Media Release
PAID PARENTAL LEAVE EXTENSION UNWARRANTED
Thursday, December 12, 2013
The government is reportedly reconsidering its opposition to
extending Paid Parental Leave from 14 to 26 weeks. This comes
despite Treasury advice that there would be
"minimal benefit
from increasing the length of parental leave."
Welfare commentator Lindsay Mitchell said last year Treasury
analysed who was using paid parental leave, labour market outcomes,
and child health outcomes. It found that,
"...there is not a
strong evidence-based argument to support extending the length of
paid parent leave."
Treasury's report states,
"...the majority of mothers return
to work when the baby is six months old...". Marginal
benefits to labour market participation and child health and
well-being would therefore be small. Additionally, it notes,
"...the
most vulnerable children are likely born into families where
parents are not eligible for paid parental leave...".
In a discussion about improving income adequacy it found that the
arguments are
"weak" as
"the current access group are
likely to be middle and high income women with stable employment."
Of the 32,000 paid parental leave recipients in 2011/12, 58
percent were earning over $40,000; 27 percent were earning over
$60,000.
Treasury also noted a possible negative impact for employers,
particularly small to medium enterprises, as their costs are,
"...likely
to be more significant as the length of parental leave increases."
This could give rise to greater discrimination against child-bearing
age females in the labour market.
The implementation of 26 weeks Paid Parental Leave will cost $327
million by 2015/16. Unchanged, the cost would be $176 million in
2015/16. An annual increased expenditure of $151 million for
"minimal
benefit" seems highly questionable. The benefit to the
government may lie in gaining electoral favour in 2014.