Paid parental leave is essential for working families, for parents and for their children. The changes in this bill update a scheme that is now more than a decade old. It does the work those opposite failed to do during their time in government but the work that Labor governments do.
Almost 13 years ago, the Gillard government introduced Australia’s first national Paid Parental Leave scheme. This change was spearheaded by Jenny Macklin, my predecessor as the member for Jagajaga, and I was proud to work with Jenny to help bring paid parental leave to life as part of the reforming work of the Gillard government. This Labor government is now doing the work to continue to help Australians and Australian families, building on the existing Paid Parental Leave scheme and the positive impacts it’s had and that we’ve seen in the past 13 years, making it even better.
These reforms to Paid Parental Leave are a significant expansion of the scheme, taking it to 26-weeks leave by July 2026. This expanded scheme will include four weeks of reserve leave for each parent from 2026, meaning that both parents will be encouraged to share caring responsibilities for their kids. This does send a strong signal to families and to employers that both parents, mum and dad, should be playing a role in taking on care responsibilities.
The bill also introduces concurrent leave, which means that from 2026 both parents can take four weeks of leave at the same time if they want to, giving families more flexibility in how they organise their care. This does really reflect the reality of modern families, where both parents are working and where we increasingly see that dads do want to take time off to care for their children.
We know these changes will support families a whole. We also know that they will support better maternal health and recovery by giving women more supported time after giving birth. Having fairly recently gone through the experience of having babies myself, I am very aware that there is possibly no greater disruption in a woman’s life, and too many Australian women do still feel like they go through that period without enough support. That is another reason why it is really important that we expand this scheme and that we make it easier for parents to take the flexible leave that will support women in this life-changing period. This will provide long-term benefits to both parents to take good chunks of leave, balance work and family life and help to embed the habits of care in the months and years that follow, for the rest of that child’s life and for the household. Around 180,000 Australian families will benefit from these changes each year.
As I’ve already said, the introduction of paid parental leave in 2011 was a game changer for Australian families. Eighteen weeks paid leave fully funded by the government was a first for many families, particularly for women in lower paid industries and in casual or part-time work. In many cases employers in those industries were not offering paid leave schemes, so the government scheme, introduced by a Labor government in 2011, was the first time those women had access to paid leave. It gave them stability and it gave support to families at a time of great change in their day-to-day lives. It did mean a parent—and it was and has been overwhelmingly the mother—could take time in those crucial early months to care for their child while still having money coming in and while continuing that connection with their workplace until they were ready to return.
That connection is important. A report on the early years of PPL in Australia found that it has improved longer term attachment to the workforce, so, rather than women simply leaving jobs because they couldn’t get any paid leave, they were continuing to have a connection to that workplace. More women have been returning to the workplace 12 months after giving birth following the introduction of the scheme. Of course, that is important not just for those women individually but for all of us, in terms of workplaces and productivity in our country.
The present setting for PPL is up to 20 weeks, with two weeks reserved for each parent on a ‘use it or lose it’ basis. From 1 July next year, this scheme will be expanded by the government by two weeks each year until PPL reaches 26 weeks in 2026. That’s a full six months for families. As part of that expansion, the number of weeks reserved for each parent on the ‘use it or lose it’ basis will be four weeks. That then leaves 18 weeks of paid leave remaining for parents to divvy up how they like and for whatever structure works best for their family. Again, there is that element of flexibility and of recognising that, for modern families, both parents are generally trying to juggle work and both parents want to be part of caring for their children.
The changes do mean parents will be able to take up to four weeks of PPL at the same time, doubling the existing measure. With that, as I said, come the benefits of parents also being able to take leave together. This goes back to that point on maternal recovery. The extra support that comes from being able to take leave together is very important, and I do hope that that reduces some of the stress that parents find at this life-changing moment of upheaval. Single parents will also benefit from the expansion. They’ll have access to the entire 26-week entitlement.
Paid parental leave in this country has been a huge step forward, particularly for workplace and economic equality for women. We do know that in this country the disproportionate share of unpaid caring still falls to women, and that does have long-term consequences for their careers and for their economic security. The Grattan Institute, in a report, highlighted that care and family responsibilities account for 39 per cent of the gap between men and women. Time out of the workforce and part-time work associated with care puts women on a lower earnings trajectory because this reduces their years of job-specific experience and because flexible part-time work is generally associated with slower career progression.
Of course, over a woman’s working life, this trajectory leads to a lifetime earnings gap—which is rightly called a ‘gulf’—between mothers’ and fathers’ earnings. We’ve seen data that, after a woman has a baby, her earning potential decreases, while men see no change. That’s why this scheme is so important. I know that previously, for so many women, the combined effects of not having access to good paid parental leave and not having access to affordable child care have been a really huge part of why they may have decided to not participate in the workforce as much as they wanted to or as much as it would have benefited them and their family to do so. So it is important. Our government is working through this Paid Parental Leave scheme, through our changes to child care, to make that easier for families.
This reform will allow both parents to take up caring responsibilities. International evidence shows us that, when both parents take leave and take on care roles, there are long-term benefits. Rather than what we’ve previously called the primary caregiver—the mother, in the vast number of cases—taking all or the vast bulk of the leave, we will have what we call the secondary caregiver—the father, in most situations—taking leave as well, meaning those caring responsibilities are being shared. This will normalise the idea that dads take time off too, that they get involved from the very beginning. It will normalise that parenting is a partnership.
The evidence—particularly from overseas where there are paid parental leave schemes already in existence that provide greater support for men to take leave—shows us that, when fathers take a greater caring role from the start, there is a more even distribution of household responsibilities, not just in the immediate term but persisting throughout the child’s life. That’s a good thing for families and it is also a good thing for how people interact with their workplaces, because the research also shows us that dads who use paid parental leave tend to have increased job and life satisfaction and increased happiness, in having the chance to spend solo time caring for their child. It may not always feel like that at the time, when you’re spending solo time caring for a child, but the data does show us that it absolutely increases people’s sense of satisfaction and the sense that they can balance the responsibilities they have between work and family. That’s what our government wants to see and support—both parents being a part of caring. Shared care is important, and we want workplaces and communities to reinforce and support this idea too.
We’re certainly not there yet. The Grattan Institute has found that Australian women do an average of two hours more unpaid work per day than men. On the other side, Australian men do two hours more of paid work. We have one of the biggest labour divisions of countries in the developed world. In 2017-18, 0.5 per cent of parents using the parental leave pay part of the scheme—the primary caregiver part—were men. Just 0.5 per cent of men were the primary caregiver. The dad and partner pay aspect of the scheme, which was almost entirely taken up by men, had only half the uptake of parental leave pay. So we’re still not seeing the uptake that we would like to see. I very much hope these changes will drive an uptake in that flexibility, normalising the idea that men are able to take that leave, that both parents can take that leave, when the child is born and make use of it.
The ‘use it or lose it’ provision is particularly important here. With these changes, each parent has at least four weeks of leave to take. Beyond that, they can use the remaining weeks in whatever combination they like. Again, the international evidence shows us that ‘use it or lose it’ provisions are particularly effective in encouraging fathers to take up leave. In Quebec in 2005, the year before their version of this type of ‘dad leave’ started, 28 per cent of fathers were taking parental leave. In 2018 this had jumped to 80 per cent. The ‘use it or lose it’ provision there was particularly important in making that change.
We know that expanding PPL means that we spend more money on the scheme, but what we get from that is an increase in GDP from increased workforce participation by women. So we all, as a community, benefit from the economic participation element that can come from this scheme.
I’m also really pleased to see more and more employers taking up the challenge of providing good paid parental leave schemes and providing paid parental leave schemes that support both women and men to take time off. That is a powerful thing that employers and workplaces are normalising, and we do want to see a greater uptake of those employer led schemes. Importantly, the government scheme works closely with employer schemes to ensure that parents and families get as much support and as much time off as they can in those crucial early years.
Our government hasn’t wasted time in getting on with making these changes to paid parental leave. As I said, it was a Labor government that introduce this scheme that meant that, for the first time, Australia did have a national paid parental leave scheme. It’s been a decade in between, but our government, since we have come into office, has got straight on with listening to the experts, listening to Australian families, and modernising and updating our Paid Parental Leave scheme to provide families with expanded support, to provide mothers and fathers with flexible care, to provide workplaces with care that works for their employees and to benefit us all by making sure that we are supporting Australian families at a time when we know that cost of living is a real issue, when we know that parents are making critical decisions about how they do support their families. I know that this Paid Parental Leave scheme, this expansion of the amount of support that Australian families are receiving through the Paid Parental Leave scheme, will be warmly welcomed in my community and in communities around this country.
We do know that it is often the time when families are looking at having a new child that they do particularly feel some of those cost-of-living pressures and they are making decisions about financial security and financial options into the future. This scheme reflects the realities of modern Australian families’ lives. It reflects the fact that both parents work, that both parents want to be involved in caring, and it allows that to take place for families. This scheme will support women to remain connected to the workforce. It will do some of that work we still need to do to continue to close the gender pay gap, to continue to build women’s economic participation so that they are not left at the end of their working lives with a gap in their retirement incomes. It will also, importantly, support young people and children. We do know that, when families are secure, when both parents are able to participate in caregiving, that is a much better start to life for Australian children.
I’m very pleased and proud to be speaking to this bill today and I’m very pleased and proud that it’s a Labor government that’s building on what was a very important Labor initiative in 2011 with this expanded and more flexible scheme.
