HOUSE OF REPRESENTATIVES Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 Second Reading SPEECH Wednesday, 8 February 2023I rise to speak on the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022. This bill implements the first tranche of the Labor government's Paid Parental Leave reforms announced in the 2022-23 October budget and will commence on 1 July this year. The bill reflects the Albanese government's commitment to improve the lives of working families, support better outcomes for children and advance women's economic equality.
It was a former Labor government in 2011 which introduced the current Paid Parental Leave scheme. It was an important and progressive Labor policy which gave every family with a new baby more choice, greater security and better support. While that has served our communities well, families and their needs have changed in the decades since.
The scheme as it stands today is built on gendered assumptions of primary and secondary carers, which limit parents' ability to share care. Our bill fixes this. The eligibility rules in the current scheme are unfair to families where the mother is the higher income earner. Our bill fixes this. Under the current scheme, a father or partner who is a citizen or permanent resident can be ineligible because the child's birth mother doesn't meet the income test or residency requirements. Again, our bill fixes this. Our amendments represent the biggest expansion to the Paid Parental Leave scheme since its inception in 2011.
Improving paid parental leave is critical reform. It's critical for families. It's critical for women. It is critical for our economy. The six key changes that will come into effect from 1 July 2023 are: combining the two existing payments into a single 20-week scheme; reserving a portion of the scheme for each parent, meaning they can both take time off work after a birth or adoption; making it easier for both parents to access the payment by removing the notion of primary and secondary carers; expanding access by introducing a $350,000 family income test which families can be assessed under if they exceed the individual income test; increasing flexibility for parents to choose how they take their leave days; and allowing eligible fathers and partners to access the payment, irrespective of whether the birth parent meets the income test or residency requirements.
These changes are the first stage of the Labor government's reforms and lay the foundation for an expansion to the full 26 weeks of paid parental leave by 2026. That means we will have a full six months of paid parental leave at that time. Across Australia these changes will benefit around 181,000 families each year, including around 4,300 people who would not have been eligible under the current scheme but will gain access after the changes. In my electorate of Newcastle, more than 2,000 families will benefit each year from the paid parental leave amendments in this legislation. I'd like to acknowledge those in my electorate who have contacted me to advocate for the expansion and improvement of the Paid Parental Leave scheme. I want to say to you that the government has listened and, even more importantly, we're acting by implementing these important reforms in the parliament.
The Albanese Labor government is committed to achieving economic equality for women. We know that, if done right, paid parental leave can be a driver for advancing gender equality. A key driver of the gender pay gap is the disproportionate amount of unpaid care and work that is performed by women. We know what happens when both parents are not supported to take time off paid work to care for their babies. Often it is the mum who works less or leaves the workforce altogether or takes on caring responsibilities, while the dad remains in full-time work. After the birth of a child, it's estimated that women reduce their hours of paid work by around 35 per cent for the first five years. By contrast, men's hours of paid work drop in the first month of parenthood but then return to previous levels. This pattern persists for years after the child's birth, and it is a key driver of the gender gaps in our workforce participation and earnings.
This is not an attack on men. We know that many dads want to take additional time off work following the birth or adoption of a child. We see this in the increasing number of fathers taking up parental leave in the private sector. It was very slow to start, but the increasing numbers we are seeing in the private sector are very encouraging. But if we are to close the gender pay gap and support gender equality, we must have systems in place for mothers to return to the workforce and for fathers to take on more unpaid caring responsibilities. A successful paid parental leave scheme is an important mechanism to achieve this. This government wants to establish systems that support dads and non-birth parents to share the load of caring responsibilities because we know that when they do it benefits everyone. The changes in this bill send a clear message that the government values men as carers too.
The current scheme does not treat families equally. The eligibility rules are unfair to families where the mother is the higher income earner. You could have two families with a household income of $200,000. One family is eligible because the father is the primary income earner. The other is ineligible because the mother is the primary income earner. Our bill fixes this most discriminatory part of the current scheme. I know there are many families in my electorate who will be particularly pleased to see this change.
The bill will introduce a family income limit of $350,000, which will operate alongside the existing individual income limit of $156,647 per annum. Parents, including single parents, will be eligible for the payment if they meet either the individual income or the family income test. This change is expected to particularly benefit families where the mother is the primary income earner, with nearly 3,000 additional parents becoming eligible each year as a result of this change. This change is long overdue. Between the 2010 and the 2017 financial years, the number of women with taxable incomes of more than $150,000 has more than doubled. The introduction of a more generous family income test will help ensure the scheme keeps up with the times.
This bill supports families to make decisions around the division of paid and unpaid care within their household so parents can use their weeks in a way that works for them. Currently, if a parent returns to work before the end of their continuous 12-week paid parental leave period, they forfeit the remaining days of that period. This limits the choice for parents, particularly mothers, in how they transition back to work. Under these amendments, parents can take all of the payment in multiple blocks, as small as a day at a time, within two years of the birth or adoption of their child. This flexibility will support mothers to return to work whenever they wish without the risk of losing their entitlements. This bill will also allow both parents to access leave on the same days for up to 10 days of the payment. This will help parents share caring responsibilities from the start, and it will help dads and partners care for mothers as they recover from the birth.
Currently, there are two payments from the government: parental leave pay, which provides up to 18 weeks of payment, is primarily targeted to mothers, while the dad and partner pay provides up to two weeks of payment to fathers and partners. Under this bill, parental leave pay and dad and partner pay will be combined to form a single 20-week payment that can be shared between both parents, with two weeks of payment reserved for each parent. Importantly, single parents will be eligible for the full 20 weeks.
Evidence from across several countries clearly indicates that the most successful parental leave schemes operate when the provisions encourage men to take it. This will give parents more choice and flexibility in how they use and share care, better reflecting how Australian families want to parent. The changes in this bill send a clear message that parenting is an equal partnership. They also allow fathers and partners to take the government paid leave at the same time as employer-funded parental leave. This is not an option for fathers and partners under the current dad and partner pay rules, where the legislation requires that those receiving dad and partner payments have to be on unpaid leave in order to receive their dad and partner pay. These changes will further incentivise dads and partners to take time off from paid work.
Modernising paid parental leave was one of the most frequent proposals raised by participants at the successful Jobs and Skills Summit in September last year. Businesses, unions, experts and economists all understand that one of the best ways to boost productivity and participation is to provide more choice and more support to families and more opportunity to women. I am pleased that our changes have been widely welcomed by family and gender advocates and employer and union groups, including the ACTU, the Business Council of Australia, the Parenthood, Minderoo's Thrive by Five foundation, Chief Executive Women and the Equality Rights Alliance. I also want to take this opportunity to recognise all of those who have contacted my electorate office advocating for the expansion and modernisation of paid parental leave. These reforms are in no small part due to your advocacy, and we remain indebted always for that.
Not only will our changes help families better balance work and care but they will also support participation and productivity over the longer term, providing a dividend for the Australian economy. We also acknowledge that this is not a set-and-forget model. The government is committed to continuously improving the paid parental leave scheme to support gender equality and women's economic security.
Legislation on the second tranche, the expansion to the full 26 weeks, will be introduced following consideration of advice from the Women's Economic Equality Taskforce. This task force, chaired by Sam Mostyn AO, was established by this government to provide independent advice on a range of issues facing women in Australia. This task force will examine options for an optimal PPL model to improve women's economic outcomes and deliver support and flexibility for families. This will include the optimal number of weeks parents can access together as well as how to encourage more equal sharing of leave, including the provision of 'use it or lose it' weeks.
The paid parental leave scheme is critical reform. I'm delighted this is before the Australian parliament. I'm delighted there is multiparty support for these amendments, which is right and proper. It is absolutely proper not only for a government with 52 per cent of its ranks comprised of women who have much lived experience of this scheme but also for all of us who are listening to our electorates. This has long been called for. These amendments will mean we'll have a flexible, fair and positive outcome for Australian families. It will help drive positive health, social and economic outcomes for parents and their children. I am very pleased to rise and support these amendments. They've been a long time coming, and I look forward to being able to vote positively for these reforms today. Download the Hansard transcript.
