The Coalition’s paid parental leave scheme, first announced by Opposition Leader Tony Abbott on International Women’s Day in 2010, has been both lauded and criticised as a “Rolls-Royce” scheme. But what is the difference between this and competing policies?
Labor
Labor’s more modest paid parental leave plan offers 18 weeks’ leave at minimum wage, currently around $622 a week before tax or just over $11,000 for the 18-week period.
Unlike the Coalition’s scheme, Labor’s policy is funded by general revenue. A review of this policy is currently underway but the results are unlikely to be announced until after the election.
Image from Kevin Rudd’s Twitter account.
· 18 weeks leave at $11,196 (equivalent to minimum wage)
· Funded by general revenue
· Two weeks of paid leave available to partners, also at minimum wage
· The Baby Bonus and Paid Parental Leave cannot be claimed for the same child
· Policy is currently under review but this will not be complete before election
· Claim that Coalition’s scheme would see wealthier women subsidised by poorer women
· If elected, Centrelink would cover costs of the scheme for small businesses (of less than 20 staff)
· Eligibility:
-Must be the primary carer of a newborn or recently adopted child
– Must have met the Paid Parental Leave work test
– Must meet residence requirements throughout the leave period
– Must have income of $150,000 or less in the previous financial year
– Must be on leave or not working throughout the leave period
– Full-time, part-time, casual, seasonal, contract, and self-employed workers may be eligible.
The Coalition
The Coalition’s policy offers mothers 26 weeks of leave on a full salary of up to $150,000 annually, or $75,000 for the six-month period. Funding for this arrangement is to come from a 1.5% levy on more than 3,000 of Australia’s largest companies, expected to be officially announced shortly.
Concern exists within the party that such a policy is unaffordable.
Image from Tony Abbot’s Twitter account.
· To commence from 1 July 2015
· 26 weeks leave at a maximum of $75,000 (equivalent to mother’s full time salary or minimum wage, whichever is greater)
· Funded by levy on Australia’s largest companies
· Two weeks of paid leave available to partners, also set at their own salary
· If father is nominated as the primary carer his rate of paid leave would be based on the mother’s salary.
· Estimated to cost $6.1 billion over the forward estimates (three years beyond the current fiscal year)
· Eligibility to remain the same
The Greens
The Greens have developed a policy closer to the Coalition’s due to their belief that the majority of women would take a significant pay cut to stay at home with their children under Labor’s plan. While they would also pay for the scheme using a levy on businesses, their annual salary cap would sit at $100,000, or $50,000 for the six-month leave period.
· 26 weeks leave at a maximum of $50,000 (equivalent to mother’s full time salary or minimum wage, whichever is greater)
· Also funded by levy
· Claim that Labor’s scheme is the bare minimum while the Coalition’s is inequitable
Scott recently graduated from the University of Melbourne with a Bachelor of Arts after completing high school in Singapore. He has written for Meanjin, Voiceworks, and The Punch, volunteered with the Oaktree Foundation and interned at Change.org. Scott has worked in a chocolate shop and a call
centre, annoys his housemates with his mediocre cooking skills (tacos only), and his finest moment was playing a Jimi Hendrix solo behind his head. He can be found on Twitter here.
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Top Comments
Interesting article in today's Age about PPL and the lack of childcare options for mums returning to work in Melbourne. Looks like there's too much focus on the former without thinking about what's in store when an increased number of new babies enter the 'food chain' six months, one or two years down the track.
And what happens in five years time, when this new wave of kids enters the primary school system? Has provision been made to expand numbers of schools/teachers? Or will we have the same governmental lack of foresight that sees parents lobbying for new schools so they're able to send their kids somewhere local instead of bussing them to nearby suburbs?
I remember thinking the same when the baby bonus came in - a no doubt quick fix for parents who needed a bit of help with the early costs of having a baby back then, but those parents are now the ones scrambling for educational resources now.
The solution would to provide both the PPL and the increased childcare facilities, but governments constantly cry poor when it comes to this sort of expenditure, so I guess they think it's better for their prospects to provide half the loaf ...
Lizi, I wish your were in politics...you have more awareness and foresight on this issue that any of the three political parties...
My dad is retired and says this will cost him money because of "franking credits" being lost. What does this mean? Can a smart person explain that to me please...
Your dad obviously owns shares and receives dividends from the shares. The company that he owns shares in pay a pre paid tax which sre franking credits, on all their dividends they pay out so this reduces the amount of dividends you get. (The amount if money you get)
I highly doubt this scheme will effect your dads franking credits too much, infant the carbon tax & minin tax would have effected them way more. Dividends are a percentage (based on how many shares you have) of the companies profit, yes tax does take away some if the profit margin but companies especially large ones usually get rid of staff first so it will effect jobs before dividends. Dividends are also based on the current economical climate for example if your dad owns shares in a gold mine, gold prices are at a low so his dividends will also be alot less. But that's all part of owning shares it is very unpredictable and alot of things effect it. I can't see this effecting dividends too much personally.