In 2002, Tony Abbott’s hostility to paid parental leave reached a crescendo, when he declared to the press: “Compulsory paid maternity leave? Over this Government’s dead body, frankly.”
Writing for The Australian in October 2008, he claimed that paid parental leave – like abortion – was part of a “radical women’s agenda” championed by extreme feminists in the Labor movement. He spoke out about his opposition to the scheme based on the ways it reduced stay at home mothers to second class citizens, lambasting then Prime Minister Rudd’s commitment to women workers as an example of “Political Correctness”; extreme lip-service to the feminists in Labor ranks.
In 2009 the Productivity Commission released its report into Paid Parental Leave stating that:
“Payment at a flat rate would mean that the labour supply effects would be greatest for lower income, less skilled women — precisely those who are most responsive to wage subsidies and who are least likely to have privately negotiated paid parental leave. Full replacement wages for highly educated, well paid women would be very costly for taxpayers and, given their high level of attachment to the labour force and a high level of private provision of paid parental leave, would have few incremental labour supply benefits.”
It went on to say:
“A paid parental leave scheme needs to give particular attention to lower income families:
• The beneficial employment effects of a leave scheme are most likely to be experienced by less well-educated and lower skilled females. Empirical evidence shows that higher effective wages do more to encourage these women to work than more educated, higher paid women.
• Poorer families have less recourse to savings and cannot necessarily support themselves on a low single income, hastening their return to work.
• Lower income families face the greatest barriers to work given the incentives of the welfare system.
Altogether these aspects of poorer families suggests that a statutory paid parental leave scheme must be sufficiently generous to encourage parents to be employed, and when employed, to take a sufficient leave of absence from work around the time of the birth of their babies.
Replacement wages — sometimes the basis for paid leave schemes overseas —would provide weak incentives for lower income families to work, depending on the nature of welfare payments available to those out of the labour force.
Simple provision of replacement wages or prorating of a fixed entitlement based on hours worked would not create the appropriate work incentives for the (probably) most responsive group of people.
The minimum wage typically exceeds the replacement wages of lower income parents (since many work less than full-time hours) and would have generally desirable labour market impacts:
• It would create good incentives to work for lower income females, since the payment is significantly more than the value of income support for women working in the unpaid sector.
• A payment equal to the adult minimum wage for 18 weeks would allow lower income families to extend their leave to an adequate length, yet would avoid skill losses associated with very long leave periods. (In any case, the skill losses for lower skill jobs are likely to be small.)
• Capping of benefits at roughly the minimum wage would limit the benefits paid to well-off families who often already have access to privately negotiated paid parental leave and have a strong capacity for self-financing leave.
• Unlike means-testing of welfare payments, capping is not likely to elicit undesirable labour supply responses by women earning above the capped amount. This is because they would still earn the capped amount provided they took leave (whereas in mean-tested systems, people start to lose benefits when their income exceeds a threshold).”
The Labor Party listened to this advice and introduced the scheme suggested by the Productivity Commission – 18 weeks of parental leave paid at the minimum wage.
In the lead up to the 2010 election, after attending a luncheon on International Women’s Day, Tony Abbott did the most amazing backflip, without consulting his party colleagues, and announced his “rolled gold” PPL scheme which would pay new mothers their regular wage for six months, up to a maximum of $75,000, to be funded by a 1.5 per cent levy on more than 3000 big companies.
In May 2013 he explained it is “all about” encouraging women of “calibre” to have children. In the scramble to hose down the justifiable backlash to this elitist comment, we were assured it was all about “workforce participation” for women even though the Productivity Commission Report had stated otherwise. It then morphed into some sort of “workplace entitlement” argument.
When asked if the policy should be reviewed, Malcolm Turnbull said “This is a key policy of Tony Abbott’s and it is something that we have as part of our policy and I don’t see any probability or likelihood that of that policy being shelved. Tony is very committed to it.”
Liberal backbencher Alex Hawke called it an “albatross” that must be “scrapped”. Writing for the Institute of Public Affairs he blasted it as an “unjustifiable impost on business” and said the policy should be reviewed. “An expansion of the PPL scheme is ill-suited to an economically Liberal agenda,” Mr Hawke wrote. “Most importantly for Australians, the policy does not pass the fair-go test.”
Big business joined critics of Mr Abbott’s signature paid parental leave scheme with the head of the Australian Industry Group, Innes Willox saying: “There are no positives, no upsides in this policy that we can see for business. It’s inequitable,” Mr Innes told ABC TV.
“Only the top 3000 or so companies would be paying and they’d be subsidising for everyone else. That doesn’t make sense on that level. The current system is operating well. It has very broad business and community support. We don’t see any reason to change.”
Even John Roskam of the economically dry Institute for Public Affairs said “There’s widespread concern that the Coalition is supporting a tax increase. And at this time, the Coalition should be talking about cutting taxes and cutting spending, not increasing taxes.”
Considering our supposed “budget emergency” and our “debt crisis”, and the cry for us all to help in the “heavy lifting” now that the “age of entitlement is over”, this hugely expensive and inequitable attempt to show us Tony “gets” women reeks of hypocrisy as do so many of his decisions.
Why not listen to the experts? It’s quality affordable childcare we need Tony – not handouts to rich women of calibre and grandstanding from hypocritical politicians!
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