The Coalition’s Maternity Leave Mess

I just did an interview for ABC radio on the Coalition’s maternity leave plans. Yes, maternity, not parental leave. You can’t call something parental leave unless it involves both parents and two weeks token leave for Daddy doesn’t cut it.

For those who haven’t been following it, this plan which harks back to 2010 is to give mother’s six months leave at their replacement wage up to a total of $75,000. That sounds good on the surface until you think for just two seconds as to what such leave is supposed to bring: it is supposed to make the lives of women easier. To be sure, more money when you have a baby does that but what is the cost?

The cost is to blast the household bargain back decades. In the time-old decision of who gets to stay home with the baby, this plan strengthens the incentive for that to be the mother. And if it is the mother, employers know that when they employ women they are just that more likely to take time off. Yes, I know, employers ought to be a good about things but it is also true that 6 month leave intervals are disruptive to workplaces as they currently are. So unless there is some massive shift in workplace culture, this plan will entrench gender discrimination and that is not a good outcome. Read the Coalition’s policy document and you get the feeling that is precisely what they are after.

There are other options. One is to have parental leave where either parent has the right to leave. Another is to move to a situation as they have in Sweden that requires both parents to take leave. That will start to change norms but I suspect the country isn’t ready for that.

Instead, if the Coalition were really the economically responsible party, it would engage in something thoughtful, market-based and business friendly such as my plan for years ago for tax rebates for returning workers. I won’t go into details here but if you want to read more, here is my plan. And here are some video treatments.

And this doesn’t get on to the cost of the thing. It is a regressive subsidy — favouring higher income households — and it also asks those who aren’t having children or who have already had them to essentially foot the bill.

One thought on “The Coalition’s Maternity Leave Mess”

  1. How would this policy affect companies ability to differentiate their employment terms? A lot of leading companies already offer flexible options. Also would this scheme create an incentive to say you are returning to work to collect the PPL, but then not, causing recruitment and operational problems for companies? Probably more HR questions than economic ones, but the affect on productivity could. E significant.


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