Opinion & Commentary
Who should pay for maternity leave – employers, unions or taxpayers?
Elizabeth Broderick, Sharan Burrow and Heather Ridout have come together to argue in favour of the introduction of a government-funded paid maternity leave scheme of 14 weeks at the minimum wage. At first, the trio seem like an odd grouping – but their alliance is not altogether surprising.
As federal sex discrimination commissioner, Broderick is charged with battling for equality between the sexes. Women bear the disproportionate cost of having children in terms of both direct costs (such as lost earnings) and indirect costs (such as stunted career progression). It is therefore no shock that she is wholly in favour of paid maternity leave, as it compensates women for some of these costs.
It is Burrow and Ridout who really make strange bedfellows. As they admit themselves, it is not often that they actually agree. Burrow’s role as president of the ACTU means it is her job to stand up for workers. As CEO of the Australian Industry Group, Ridout’s job is to stand up for employers. The nature of their relationship is as adversaries – Burrow tries to obtain maximum entitlements for workers, paid for by employers. Ridout tries to resist the squeeze on behalf of business, and get maximum productivity out of workers. One only need look at the heated public debate over the introduction of the previous government’s Work Choices legislation to see how ideologically opposed these two organisations are.
Which may lead the sceptical among us to ask - why they have teamed up together on this issue? They acknowledge that there are strong plusses for both workers and employers in such a scheme, but claim the key advantage of paid maternity leave is better care for our children. If that is the case, isn’t the argument better made by child psychologists, health care workers, and parents’ groups? Surely they are more qualified to speak about what is necessary to ensure the health and welfare of mothers and their new bubs.
Since when are unions and employer groups concerned about children’s welfare? When two powerful, but diametrically opposed groups get together – alarm bells should be ringing.
Unions and employer groups both have a significant vested interest in the introduction of maternity leave paid by for the taxpayer. Women will always have children, and consequently women will always need to take time out of the workforce. Someone has to bear the cost. If the taxpayer pays, individual workers and individual employers – in other words, Burrow’s and Ridout’s members – don’t have to.
If the government’s objective is to get women back to work, then short periods of well paid maternity leave (say three months) seem to work. Overseas evidence demonstrates this. In countries with low levels of family benefits, such as Japan, women are usually forced to choose between a job or a baby – but not both. The result is less women in the workforce and less children being born. In countries like Germany, where mothers can take up to three years paid leave, women are less likely to go back to work at all.
For unions and employers, their raison d’etre is keeping people in the labour force. For both Burrow and Ridout, 14 weeks maternity leave paid for by the government is the perfect solution.
Women do need time to bond with their newborn children, and this means time away from work. They also need some form of income during this time. If the positive reaction to the paid maternity leave debate in the media is anything to go by, most of us agree with this proposition.
But Ridout and Burrow’s argument assumes that taxpayers should foot the bill immediately absolves their members of any responsibility. Their proposal will just add another layer to the already dense system of middle class welfare in Australia, and will no doubt be subjected to the same criticisms as the Baby Bonus. Why should taxpayers subsidise well paid women to take time off work?
By stating that maternity leave must be paid for by the taxpayer, Ridout and Burrow circumvent any discussion of alternative funding proposals. Many women in Australia already have access to paid maternity leave, funded by their employer. If a government sponsored benefit is introduced, employers are automatically absolved of this responsibility. It’s an example of the government ‘crowding out’ the private sector from an area which they have traditionally had responsibility for.
Around the world, maternity leave is paid for in a number of ways. Compulsory social insurance programs have been very successful in providing paid maternity leave schemes in countries such as Canada, France and the Netherlands without drawing on taxpayer funds. At a time when the government is trying to cut back spending, do we really want to introduce another welfare benefit?
Undoubtedly, Ridout and Burrow care about children’s welfare. They wouldn’t be human if they didn’t. But let’s not forget what their real objective is – to keep women in the workforce, and have you and me foot the bill. Agreeing that new mums should have some time away from work shouldn’t automatically lead to the conclusion of more government benefits. An important question needs to be asked in the debate about paid maternity leave – who pays?
Jessica Brown is a policy analyst at The Centre for Independent Studies.
