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The Coalition’s PPL scheme: budget drain or revenue raiser?

One of the most controversial features of the Coalition Government’s proposed Paid Parental Leave (PPL) scheme is its significantly greater cost compared with the current scheme. The more generous proposed scheme is expected to cost $5.7 billion per year when up and running in 2016-17, while the current scheme will cost $2 billion in that year. Media reports suggest that this has led some Coalition members of parliament to urge the Prime Minister to either abandon or ‘scale down’ his proposed scheme. However, it is important to note that according to the Coalition’s 2013 election costings the scheme is expected to make money by its second year—that is, it will ... Read more...

Removing employer responsibility for Paid Parental Leave

New Abbott Government legislation will remove the requirement for employers to make payments to employees under the national Paid Parental Leave (PPL) scheme from 1 March 2014. Instead, employees would be paid directly by the Department of Human Services, unless the employer chooses to make the payments.The Government's reason for making the change is to 'ease administrative burdens on business'. Currently, in most cases, the Commonwealth Government funds employers to provide instalments of PPL to their eligible long-term employees for up to 18 weeks at the National Minimum Wage (currently $606.50 per week). The employer role in making these payments was suggested by the Productivity Commiss... Read more...

Paid Parental Leave: Robin Hood or piggy bank?

While there are numerous differences between the Labor and Coalition policies on parental leave pay, the most controversial is the rate of payment. While the current Government scheme is paid at the National Minimum Wage ($606.50 per week), the Coalition proposal is for parents to be paid at their full salary capped at an income level of $150,000.The difference between the two approaches highlights the complicated relationship present in both schemes between the idea of Parental Leave Pay as a workplace entitlement and a payment made through the social security system.Australia's current Paid Parental Leave scheme operates within the framework of social security benefits paid through the Dep... Read more...

Sibling rivalry: Baby Bonus and Paid Parental Leave

The Government has announced as part of the Mid Year Economic and Fiscal Outlook (MYEFO) that it will reduce the Baby Bonus to $5000 and freeze indexation of the payment for three years. Currently, the Baby Bonus is $5437 and indexed in line with changes to the Consumer Price Index (CPI) on 1 July each year. The decision has been criticised by some as discriminating against 'stay at home' mothers because the Government did not also take savings from the Paid Parental Leave scheme. This post attempts to clarify the issues involved by briefly looking at the relationship between Baby Bonus and Paid Parental Leave.Baby Bonus in its original form was introduced by the Howard Government in 2002. I... Read more...

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