Submission to the Inquiry into the potential impacts of the Commonwealth Paid Parental Leave Scheme on small businesses and their employees 

Policies, Publications & Submissions - July 11, 2023

There has been a national Paid Parental Leave scheme (PPL scheme) for people who meet residency, work/activity and income criteria since January 2011. In 2022 the federal government introduced the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 (the Bill). The Bill amends the Paid Parental Leave Act 2010 by expanding the number of weeks of paid parental leave available to eligible parents and increasing the flexibility for sharing the entitlement between parents. This was an important part of the gender equality reforms that have been implemented by the current federal government.

In its submission regarding the Bill, the ACTU welcomed these changes as being crucial and significant reforms to the PPL scheme, and also acknowledged that there is more to be done to improve Australia’s PPL scheme – including extending the scheme to 52 weeks by 2030, increasing the rate of pay from its low level of the National Minimum Wage, providing incentives for shared parenting, and paying superannuation on top of PPL.

The Australian scheme, by international standards, provides little in comparison to most OECD nations. Even once the Government’s PPL reforms are fully implemented and the scheme is expanded to 26 weeks from 1 July 2026, Australia will still rank in the bottom third of parental leave entitlements offered internationally.2 In fact, the changes, which would lift the payment from about 8 weeks of full-time average wage equivalent up to 10.3 weeks, only lifts Australia from the 2nd worst position in the OECD, up to the 4th worst position based on 2022 figures.

The Services Australia website states that the PPL scheme complements other employer provided parental leave entitlements, recognises that taking time off to care for a child is part of the usual course of life for parents, and promotes equality between men and women and balance between work and family life.

Importantly, it also articulates the benefits that the PPL scheme provides for employers – including by helping to retain valuable and skilled staff by encouraging them to stay connected with their workplace when they become parents; enhancing a family friendly workplace without the employer being required to fund Parental Leave Pay; and increasing long-term workforce participation for new parents.

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