Senator STEPHENS (Parliamentary Secretary for Social Inclusion and Parliamentary Secretary for the Voluntary Sector) (10:39 AM) —I thank everyone for their contributions to the debate. The Paid Parental Leave Bill 2010 and related bill are important pieces of legislation because the package of bills will introduce Australia’s first national government funded Paid Parental Leave scheme from 1 January next year. This is a significant economic and social reform for Australia’s families and for Australian employers.

The Rudd government has produced a Paid Parental Leave scheme that will provide financial support and certainty to families at a time when they need it most. Importantly, we will also be helping business to retain their skilled staff and to reap the benefits of family-friendly policies. This government has committed $1.042 billion over five years to establish a national Paid Parental Leave scheme that will encourage women to stay connected with the workforce and with their careers while helping them to balance their work and family lives. The primary objective of the Paid Parental Leave scheme is to enhance child and maternal health and development by enabling mothers to spend longer caring full time for their newborn child. Again, we want to facilitate women’s workforce participation because this, of course, will improve Australia’s productivity.

The scheme promotes gender equity and encourages work and family life balance. This is particularly so for Australian women who have long been juggling family responsibilities with the responsibilities and aspirations of their careers and their working lives. Taking time off to look after a newborn baby is a normal part of a woman’s working life not an abandonment of her working life. This scheme is a culmination of much consideration and consultation with a range of groups over a two-year period and before that it has been a conversation that has been had for more than a decade. Many of the speakers in today’s debate have contributed some perspectives around that long period of consultation, and we believe that the scheme balances the needs of all parties, businesses and families. The opposition, while having affirmed paid parental leave as a valid workplace entitlement rather than a social security measure, has also asserted that this bill:

It is precisely because this government sees our Paid Parental Leave scheme as an entitlement for women participating in the workforce that we are asking employers to provide parental leave pay to their eligible long-term employees just as they currently pay these employees their other workplace entitlements, their annual leave, their sick leave and other forms of leave.

Paid parental leave should be considered a normal part of employers supporting women to take leave from work to care for their new child. Employers will only have to pay parental leave payments to their long-term employees not to people who will be returning to work for them. The Family Assistance Office will make payments to other women. These arrangements balance the interests of women and employers, and employers will reap the benefits from their participation through their retention of skilled staff.

Despite complaints from some, women on low salaries are the big winners from this new scheme. Precisely because these women usually have no paid parental leave under their employment arrangements, the government is funding 18 weeks at the national minimum wage for all eligible women who meet the paid parental leave work test. In relation to superannuation and paid parental leave the government has said that we will review the scheme in two years time and the introduction of superannuation will be one of the matters considered then.

The Productivity Commission has estimated that women will take an extra 10 weeks off on average further to the 37 weeks they take now. This means that many mothers will be taking most of a year off to care for their babies, which is well above the minimum six-month period recommended by the World Health Organisation to give mothers the opportunity to breastfeed their infants. This again is real support for mothers and their families.

Some have commented that the new legislation is an impost on business. Well, employers will have six months to understand and adjust to the scheme before they are required to pay paid parental leave pay from 1 July 2011. They can, though, choose to participate earlier if they want to. To give business this adjustment time, the Family Assistance Office will provide parental leave pay during the first six months to claimants who are not paid by their employers. This scheme has been designed so that employers will not have to work out if their employee is eligible; the Family Assistance Office will do all of this work and then inform employers of their role. Employers will not be out of pocket through making the parental leave payments. The Family Assistance Office will send sufficient funds to the employer before the payment date, and their cash flow will not be affected. Businesses will not need to change their payroll systems, because full funding will be provided before the payment date so that payments can be made in line with their existing pay cycle.

The system will soon become familiar to businesses once they start to make payments. Many small and medium-sized businesses that currently offer no or minimal parental leave pay will find this scheme most beneficial. This is what businesses have actually told us. This scheme will allow business to benefit from employee loyalty and retention of skilled labour without having to pay for it and without a new tax or levy.

There is no scope for employers to absorb parental leave pay into existing employer funded schemes and withhold parental leave pay owed to an employee. Employers cannot use this parental leave pay to offset an existing employer funded scheme. The legislation requires employers to provide parental leave pay to their employees if they have been funded to do so.

In summing up this landmark legislation, I remind the Senate that this scheme is based on sound evidence, on rigorous analysis of that evidence by the Productivity Commission and on consultation with all stakeholders over more than two years. We have released an exposure draft and we have had a Senate inquiry into the main bill, and this is considered open and transparent policy development undertaken over a very reasonable period of time. The scheme meets the needs of a broad range of women and their employers and balances many interests, and we believe that that balance is right. Women get 18 weeks of parental leave pay to take time off work, and this is in addition to their current workplace entitlements. Their employers are funded to make the new payments and are not subjected to any new taxes or levies. Costs involved in paying employees will be tax deductible for businesses, and the Australian people get an affordable scheme which will help to increase women’s workplace participation and alleviate the impacts of an ageing population on the workforce. This is a scheme that Australia’s working women want us to deliver, and I urge all senators to support the bill.

Question negatived.

Original question agreed to.

Bill read a second time.