by

Joanna Mather

Misa Han Employers will respond to new restrictions on paid parental leave by dumping their own schemes, business leaders warn. From the start of July, next year, parents will no longer be allowed to access government-funded paid parental leave if their employer provides a more generous scheme. At present, new mothers can access 18 weeks' of pay at minimum wage, or about $11,500, as well as payments made by their employer. The government says it wants to end this "doubling dipping". The Australian Chamber of Commerce and Industry warned that employers would respond by getting rid of their own schemes, denying the government the $1 billion in savings it anticipates.

Chief Executive Women president Diane Smith-Gander said the "disappointing" change would widen the superannuation gap between men and women at a time when Treasurer Joe Hockey insisted people needed to be independent in retirement. Advertisement

This was because new parents would move off company schemes on to the government one, which does not cover super payments. "To have [Mr Hockey] characterise the topping up of what he himself identified as an inadequate parental leave scheme as double-dipping is unbelievable," she said. Unsustainable "Men control 64 per cent of super balances and women 36 per cent and women live longer than men so this is an unsustainable situation. I thought the treasurer got that."

Vodafone has promised to keep its own paid parental leave scheme, which provides 16 weeks at full pay. "We will provide the paid parental leave regardless of anything the government does," the general manger of human resources, Vanessa Hicks, said. "We provide the payment to take away some of the financial stress and we want to attract talent and retain talent during parental leave." ACCI chief executive Kate Carnell said businesses would withdraw their own schemes so employees could access the government one. Those paying more than the government scheme would use whatever extra money would have been spent on parental leave to boost other perks or incentives, she said.

"They'll say to employees, let's see how we can rejig your package to work best for you," she said. "Maybe you might like a bonus on return to work. Or maybe you would like to work four days and we'll pay you for five." Ms Carnell said the government's anticipated $1 billion in savings was premised on the fact businesses would continue provide their own schemes. That premise was false, she said. Prime Minister Tony Abbott announced plans to make paid parental leave more generous in 2010 and the Coalition took the policy to two elections. Criticism

The original $5.5 billion plan was to pay new mothers their full salary plus superannuation for six months up to a limit of $150,000. That figure that was revised downwards to $100,000 in response to criticism about the cost of the scheme before Mr Abbott dumped it altogether. "It's not double-dipping, it's double-crossing," said Marian Baird, an industrial relations professor at the University of Sydney. "The government went to the electorate with a generous paid maternity leave scheme. They have now dropped that and furthermore, have taken away what women have. Australia is going backwards."

Australian Council of Trade Unions president Ged Kearney said the basic scheme was intended as just that, a basic scheme that would be added to by employers. "To say women are 'double dipping' fundamentally misrepresents the paid parental leave scheme which was always intended to complement employer-based entitlements," she said. Mr Abbott conceded it was a disappointing development. Wrench "It was a bit of a wrench for me, as you'd expect, given my long-term commitment to paid parental leave," he said on Monday. "But nevertheless, given the circumstances that we found ourselves in, it was important that we prioritise in this way and, as I said, this is going to be a very good policy, good for families and good for the family." The government says about half of mothers have no access to an employer-provided scheme. They will receive 18 weeks at minimum wage, or $11,500. Parents who have access to an employer scheme that is more generous will no longer be eligible for government support.