At last, we have a government committing to paid parental leave! This is the real good news: the government is prepared to acknowledge a clear unequivocal financial relationship between the workplace and parenting. This is the first time that there will be a specific publicly funded program that makes the connection explicit. We have had programs directed to reinforce the "choice" of non working mothers, such as Family Tax Benefit B, but not those in paid work, as even the child care funding also covers those who are not employed.
This connection needs to be celebrated as a basic shift in the political perception of legitimate time off for the care of others. It has been a long time coming as shown by two near misses, one under Keating and another with the Baby Bonus. Both converted a maternity leave possibility into a welfare payment for all mothers. This time it is clearly labelled leave and has a workforce entitlement component. Hooray!
Those not in the paid workforce will still do well in this model, in fact some may do better than some of those claiming the new payment. If they have not worked for at least 330 hours, or one day a week for 10 months in the 13 months before the birth, they still get the Baby Bonus and Family Tax Benefit B. This is $128.80 a fortnight or $3348.80 over a year. This is $8334.80 over 12 months, while the paid parental leave will produce $9700 over 18 weeks. So the government will win kudos for a payment that costs them maybe an extra $1365.20 per person
But wait! There are other potential clawbacks because the parental leave payment is taxable and the Baby Bonus is not. If the paid worker has other income in the year that push her into the 30% tax bracket or higher, she would be better off with the old Baby Bonus than the new payment. The Government therefore would further reduce its costs. The final Productivity Commission Report is also released tomorrow so we can check these costings.
The government has cleverly used Mothers’ Day and a relatively small amount of expenditure ($260M) to get some very good news responses. The leave is not coming in till 2011, which is most likely to be after the next election, so that makes me somewhat anxious. However, in sum, the many feminists who pushed for this change deserve congratulations, not so much for the scheme itself, but for the principle it sets in place. Official recognition of the care/paid work nexus offers the possibilities of building onto this. Oops, should we mention this before it happens?