Among the surprises revealed during stakeholder briefings over the Abbott Government's paid parental leave legislation is a plan to use constitutional powers to override the existing provisions within private employer contracts and industrial agreements. Marie Coleman was briefed by federal government officials and explains what's in store.

The Abbott Government wants to have its new Paid Parental Leave Scheme (PPL) legislation passed through both Houses of Parliament before July 1, 2014 (when the new Senate takes office). Implementation is to start on July 1, 2015.

Rushed stakeholder consultations are underway during January, with a view to getting an exposure draft of the legislation ready before autumn.

The basic parameters of the Abbott scheme are as laid out prior to the federal election:

26 weeks paid leave for the primary carer paid at the primary carer's income level, subject to a payment cap of a total of $75,000. Women earning less than Adult Minimum Wage (AMW) will be paid at AMW.
2 weeks paid leave (of the 26) for the partner, at the partner's income level, same cap as for primary carer.
Superannuation at employer rate, or a base rate 9.25 per cent of income payable to the primary carer during the period of leave (some issues yet to be resolved).
Paid through Centrelink (not by employer).
Financed by 1.5 per cent levy on company incomes to be paid by companies with an after tax turnover above $5 million per annum, offset by some changes to company tax rates.
The scheme is proposed to subsume and replace the current Commonwealth scheme, introduced by the Rudd Labor government, which is paid (subject to a residency and an income test at $150,000 per annum) for 18 weeks at the Adult Minimum Wage level, regardless of the actual income of the primary carer, with two additional weeks available to the partner also at AMW.

The Government has made it clear that any related changes to the Fair Work Act sought by interested parties, such as the Australian Greens, will not be on the table.

Approximately 51 per cent of currently employed women have access to employer paid PPL (either through industrial awards, or individual employment contracts), which they may access in addition to the current Government scheme. This includes State, Commonwealth and Local Government employees as well as private sector arrangements. This will cease under the proposed new arrangements. It is likely that some low paid Commonwealth and State employees currently able to access both their employer scheme, and the (Labor) Government scheme, will be losers under the new arrangements.

In a surprising step, the Commonwealth proposes to use the social services powers in the Australian Commonwealth Constitution to override private employer contracts as well as industrial agreements. This has the potential to raise alarms about whether the Commonwealth might similarly use its powers to override other sections of individual contractual agreements or industrial awards.

At this time, the attitude of unions covering state and local government employees is not known. However, premiers have agreed at a December 2013 COAG meeting to have officials work with the Commonwealth to discuss integration of schemes (most states have multiple state-financed PPL schemes under differing awards).

Under current arrangements, women who are not able to access PPL, as a result of not meeting the work test, have the Baby Bonus of $5437 to fall back upon. However, on March 1, 2014, the Abbott Government will abolish the Baby Bonus. There will be a significantly smaller addition to Family Tax benefit A of $2000 on the birth of the first child, and $1000 for second and subsequent children.

There are some concerns that women on contracts, or working casually in highly seasonal industries (for example, tourism in Tasmania in the summer ... not much winter work) may not be able to meet the work test. Many school teachers are now employed on rolling short term contracts, and have no work-no pay during the summer school break. They will also have no fall-back of significance. This is an issue which is being raised by stakeholders.

There are also problem issues around the definition of income. Many couples running an enterprise (tradesmen whose wives take bookings, do the accounts) may not pay the wife a wage. The same is the case for many doctors' wives. How then to determine the income level to be replaced? The issue also arises where a woman may be employed on a low base rate wage, but earn significant additional income through bonuses, or commissions. The issues arising from difficulty in defining income for replacement purposes also flow on to decisions about the most appropriate rate of payment of superannuation, but it appears that the basic 9.24 per cent rate will apply at AMW.

While the proposed new scheme has a duration of 26 weeks (compared to the 18 weeks post-birth of the current scheme), one significant difference is that up to 6 weeks of the leave can be taken before the birth. With the possibility of another two weeks being surrendered for partner leave (albeit at the partner's income level), the balance will be 18 weeks paid leave post birth, just like the current system. The National Foundation for Australian Women is pressing for the partner leave to be additional to the 26 weeks, and provided on a take it or lose it basis, as is common in many OECD schemes

continue

And the rightards insist that wealthfare is a myth.

Here's all the proof anyone could need that it's nothing of the kind.

The cost of this stupid policy is going to hurt:

1. small business as big business recovers the cost of the 1.5% levy. Banks will charge small businesses higher interest rates on their loans as one example.

2. Those saving and investing towards their retirements—dividends will be franked 1.5% less, hurting their income (the levy is not considered a tax so no franking.)

3. Those living off investments in retirement

4. Everybody earning less than $150,000 per annum.

The stupid Greens, conservatives in fact, will agree to this complete waste and may just reduce the cap to $100K which really does not fix the idiocy of this idiotic scheme! With the private sector still indebted and not having much confidence this idiotic piece of middleclass welfare is going to see spending fall even further. This scheme values some babies MUCH more than others.

If a woman wants to stay home for 6 months looking after her new baby is there any need for the taxpayers to pay her wage for the full six months? Don’t think so—the woman can use annual leave, long service leave etc to cover two of those months—which is why the more limited Labor PPL only covers four months.

And once the 6 months is over—what child minding facilities are available so the women can return to work?

Apparently his  daughters, school girls at the time, thought up this idiocy. They must have been smoking something good!

bwahahahaha more comedy GOLD from sprinty!

Not NBN—Fraudband!

Won’t even start being rolled out to 2017, maybe.

Over generous.

Dumb politicians making dumb promises.

Needs to be scrapped, the ALP policy seemed pretty good to me.

Doctor Jolly wrote on Jan 23^rd, 2014 at 9:18am:


Yes we need it, that's why the ALP delivered $400 million of it to us.