Sky News: Paid Parental Leave

March 9, 2010

David Speers: Sharman Stone if you can explain for me how this would work, it’s available to mums and dads earning up to $150,000 per year, they would get 6 months paid parental leave at their salary that they currently earn.

Sharman Stone: Well that’s right. After you’ve had your baby you can access 6 months paid parental leave as the primary carer whether that’s the mother or the father, that’s the choice for the family. The income though it is capped at $150,000 so if you’re earning more than that you would receive the equivalent as if you are at $150,000 income.

David Speers: So 6 months of that is set at the $150,000 level, that’s a generous scheme. Is it also paid regardless of the partner’s income if the spouse earns millions of dollars, that doesn’t disqualify you from getting this?

Sharman Stone: Well we’re going to sort out those details but at this point of time, we’re saying that the primary carer must have an income that is equivalent to what she or he has lost. At the moment what Labor is presenting is the minimum wage as the paid parental leave, now that’s a serious problem for most households who have a lot of dependence on two incomes. You see families will be forced back to work with a baby just newborn, or just a few months old. So we want to have 6 months where there is the replacement of the salary of the primary carer, but with a cap of $150 000.

David Speers: But you are yet to decide wether it will be on the partner’s income as well?

Sharman Stone: Well at our first look we are seeing it is as the primary carers salary being replaced.

David Speers: Regardless of the partner’s income.

Sharman Stone: Yes, yes, of course there are complications about self employed, people in business partnerships like farming women and I’m afraid Labor ignored all of those complexities. They have to be in the mix and so that this is fair and equitable and really gives families in Australia what other countries have been offering for a very long time and that is some financial security, some capacity for those first 6 months, to be with the baby and hopefully both parents having some engagement in those first 6 months and some parental leave as well.

David Speers: This will create a bit of disruption for businesses if both parents can take 6 months off, it’s a lot that the government is offering. Do you accept that there will be businesses where you only have 2 or 3 employees with a great deal of disruption here if they are going to lose one of their workers for 6 months?

Sharman Stone: Well it’s about the realities of life; we can’t have a penalty for women who choose to have children. Our society depends on our next generation coming up and through. For women to be forced back to work before they’ve been able to fulfil that fulltime caring is not clever and sensible in any country. We also then tend to lose those women if they find it all too difficult to manage part-time work or whatever, and in Australia we have this huge amount of women who don’t come back after their first or second child. We have in the OECD one of the highest levels of education in the developed world and yet we have some of the lowest workforce participation rates for women who have children. That’s about our productivity so we think that it is not a cost to business or the economy that we have 6 months at least paid parental leave. Other countries have proved that it is in fact, a good thing for society, good for their economy and I know our small businesses have been kicking and screaming about this for generations, but it’s time in Australia that we really got with the program.

David Speers: Now to pay for this you’re proposing a tax on big business, those that earn more than $5 million[ at the moment but, they would face a tax of about 1.7 % could this also act as an impost on them if they are facing higher costs, isn’t it going to be harder for them to meet their labour costs.

Sharman Stone: Well for a start we’re calling it a levy and we’re saying it would be about 1.7% of additional cost if you’re earning over or paying tax on over $5 Million in business tax now. That involves probably over 3000 companies. At the moment, a lot of those companies, especially in the finance sector are already offering paid parental leave to their fortunate parents in their employ. That’s one of the big problems in Australia right now; it’s all over the place. The higher paid women are offered paid parental leave but the lower paid women are not. Now if you’re already paying paid parental leave, not necessarily for 6 months, but are already paying that, that will naturally be subsumed under your levy, and as Tony Abbott said today, as we were making this announcement, we are a government that believes or a Coalition that believes when in government in lower taxes, so we’ll be aiming to reduce business tax so over time that would shrink this levy.

David Speers: But for these big businesses, I’m sure the government would argue, is going to be a great big new tax, particularly for the bigger corporations, and we’re talking about, quite high sums when you put a 1.7% tax on their earnings. Is this really going to result in some of these costs being passed on to consumers at the end of the day?

Sharman Stone: We don’t see it, as I said before, as a tax, but as an investment in our human capital in this country and as a resource. We already have a lot of those companies paying parental leave, so they won’t be required to double dip and be paying twice and we also can’t be, if you like, just be requiring payment from those companies who do pay parental leave right now, it’s across the board, whether you are paying women or not. So it won’t have that rebound effect of some companies saying, we’re not going to employ women anymore, because of course whether you do or you don’t, it’s across the board and, we think, an important investment for Australian businesses to make in their parents they employ. It will make for better attachment to the workforce, of their staff. We need to increase our workforce participation, we need to keep the skills in the workforce and a paid parental system does all of that and this, we think, is an equitable way, to achieve it and in a way that delivers, at least 6 months, not the miserable 18 weeks that Labor suggested at the minimum wage. That doesn’t help at all, it’s not a real PPL.

David Speers: Do you see the irony now that the Coalition is proposing a higher taxing regime, particularly a higher tax on big business?

Sharman Stone: Well, what we’re proposing is a genuine investment in bigger business, in our human capital of Australia. The public good that’s delivered through parenting is to be shared across the economy. We think that just the minimum wage being offered through the general tax system by Labor, is not adequate. It hasn’t been praised or triumphed by any women’s or advocates groups or the business sector. It has been the minimum, in fact a fairly insulting offer to parents, the Labor scheme. It only is about $260 million cost a year. So you can’t, on one hand, say you’re addressing the paid parental leave issue in Australia and on the other making it the miniscule, miserable offer that Labor is offering. So we believe that this is the best way to fund an appropriate scheme of at least 6 months. We hope that business will see this as not a tax, but an investment in their workforce. It’s a good citizen company that embraces this and certainly we think that there’s some nice profits being made right now across the financial sector, our big four banks, are well able to afford this and our mining sector is growing. We think this is a good way to help all parents in this country, and to grow our talent pool and keep women in the workforce.

David Speers: OK Sharman Stone thank you.