Opinion & Commentary
The Parent Trap: Will paid maternity leave really lift the birthrate?
Heather Ridout, deputy chief executive of the Australian Industry Group, says government-funded basic maternity leave is desirable but needs to be augmented by more child care support and flexible working arrangements. Jennifer Buckingham, policy analyst at the Centre for Independent Studies, says maternity leave would benefit few women and be unlikely to boost birthrates and support should be given to stay-at-home mothers as well.
Heather Ridout
A minimum government-funded paid maternity leave scheme is socially desirable and economically achievable. It would benefit our economy, our society and, most importantly, the working women facing the tough choice of whether or not to have children.
Currently, 71 per cent of Australian women in their key childbearing years (25-34) are in the workforce. Women need that engagement and they want that engagement.
But as the number of working women rises, our fertility rate declines. Just one in 10 women under the age of 30 have both a degree and a child, according to The Centre for Independent Studies.
That statistic alone shows that we are simply not doing enough to ensure that women don't have to make a choice between pursuing a career and having a family.
The Australian Industry Group has proposed a system under which working women would receive 12 weeks maternity leave paid by the Commonwealth Government at the federal minimum weekly wage of $431.
Such a scheme needs to be fiscally responsible and may involve reviewing other government programs. But it would have long-term public and private benefits.
More than 120 countries around the world now provide paid maternity leave and health benefits by law. Many of these benefits are far more generous than anything being proposed in Australia. Sweden, for instance, offers parents 13 months leave paid at 80 per cent of their wage, with three months more at a minimum rate. The UK is in the process of introducing six months paid maternity leave followed by six months unpaid leave.
We don't expect the Australian Government to offer comparable benefits. What we are talking about are minimum arrangements for working women. Under the Ai Group scheme, it would be up to individual employers to top up the leave payments for their employees in line with what they can afford.
A limited paid maternity rate will not have a major impact on the fertility rate. But it will help by making parenting more affordable for many people.
Ai Group believes a minimum paid maternity leave scheme should be just the start. Employers need to be encouraged to examine how they could better help women combine motherhood with continued participation in the workforce.
We are already seeing more individual employers tackle these issues, usually as part of the enterprise bargaining process. In the past decade, more women have had access to flexible working hours, permanent part-time arrangements, job sharing and employer help with child care. No doubt these trends will continue.
Ai Group believes other measures to support parents need to be developed through the social welfare and taxation systems. Initiatives such as further child-care support should be on the table alongside paid maternity leave.
There is no doubt that any measures making it easier for women to combine motherhood and employment have significant economic benefits: greater staff retention; lower recruitment, selection and training costs; preservation of skills; greater staff loyalty; improved morale and higher productivity.
Australia's fertility rate is now 1.75 per cent. That's below replacement rates and low by international standards. It is tipped to fall even lower, to 1.6 per cent, in 40 years.
Australia has a window of opportunity to put in place measures to help working women have children. All Australians need to be involved in finding a solution because all Australians will reap the rewards.
Jennifer Buckingham
Although the current debate has been framed in terms of Australia's declining fertility rate and its consequences, this is only part of the issue of supporting families with children. A well-cared-for, well-educated child becomes a good citizen and taxpayer, and thus benefits a whole society. Those people who take on the responsibility of providing the next generation of Australians need and deserve financial assistance.
Among the proposals to encourage women to have children, paid maternity leave has been most prominent and most controversial. Upwards of 12 weeks paid leave has been promoted as a minimum entitlement of working women. There is no question that paid maternity leave would be a boon for many women, particularly those who would have had children anyway and if companies wish to offer it, then this is a matter for them and their employees. But if the aim is to lift the birthrate, there are many reasons to believe compulsory paid maternity leave would be both expensive and ineffective.
First, paid maternity leave is only useful to the small proportion of mothers who have jobs and plan to return to work. It will not benefit mothers who do not have jobs, or those women who do not plan to return to work. Furthermore, from the mother's perspective, paid leave comes with the expectation that she will return to work within a relatively short period. This may place unwelcome pressure on mothers to leave their very young children.
Second, paid maternity leave is only the tip of the iceberg when it comes to supporting mothers who return to work while their children are very young. It is pointless without heavily subsidised child care, so any costing of maternity leave must also take into account this ongoing expense. This also raises the old dilemma of the effect of child care on children.
Third, there is no evidence that paid maternity leave would encourage women to have children. Women who choose not to have a child for financial reasons are not going to be persuaded otherwise by 12 weeks pay. Likewise, many women claim to work not for financial reasons but for personal fulfilment. If this is true, then 12 weeks pay is also unlikely to be sufficient incentive to put their career on hold.
The increase in childlessness and small families is partly borne of financial constraints and partly a result of a deeper cultural shift involving women's expectations and opportunities. It must be remembered that fertility rates are not low in all sections of the community. The most children are born in the poorest families and the lowest fertility rates are among high-income women, so clearly money is not the only issue.
If compulsory paid maternity leave is not the answer, what is? Any public support for families raising children should be universal that is, available to both employed and stay-at-home mothers, and of an amount that is meaningful. My colleague Barry Maley has proposed an amount of $3,000 per child per annum, which might or might not be means-tested. As opposed to paid maternity leave, it would enable mothers to make choices. It could be used to help working mothers with child-care costs, or to offset the income forfeited by stay-at-home mothers.
Whether this would be enough to encourage high-income women to have children is arguable but it would be a significant step towards defraying the costs of raising children for many families. Ultimately, however, policies designed to raise fertility rates can only do so much. The decision to have children rests entirely with the individual, and this responsibility cannot be placed on governments or employers.
