Tough economic times call for tough business decisions. Decisions made now to strengthen our country’s productivity and market competitiveness will be among the most important of our time. This is precisely the reason why we must stay committed to introducing a government-funded scheme of paid maternity leave.
After 20 years in the business world, I am yet to come across a company that has introduced paid maternity leave solely because it is good for women. For business, it is always about the bottom line - as it should be. That is why more and more large businesses and government employers have identified the importance of paid maternity leave to productivity and the management of one of their major assets – their skilled female workforce.
Paid maternity leave has a dual function to perform. It will put money in the pockets of families who clearly need it, and who will spend it, while allowing mothers and fathers to care for their child - we must not forget that many of those who don’t have paid maternity leave are those who struggle financially, to provide healthcare for their children, to put food on the table.
Importantly, paid maternity leave will alsohelp improve our productivity through increasing women’s workforce participation for the longer term.
It is widely accepted that Australia has to catch up with our international labour market competitors who typically, not only have higher women’s workforce participation, but have paid maternity leave schemes well and truly in place.
The employment rates for Australian women with children, particularly those where the youngest child is under six years of age, are low by comparison with other OECD countries. The employment rate of Australian mothers with a youngest child under six years of age is 49.6 per cent, compared with the OECD average of 59.2 per cent.
Further, in Australia, women typically make up at least half, and in some cases the large majority, of people in tertiary education courses.
Right now, the government is making plans for an education revolution to improve our international competitive advantage. The government is right to invest in education. But with a vulnerable economy, it is even more important for us to ensure that we get an economic return on the billions of education dollars we invest. There is no point having an education revolution if the nation's investment in the education of women and girls is wasted because they do not have the necessary systems in place to maintain labour market attachment when they become mothers.
Paid maternity leave is one such system.
Paid maternity leave is now under renewed community consultation following the publication of the Productivity Commission’s draft report Paid Parental Leave: Support for Parents with Newborn Children. The draft report proposes an 18 week paid parental leave scheme, which initially goes to the birth mother, who then has the choice to transfer the leave to her partner.
The Productivity Commission’s proposal is reasonable and affordable. The cost to the taxpayer – $452 million – is modest by comparison with Australia's current overall spending on family payments. The scheme would increase family-related government payments by only 2 per cent.
While community and business views differ on the advantages and disadvantages of the proposed model, there is no doubting the broad support for a paid maternity leave scheme.
Business wants it, unions want it. Community groups, human rights organisations, child health organisations and the women’s movement embrace it.
Including provision for paid maternity leave in the next budget is the right decision to make.
For very sound business and social reasons, the time to implement this important national reform is most definitely now.