Work levy to pay for new mums - Proposal to fund maternity leave scheme

Workers would be charged a levy under a new maternity leave scheme. Pic by: Getty Images

Workers would pay a levy averaging $5.70 a week to fund a paid maternity leave scheme delivering mothers six months leave - under the first serious maternity-leave proposal put before the Federal Government.

A former senior public servant has drawn up plans for the $3.5 billion scheme that will be examined by the Productivity Commission inquiry into paid maternity leave tomorrow.

All employees would be levied 0.5 per cent of their wages to fund the scheme, which means the plan would cost someone on the average wage $5.70 a week.

A worker earning $100,000 a year would pay $10 a week. Employers would also be levied 0.5 per cent of their payroll to help fund the scheme.

Fathers as well as mothers would benefit from the scheme, gaining four weeks paid paternity leave after the birth of a child.

And employers would get a subsidy from the scheme to help them replace the mother while she was on leave.

The proposals would also fund the payment of 100 per cent of the mother's wages as well as her superannuation contributions while she was on maternity leave.

The scheme has been designed by Julia Perry, a former senior public servant who used to work for the Department of Social Security.

It will be the first scheme to be considered by the Productivity Commission when it begins public hearings into paid maternity leave.

More than twice as generous as a plan being touted by the union movement, the Perry plan has been endorsed by the National Foundation for Australian Women. Unlike other proposals the Perry plan would mean a mother would get 100 per cent of her wages on maternity leave.

The ACTU is proposing to give women just the basic wage and only for 14 weeks.

Mothers not in the work force would continue to get the $5000 baby bonus from the government.

But the baby bonus due to working mothers would be used to help fund the 100 per cent replacement of their wages and would form the government's contribution towards the paid maternity leave scheme.

National Foundation for Australian Women spokeswoman Marie Coleman said the Perry scheme was affordable and did not call for significant extra government spending.

Most importantly it supported the principle of income replacement for women on maternity leave, she said.

Ms Perry dismissed suggestions the plan may be difficult to sell because it called for a new tax to fund it.

She said any scheme would eventually have to be funded through the tax system.
"It is not a tax it's a levy and we need to encourage people to have children and have the best early childhood we can deliver,'' she said.

It was right that single people and those who would never have children helped fund the scheme because they didn't bear the costs of raising children, she said.


The Daily Telegraph, May 6, 2008