Speech by The Hon Jenny Macklin MP

Speech at Fifth International Community, Family and Work conference

Location: Sydney

Check against delivery

I would like to acknowledge the traditional owners of the land we are meeting on and pay my respects to their elders, past and present.

I would also like to acknowledge:

– Professor Shane Houston, Deputy Vice Chancellor, University of Sydney, our hosts for today
– Members of the conference organising committee
– All the keynote speakers for the conference
– And all of you here to participate in this conference over the coming days.

Thank you for inviting me to join you today.

The challenges of shaping government policy to match the circumstances of Australian families have kept me occupied for more than five years now as a Minister.

And for years prior to that as I worked in the social policy field in Australia.

So I look forward to hearing about your discussions over the next few days.

Today I want to share with you the insight that my position has given me into how we as a government support Australian families.

In particular, I want to talk to you about the creation and operation of Australia’s first national paid parental leave scheme.

Our government introduced this scheme in 2011, after detailed policy work to ensure it would best meet the needs of Australian families today.

We designed a scheme that reflected the reality of family life in Australia – a reality where both parents are likely to be working -and mothers continue to work after the birth of their child.

We designed a scheme that reflects the reality of the Australian workplace.

Where women on higher incomes are more likely to have access to generous paid leave schemes funded by their employer and are likely to have stronger attachment to their workplace.

And so we created a scheme providing government funded leave for 18 weeks at the national minimum wage.

A scheme that is providing many women on low and middle incomes, including casual and part-time workers, with paid leave after the birth of their child for the first time.

And a scheme that reflects the broader expectations Australians have of family support from their government.

That we will provide support to those people who need it most, and not ask taxpayers to subsidise those on higher incomes.

That we will complement existing support from the private sector and we do not make it the role of government to duplicate or discourage this support.

And above all, that we will do our part to help Australian families meet their daily challenges, and give their kids the best possible start in life.

Almost three years into our first national paid parental leave scheme, it can be hard to remember that it wasn’t always there.

But in fact, for too long Australia lagged way behind other OECD countries in providing support to women to take time off after the birth of their child.

The fight for paid parental leave took decades and I pay tribute to the many passionate women who kept at it until we got a result.

Paid parental leave was long overdue in Australia because our system no longer reflected the daily reality of family’s lives.

A reality where the old distinctions between ‘stay at home mums’ and ‘working mums’ are increasingly irrelevant.

Today, most Australian women move in and out of paid work when they have their children and as their children get a little older.

These women do want to spend time at home with their newborn children – to experience those important moments in their child’s early life.

But at the same time, they also want to return to the workplace – but need some support to help them stay connected to their workplace.

Today in Australia, 85 per cent of mothers are employed before giving birth to their first children.

Almost half (50 per cent) of these women have returned to work by the time their child is nine months old and almost three-quarters (71 per cent) have returned to work by the time their child is 13 months old.

Sixty-three per cent of women are employed before the birth of their second child and 51 per cent before the birth of their third child.

This shows just how important providing good leave and flexible work arrangements are to ensuring women are able to continue to participate in the workforce.

Before our government introduced paid parental leave in 2011, our system of support did not reflect this reality of modern family life.

In fact, around 55 per cent of working mothers had no access to paid parental leave.

The majority of the women missing out were in lower paid jobs, working in casual jobs or self-employed.

These women were having to take unpaid leave, or worse, leave their jobs altogether, when they had a baby.

Like a young woman I met in Sydney who worked at a fast food chain of restaurants and simply could not afford to take time off with her new baby.

This woman had a very sick baby in intensive care. She and her partner took turns to work in their shift work jobs, and visit their baby in hospital. She valiantly tried to establish breastfeeding, expressing in the toilets at her work. She broke down when she told me how hard it was to give up on that dream after her less than understanding boss asked here to stop expressing as it was putting the customers off.

And she told me how much paid parental leave would have meant for her family.

It is women like this that I think of now that Labor’s Paid Parental Leave scheme has helped more than 300,000 women take time off with a new baby.

Now, with the introduction of our scheme, around 95 per cent of working mothers have access to paid parental leave – a 50 per cent increase in just three years

The median income of those who are receiving paid parental leave is around $45,000.

The evidence shows that the scheme is making a real difference for the very mums who previously missed out.

In the context of speaking to you as a Federal election here in Australia approaches, I wanted to take the time to examine the paid parental leave scheme being proposed by the Liberal National Coalition – the main opposition party.

I want to explain why as a feminist and a policy maker, I believe it is not the best option for Australian families.

As many of you would be aware, the Opposition is proposing a policy which would pay leave at a mother’s replacement wage, rather than at the minimum wage.

They propose funding this $4.5 billion a year policy through a levy on business – a cost that those businesses have confirmed they will pass on to their customers.

Let’s be frank about what this means. It means banks increasing their fees and interest rates, and supermarkets charging more at the checkout.

Their proposal would favour the wealthy, but all Australians would pay for it.

At its most basic, I don’t believe it is fair that a woman earning more than $150,000 a year will receive $75,000 in Government assistance when they have a baby, while a cleaner on minimum wage will get just $16,000 from the Government.

And a woman who isn’t working before the birth of their child would be left behind even further.

This does not reflect the way the rest of our family assistance system in Australia works. Ours is a highly targeted system – that provides the largest benefits to those families who need it most.

Not the other way around.

One of the key arguments that proponents of a replacement wage scheme use is that a number of other OECD countries provide replacement wage, or near replacement wage, schemes.

But again, we need to assess whether this is a valid comparison given the nature of the Australian social security system.

Our family payments and income support systems are not like the social insurance schemes of many European OECD countries. Our system is funded from general government revenue, and is highly targeted.

It is not funded through premiums paid by individuals and employers as is the case in many European countries.

The full replacement wage model is typically just one element of a broader set of social insurance arrangements in these countries.

Under these arrangements, employers, employees and, more rarely, government, make mandatory contributions to a pooled fund that meets a range of employees’ lifetime social needs, such as income support for maternity leave, incapacity, sickness, unemployment; and retirement.

This is quite different from the system in Australia where we provide additional family assistance through a range of other payments that is relatively generous, although highly targeted, when compared to other countries.

This was a point noted by the Productivity Commission when it recommended against paying replacement wages as part of an Australian scheme.

For our overseas guests, the Productivity Commission is a leading independent economic and policy research body – funded by the Government.

The Productivity Commission found that providing full replacement wages for highly educated, well paid women would be very costly for taxpayers and would deliver few benefits in increased workforce participation.

This is because the evidence is that women on higher incomes already have strong attachment to the workforce.

And they tend to be in industries and workplaces where there are already paid parental leave schemes provided by their employers.

I believe it is appropriate that these women continue to be able to access paid parental leave from their employer, in conjunction with the Government’s scheme where they are eligible.

Good employers recognise that providing strong schemes of their own helps them attract and retain the best and the brightest.

We have evidence that if the government was providing a more generous replacement wage scheme, employers would reduce their own schemes.

In fact, the Opposition leader, Tony Abbott, has been openly encouraging employers to drop their own schemes, so that they can afford to pay his levy.

So that instead of Government concentrating on ensuring women on low incomes and those in casual employment are covered, it would mean Government taking on responsibility for even the most expensive private schemes.

New analysis from my Department also shows that the beneficiaries of a scheme that paid replacement wages would be spread inequitably across Australia.

The majority of high income women – who will get the highest benefits under a replacement wage scheme – are concentrated in the wealthy suburbs of our major cities and in the big firms found there.

Meaning the woman working in the local chemist in Gippsland in regional Victoria would be subsidising the paid parental leave of the woman working in the bank headquarters in Collins Street in Melbourne.

In New South Wales, the Opposition scheme would see women living in inner North Shore suburbs such as North Sydney and Mosman receiving the highest financial benefits while women in areas such as Wyong, Penrith, Liverpool and Campbelltown would receive the lowest financial benefits.

Only one in five working women in Mosman is earning less than $600 per week (around the minimum wage), compared to more than 40 per cent of working women in Wyong.

And it is areas like Wyong, and the western suburbs of Penrith, Liverpool and Campbelltown where the majority of working families on modest incomes live, and where the majority of babies are being born.

For example, the fertility rate in Penrith is 1.99 children per family, while the rate in North Sydney is 1.39 children per family.

It is a similar story elsewhere in the country.

In Queensland, around two thirds of working women in Ryan, an electorate in Brisbane, earn more than the minimum wage.

In the regional electorates of Fisher, Hinkler, Maranoa and Wide Bay, nearly half of working women earn less than $600 per week.

I don’t believe that is fair.

And I don’t think it’s the best way to support Australian working women.

Three years into our scheme, more than 300,000 Australian women have now benefitted.

And we have early evidence that the scheme is not only making it easier for women to take time off around the birth of their child, it is also increasing their ongoing attachment to their workplace.

Compared with our baseline from before the introduction of paid parental leave, when around 53 per cent of women returned to work at the same employer, we are now seeing around 60 per cent of women who have received paid parental leave return to work at the same employer.

And of course paid parental leave is just one of the ways our government is supporting Australian families to balance work and family life.
Importantly we are also providing the support that women need when they go back to work.

Obviously child care is central

Since coming into Government, Labor, has tripled the investment the previous government made in early childhood education and care.

By increasing the Child Care Rebate from 30 per cent to 50 per cent of out of pocket costs up to $7,500 a year per child, child care is now more affordable for Australian families.

And at the same time, we have lifted the quality of early childhood education and care through improved child to staff ratios and better qualified early childhood educators.

Because we know that women will only make the choice to return to work, if they are comfortable that their child is being well cared for, and receiving a quality early education.

We also want to ensure that women return to work after parental leave with good jobs. That they have access to flexible work arrangements, and opportunities for career advancement just like other employees.

That’s why we have asked the Australian Human Rights Commission to conduct an inquiry into workplace discrimination against employees taking parental leave.

There is significant anecdotal evidence that women are being demoted, sacked, or having their role or hours unfavourably ‘re-structured’ while on parental leave, or on their return from leave.

This inquiry will measure the prevalence of this discrimination and help ensure mothers are treated fairly at work.

And it is also why we have recently legislated expanded rights for parents to request flexible work arrangements from their employers.

The introduction of Australia’s first paid parental leave scheme was a very important moment for our nation.

It is when our system of supporting new families caught up with the realities of those families’ lives.

When we made it possible for women on low and middle incomes to feel secure about taking time off to spend with their newborn.

And it took a Labor Government to deliver it. We should not forget that the Liberals had almost 12 years in Government to deliver paid parental leave – and did not.

In fact, Tony Abbott famously said as a Cabinet Minister in the previous government that it would happen ‘over this Government’s dead body’.

Now he won’t say when he’d start his scheme if he was elected and his own party is so hopelessly divided on it, meaning families can’t be sure it will even happen.

Families have a clear choice at this year’s Federal election.

And Labor is committed to continuing to provide an equitable system that supports Australian families when they need it most.

Thank you.