The Australian Government's statutory paid parental leave scheme should be taxpayer-funded, and should:
provide paid postnatal leave for a total of 18 weeks that can be shared by eligible parents, with an additional two weeks of paternity leave reserved for the father (or same sex partner) who shares in the daily primary care of the child
provide the adult federal minimum wage (currently $543.78) for each week of leave for those eligible, with benefits subject to normal taxation.
All those employed with a reasonable degree of attachment to the labour force should be eligible, including the self-employed, contractors and casual employees.
A broad range of family types should be eligible, including conventional couples, lone parents, non-familial adoptive parents, same sex couples, and non-parental primary carers in exceptional cases, so long as they meet the employment test.
Those families not eligible for paid parental leave may still be eligible for paternity leave, the baby bonus ($5000) and other financial support through the social transfer system.
Employers should participate in the scheme by:
acting as paymasters where the employee had sufficient workplace tenure, with the government prepaying employers by instalment to avoid cash flow impacts
providing superannuation contributions for long-term eligible employees, though this measure should be deferred for at least three years and reviewed at that time.
Such a scheme would meet a range of commonly agreed objectives. It would:
generate child and maternal health and welfare benefits by increasing the time parents take away from work. The Commission estimates that the average absence will increase by ten weeks. Many more families would have an increased capacity to provide exclusive parental care for children for six to nine months
promote some important, publicly supported social goals, and in particular, that having a child and taking time out for family reasons is viewed by the community as part of the usual course of work and life for parents in the paid workforce
counter some of the incentives against working posed by the tax and welfare system - potentially contributing around six months of net additional employment for the average woman over her lifetime
increase retention rates for business, with reduced training and recruitment costs.
The Commission estimates that the government scheme will cost taxpayers around $310 million annually in net terms (with an additional net cost to the economy of $70 million if super contributions are introduced in the future).
These costs take account of significant offsets from reduced social welfare payments (including removal of the baby bonus for parents using the scheme) and the tax revenue from paid leave. The costs would be much higher without these offsets.
Contents
Preliminaries
Cover, Copyright, Terms of reference, Contents, Acknowledgments, Abbreviations and Glossary
Overview - including key points
Recommendations
Chapter 1 Objectives of statutory paid parental leave
1.1 Introduction
1.2 What has the Commission been asked to do?
1.3 What objectives might a mandatory scheme seek to achieve?
1.4 Some rationales are stronger than others
1.5 Some issues for scheme design
Chapter 2 What we are proposing and why
2.1 How to view the model
2.2 The model
2.3 How financially generous should the scheme be?
2.4 Who should finance the scheme?
2.5 Eligibility and requirements for use
2.6 The duration and timing of leave
2.7 Measures to reduce business burdens
2.8 Complementary policies
2.9 The cost of the scheme
2.10 Review
Chapter 3 Parental leave in Australia today
3.1 Introduction
3.2 What are the rules governing parental leave now?
3.3 Who is eligible for parental leave?
3.4 The current usage of parental leave in Australia
3.5 Summary
Chapter 4 Child and maternal welfare
4.1 Leave prior to the birth of a child
4.2 Maternal recovery
4.3 Breastfeeding – benefits for children and mothers
4.4 Child health (breastfeeding aside) and development
4.5 Fathers
4.6 Choosing an optimal leave period
Chapter 5 The labour market impacts of paid parental leave
5.1 The dimensions of labour market impacts
5.2 The female labour market experience
5.3 Labour market outcomes as a rationale for action
5.4 The labour market impacts of paid parental leave
5.5 The empirical evidence
5.6 The bottom line
Chapter 6 Social and cultural issues
6.1 Introduction
6.2 Supporting people's efforts to balance paid work and family life
6.3 Greater opportunities for fathers
6.4 Gender equity objectives
6.5 Reflecting society's norms
Chapter 7 Business impacts
7.1 Introduction
7.2 Business costs
7.3 Business benefits
7.4 Effects on existing voluntary schemes
Chapter 8 Financing and delivery options
8.1 Introduction
8.2 Direct employer financing
8.3 Pooled levy arrangements
8.4 Portable leave savings accounts
8.5 Income contingent loans
8.6 Concessional business tax arrangements
8.7 Parental leave financed through general government revenue
8.8 Delivery options
Chapter 9 Interaction with social welfare payments
9.1 Interaction with other government payments
9.2 Interaction with the tax system
9.3 The bottom line
Appendix A Consultations
Appendix B How much will it cost?
References
Appendices
The following appendices are referred to in the chapters but are not reproduced in the printed report.
Paid Parental Leave: Support for Parents with Newborn Children (PDF - 2065 Kb)
Paid Parental Leave: Support for Parents with Newborn Children by chapters (Zip/Word - 1680 Kb)