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Paid maternity leave: the unfolding debate

Sex Discrimination

Paid maternity leave: the
unfolding debate

"Not if ... but
how: A Victorian perspective on paid maternity leave" forum

Speech Delivered by Pru Goward,
Federal Sex Discrimination Commissioner at RMIT University, 31 May 2002

  • When the interim
    paper Valuing Parenthood: Options for paid maternity leave was launched
    the most we thought we could hope for was government agreement to economic
    modelling of the options.


  • Wow, weren't we
    aiming low!


  • That modest dream
    has been more than surpassed as baby talk has dominated politics and
    the media. The support of major political parties and the careful consideration
    being given to it by Government is a great bonus.


  • Why has the issue
    taken off in this way?


  • There is not any
    one reason. It's not just that motherhood is hard to oppose.


  • Let's just say
    the timing has been right. The community is worried about how we can
    keep juggling work and family without falling off the perch. Some are
    worried about declining numbers of grandchildren, they're worried about
    babies in child care because Mum has to go back to work. They're worried
    about young women continuing to do a double shift. Their mothers did
    it and are prematurely aged - they don't think it needs to be like that
    - and its not right.


  • In addition to
    this, the Government has made clear that the money is there. The announcement
    of a Baby Bonus scheme, costed at ½ a billion dollars in a full
    year, says so. $500 a year for women to stay at home for 5 years - I
    don't think so - but that $1/2 billion is certainly a handy sum for
    a paid maternity leave that has been costed at $300m.


  • Nobody seems to
    like it much.


  • Paid maternity
    leave has been brought onto the national agenda at a time when we're
    hungry for future solutions. Treasury finally caught up with us by releasing
    the Intergenerational Report on Budget Night, 3 weeks after our report
    hit the streets. It had no solutions but at least it admits there is
    a problem.
  • Women no longer
    want to single-handedly perform a dual role as mothers and workers.



  • They are starting
    to say 'enough is enough.'


  • They know the
    juggle is thankless and demanding, and many are no longer prepared to
    do so.


  • As a result women
    are having fewer children, later in life, if at all.


  • The macro outcome
    is the sum of each woman believing she can choose to both work and have
    children.


  • This is of concern
    for the future of Australia.


  • The issue has
    taken off as global and Australian marketplace competition grows.


  • Employers need
    to hire best people for the job - and they need to keep them there.


  • The Australian
    economy needs their skills and experience and it is for this reason
    that economists and business leaders now recognise the importance of
    enabling women to have the choice of a decent job, decent income security
    and a decent family life as well.


  • Tax payers also
    need to think about it.


  • Every year the
    Australian Government invests public funds into education and training
    programs.


  • In 2000 women
    made up 46 per cent of all Australians with post school qualifications.



  • Women are spending
    years studying and training to enter the workforce - Women are attending
    university, entering TAFE and doing other a variety of other training
    courses.


  • They are qualifying
    as lawyers, accountants, chefs, beauticians and aroma therapists.


  • And just when
    they've got that far, they reach an age when you can't feasibility put
    off children any longer.


  • The majority of
    women are having children between the ages 30-34.


  • It is when women
    have committed at least 10 years to their field, in study and/or experience,
    and are often on their way to becoming leaders in their fields, that
    they leave the workforce.


  • Australia fails
    to maintain its most skilled labour force, crucial in the increasingly
    competitive global market.


  • Business case
    arguments show that paid maternity leave can reduce attrition rates
    and encourage women to return to the workforce earlier - AMP reported
    an increase in retention rates from 52% in 1992 to 90% in 1997, following
    the introduction of paid parental leave. [1]
  • There is recognition
    that the introduction of paid maternity leave may assist in ensuring
    the attachment to the workforce of this skilled, experienced and therefore
    scarce commodity.


  • Employers realise
    that paid maternity leave may potentially cut down staff recruitment
    costs. Another reason why this issue has taken off in the current climate
    of economic instability.


  • A major retailer
    found that it costs a minimum of $3800 to recruit a new full time employee.
    [2] This does not include calculations for training
    or loss of experience. It can go higher - for a bank teller, it's estimated
    at eighty thousand dollars and for a qualified lawyer, hundreds of thousands
    of dollars.


  • These are the
    reasons why all state public servants and 23 percent of women in the
    private sector currently get paid maternity leave.


  • The issue has
    also taken off as people find it unacceptable that from July, when New
    Zealand introduces its paid parental leave scheme, Australia will remain
    one of only two nations in the developed world failing to provide a
    national scheme of paid maternity.


  • I think we can
    say paid maternity leave is under active consideration.


  • The main thing
    now is to decide - what scheme of paid maternity leave do we introduce?
    How it will be funded? What will it provide?

OPTIONS

  • The interim paper
    sets out five possible options for funding paid maternity leave.


  • These are largely
    based on schemes that have been successfully implemented in other countries.



  • They are worthy
    of meaningful consideration and include:

1. Government
funded universal payment:
payment through the welfare system to
all women who give birth.

2. Government funded employment based mode: Flat payment to women,
made via either the tax or welfare system. Alternatively paid by employers
who are reimbursed by the government.

3. Social insurance/superannuation style scheme: Government,
employers and employees contribute to a fund from which maternity leave
would be paid.

4. Employer levy: Employers pay a levy based on total salaries
to avoid men being hired over women. Small businesses may be exempt.

5. Individual employer funded payment: Women have their maternity
leave paid for by their employers with 'top up' payments to encourage
their return to work.

 

  • Let me say from
    the outset - as stated in the options paper and reiterated in every
    public comment I have made on this topic - this fifth option, mandatory
    payments of maternity leave by employers to employees is not a preferred
    option. It's not preferred by the ILO, among others.


  • It is a third
    world scheme - it exists in Bahrain and Burundi. No where in the developed
    world is paid maternity leave funded through mandatory direct employer
    payments.


  • The Federal Government
    has shown no support for such a scheme. Nor the Opposition, nor the
    Democrats.


  • Women would be
    disadvantaged under this scheme. As employers and employer group spokespersons
    keep telling us, employers - especially small business - would stop
    employing women of child bearing age to avoid this cost.


  • Any scheme which
    would further disadvantage women in the workforce is obviously unacceptable
    and must be avoided.
  • So let's not
    focus the debate on this option.


  • There are four
    other options outlined in the options paper worth considering - and
    no doubt an array of other options in your minds.


  • In deciding which
    option to support, it is necessary to consider which option best meets
    the objectives of a paid maternity leave scheme.


  • So what are the
    objectives of a paid maternity leave scheme?

OBJECTIVES

  • There are many.
    I would like to outline two here today.
  • Objective
    1: Addressing the declining fertility rate.
  • The current fertility
    rate is 1.75. This figure sits well below the replacement rate of 2.1
    and even further below the 1961 of 3.6 children per women or the 1990
    rate of 1.9 children per women.


  • We need a next
    generation to financially support Australia's increasingly aging population.


  • More importantly,
    we need a future generation to ensure that we continue to be a functioning
    society - we need a next generation of consumers, innovators, creators
    and workers.


  • At the moment
    this is far from guaranteed.


  • Let me show you
    what I mean.
  • Overhead 1:
    The current age structure (or spread of ages in Australia). Based on
    the total fertility rate in 2000, 1.75, and migration of 80,000 persons
    per annum.

  • As you can see
    we have a nice beehive shaped structure, with a slight bulging in the
    34-44 age groups.
  • Now let's look
    at age structure projections for Australia in 2050.


  • Overhead 2:
    A standard projection for the year 2050. Assumes that the total fertility
    rate falls to 1.65 in 2005 however remains stable at this rate.

  • Assumes also that
    the number of migrants remains constant.
  • What do we get?
  • Perhaps a few
    more queen bees and a few less worker bees as we see the bulge rise
    slightly, to the 44-64 years age groups, however our beehive structure
    still exists.


  • Overhead 3:
    This projection assumes our fertility rate continues to decline.

  • It falls to 1.65
    in 2005 and then to 1.3 in 2015 where it remains constant. Again, immigration
    remains constant.
  • The result?
  • A grim projection.

  • The bulge moves
    to cover the 50-70 year old age groups.
  • Our beehive age-structure
    is now replaced by a coffin.


  • I am not suggesting
    that paid maternity leave alone can rectify this trend and ensure the
    existence of a next generation.


  • A period of paid
    leave following the birth of a child does however respond to some of
    the financial concerns discouraging women from having babies.


  • Why?
  • Because paid
    maternity leave means that there will not be a total loss of income
    by one, or sometimes the only income earner in a family at the time
    of the birth of a child.


  • Objective 2:
    Supporting women in their choices - in turn supporting families.
  • Last financial
    year, the Federal government committed over 10 billion dollars to direct
    family assistance, including the maternity allowance, family tax benefits
    A and B and a maternity immunisation allowance.
  • Add the amount
    spent on child care and parenting payments and this amount increases
    to 16 billion.
  • Another half a
    billion dollars will be spent on the baby bonus tax when it is introduced.
  • What this says
    is that we always have, and continue to, support families.
  • Now the family
    has changed, the sort of support we give them has got to change.
  • Paid maternity
    leave however, does something that not one of these other schemes does
    - it enables women to CHOOSE to stay home with their babies for the
    first 14 weeks of that baby's life.
  • It means they
    don't have to get a doctor's certificate to go back to work at 4 weeks
    because there's a mortgage to be paid.
  • Offering women
    a period of paid leave after the birth of a child is simply a sensible
    and effective way of supporting women - and therefore supporting Australian
    families today.
  • We've got options;
    we've got objectives that a national scheme of paid maternity leave
    will go some way in addressing - what next?

NEXT STEPS

  • Through public
    submissions and a series of informal nationwide consultations with employee
    and employer groups, business organisations, unions and experts in the
    field we debate the feasibility of the each of the options.
  • We can begin by
    considering the options for a national scheme of paid maternity leave
    scheme as set out in the paper. We also welcome submissions outlining
    other options for funding paid maternity leave.
  • The submissions
    will form the backbone of the final report on the options for paid maternity
    leave due out towards the end of this year.
  • Submissions are
    due by 12 July. During this period the nationwide consultation process
    will take place.
  • It is already
    underway - last week, forums were held with employer groups, unions
    and women's groups in Queensland. The process continues this week in
    Melbourne.
  • Every meeting
    has included critics - but every meeting has been constructive give
    the moral dimension that appears to underlie this issue.
  • I'd like to think
    the final report will be critic proof. That we've locked the stakeholders
    up - and then in behind us.
  • Paid maternity
    leave itself is not an option. As the title of this forum so aptly puts
    it - it is not an if but a how.
  • Our challenge
    now is to make sure the public support for the issue gets heard by those
    with the power to make it happen.
  • I look forward
    to your submissions and input in consultations, your thoughtfulness
    and your ideas. It is rare for Australians to have a chance to directly
    contribute to policy debate, let's make sound and intelligent use of
    it on this occasion.

1.
[1] George Trumbell "Creating a culture that's good for business"
in E.M. Davis and V. Pratt (eds) Making the Link: Affirmative Action and
Industrial Relations No. 8 Labour-Management Studies Found Sydney 1997,
31 -33 at 32.

2. [2] Human Rights and Equal Opportunity Commission consultation
with Phil Naylor, CEO Australian Retailers Association 19 September 2001;
Australian Retailers Association, Department of Employment and Workplace
Relations and Equal Opportunity for Women in the Workplace Agency Balancing
the Till: Increasing profits and building a better workforce Commonwealth
of Australia Canberra 2002, 11.

Last
updated 14 June 2002