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Monday, 31 May 2010
Page: 4532


Mr BILLSON (12:45 PM) —It is a real pleasure to engage in this debate on the Paid Parental Leave Bill 2010 and the Paid Parental Leave (Consequential Amendments) Bill 2010 today, for a number of reasons, most of which have been canvassed by previous speakers and which I will take a few minutes to touch on.

It is interesting to characterise the debate on the basis of what you hear from this parliament. What we seem to be in heated agreement about across the chamber is that paid parental leave is a good thing, that it is desirable and something our nation should put in place for the benefit of the microhumans—the babies—coming into this world, for their parents, for the broader economy, for productivity in our workplace and for engaging the incredible gifts of women in Australia so that our participation rates in the workforce are in keeping with the goals and ambitions of Australian families. That seems to be undisputed. Everyone seems to be of one voice in expressing that view in this parliament. What then happens though is that the debate falls away rather quickly. From those very thoughtful and considered remarks we move into a bit of an argument over backflips and the like. It is quite extraordinary to hear Labor members in this chamber suggest that there may be a coalition backflip, with no basis whatsoever to support that claim. This is in the incredible context of backflip after backflip from the Prime Minister on things like climate change—‘the greatest moral challenge of our time’—which he suggests are ‘deeply ingrained in his soul’. This is language that you would normally only hear during wartime. Our Prime Minister is happy to go into that hyperbole at the drop of a hat when it suits him politically, and then just abandon the idea without any explanation or any alternative plan.

If we are going to have a real discussion about backflips and where this might leave families in Australia in relation to paid parental leave, my assessment, and I think the assessment of the Australian public, would be that that is not a good tactic for the Rudd Labor government and Labor members to go down. Their form on this is notorious. If big moral challenges of our time represent no impediment to the Rudd Labor government doing spectacular backflips, paid parental leave would be an easy one for them.

I think it is an empty argument and I think it is quite courageous for the Rudd Labor government to go down that pathway of backflips again. But, in going down that pathway, they highlight the real difference between paid parental leave and the debate that we should be having in this place—that is, which paid parental leave scheme is best for Australia? On that basis, it is a lay-down misere that the coalition proposal outperforms the Rudd Labor government’s Paid Parental Leave scheme in every measure. That is probably why the Labor members in this chamber do not want to talk about those issues; they would rather scurry down the pathway of ugly arguments, personal attacks on the Leader of the Opposition and some ridiculous notion that the opposition has some proclivity to backflip, when really the Rudd Labor government has no hesitation in backflipping.

That is really what this debate is about. The bills before us are about a proposition for 18 weeks of paid parental leave paid at the minimum wage. That minimum wage represents about $543 per week, and that is for those who qualify on the basis of residency, income and work tests and who bring into this world or adopt a child after 2011. That idea represents a small step forward on paid parental leave; it does not represent a substantial move to implement the kind of scheme that Australian families and our economy actually needs.

Where we are at the moment is in a debate over which scheme would best support families and employers and be best in our long-term interest. As I mentioned in my opening remarks, the coalition scheme outperforms Labor’s in every respect. The Productivity Commission and others have looked at this issue and undertaken research on paid parental leave, and their report is very interesting. It confirms—in fact almost all studies confirm—that paid parental leave is a good thing. But it also points out that 26 weeks is really what paid parental leave should be about. Yet Labor’s bills are 18 weeks. So even in relation to that very fundamental period of time when parents can be with their children, the Labor proposal falls short. The coalition proposal addresses what is necessary in the eyes of nursing mothers associations and early childhood development experts—that 26 weeks is pretty much right. So, on that benchmark, the coalition proposal outperforms the Labor proposal.

In relation to the funds that are paid, the coalition proposal again outperforms the Labor proposal. In the coalition’s proposal, we advocate what is effectively described as a ‘wage or salary replacement proposal’. This actually goes to the heart of the difficult decisions families face. Whilst the Rudd Labor government proposal talks about the minimum wage, which is currently $543.78 per week, the coalition proposal actually takes account of what women are earning at the time they leave the workforce to bring a child into the world with the best possible start it could hope for. That child does not all of a sudden move into a household that is geared, framed and budgeted on the minimum wage; that is not the case at all. That child is entering a household where there are income traditions and trajectories that have set in place things like the capacity to pay mortgages, the capacity to pay car-financing charges, decisions about health care and the costs of living that that family unit accommodates in its normal course of events.

Those things just do not stop. You do not get the bank ringing you up and saying: ‘Congratulations on your newborn. We’ll now change your mortgage to what your mortgage might be if you were on the minimum wage.’ That does not happen. The finance company to whom you may be repaying a loan for a vehicle or home appliances does not send you a letter, a nice bouquet and maybe a little gift saying: ‘Congratulations on the microhuman who has come into your family. We will now adjust all of the expenditure commitments you have to reflect a household which has been living and shaping its life on the basis of a minimum wage.’ That does not happen. That is not the way the world works. All of a sudden people do not move house. They do not change their debt and financing obligations. They do not find their mortgages suddenly paid for. The electricity company does not say, ‘Despite the increasing cost of living which is happening in every aspect of your life, we will change everything so that your financial responsibilities reflect a minimum wage level of income.’ That does not happen. That is a ridiculous idea, nonsense, which sits behind the Rudd Labor government proposal.

People’s financial responsibilities do not change—the way in which their household budgets need to address the costs of their home, their cost of living and expenditures which last well beyond the immediate period of support for a newborn. This is why the coalition’s proposal is infinitely superior to the Rudd Labor government proposal. The coalition’s proposal is for a replacement wage so that all the normal expenses of a household, which are not relieved purely because of a microhuman coming into the world, can be accommodated. That is an enormous comfort for couples planning a family, to have a new child as part of their lives. Under the Rudd Labor government, wherever you look there are financial risks and uncertainties at a time of increasing costs of living. So having financial security, your personal economic security, knowing your circumstances and understanding the income needed to maintain your financial commitments and the living standards you have worked so hard for, all that is very important.

We had a discussion in my office earlier today in preparing for this speech. Among the group in my office and among our network of friends, it is hard to identify a family with young children where both parents are not obliged to work. It is hard to conceive of that family with housing costs being what they are, the cost of living pressures having so accelerated under this Rudd Labor government and further cost concerns into the future about great big new taxes on everything under the cryogenically frozen Rudd Labor government ETS, even on the cost impact of the mining supertax and how it will push up by $20,000 the cost of the average home and add to energy bills, the cost of construction, food and in so many things in life. These are real cost of living concerns. The coalition proposal is responsive to those and the Rudd Labor proposal ignores them.

The idea of a replacement wage is incredibly important for families, realising when they are thinking about having a family that the running joke is they might be nesting; no, they are ‘nest-egging’, trying to get the cash together to make payments which are not relieved purely because a child has come into the world. They are not adjusted to a minimum wage income. After the child arrives, they continue as they were before the child arrived.

The other thing which is important is 26 weeks over 18 weeks. I have touched on why that is relevant. Significantly, in the coalition’s proposal there are two weeks paternity leave, two weeks as part of the 26 weeks for dad to be involved, providing support during the early life of the child who has come into the household. That is not provided for under Labor’s scheme. Not only does the coalition’s scheme offer a replacement wage up to quite a responsible cap but also it extends for longer and recognises that dad wants to do all he can too, particularly in the first couple of weeks after a microhuman comes into your world. People say: ‘You’ve got a newborn. What’s it feel like?’ It is often hard to describe. The answer is: ‘Our world’s been bumped into another orbit. Everything’s different. It’s all hands on deck.’ I am pleased the coalition proposal is responsive to that.

Some questions are asked about the start date for the coalition’s proposal. I have a simple answer to that: it will be pretty smartly after the end of the Rudd Labor government. And hallelujah! What a great day that will be. The sooner we can get rid of this crowd the quicker the coalition’s superior paid parental leave can come into effect. I am not sure when that will be as the Prime Minister is holding his own counsel about when the election may be.

The other things I want to touch on go to some very specific portfolio interests relating to the small-business community. There was a very strange proposition embedded in the Labor proposal, a proposition which again illustrates why the coalition’s paid parental leave idea is superior. In the Rudd Labor government’s proposal the Paid Parental Leave scheme obliges small business employers to be the paymaster, to carry an administrative burden and a compliance risk for transferring payments to the benefiting employee. As you read through the Productivity Commission’s report, you see that there is an interesting commentary in a number of passages about compliance costs, the risks and the administrative complexities which accompany the Rudd Labor government’s scheme. There has been some effort by the commission to identify different ways of addressing those shortcomings.

I commend the Hair and Beauty Australia organisation, the Master Grocers of Australia, Clubs New South Wales, COSBOA and other small business organisations, VECCI and ACCI and the like, all of whom have made their concerns known: why should a small business be injected into this process where effectively the Rudd Labor government sees the government making a payment to the eligible recipient, where the federal government’s Family Assistance Office is involved in that process but does not actually make the payment? So you are requiring a small business to be a part of that scheme, when that exercise adds no value whatsoever to the scheme itself and, in fact, puts the small business at a significant disadvantage and quite significant risk for inadvertent noncompliance with the scheme.

The proposition that the Rudd Labor government has brought forward that requires the small business community to be a part of this exercise of transferring money from the government to the eligible person has been justified on the basis of ‘keeping in touch’—that there are some similar provisions in the United Kingdom and that they thought there was some advantage in ‘keeping in touch’. I can tell this parliament that every small business organisation I have spoken with sees no upside whatsoever in this ‘keeping in touch’ notion and they would much rather be kept out of this process.

It is simply a transfer of funds, requiring a small business to alter its payroll and administrative systems, to account for the receipt of the funds and then the payment of them, to be responsible for whatever variation there may be in tax liability and obligations, and to be at risk of not doing what is being imposed upon them and therefore at risk of penalty for noncompliance—and then also having that payment being paid by the federal government but being run through their books being taken into account for other things such as workers compensation liabilities and payroll tax. You could imagine that a small business sees no upside in any of those risks and no advantage in any of those additional cost burdens. Yet, having heard from the small business community over and over again, the Rudd Labor government is persisting with this flawed idea as part of its flawed and underperforming scheme and requiring the small business community to be a party.

You see in the Productivity Commission report example after example about why this is not a good idea. COSBOA, in their statement in March, in welcoming what they said was ‘small business support for Abbott’s paid parental leave plan,’ go on to highlight its better suitability for the small business community and its ability to attract women to small business employers and the small business family generally. They went on to talk about the compliance cost obligations and the risks. They talked about those things as being a concern and that the Abbott coalition plan overcomes those concerns by the streamlined, tidy and uncomplicated way in which the Family Assistance Office will be responsible for the administration of the payments.

I cannot for the life of me understand why the Rudd Labor government is turning its back on this clear and consistent message from the small business community. All they have done—and I believe inspired purely by getting this off the agenda, they hope—is said the Family Assistance Office for the first six months will handle the Rudd Labor government Paid Parental Leave scheme in the way in which the coalition’s proposed its scheme would be handled. My message is simple: if it is good enough for the first six months and all the investment in putting those systems in place with the Family Assistance Office makes sense, why not just keep doing it?

The coalition insists that the small business community not be left holding the parental leave cheque because they do not need to. There is no advantage to it and there are plenty of disadvantages to that model as I have outlined in my contribution already. So if the Rudd Labor government has any interest whatsoever in regulatory and compliance burdens and has listened to the legitimate and substantiated concerns of the small business community, they will not force them to be the ones handling the cash with the risks that are attached to that and the inevitable costs of changing their own internal systems, payroll systems and the like; the reporting obligations back and forth to the FAO and to the employee; the concerns about triggering an increased financial liability for workers compensation and payroll expenses because their payroll budget is inflated by that amount. It adds no advantage whatsoever.

If the government would follow the call of the opposition and the small business community, it would also bring some comfort to the small business community. As we have heard from speaker after speaker, the Labor plan is not quite right. It is underdone. It is too short. It is not recognising the real cost-of-living impacts on families—and there is every possibility many on the Labor side of the parliament recognise that. If you build in a payment handling reporting and compliance requirement for the small business community, this idea that employers may if they choose top up the contribution coming from the government can quickly morph into an obligation to do so if you set all that machinery in place.

Most people, except those opposite in the Labor Party, agree that 26 weeks is better than 18, and that replacement wage outperforms minimum wage any day. So if the Rudd Labor government comes to that conclusion and it is allowed to implement these administrative costs and obligations on small business, they will be fitted up with topping it up. (Time expired)