Objectives

Section 3A of the Paid Parental Leave Act 2010 as originally enacted6 explicitly set out the objectives of the PPL scheme:

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The Paid Parental Leave and Other Legislative Amendment (Dad and Partner Pay and other Measures) Act 2012 received royal assent on 14 July 2014. It amends the Paid Parental Leave Act 2010 for the introduction of Dad and Partner Pay. Among other changes, the objectives of the scheme were amended to provide two overarching scheme objectives, and additional objectives for each payment under the scheme. The overarching scheme objectives are to:

(a) Signal that taking time out of the paid workforce to care for a child is part of the usual course of life and work for both parents; and

11 1. The object of this Act is to provide financial support to primary carers (mainly

birth mothers) of newborn and newly adopted children, in order to:

a. Allow those carers to take time off work to care for the child after the child’s birth or adoption; and

b. Enhance the health and development of birth mothers and children; and

c. Encourage women to continue to participate in the workforce; and d. Promote equality between men and women, and the balance

between work and family life.

This statement can be viewed as comprising two proximate objectives and four long- term or enduring objectives. The proximate objectives are:

• That financial support will be provided to primary carers of newborn and newly adopted children.

• That as a result these carers will take time off work to care for their child after the birth or adoption.

Over time, it is anticipated that this will:

• Enhance the health and development of mothers and children; • Increase women’s workforce participation;

• Promote gender equality; and • Improve work-life balance.

The rationale for the introduction of a PPL scheme and for the objectives stated in PPL legislation were considered at length in the Productivity Commission’s report (Productivity Commission 2009), which drew extensively on both expert opinion and research and public opinion as expressed in verbal and written submissions. The arguments canvassed by the Productivity Commission were discussed and debated in the Parliament, the media and in expert and academic commentary. The argument and evidence underpinning each of the four long term objectives referred to in the

Paid Parental Leave Act 2010 are now discussed.

2.3.1.1 Maternal and child health

The first set of arguments outlined by the Productivity Commission in support of the introduction of a PPL scheme concerned the impact of such a scheme on maternal and child health (2009: xviii-xxiii, 4.1-4.59). The Commission argued that:

There is compelling evidence of health and welfare benefits for mothers

and babies from a period of postnatal absence from work for the primary caregiver of around six months. There are also reasonable grounds to expect benefits from longer periods of exclusive parental care up to nine to 12 months. (2009: xviii)

In arriving at this view, the Commission relied on research evidence that non-parental care during the first few months of a child’s life can lead to behavioural problems and delayed cognitive development for some children. It also relied on evidence that exclusive breastfeeding during the first six months has health benefits for children and mothers, and that there was a positive association between provision of paid parental The additional objectives for PLP are those listed above at (1) (a), (b), (c). Phase 2 of the PPL Evaluation focuses on the original scheme objectives listed above under section 2.3.1

12 leave and the duration of breastfeeding. The Commission also found that there was scope for paid leave to prolong beneficially the parental care of babies, given prevailing low rates of breastfeeding and the high incidence of women returning to work earlier than six months and often against their own preferences (2009: xix-xx). The length of time of paid parental leave proposed by the Commission was linked to their estimates of the time needed to achieve significant health benefits (2009: 2.3.3). The Commission also cited evidence that paternity leave has emotional benefits for fathers; that it positively affects children’s emotional and educational achievement; and that it provides support to the mother. On this basis, they proposed two weeks of Paid Paternity Leave (2009: 4.1). With respect to all of these issues, the Commission drew on the views of organisations representing women and mothers and on individuals’ accounts of their experiences, as well as the research evidence.

The Productivity Commission’s argument concerning the health and wellbeing benefits of the PPL scheme were endorsed by the Minister in her Second Reading Speech introducing the Paid Parental Leave Bill 2010 into the Parliament:

Paid Parental Leave will give babies the best start in life. It means one

parent has the financial security to take time off work to care for their baby at home during the vital early months of their baby’s life. It will give mothers time to recover from birth, and to bond with their baby. (Commonwealth of

Australia, Parliamentary Debates, House of Representatives, 12 May 2010, Jenny Macklin, Minister for FaHCSIA)

2.3.1.2 Women’s workforce participation

The second argument developed in considerable detail by the Productivity Commission in support of the introduction of a PPL scheme concerned the impact of such a scheme on lifetime workforce participation by women (2009: xxiii-xxiv, 5.1- 5.39). The Commission noted that a PPL scheme would (intentionally) reduce a woman’s labour force engagement while her baby was young. However, it argued that this would be offset over the long term in two ways. Firstly, PPL is an in-work benefit and its availability would provide an incentive to women outside the labour force to become employed. Secondly, PPL would increase women’s workforce attachment and hence workforce retention rates:

In the absence of paid leave, many women resign from their jobs and lose contact with their former employers. It is harder to re-enter employment from outside the labour force compared with the expected return to work implied by taking a period of paid leave. (Productivity Commission 2009:

xxiii)

The Commission estimated that the proposed PPL scheme would result in a net increase in average female lifetime employment of approximately six months. It noted that Australian women’s participation rates during their prime reproductive ages are significantly lower than many other OECD countries, and that there was scope for policies such as PPL to significantly raise workforce participation rates for women of these ages. It emphasised that the welfare and taxation systems currently imposed some disincentives for women to work and that PPL would partially offset these disincentives.

As with the themes of maternal and child health, the arguments relating to women’s workforce participation were emphasised by the Minister when introducing the Paid Parental Leave Bill 2010 into the Parliament. The Minister argued that the PPL scheme would support women to maintain their connection with the workforce and boost female workforce participation rates by reducing a barrier to greater participation by women. The Minister also emphasised the advantages for business:

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Business will benefit from the retention of skilled and experienced female staff but will not have to fund the parental leave payments. (Commonwealth

of Australia, Parliamentary Debates, House of Representatives, 12 May, 2010, Jenny Macklin, Minister for FaHCSIA)

2.3.1.3 Gender Equity

The advancement of gender equity as a core objective of the PPL scheme was also discussed in some detail in the Productivity Commission Report (2009: 6.11-6.15). The Commission noted that some participants in its consultative processes saw this as the core issue, emphasising the role of a PPL scheme in creating greater equity between men and women in the ability to engage in paid work. A statutory PPL scheme was viewed as a means of providing PPL to a much wider range of women than those covered by voluntary, employer-provided schemes, including women in lower paid and tenuous employment. However, the Commission noted that the overall impact of its proposed PPL scheme on the gap between male and female labour force participation rates was likely to be small. It also emphasised the role of personal belief and ideology:

What is perceived by some as undesirable from a gender equity viewpoint may be seen by others as their preferred way to organise their household.

(Productivity Commission 2009: 6.11)

The Commission drew attention to some of the complexities of the gender equity issue. It set out the argument that PPL signals the importance that society places on the unpaid work that parents, especially mothers, do in caring for their children. However, it also noted the contrary argument that PPL might strengthen the gender- based division of labour by encouraging the mother to take extended leave to raise the child and organise the household while the father continues in the paid workforce.

2.3.1.4 Work/life balance

The fourth stated objective of the PPL scheme was that it would address work/life balance issues for families with infants. The Minister emphasised that a central aim of the PPL scheme was to respond to ‘the challenges and realities of modern family life by giving parents more time at home with their new baby and helping them balance their work and family responsibilities’ (Commonwealth of Australia, Parliamentary Debates, House of Representatives, 12 May, 2010, Jenny Macklin, Minister for FaHCSIA).

In a similar vein, the Productivity Commission, while acknowledging the diversity of community views concerning issues such as gender equity, argued that ‘there is evidence of a shift of view within the community to favour government support for those seeking to juggle family life with a continuing role in the paid workforce’ (Productivity Commission 2009: 6.16). It argued that these changing norms reflected the dramatic increases in female workforce participation rates of the last thirty years (1978-79 to 2007-08) in response to cultural change, greater educational attainment, the switch to a service-based economy, lower fertility rates, provision of child care and increased productivity in domestic chores. It noted that the employment rate of mothers of children aged 0-4 in couple families rose from 28.8 to 51.0 per cent and of children aged 5-9 from 50.5 to 74.8 per cent (Productivity Commission 2009: 5.6-5.7). In this sense, the final rationale for the introduction of a PPL scheme is that it is a response to the exigencies of family life in the early twenty-first century.

If PPL is viewed as a response to the challenges and realities of modern family life, one of the main arguments for the introduction of a mandatory scheme was the uneven access to employer-funded parental leave. The Productivity Commission

14 found that in 2007, around 54 per cent of all female employees had access to some form of employer-funded maternity leave, however only about one third of employed women who had children received paid maternity leave from their employer. Part-time workers, workers in the private sector, and workers in low skilled, low pay casual jobs were strongly under-represented in access to employer-funded maternity leave. Less than a quarter of women on very low wages had access to employer-funded maternity leave compared with three quarters on high wages (Productivity Commission 2009: 3.1-3.28; Australian Government 2009: pp. 2-3). Whatever the ultimate benefits of the PPL scheme were deemed to be, a central rationale for the introduction of a public scheme was to provide greater equality of access to the immediate benefits.