The prime minister has made the decision to scrap his Paid Parental Leave scheme in favour of providing affordable and accessible childcare.
In December, Human Capital reported that Tony Abbott was planning to cut funding to his signature Paid Parental Leave (PPL) scheme.
The prime minister yesterday confirmed that he has now made the decision to abandon the scheme, announcing to the Press Club that the "bigger Parental Leave scheme is off the table.”
“Over Christmas, I said that over the break I’d be better targeting the proposed Paid Parental Leave scheme and scaling it back in a Families Package focusing on childcare,” Abbott said in a statement.
He added that “what’s desirable is not always doable – especially when times are tough and budgets are tight.”
“We've taken [it] off the table,” assistant treasurer Josh Frydenberg told ABC radio.
According to Frydenberg, the government’s intention is now to place “emphasis on child care and how we can build and boost female workforce participation.”
The scheme was designed with the intention of paying new mothers their full salary for six months up to an annual income of $100,000, but is set to be replaced with an overhauled families package.
He claimed that the reason for the discarding of the project was budgetary restrictions, which made it too difficult to proceed.
It was also said that Abbott had taken factors such as the Productivity Commission’s report on childcare into account, as well as the opinions of his colleagues.
Ewen Jones, Queensland MP, said that the government were aware of the backlash the decision is likely to receive.
“It was too hard a sell, and it has to go,” he said, adding that he knew many women who would be disappointed that the scheme is to be dropped.
The decision to shelve the scheme is being welcomed by Diversity Council Australia.
DCA’s CEO, Lisa Annese, said that one of the most influential factors over female participation in the workforce is childcare.
“In a survey of our employer member organisations in 2014, nearly 95% of employers said access to and availability of affordable childcare presented difficulties for their employees,” she said. “There is no doubt that this is a major disincentive to women participating more fully in the workforce.”
Annese added that while Paid Parental Leave (PPL) is important, childcare is a bigger issue for employers.
“The existing government funded PPL scheme provides a very important safety net for new parents,” she said. “But as suggested by the Productivity Commission and in line with feedback from our members, we support the Government’s plan to direct funds allocated for the expanded PPL scheme towards improving accessibility and affordability of childcare as this is likely to have a greater positive impact on the workforce participation of women.”
She also claimed that access to flexible work is critical to women’s workforce participation.
“DCA encourages the Government to ensure that an emphasis on workplace flexibility is promoted and supported as a critical part of maintaining progress on workplace gender equity and supporting parents – especially those with younger children – to remain in paid work,” said Annese. “Clearly, more needs to be done to support the cultural shift in Australian business necessary to mainstream flexibility to the benefit of Australian parents.”
The Sydney Morning Herald reported this morning that potentially billions of dollars will be pumped into the currently unspecified childcare restructure aimed at simplifying assistance and improving parents’ financial si141475tuation. The childcare scheme is expected to be announced at or before the May budget.
