By Alexandra Marriott
The Paid Parental Leave Bill passed into law yesterday evening; the scheme takes effect on 1 January 2011.
The introduction of statutory entitlements to a period of paid parental leave was a key plank of the broad reforms relating to workplace relations and social justice promised by the Rudd Government.
VECCI welcomes the paid parental leave scheme, which will benefit not only women and their families, but may also improve the capacity of employers to retain skilled and valued staff. There is a clear mandate for a paid parental leave scheme – until now, Australia has been one of only two OECD countries without a national paid parental leave scheme.
The Minister noted in the Second Reading Speech that the scheme “is fair, balanced and economically responsible”, “does not involve any new taxes on business” and provides benefits for employers.
The concern of many employer groups – VECCI included – is that the responsibility of business to disburse the funds to employees may prove onerous for small business. The Bill that passed last night did not incorporate proposed amendments for the parental leave payments to be administered by the Family Assistance Office.
The Government maintains that this model will preserve an employee’s connection to their workplace, thereby enhancing the likelihood of business retaining valued skilled staff. Minister Macklin noted that “By receiving parental leave pay through their usual pay cycle just as other workplace entitlements are paid, women will remain connected to their workplaces and be more likely to return to work.”
VECCI will monitor the development of the scheme closely, and welcomes the provision of transitional arrangements in the Bill which allow a business to elect to defer the administration of parental leave payments until 1 July 2011.
Meanwhile, Leader of the Opposition, Tony Abbott, has again affirmed his intention to extend the scheme, and imposing a levy on big business to fund it. This is a curious and surprising initiative, given that extra taxes are the last thing that business needs at this time. We encourage the Opposition to consider their proposal closely.