- Federal Election Update-Coalition's Paid Parental Leave
- September 2, 2013 | Author: Adam Salter
- Law Firm: Jones Day - Sydney, New South Wales Office
If the Coalition wins the Federal Election, it has committed that its paid parental leave scheme will start on 1 July 2015 and feature 26 weeks of paid leave entitlement for women, calculated on their actual wage or the national minimum wage (whichever is higher). Superannuation contributions at the mandatory rate will also be paid for the entire period of parental leave. However, payments will be capped for those women earning $150,000 or more.
The Coalition released the details of its paid parental scheme on 19 August 2013. The Coalition says it will cost an additional $6.1 billion, which will be met by savings and reductions in other outlays and more significantly, a 1.5 percent levy on large companies with taxable incomes over $5 million.
Labor’s "work test" will be retained by the Coalition so women in other forms of employment such as casual or contract employment will also be eligible under the scheme. Fathers can also take two weeks out of the 26 weeks for dedicated paternity leave either concurrently with or separately from the mother’s leave. The Family Assistance Office will directly pay and administer the Coalition’s scheme rather than having employers involved in additional paperwork. To offset the paid parental levy, the Coalition says it will also introduce a tax cut from 1 July 2015, reducing the current company tax rate of 30 percent by 1.5 percent to 28.5 percent.
Under Labor’s current paid parental leave scheme, women are entitled to 18 weeks of leave paid at the minimum wage with no superannuation contributions. According to its policy document, the Coalition states that women earning the average full time salary of $65,000 will be $21,000 better off under their policy and $50,000 better off in retirement. However, it should be noted that the current political and media scrutiny over the reliability of the Coalition’s costings throws some doubt over how much money will be required to implement this scheme.
Stop Press: Coalition IR Policy Update
Separately, the Shadow Minister for Employment and Workplace Relations, Eric Abetz, has shed some light on the direction of the Coalition’s industrial relations policy by commenting on productivity reforms and penalty rates in the retail and hospitality industries.
Under the Coalition’s policy to improve the Fair Work Laws, industrial action will be protected only if the Fair Work Commission (FWC) is satisfied that there have been genuine and meaningful talks between employees and employers. The FWC will need to be satisfied that the parties involved have discussed ways to improve productivity before approving an enterprise agreement. Furthermore, Senator Abetz cast doubt on the provision of penalty rates in the retail and hospitality industries. He referred to anecdotal evidence indicating that jobs were being lost due to penalty rates. The amendments to the Fair Work Act 2009 (Cth) are set to take effect from 1 January 2014, where the FWC will have to consider the penalty rates of employees who work irregular hours when reviewing modern awards.