Sharan Burrow: Paid Maternity Leave – a vital economic measure in 2009 budget

As Australia plunges into tumultuous economic waters, the introduction of an affordable paid maternity leave scheme would be a minor addition to the 2009 budget and makes good economic sense.

The millions of women who now make up nearly half the workforce are more educated and skilled than at any other time in Australia’s history.

On average, those taking time out to start a family already have 10 years experience in the workforce.

One of the biggest discoveries of other OECD countries is that paid maternity leave, whether offered by the employer or government, overwhelmingly keeps women connected to the workforce. Without it, many stop work altogether and find it hard to return.

It would be economically unproductive and an extravagant waste of public and private investment to see women drop out, or forced out, of the workforce indefinitely when they have a child because of employer uncertainty about the economic downturn and government hesitation about a paid maternity leave scheme.

We can’t afford to lose the knowledge, expertise and spending power of our working women; they are essential to the continuing economic growth of this country. 

Australia already suffers from one of the lowest rates of labour force participation by mothers in the 24 to 45 age group in the developed world. Many say they would like to work.

With the right measures, starting with a paid maternity leave scheme and flexible work arrangements, we could easily tap into this pool of potential workers, increasing GDP and boosting government revenue.

Australia’s most progressive employers have already blazed a trail.
They know women are more likely to return to their jobs after a decent period of paid leave when they have a child.

Staff retention rates in some of these businesses are as high as ninety per cent, minimizing the cost of re-hiring and re-training.

But savvy bosses also understand that paid maternity leave is about much more than the money: it engenders a powerful sense of support, loyalty and trust, and the reward runs both ways.

Employers retain a trained and valued staff member while women feel secure in taking time to recover and nurture their babies. The minority of women benefitting from such civilised conditions are largely white-collar professionals.

It’s the army of casuals, part-timers, self-employed and low paid women with no access to any form of paid maternity leave who are most vulnerable, and much more so in a volatile economic climate.

They are often the primary carers in the vast majority of Australian families that rely on two incomes to pay bills, rent or mortgage.     

Even in recent prosperous years, the cost of living has been placing an unhealthy pressure on many working mothers to return to work too early to keep the family financially afloat.

With job security under now under threat, returning early becomes even more urgent.

The loss of income can mean a struggle to put decent food on the table, no way to pay for medical care such as a visit to the dentist and no capacity to give children experiences others take for granted, such as holidays.

The social, psychological and medical costs of having women back at work before they have physically recovered or established breast-feeding and a bond with their newborn babies cannot be measured or tolerated in any forward-looking nation.

A government-funded paid maternity leave scheme must be judged as a long term economic and social measure that will help retain as many jobs as possible in a tough climate, keep productivity on track and pay off when better times return.

As a stimulatory package, it would be relatively cheap. The Productivity Commission calculates that an 18 week paid maternity leave scheme would only cost $452 million, equating to a 2% increase in spending on existing family assistance measures.

The ACTU, unions and thousands of Australian families call on the Rudd Government to include the Productivity Commission’s proposed scheme in the 2009 Federal Budget as a matter of urgency.


Sharan Burrow
ACTU President

Courtesy of ABC Online 26.11.08