How Fair Dinkum Is Abbott’s Paid Parental Leave Scheme?

Now that the Coalition’s campaign has been launched, Eva Cox has a closer look at Abbott’s paid parental leave scheme

The introduction of a fair dinkum paid parental leave scheme is the obligation that a serious political party owes to modern society and that an aware political parent owes to his three daughters. These days, most families need more than one income to survive and because 62 per cent of mothers are in the workforce just prior to having a baby, paid parental leave reinforces the most conservative instinct of all: the instinct to have a family.

So said Tony Abbott at the Coalition campaign launch on the weekend – and who could disagree with him? Even though Abbott does go on and on, I agree with most of his rhetorical flourishes – except this comment that the ALP version is just a re-badged baby bonus.

It’s good for women because it gives them a real choice to combine paid work and family. It’s good for families because it gives them real help when they are most financially vulnerable. Labor’s scheme by contrast is just a re-badged Baby Bonus; it’s certainly not the real wage that families need to pay their bills and to make ends meet. That’s why we will pay replacement wages like the vast majority of schemes around the world.

Why do I disagree with this comment? Because it’s even more applicable to the Coalition’s policy.

Paid parental leave is important because it legitimises the connection between paid work and family responsibilities. Neither of the 2010 competing schemes do this adequately because neither incorporates any leave entitlement, just a payment. The Coalition offers 26 weeks at replacement pay rates, plus two weeks paternity leave, versus Labor’s 18 weeks at the minimum wage. So both can be seen as an improved baby bonus schemes which significantly provides more for those women in paid work than those with little or no earned income.

The Labor scheme is in place, ready to start from the beginning of next year. It expects employers to administer the payments through the wages system so hopefully it will maintain some workplace connections.

The Coalition’s version has two significant design flaws which raises queries about their understanding the whole concept. One is that all payments will be made by the government, which undermines the workplace employer connections; the other is that, despite either parent being eligible, the replacement salary will be at the mother’s pay rate. This is obviously a money saver as women generally earn much less but it also suggests that the gender pay gap is being exploited by the Coalition.

As a win for gender equity, these factors negate much of what Abbott claims, despite their scheme being more financially generous.