The reaction to the CIS’ Fairer Paid Parental Leave this week, a report that proposes an alternative to the Coalition’s controversial reforms to Paid Parental Leave (PPL), has been mostly positive.
The Coalition proposes to increase the length of taxpayer-funded PPL from 18 to 26 weeks, and increase the rate of payment from $11,538 to the primary carer’s pre-birth wages up to a cap of $100,000.
Not only would this greatly increase expenditure on PPL to over $5 billion by 2016-17, it would also provide payments of $50,000 to parents with incomes in excess of $100,000 while providing $16,667 to those earning less than the full-time minimum wage.
Fairer Paid Parental Leave makes the case for up to 26 weeks of wage replacement PPL to be provided through a loans scheme similar to the Higher Education Contributions Scheme (HECS). This Parental Leave Contributions Scheme (PLCS) would enable parents to fund parental leave out of their own future incomes. Repayment of the loan would be the responsibility of both parents, not just of the parent who takes leave.
As is to be expected, not all who responded to the report were in favour of the proposal, especially not the assertion that PPL should be largely financed by parents rather than taxpayers.
The notion that the taxpayer should fund PPL is one that has gone largely uncontested in this policy debate. The two most often cited reasons for taxpayer funding are: PPL is a workplace entitlement; and there are social benefits associated with full-time parenting in the early months of a child’s life.
The first argument is somewhat at odds with how the labour market actually works. The second might be an argument for some taxpayer funding but does not justify poorly targeted PPL payments, let alone a policy that provides $50,000 to high income earners, less to those on lower incomes and nothing to stay-at-home parents.
If parents are deserving of taxpayers’ dollars because parenting is a `social benefit,’ then a case needs to be made as to why our current family payments provide insufficient recognition of this. Current PPL policy provides far greater payments to those who work prior to giving birth than to those who stay at home – the clear implication of this is that the parenting of stay-at-home parents is of lower social value.
The Coalition’s proposal also sends a clear message that the parenting of some is superior to that of others. Many would think this proposition controversial but not some.
A PLCS does not make value judgements about people’s parenting. All working parents could receive a similar level of support from the taxpayer or this could be means tested. The rest of the payment would come out of parents’ future incomes rather than be shifted to the taxpayer. That’s fair.
Matthew Taylor is a research fellow at The Centre for Independent Studies, and author of Fairer Paid Parental Leave.
Home > Commentary > Opinion > Does fair paid parental leave mean taxpayers cop the bill?
Does fair paid parental leave mean taxpayers cop the bill?
The Coalition proposes to increase the length of taxpayer-funded PPL from 18 to 26 weeks, and increase the rate of payment from $11,538 to the primary carer’s pre-birth wages up to a cap of $100,000.
Not only would this greatly increase expenditure on PPL to over $5 billion by 2016-17, it would also provide payments of $50,000 to parents with incomes in excess of $100,000 while providing $16,667 to those earning less than the full-time minimum wage.
Fairer Paid Parental Leave makes the case for up to 26 weeks of wage replacement PPL to be provided through a loans scheme similar to the Higher Education Contributions Scheme (HECS). This Parental Leave Contributions Scheme (PLCS) would enable parents to fund parental leave out of their own future incomes. Repayment of the loan would be the responsibility of both parents, not just of the parent who takes leave.
As is to be expected, not all who responded to the report were in favour of the proposal, especially not the assertion that PPL should be largely financed by parents rather than taxpayers.
The notion that the taxpayer should fund PPL is one that has gone largely uncontested in this policy debate. The two most often cited reasons for taxpayer funding are: PPL is a workplace entitlement; and there are social benefits associated with full-time parenting in the early months of a child’s life.
The first argument is somewhat at odds with how the labour market actually works. The second might be an argument for some taxpayer funding but does not justify poorly targeted PPL payments, let alone a policy that provides $50,000 to high income earners, less to those on lower incomes and nothing to stay-at-home parents.
If parents are deserving of taxpayers’ dollars because parenting is a `social benefit,’ then a case needs to be made as to why our current family payments provide insufficient recognition of this. Current PPL policy provides far greater payments to those who work prior to giving birth than to those who stay at home – the clear implication of this is that the parenting of stay-at-home parents is of lower social value.
The Coalition’s proposal also sends a clear message that the parenting of some is superior to that of others. Many would think this proposition controversial but not some.
A PLCS does not make value judgements about people’s parenting. All working parents could receive a similar level of support from the taxpayer or this could be means tested. The rest of the payment would come out of parents’ future incomes rather than be shifted to the taxpayer. That’s fair.
Matthew Taylor is a research fellow at The Centre for Independent Studies, and author of Fairer Paid Parental Leave.
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