Paid parental leave was supposedly one of budget night's winners. Yet the proposed changes are meagre in scope. It's a modest policy innovation but not a nation building one. Nor one that substantially impacts the cost of living; the budget centrepiece.
Yes it does improve on policy that frequently results in men as secondary carers taking the bare minimum. But it doesn't actually encourage men to take paternity leave.
So what does it do? Families and dads will soon have greater choice accessing paternity leave so parents can split 20 weeks of leave between them.
Sounds good. But pooling leave between carers creates a fixed pie where the more one carer takes the less the carer other gets. How many dads will be inclined to take leave if every bit they take comes off the allowance of their spouse?
Families tend to treat their earnings as an economic unit; that is they seek to maximise income from both partners. If one earns less than the other does, the lower paid partner will be incentivised to take the greatest amount of leave to retain family payments and childcare subsidies. As women tend to earn less than men, one can bet in this case mothers will take leave and dads will be discouraged from doing so. This in effect exacerbates gender imbalances.
What would be better? We need policy that treats carers as independent and valuable contributors. It would be better to uncouple the two and offer parental leave for both partners separately. Some organisations are already doing this. For example, Deloitte has 14 weeks and the Australian National University, where I work, has 26 weeks expressly for dads (or alternate carer) in the first year. Unfortunately, the number of organisations doing this are few, so this is truly for the lucky few. If the government saw paternity leave as a key issue, why not implement something along these lines?
Can we afford this? Yes. When men don't access parental leave they are far less involved as parents. When they do they spend time bonding they develop better relationships with their kids. They are also more involved and more capable performing mundane but essential chores. Critically it supports gender equity as dads are more involved taking caring roles supporting their partner's workforce participation. Lifting women's participation increases financial security for women and their families by way of higher lifetime earnings and retirement savings. It also enhances economic growth. Paternity leave isn't just good for dads, but benefits spouses, family and the economy, too. So yes, we can definitely afford it.
The question this is, how can we improve paternity leave in Australia? There are international examples such as Canada's that even if not perfect tell us much better is possible. This scheme combines couples leave but it has a floor for how much one carer can get out of the total. For example, in a standard plan one carer can get a maximum of 35 out of 40 weeks. Meaning at a minimum the other carer has five weeks or they lose it.
The best model, though, is a separate scheme for each parent that has a use it or lose it approach; meaning if you don't use it, it is gone. For example, Sweden instituted a "fathers-only" paid leave policy that men have to take advantage of before their child turns eight or else they lose their days off; this has resulted in 80 per cent of Swedish fathers now taking at least some time off to care for their children, whereas only 4 per cent did so in the past. So if there is evidence from other countries leading the way why do we continue to follow the current setup?
It's also vital to remember care doesn't stop at 20 weeks. If early child development was viewed holistically, it also makes sense to consider early childhood education and care. No new budget measures were included to ease the cost of early childcare, nor address workforce disincentives. It can be cheaper for a carer to look after their kids than go back to work. Investing in early child centres, especially in remote and regional areas, and addressing return to work disincentives for mothers seems logical if we want an equitable society that supports both men and women.
Paid parental leave and early childhood education should be an election-defining issue. If this and the cost of living was actually a budget centrepiece this was a lost opportunity. We should be leading here rather than celebrating such modest change. It will be interesting to see if Anthony Albanese aims to go one better for families.
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