of time to recover from childbirth and be with their child without financial pressure to return to paid work.
3.4 Government payments to parents
3.4.1 Current government assistance
Introduction
The federal Government provides a range of income support payments to families to assist with the costs of raising children, including newborns. [183]
Government expenditure in 2000-2001 on Maternity Allowance and Maternity Immunisation Allowance was $218 million. [184] These payments both constitute a payment to families to support young children. Government expenditure in 2000-2001 on Family Tax Benefit Part A and Family Tax Benefit Part B was $10.076 billion. [185] While Family Tax Benefit provides financial assistance to families with young children, assistance also extends to much older children. The Baby Bonus has only been available since July 2001. Government spending on the Baby Bonus is projected to reach $510 million in 2005-06. [186]
In light of the significant government spending on family assistance payments it is important to consider the extent to which these payments already meet the objectives of paid maternity leave.
HREOC considers that the key features of paid maternity leave are that it is a payment made immediately prior to and following the birth of a child that provides the opportunity for the woman to recuperate, provides time for the mother and child to bond without the financial pressure leading to an early return to paid work, and compensates the family for a loss of income from paid work necessitated by the birth of a child. [187] In addition, the number of women who are able to access the payment is important when considering whether any existing payment approximates a national scheme of paid maternity leave. Existing government payments are reviewed against these objectives in order to establish the extent to which the Government can be considered to be currently delivering appropriate support to women at the time of childbirth.
Maternity Allowance
The purpose of Maternity Allowance is to help families with the extra costs associated with the birth of a new baby. Maternity Allowance is paid as a non taxable lump sum of $811.44 per baby, and is paid close to the time of birth. [188] This amount is equivalent to just over one week of Average Weekly Earnings, [189] less than two weeks of the Federal Minimum Wage [190] or four weeks of unemployment benefits. [191] In order to receive Maternity Allowance, the claimant must qualify for Family Tax Benefit Part A within 13 weeks of the child being born. This means, for a family with one child, that family income must be below $83 184 a year. [192]
Maternity Allowance falls short of paid maternity leave in terms of the level of payment that is made, and the fact that the payment is means tested. It is also only paid after the birth of the child.
Maternity Immunisation Allowance
Maternity Immunisation Allowance is paid for children after the child reaches 18 months old and either has been fully immunised, or is exempt from the immunisation requirement. Claimants must have been paid Maternity Allowance for the child or be eligible for Family Tax Benefit Part A when the child meets the immunisation or exemption requirements. It is paid as a non-taxable lump sum of $208. [193]
The Maternity Immunisation Allowance falls short of paid maternity leave in terms of the level of the payment, the timing of the payment and the fact that the payment is means tested.
Family Tax Benefit Part A
The purpose of Family Tax Benefit Part A is to help families with the costs of raising children. It is paid to families with children up to 21 years and young people between 21 and 24 who are studying full time (and not receiving Youth Allowance or a similar payment). Family Tax Benefit Part A is means tested on the basis of family income, but does not have an assets test. Families with one child who have an income below $30 806 a year will receive the full rate of payment. The payment is then reduced on the basis of earnings, and cuts out for a family with one child when the family income reaches $83 184 a financial year.
The maximum rate of Family Tax Benefit Part A for a family with a newborn baby is $126.70 per fortnight. [194] This amount is equivalent to nine per cent of the Average Weekly Earnings, [195] 15 per cent of the Federal Minimum Wage [196] or 31 per cent of the weekly rate of unemployment benefits. [197]
Family Tax Benefit Part A falls short of paid maternity leave in terms of the level of payment that is made, and the fact that the payment is means tested. It is also only paid after the birth of the child. Its benefit to the family in the first year depends therefore on when in the tax year the baby is born.
Family Tax Benefit Part B
The purpose of Family Tax Benefit Part B is to provide extra assistance to single income families, including sole parents, especially families with a child aged under five years. Family Tax Benefit Part B is paid to families with children up to 16 years and children between 16 and 18 years who are studying full time.
Family Tax Benefit Part B is not income tested on the basis of family income. There are no limits on the income that the primary income earner can earn. The payment is income tested on the basis of the second income earner, who must earn below $11 206 per year to be eligible for payment. [198] There is no assets test for Family Tax Benefit Part B. The maximum rate of Family Tax Benefit Part B for a family with a newborn baby is $108.78 per fortnight. [199] This amount is equivalent to eight per cent of Average Weekly Earnings, [200] 13 per cent of the Federal Minimum Wage [201] or 27 per cent of the rate of unemployment benefits. [202]
Family Tax Benefit Part B falls short of paid maternity leave in terms of the level of payment that is made, and the fact that the payment is means tested. In addition, the targeting of this payment at single income families effectively means that women cannot return to paid work and receive this payment. It is also only paid following the birth of a child.
Baby Bonus
The purpose of the Baby Bonus is to recognise "… the loss of income that generally follows the arrival of a family's first child". [203]
The Baby Bonus provides a tax refund in each of the first five years following the birth of a family's first child. Payment is made at the end of each financial year. The maximum payment available each year is $2,500. [204] The rate of payment is linked to the level of the woman's earnings before the birth of the baby. The highest level of payment is available if a woman does not return to work. The amount a woman receives reduces if she returns to work following the birth of a child. For example, she will receive half her possible payment if she earns half the amount she earned prior to the birth. She will receive no payment if she earns equal to or greater than her earnings prior to the birth. A minimum payment of $500 is available for mothers whose taxable income is $25,000 per annum or less. [205]
The Baby Bonus falls short of paid maternity leave in terms of the payment level, and the timing of the payment which is spread over five years and is only made at the end of each financial year. In addition, the Baby Bonus is only made for a family's first child. This means that a family will not receive the Baby Bonus for a second or subsequent child.
Parenting Payment
The purpose of Parenting Payment is to assist people with children, particularly low income families, by providing an independent income. Parenting Payment is paid to the primary carer of a dependent child aged under 16 years.
Parenting Payment is subject to an income and assets test. It is paid fortnightly at a rate of up to $429.40 per fortnight for sole parents and $338.10 per fortnight for partnered parents. [206]
Women who are on unpaid maternity leave following the birth of a child may receive Parenting Payment, provided that they meet the income and assets test.
HREOC considers that the level of payment of Parenting Payment means that it falls short of paid maternity leave. It is subject to an income and assets test, which restricts the number of women who can access this payment. In addition, it is only available following the birth of a child.
Child Care Benefit
Child Care Benefits are a government rebate of up to $2.66 per hour for approved or registered child care. [207] A minimum rate applies for families over a certain income threshold. [208] All families have access to 20 hours of child care benefit each week, while families using child care for work, study or training purposes may claim a rebate for up to 50 hours a week. [209]
Child Care Benefit is a payment made specifically in relation to purchased child care. The benefit can only be claimed for hours of child care that are actually purchased. This is a very different purpose to paid maternity leave and does not relate to income replacement.
Cumulative effect of government payments
While no single government payment equates to paid maternity leave, it is possible that the cumulative effect of these payments is equivalent to paid maternity leave.
As noted above, HREOC considers that payments should be made at the time of the birth if they are to be considered equivalent to paid maternity leave. As such, the key payments which, together, may be equivalent to paid maternity leave are the Maternity Allowance, Family Tax Benefit Part A, Family Tax Benefit Part B and Parenting Payment.
The maximum amount of cumulative government payments would apply to a woman who was a sole parent and who was not in paid work. A woman in this situation would receive maximum Family Tax Benefit Part A ($126.70 per fortnight), [210] maximum Family Tax Benefit Part B ($108.78 per fortnight), [211] the Maternity Allowance ($811.44 lump sum payment) [212] and the full rate of Parenting Payment Single ($429.40 per fortnight). [213] This means she would receive $5 465.60 in the first 14 weeks of her baby's life. This is equivalent to $390.40 per week for fourteen weeks. This rate is close to a weekly payment at the rate of the Federal Minimum Wage ($431 per week). However, the woman must be single and have no earnings from paid work in the financial year of the baby's birth to receive this level of payment. She would also need to meet the Parenting Payment assets test.
Any woman who has earnings from paid work within the financial year of the baby's birth (whether as a result of being in paid work prior to the birth of the child or returning to work after the birth), who has a partner who is in paid work, or who has assets greater than allowed under the assets test will receive less than this amount.
For example, a woman who earned more than $11 206 ($431 per fortnight) in the financial year that her baby was born, and whose family income was greater than $38 276 per annum may only receive the base rate of Family Tax Benefit Part A ($40.74 per fortnight) [214] and the Maternity Allowance ($811.44 lump sum payment). [215] This means she would receive $1 381.80 in the first 14 weeks of her baby's life. This is equivalent to $78.33 per week for fourteen weeks because of the retrospective nature of means testing. This rate would apply despite the possibility of a very significant drop in the family's income during the first 14 weeks following childbirth. In these circumstances it is foreseeable that a family may have had to accumulate significant savings prior to the birth of the child, or face the alternative that the woman will be under financial pressure to return to work as soon as possible. HREOC is of the view that a payment of $100 per week would not be a sufficient payment to ensure that women can have a guaranteed period of time out of the workforce.
Conclusion
The Government provides a range of family assistance and income support payments to support the different circumstances of women and families with children.
The Government has not claimed that any of these payments are equivalent to or meet the objectives of paid maternity leave. However, there are clearly overlapping aims between some of these payments and paid maternity leave. In particular, the Government has claimed that one of the purposes of the Baby Bonus is to replace the income a family loses when a woman takes time out from paid work to care for a baby. This is similar to the income replacement objective of paid maternity leave. Similarly, the Maternity Allowance overlaps with the purposes of paid maternity leave to some extent in that it is designed to support families with the additional expenses incurred at the time of arrival of a baby.
The most important fact in relation to existing government payments is that currently none of these payments enable a woman to take a period of time out of paid work immediately prior to and following the birth of a child. Under the current system of government payments, some women are faced with the options of saving over an extended period for a baby, returning to work before they or their baby are physically ready or not having a child because they cannot afford to forego their income from paid work.
3.4.2
Community views on government payments
to parents
Many submissions considered that existing government payments to families were financially inadequate and restricted in coverage. The income thresholds for the means testing applied to some government payments were felt to be set inappropriately, while other government payments were not means tested at all. [216] The Australian Council of Trade Unions, for example, considered that:
[e]xisting government support for families of newborn children is both inadequate and inequitable.
The Maternity and Immunization Allowances of $798.72 and $208.00, means tested, are inadequate to compensate families for the costs associated with childbirth.
The Family Tax Part B ($2752.00) was justified as support for families who choose to care for their children at home, rather than in child care … However the Family Tax Benefit Part B does not perform this role, in that it:
- is payable to parents of children up to 18 years of age
- discourages dual income earning and the sharing of care responsibilities, and penalises return to part time employment
- is not means tested, and thus is paid to some high-income families.
How many families with the mother in employment would be eligible for Family Tax Benefit Part B in the child's first year, given the likelihood of some maternal income in the period before the child's birth.
The new Baby Bonus is regressive and acts as a disincentive to employment. Payment is made at the end of the financial year, not at the time of the birth. This means it is not an immediate source of income replacement at the time of birth. Payment has outstanding debt taken from it. Payment in the first year reduced proportionally to the timing of the birth over a whole year. [217]
The Shop, Distributive and Allied Employees' Association asserted that:
… current government support payments to families are grossly inadequate. They are inadequate in respect of the levels of payment, they do not deliver adequate levels of support to many for whom they were designed, and in some cases, they are fundamentally inequitable in their design. None of them approximate paid maternity leave. [218]
The New South Wales EEO Practitioners' Association wrote that:
[c]urrent payments to assist women at the time of child-birth are financially inadequate in terms of the level of payment and coverage. In particular we note that the majority of existing supports are income tested and not accessible by many women at higher levels of income. [219]
The Women's Economic Think Tank considered that there was an imbalance in family assistance payments available to single and dual income families.
One underpinning concern driving support for paid maternity leave … is to redress in part the message given by the present imbalance in funding policies that clearly provide more support to single income families as a category. [220]
Some submissions distinguished the scope and purpose of existing payments from those of a proposed paid maternity leave scheme, noting paid maternity leave's short term focus on providing adequate financial support for women for the period surrounding childbirth. Coles Myer wrote that:
[i]t is acknowledged that the federal government currently provides a wide range of support for families. However, the payments currently available appear to be targeted more broadly than a paid maternity leave scheme would be. In addition the payments are means tested restricting availability to certain socio-economic groups.
…
A paid maternity leave scheme would ideally be structured in such a way as to provide financial support at the time of the birth of a child and the payment would be sufficient to provide a sense of financial security to the mother for a reasonable period of time following the birth to reduce the financial imperative to return to work prematurely. [221]
The Australian Retailers Association considered that existing government payments "… do not address the situation of short term financial assistance to a two income couple during that initial period following the birth of a child". [222]
Many submissions, including submissions from employers, employer groups, unions and women's groups, argued that the existing government payments available to families did not equate with, or even approximate, paid maternity leave. The Australian Industry Group commented that "[a] range of family payments are currently available to eligible persons, but none are genuine paid maternity leave schemes". [223] Similarly, the Australian Retailers Association noted that their organisation:
… does not consider that government support for families with newborn children may be considered to approximate paid maternity leave.
Payments currently available appear to be targeted more broadly than a paid maternity leave scheme would be. In addition the payments are means tested, restricting availability. [224]
Coles Myer submitted that it "… does not consider that government support for families with newborn children may be considered to approximate paid maternity leave". [225]
The Victorian Independent Education Union noted limits in the ability of existing government payments to meet the objectives of paid maternity leave, particularly focussing on the Maternity Allowance.
Current government support provided to families with newborn children cannot be considered to approximate paid maternity leave. The means tested Maternity Allowance … is designed to offset costs associated with the birth and care of a newborn baby. It does not assist a mother to take time off work or provide financial security during the period after birth while she recovers physically and psychologically, establishes feeding and care for the infant. The Maternity Allowance does not protect the mother's employment (thereby ensuring she has a position to return to), nor does it protect or preserve other workplace entitlements (long service leave, sick leave and the like). [226]
A number of submissions raised a concern that existing government support for adoptive families often does not acknowledge the additional costs, including government imposed costs, associated with adoption, as opposed to biological births. [227] Government support also does not take account of the particular costs of inter-country adoption, nor does it acknowledge some of the realities of adopting an older child. For example, eligibility for the Baby Bonus requires that the child is under five years of age. [228] Seventeen per cent of intercountry adoptees in 2000-2001 were five years of age or older. [229] Eligibility for Maternity Allowance requires that the child is under 26 weeks of age at the time of placement with the family. [230] This issue is considered further in the discussion of the proposal for a national scheme of paid maternity leave at 14.5.
3.4.3 The Baby Bonus
Many submissions were particularly critical of the Government's recently introduced Baby Bonus. For example, the Australian Education Union were concerned about the timing of payment of the Baby Bonus.
[T]he maximum of $2 500 available [via the Baby Bonus] is refunded from tax already paid at the end of the financial year. The economic pressure experienced by women occurs when the birth is imminent or has occurred not at the end of the financial year. [231]
BPW Australia considered that:
… the baby bonus [is] poorly targeted and unhelpful in supporting families to combine work and family formation. Like other tax-break schemes it unfairly offers more benefits to women on higher salaries, but still not enough to make a difference. As such it is expensive, ineffective and poorly directed and rather than encouraging women to have children, discourages those that do have babies from returning to work even part-time. [232]
A submission by a union argued that the Baby Bonus acted as an incentive for women to leave the workforce and become reliant on the welfare system.
[T]he current Baby Bonus is an expensive and inequitable system that discourages women from returning to work. The current Baby Bonus scheme provides an incentive for leaving the workforce through the means of maximising tax benefits based on the period out of work. Long term detachment from the workforce results in a greater reliance on the welfare system (Gregory 2002), a stifling of career progression, negative effects on retirement incomes and shifting women from contributing to the taxation system to be reliant on the welfare system. [233]
The Women's Economic Think Tank considered that another weakness of the Baby Bonus is that it is not available for the birth of a second child:
… unless the first child was born before the introduction of the payment … the mother is more likely at this stage to be working part time, and is likely to be earning less. So no baby bonus or a reduced one makes the choice to add a child a more difficult one financially. [234]
This issue is considered further in the discussion of the proposal for a national paid maternity leave scheme, at 21.3.2.
3.4.4 Calls for a review of government assistance
Several submissions called upon the federal Government to review its current system of family payments while considering the introduction of a paid maternity leave scheme. The Australian Education Union considered that "… the existing family payment system needs a thorough review". [235] The National Farmers' Federation proposed that:
… the Federal Government should review existing social assistance measures to determine whether there should be amendments to existing measures or the introduction of new measures that may enhance the pursuit of the objectives in respect to family and population policies. This approach would be more efficient and equitable than pursuing the paid maternity leave model. [236]
The Australian Council of Trade Unions called for "… a review of the maternity allowance, baby bonus and Family Tax Benefit payments, at least as they relate to the first year of a child's life" to be conducted in conjunction with the introduction of paid maternity leave. [237]
The Australian Chamber of Commerce and Industry argued:
… that the Commonwealth should examine and consider restructuring existing government funded maternity, parenting and family payments made via the Australian social welfare system. [238]
That submission also stated that:
[the Australian Chamber of Commerce and Industry] would participate in a review of existing Commonwealth social welfare funding for maternity, parenting and families with a view to examining whether such payments should be restructured into a national government funded maternity benefits scheme. [239]
The Australian Catholic Commission for Employment Relations argued that:
[i]ndependent analysis and reappraisal of the effectiveness of current and proposed family assistance payments and rebates needs to be undertaken before there can be a final determination about the introduction of any form of new assistance to families, either by way of paid maternity or parental leave or universal family assistance. [240]
Some submissions called for a more comprehensive review, including the interaction of tax, government payments and working arrangements for families.
We call on the federal government to initiate a national inquiry into current and future arrangements, addressing the interrelationships of tax, social security, employment conditions, superannuation, childcare and health care funding throughout the life-cycle, especially as these intersections are experienced by the worst-off women. A useful model is the Green Paper process recently completed by the UK Government, although the Australian inquiry needs to be even broader in view of the ad hoc and piecemeal nature of existing provisions and their manifest inadequacy for the needs of women and families in Australia today and in the future. [241]
HREOC has not considered government payments beyond the scope of their equivalence to and interaction with a national paid maternity leave scheme. Given the concerns that women expressed to HREOC about their ability to combine work and family there may be merit in the Government undertaking a broader review of family assistance payments.
Regardless of the Government's decision on the possible review of family assistance, it is clear from the consultations that paid maternity leave is a crucial element of any package of support. Any review of family assistance should not delay the introduction of paid maternity leave.
3.5 Conclusion
Unpaid maternity leave arrangements exclude women who have not worked for their current employer for more than a year, as well as certain groups of casuals. In addition, since unpaid leave does not provide income replacement, women may be forced to return to work before they or their babies are ready.
Paid maternity leave arrangements are limited and uneven in availability and duration. Women who most need financial support are the least likely to have any entitlement. Where paid maternity leave arrangements do exist, they may have been traded off against another workplace benefit as part of a negotiated agreement. Large numbers of women have no entitlement at all to paid maternity leave.
All of the evidence indicates that enterprise bargaining is not delivering paid maternity leave to the vast majority of women in paid employment. HREOC considers that the industrial track is an inherently inadequate means for women to secure paid maternity leave in order to be with their child. In addition, such leave is a basic need and should be guaranteed rather than negotiated.
HREOC has concluded that government assistance to families with young children is inadequate as an alternative to a legislated paid maternity leave scheme. Current government assistance does not provide women in paid employment with the financial support to guarantee an adequate break from employment around childbirth.
HREOC recognises the need for government assistance to support the different circumstances of women, including those in paid work and those who are full time carers. Paid maternity leave should not be seen as a replacement to existing government support, but rather as a modification or addition that would support the needs of a particular group of women. Paid maternity leave is only one of a suite of measures that should be available to give women real choice in how they care for their children and how they combine work and family.
HREOC considers that the existing government and business provisions to support women and families at the time of childbirth do not equate to a national paid maternity leave scheme. HREOC calls on the Government to introduce a national system of paid maternity leave as a priority.
20. Studies show that 39 per cent of women return to work after a maternity break of less than six months and eight per cent retur