The federal government has put on hold plans to change the paid parental leave framework, conceding it will not be able to pass the required legislation during its current term.
In the 2015 federal budget, the government forecast savings of $967 million over four years by cutting access to some of the federal government’s existing paid parental leave scheme from July 2016 for 80,000 new parents.
The planned change was intended to make sure workers could not “double dip” by accessing the government-funded parental leave scheme and leave paid for by their employer.
The government-funded scheme currently provides $11,500 to new parents, made up of 18 weeks of leave at the minimum wage for primary care givers earning $150,000 or less a year.
However, some parents are also able to access paid parental leave from their employer if the organisation they work for has a scheme in place.
Social Services Minister Christian Porter today said “the status quo is clearly going to be maintained for a period of time”, according to news.com.au.
“The reality is that the legislative change that we wish to make to that arrangement is not going to be successful in this term of Parliament,” Porter told the ABC.
“I think that much is absolutely clear to me and to the members of the government.”
However, Porter said the government remains committed to reforming the existing arrangements.
“That does not mean that this government at the moment is not trying to change (the current scheme) or if it were re-elected wouldn’t also be looking at ways in which to modify the existing system along the lines what we have suggested because there is a real equity issue here,” he said.
“It is a generous system to people who are at the lower end of the income earning spectrum, as it should be.
“But the additional problem that arises is for the top 20 percent or so of higher income earners, it is inequitably generous because you can have the 18 weeks at minimum wage but also be able to access your own, which is often very generous, employer-based PPL.”
Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany this morning while only a small percentage of small businesses offer their employees paid parental leave, the issue is around equity.
“It’s about equity. They’ve got to do something about it,” Strong says.
“Those who are arguing against changing it [the government scheme] need to consider what it is meant to be there for. Is it meant to supplement or to provide?”
However, Strong believes the government should also consider re-thinking how the government-funded parental leave scheme is administered, saying there is scope to streamline the process.
“The problem for us is we [small businesses] are the ones who receive the money and pass it on to employees,” he says.
“Instead of the government paying employees directly, it goes through the employer … it creates a burden on small businesses.”
Editor
Eloise is an experienced business journalist and editor, who has held senior editorial roles at SmartCompany since 2014. Prior to joining SmartCompany, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry. Eloise has degrees in media and communications, marketing and business management, and political science. You can follow her on LinkedIn, and Twitter at @ellykeating.
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