Families could lose up to $11,000 as part of the Government’s latest Paid Parental Leave changes.


It’s hard to find an issue as badly misunderstood in Australia as paid parental leave.

Here, it is variously couched as an unnecessary extravagance, a “first world problem” (according to the Social Services minister Scott Morrison), a luxury, a ‘rort’.

Federal Politician Scott Morrison: Paid parental leave concern a First World problem.

It is very rarely explained as a public investment with rich – social and financial – rewards.

In 2009 Labor introduced Australia’s first paid parental leave scheme. It offered the primary carer of an infant up to 18 weeks’ of the minimum wage, that could be received in conjunction with any parental leave paid by the parent’s employer. It had twin objectives of enhancing child and maternal well-being and supporting parental work force participation.

It was designed to get as many new parents as possible close to 26 weeks of paid leave, the standard recommended by the World Health Organisation for optimum long term health benefits. It was a welcome safety net and split the cost between government and business.

For context, in 1970, 45 years ago, an average of 17 weeks of paid leave was available to mothers across OECD countries. By 1990 this had increased to 39 weeks, while by 2014 the OECD average stood at just over one year.

To reiterate, in 2015, Australia offers mothers 18 weeks paid at the minimum wage. And rather than progressing forward, we are regressing.

In one of the more whiplash-inducing policy twists of recent times, in just six months last year the coalition government moved from a position of increasing paid leave entitlements to 26 weeks at full replacement wage,  to cutting the existing entitlements of up to 80,000 families, by up to $11,000.


Before we figure out how that happened, this question needs to be answered.

“In 2015, Australia offers mothers 18 weeks paid at the minimum wage. And rather than progressing forward, we are regressing.”

Why is it paid at all?

Paid parental leave is not merely a gesture of good will, a generous folly or a concoction of bleeding hearts or greedy mums. It is paid by governments around the world because economically and socially it makes sense.

The Productivity Commission Report on Paid Parental Leave in 2009 noted that there is compelling evidence of health and welfare benefits for mothers and babies from a period of postnatal absence from work for the primary caregiver of around six months.

Governments save money on health because of the proven long-term benefits of mothers being able to spend time with their new babies. And they stand to make money because it enables more women to continue participating in the workforce, thus increasing the pool of taxpayers from whom they earn revenue.

In Australia the latter is a legitimate economic priority: the inter-generational report handed down by Joe Hockey last year made it clear that because of our ageing population we need as many women working as possible.

It is also relevant at this point to note that while Australia leads the world in educating women, we lag 51 other countries when it comes to women engaging in the workforce.

Far from being a waste of money, on many levels, paid parental leave is a legitimate investment in Australia’s future.


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Why are we moving backwards when the world is moving forwards? 

Five years ago, Tony Abbott proposed the introduction of a very generous paid parental leave policy. Under his policy the government would pay a baby’s primary carer 26 weeks’ of their salary , as opposed to 18 weeks of the minimum wage.

It proved divisive. Within his own party it was ridiculed as out of step with the government’s narrative of a budget crisis. Cynics believed it was merely a grab for women’s votes, an attempt to address Abbott’s “women problem”.

Others argued the investment would be better spent on increasing access to childcare. Plenty of everyday Australians found the idea of paying women to have babies repugnant.

At the beginning of last year, after surviving a leadership spill, Abbott relented and ditched his signature policy.

In May, on Mother’s Day no less, the then-Treasurer Joe Hockey went one step further and proposed cuts that would mean 80,000 women miss out on some or all of their government entitlements.


It attracted universal condemnation from those with an understanding of the existing scheme. It was the “mother of all insults” according to Sydney University professor and one of Australia’s pre-eminent academics in this area, Marian Baird.

“…Then-Treasurer Joe Hockey went one step further and proposed cuts that would mean 80,000 women miss out on some or all of their government entitlements.”

Within days of the announcement 34 leaders from corporate, academia and health and representatives from a further 21 organisations wrote a letter demanding a policy reversal.

Marie Coleman, Prof. Graham Vimpani AM, Prof. Marian Baird, Jo Briskey, Ruth Medd, Ged Kearney, Dr Caroline Lambert, Sally Jope, Prof. Fiona Stanley AC FAA and Dr Cassandra Goldie were among the signatories on a statement that was sent to the Prime Minister, the Leader of the Opposition, the Leader of the Greens and cross bench Senators.

Late last year the Turnbull government modified the unpopular cuts but the consequences remain the same: they will reduce the entitlements of new parents.

Where are we now?

Analysis conducted by the Women and Work Research Group at the University of Sydney, commissioned by Fair Agenda, shows almost 80,000 families will be adversely affected by the proposed changes.

Nurses, ambulance service workers, teachers and retail workers are among those who will be hit the hardest, with some families losing up to $12,000.

In real terms this translates to between 4 and 6 weeks of their family’s average living costs: meaning they will only have enough income to cover 7 – 13 weeks of living costs while caring for their new baby.

Almost 80,000 families will be adversely affected by the proposed changes.

That’s less than half the 26 weeks experts recommend for both a mother and newborn’s health and welfare outcomes.

“This report shows women on low incomes will be hit particularly hard by the government’s attack on the paid time parents have at home with their newborns — and we expect it will prove just as unpopular with the community and the cross-bench as the proposed cuts Mr Hockey announced last Mother’s Day,” Fair Agenda Executive Director Renee Carr explains.

Professor Marian Baird, a co-author of the report and one of the independent experts tasked with reviewing the current paid parental scheme, explains why the change is dire.

 “Given the important and positive role the current system is playing, we can expect that if the government makes this cut it will force new mothers to either drop out of the workforce entirely; or leave their babies earlier than experts say is good for health and welfare outcomes. That’s assuming they can find childcare – which is already unable to meet demand for infant care. Access to good paid parental leave is not only critical for ensuring the next generation has a bright future; but also for tackling financial inequality faced by women. We know economic disparities in women and men’s working lives often start at motherhood; and right now 99% of those accessing paid parental leave are women.”

Six months paid parental leave remains a pipe dream for most Australian families. Having the government scheme operate in conjunction with what employers are already paying, helped more families get closer to that 26 week mark of paid leave. Cutting that entitlement, so families only get paid leave from either their employer or the government is counter-intuitive as it undermines the purpose of the scheme.

“It was a deliberate choice  designed to help lengthen the period women could take off work,” Baird says. “The former Labor government introduced the current scheme in 2011 because there was no government funded scheme. So now, taking this government leave time away from women – when our scheme is still not providing a long enough period of leave as it is – is a massive step backwards.”

For a Prime Minister as future-focused as Malcolm Turnbull it is difficult to reconcile Australia’s outdated stance on this issue.