Budget 2014: Why Tony Abbott’s PPL is good for mothers and good for society

For a scheme that comprises less than 2% of the total budget, the Coalition’s paid parental leave scheme has attracted a remarkable amount of attention, most of which has been negative.

Rarely has the debate focused on the health impacts of the Coalition’s scheme, its capacity to reduce the prevalence of pregnancy related discrimination and drive a range of social benefits.

The focus has instead mostly been on the affordability of the scheme, how the money ought to be spent elsewhere, and whether it should be paid at a mother’s replacement wage or not.

But this scheme is good for mothers and good for babies, and not just for economic reasons.

Here’s why.

Paid parental leave schemes support a mother to recover from pregnancy and birth and care for her newborn baby and support child development. The OECD recently summed up the evidence on child development and parental care by stating that:

“Taking stock of the evidence, it seems that child development is negatively affected when an infant does not receive full-time personal care (breastfeeding issues aside…) for at least the first 6 to 12 months of his/her life. Cognitive development of a child benefits from participation in good-quality formal care (and interaction with its peers) from age 2-3. This generalisation of the evidence stands or falls with the quality of formal childcare, but as formal care and education is supplementary to parental care, also with the intensity and quality of interactions at home: the positive effects of formal care are biggest for children in disadvantaged families.” (OECD 2007, pp. 110–111)

In Australia, mothers take on average 32 weeks of parental leave, although they are entitled to 52 weeks of parental leave (paid and unpaid) by law, representing an underutilization of approximately 18 weeks that is often attributed to affordability issues. Single mothers are likely to take off less time, while older mothers in dual income relationships are likely to take off longer. Where the leave is unpaid or at the minimum wage, UK studies have found that the mother may go back to work anyway.

We expect that, under the Coalition’s scheme, mothers will on average take 12 months paid parental leave at half pay, which supports child development findings by the OECD. Regardless of who is paying, it also creates a long term attachment to the workplace for women, and increases the likelihood of a mother returning after 12 months: the money runs out, but she has also spent 12 months with her baby and our experience is that mothers are more comfortable about leaving him/her in care once the baby turns one.

A key goal of paid parental leave schemes is to encourage women of reproductive ages to maintain a lifetime attachment to the workforce, thereby boosting female participation, growing our GDP, providing a way for us to support the ageing workforce, and increasing women’s economic prosperity. As was recently disclosed by the Human Rights Commission, these benefits can be negated when mothers experience discrimination. Workplace discrimination begins during pregnancy, when 49% of mothers report experiencing what they believe is pregnancy related discrimination.

A Federally funded and managed PPL scheme serves to address the cause of discrimination. Why? Because corporate paid schemes are a cost to business and, for the most part, only paid to mothers.

All too often managers lament mothers and maternity leave because if it wasn’t for the new mum taking the time off, they would have made budget. Such behaviour is reinforced in challenging economic times by executives who will not make exceptions to job freezes to enable managers to replace mothers taking maternity leave. The result is an overworked, resentful and disengaged team who will find a way not to let it happen to them again. Paying parental leave at the replacement wage + super – just as we receive holiday pay, sick pay and long service leave – normalises paid maternity leave. This legislation is an opportunity to invest in a policy that addresses the cause – discrimination – not just band-aiding the symptoms.

In a society where women comprise less than 1 in 10 executives of ASX 200 and 500 companies, it is disappointing that the Government caved into public pressure and reduced the cap from $150,000 to $100,000. Why aren’t we supporting the 1.7% of women aged 18-49 years who earn more than $100,000 and paying them their replacement wage maternity leave?

It seems far too many men and women have been drawn into, as Eva Cox put it, the “emotive, often sexist and deeply irrational” elements of the debate. Kevin Rudd’s comments in the lead up to the last election are evidence of this: ”For the life of me, guys, I can’t work out why this bloke thinks it’s a fair go to provide $75,000 for a billionaire to go off and have a baby.”

Of course, it’s the ASX 200 that will fund the majority of the scheme disproportionately – particularly the likes of mining companies – and ultimately aid the employment of mothers who tend to be concentrated in health, education and social work. That’s because the 1.5% tax on big business operates as a non-deductible levy, as opposed to a tax deductible wage, which is currently the way paid parental leave is funded by those corporates that pay it.

There are of course many other priorities which are equal to paid parental leave – quality and affordable childcare and workplace protection guarantees for men and women seeking to work flexibly being the most obvious initiatives needed — to continue to support parents (in particular mothers) with young children to work. But this policy is a great outcome for mothers. So let’s not succumb to the hypocrisy of a sexist culture that falls short of delivering ALL the support and change needed to support mothers to work.

This article first appeared on Women’s Agenda.