Women's working experience
In conjunction with the gender pay gap, women's workforce participation
has a significant effect on lifetime wealth accumulation and retirement
savings. Women are more likely to take time out of paid employment to care for
children or family members, and are more likely to be employed part-time due to
caring responsibilities. Many of the submissions and witnesses argued that
increasing women's workforce participation rates would improve greatly women's
economic security in retirement. This chapter assesses the various causes and
barriers to women's workforce participation, including gender and age
discrimination. It also examines measures to maintain women's attachment to the
paid workforce, flexible working arrangements, access to affordable childcare
and paid parental leave.
Women's workforce participation
Women's workforce participation has increased dramatically over the last
40 years, resulting from an increase in the proportion of women of
childbearing age working. In 1978, only 39 per cent of the female population
over 15 years of age was in paid employment (compared to men's employment rate
of 75 per cent), whereas in 2015 the employment rate was 55 per cent (the rate
was 66.7 per cent for men).
Despite these developments, the increase in the number of women in the
workforce as a proportion of the adult population has stagnated over the past
decade, and the proportion of women working full-time is similar to the
proportion in 1978.
Women are also more likely to be employed part-time. Approximately two-thirds
of the part-time workforce are women, with 46.4 per cent of all employed women working
part-time compared to only 18 per cent of all men. Overall, women undertake the
majority of unpaid domestic work and men the majority of paid work.
In addition to lower workforce participation rates, the ASU noted that
women with caring responsibilities were more likely to be employed in lower
paying jobs and in more insecure employment such as part-time, casual or
Professor Patricia Apps, a Professor of Public Economics at the University
of Sydney, observed:
...while female employment participation rates have risen
dramatically, most women are either working part-time or are not in the
workforce. The result is a gender gap in labour supply in the order of 40 to 50
per cent across the entire life cycle, not just when their children are young.
This creates a loss of human capital, which partly explains lower wages later
on, prevents the necessary expansion of the tax base and undermines economic
Dr Brendon Radford, National Seniors, pointed out that 'by providing the
support to get women back into the workforce, you are actually creating greater
productivity within the country in economic growth because more people are
working and more people are paying taxes'.
The AIST observed that:
...if Australia could match Canada with 6 percent more women in
the paid workforce (i.e. an 88 percent female participation compared with men's),
the Australian economy would increase by about $25 billion a year. If the gap
was closed completely, it would be by about $195 billion or 13 percent of
Gender discrimination and workforce
Many submissions highlighted the ongoing prevalence of gender
discrimination in the workplace, particularly around parental leave. A National
Review conducted by the Australian Human Rights Commission (AHRC) in 2014 (Supporting
Working Parents: Pregnancy and Return to Work National Review) found that
one in two (49 per cent) mothers report experiencing discrimination in the
workplace at some point during pregnancy, parental leave or upon return to
work. Interestingly, the research found that over a quarter of fathers and
partners also reported experiencing discrimination relating to parental leave
and return to work. Thirty-two per cent of all mothers who were discriminated
against during pregnancy went to look for another job or resigned. Further,
almost one in five (18 per cent) mothers indicated that during their pregnancy
or when they returned to work they were either made redundant or that their
jobs were restructured; or they were dismissed or that their contract was not
Consistent with the findings of the AHRC, the Finance Sector Union (FSU)
found a similar prevalence of discrimination among its members, and argued that
discrimination legislation should be strengthened to provide adequate
protection from unlawful treatment for pregnant women and carers.
The ACTU argued that addressing gaps in anti-discrimination law would
help to reduce the effect of discrimination on women's workforce participation.
In particular, discrimination relating to pregnancy and returning to work after
parental leave, which continues to be a widespread issue that contributes to
women's under-participation or withdrawal from the workforce.
The ACTU supported the AHRC's recommendation, as made in its National
Review report, that the Sex Discrimination Act 1984 should be amended to
extend the discrimination 'ground of "family responsibilities" to
include indirect discrimination, and include a positive duty on employers to
reasonably accommodate the needs of workers who are pregnant and/or have family
Age discrimination and workforce
The AHRC observed that older women are 'more likely than men to face age
discrimination due to perceptions that they have outdated skills, are too slow
to learn new things or that they will deliver an unsatisfactory job'. As such,
older women face greater barriers to obtaining employment.
Importantly, the AHRC is currently conducting a national inquiry into
Employment Discrimination against Older Australians and Australians with
Disability. The AHRC inquiry's Issues Paper stated:
There are considerable economic costs associated with low
labour force participation of older Australians. According to Deloitte Access
Economics, an extra 3 percentage points of labour force participation among
workers aged 55 and over would result in a $33 billion boost to GDP—or around
1.6% of national income.
The Hon Susan Ryan AO, Age and Disability Discrimination Commissioner,
explained that the women the AHRC had spoken to during the consultation for its
current inquiry had experienced both direct and indirect discrimination. For
Either they are subjected to direct discrimination—like they
are offered redundancies or they are told they are not required anymore—or they
experience indirect but very damaging age discrimination, such as not being
able to apply for promotions or not being able to apply for training courses
which are essential to keep their skills up-to-date.
Women in Super highlighted the effect of age discrimination on women's
security in retirement. It stated:
Age discrimination (although illegal since the introduction
of the Age Discrimination Act 2004) impacts the ability of many older women to
accumulate superannuation in later life. Many women (and men) need to work past
retirement age for many reasons including inadequate superannuation. However,
for many finding a full-time or part-time job is difficult. For those who have
been out of the workforce for a period of time and find the need to return to
work due to changed circumstances in their 50s and beyond (for example divorce,
death of a partner) it is difficult to find suitable work.
COTA Australia expressed concern about the effect of a combination of
sex and age discrimination on older women returning to the workforce. It
referred, in particular, to:
...the impact on living standards and retirement incomes of
women who exit the workforce in their 40s and 50s to care for grandchildren
and/or ageing parents and then, when the need has passed, find themselves
unable to return to work due to a combination of age and sex discrimination and
the way the labour market tends to operate.
The committee considers that increasing women's workforce participation
will significantly improve retirement outcomes for both younger and older
women. The evidence the committee received clearly demonstrated that, despite
anti-discrimination legislation, both age and gender discrimination continue to
persist in Australian workplaces, creating a significant barrier to women's
The committee recommends that the Australian Government consider
carefully the recommendation from the Australian Human Rights Commission's Supporting
Working Parents: Pregnancy and Return to Work National Review, to amend the
Sex Discrimination Act 1984 to:
extend the discrimination ground of 'family responsibilities'
under the Sex Discrimination Act to include indirect discrimination; and
include a positive duty on employers to reasonably accommodate
the needs of workers who are pregnant and/or have family responsibilities.
Following its inquiry into Employment Discrimination against Older
Australians and Australians with Disability, the Australian Human Rights
Commission's findings may provide further opportunity to introduce measures to
address age discrimination experienced by older Australians, particularly
Flexible work arrangements
Many submissions and witnesses highlighted the importance of workplace
flexibility arrangements for parents, carers and older workers. The WGEA
highlighted the need to promote and encourage flexible work for both men and
women. According to data provided by the WGEA, only 60.2 per cent of employers
have a policy or strategy on flexible working arrangements. Half (50 per cent)
of employers have policies on flexible working but only 14.6 per cent have a
strategy for flexible working. A similar share of employers (58 per cent) have
a family and caring responsibilities policy or strategy, the majority of which
have a policy (47.2 per cent) rather than a strategy (14.6 per cent). The WGEA
provides organisations with the tools to develop strategies for providing flexible
In addition to the resources that the WGEA provides, the Fair Work
Ombudsman has developed a best practice guide for individual flexibility arrangements
The Fair Work Act provides employees in the national workplace relations
system with a legal right to request flexible working arrangements. To be
eligible, employees must have worked for their employer for at least 12 months
on a full-time or part-time basis. Long-term casual employees—employed on a
regular and systematic basis for at least 12 months—who have a reasonable
expectation of ongoing employment are also eligible. Employees are eligible to
request flexible working arrangements in the following circumstances:
the employee is a parent, or has responsibility for the care of a
child who is of school age or younger;
the employee is a carer (within the meaning of the Carer
Recognition Act 2010);
the employee has a disability;
the employee is 55 or older;
the employee is experiencing violence from a member of the
employee's family; or
the employee provides care or support to a member of their
immediate family or household who requires care or support because they are
experiencing violence from the member's family.
Under the Fair Work Act, employers must seriously consider a request for
flexible working arrangements but may refuse on reasonable business grounds
(which are discussed further below).
A number of submissions, however, proposed strengthening the 'right to
request' provisions under s 65 of the Fair Work Act to provide an
enforceable right to request flexible working arrangements. Parents, carers and older
workers all have a right to request flexible working arrangements. For example,
Ms Veronica Black, FSU, proposed strengthening the 'right to request'
provision in the Fair Work Act, as currently:
...workers can request flexible working arrangements, but the
right is to request, not a right to have. In fact, there is no process for
appealing against a decision of your employer should they decide they are not
prepared to grant you that flexibility.
Ms Katie Biddlestone, SDA National, expressed a similar view:
We feel that in its current form it really is not working as
a mechanism for workers to obtain flexible working arrangements. Because there
are no rights, an employee can ask a question, but that is really all that the
legislation provides for. We would like to see an improvement around section 65
of the Fair Work Act to ensure that there is an appeal mechanism for employees
to go to the Fair Work Commission. So if there is a question around whether an
employer is unreasonably refusing a request for flexible work arrangements,
there is an independent body which can make that assessment and a ruling in
relation to that.
Carers Australia suggested that the right to request should be extended
to include employees who have worked with an employer for less than twelve
months. Ms Anna Morison, Carers Australia, stated
Obviously, that is there for some very good reasons, but it
does discriminate against those [carers]...that are looking to get back into
employment and it also sort of discriminates against our young carers, those
that might have had a very delayed start to their employment career, and maybe
are still caring, and are looking at entering their first job. If they still
have caring responsibilities they are properly going to need flexibility right
from the start. There are options there where we could look at strengthening
that legislation and that framework.
One carer, Ms Kathryn Squires, shared her own experience of difficulties
balancing caring with paid work. She explained:
I moved away from Canberra a number of years ago. I started
working in event management up in Queensland, which was great. My parents
became quite frail, so after about seven years up there I returned to Canberra.
I lost a lot of my jobs on events because I was no longer local. I managed to
retain a couple of those contracts. That is only a couple of times a year now.
It is hard to hold on to those jobs. Another job I started in the last couple
of years was a job in Sydney as a PA. That was really difficult, and I have now
lost that job because I was often saying, 'I can't come because one of my
parents is really ill and I have to stay and care for them.'
The Age and Disability Discrimination Commissioner found that more could
be done to change attitudes in the workplace towards people accessing flexible
So, again, we do need more promotion, and this is where
government can do communications campaigns and initiate national discussions
around these issues, so that a parent returning to work will know: 'I do have
these rights,' and her coworkers and her immediate boss will know: 'This woman
was entitled to go off on leave. She is entitled to come back. She is entitled
The Age and Disability Discrimination Commissioner noted that older
people also have the right to request flexibility. However, she noted that in
discussions with older people they expressed concern that it would put them in
a 'bad light' with their employer.
Carers Australia observed that there needs to be greater recognition
that 'people need to leave work for different sorts of reasons, not just that
they are parents of children—people care for elderly parents and people with
The WGEA highlighted the need for more part-time or flexible senior
management roles, with only 6.3 per cent of managerial positions being offered
on a part-time basis in 2014–15.
In addition, there is a lack of training and opportunities for promotion for
women who work part-time. The Age and Disability Discrimination Commissioner
reasoned that there needed to be a discussion with employers on how to create
more flexible workplaces, 'pointing to those who are doing it, like the ANZ and
other employers who have worked out how to do it, and encouraging all employers
to see the benefits'.
The committee received evidence suggesting that some employers, and in
particular smaller businesses, struggle with the complexity and administrative
burden of implementing flexible workplace arrangements for their employees. For
example, Mrs Andrea Slattery from the SMSF Association referred to her own
experience as a small business owner in this respect:
We run a small business ourselves and we have a flexible
workplace arrangement for all of our employees. We have 25 employees, very much
along the lines of other small businesses. One of the things that is most
difficult is actually physically managing the flexibility arrangements. When
you have between about 10 and 50 employees, you do not have the capacity to
have a HR person on site with all the forms and red-tape administration issues
that you have.
Ms Yolanda Beattie, Mercer, observed that 'it is one thing to mandate
[flexible] requirements; it is another to equip employers to do it'. She
We know that part-time work and job sharing is one of the
hardest types of flexible work for employers to implement. It is the hardest,
but it is not impossible. It just takes a different and more innovative way of
thinking. That is really about rethinking job design and unpacking roles so
that they can be designed in ways that can be done in three days or four days.
You often hear about people having the experience of, 'I am getting paid for
four days, but my outcomes haven't changed'. I think there is guidance needed
for employers to be able to deliver that and achieve that realistically. When
you put it in legislation, you require that conversation to happen and that
investment to be made by employers—to really investigate how to make it happen
and do it well.
Mrs Slattery suggested that the government might provide small
businesses with some guidance and support to help facilitate the introduction
of flexible workplace arrangements.
It is worth noting at this juncture that the WGEA and the Fair Work Ombudsman
have, in fact, already prepared and published a range of resources to help
employees and employers implement flexible workplace arrangements. At the same
time, there may be scope for the WGEA and the Fair Work Ombudsman to improve
the resources available to small businesses in this regard.
Increasing women's workforce participation is critical for the economy
as well as gender equity. Flexible working arrangements assist parents and
carers, who are predominantly women, as well as older workers to re-enter or
remain in the paid workforce. The committee supports the work of the WGEA in
promoting flexible work strategies for employers. Evidence presented to the
committee suggests that further work is necessary to develop greater awareness among
both employers and employees regarding employee rights to access flexible work
arrangements, as well as management strategies to enable career progression and
development opportunities for part-time workers.
Further, while noting the increased difficulty that smaller employers
have in offering flexible conditions, the committee considers that calls to
strengthen the 'right to request' provisions in the Fair Work Act have merit.
The committee recognises that implementation of such a measure would require
careful consultation with employers and employee representatives to ensure
workable arrangements are established.
The committee recommends that the Australian Government consult with
stakeholders on practical options to implement the relevant findings from the Australian
Human Rights Commission's Supporting Working Parents: Pregnancy and Return
to Work National Review, which recommends strengthening the 'right to
request' provisions under s 65 of the Fair Work Act 2009 by:
removing the qualification requirements in section 65(2)(a) of
the Fair Work Act (that is, the requirements for 12 months continuous service);
introducing a positive duty on employers to reasonably
accommodate a request for flexible working arrangements; and
establishing a procedural appeals process through the Fair
Work Commission for decisions related to the right to request flexible working
arrangements to ensure processes set out in the Fair Work Act have been
Tax transfer system and workforce participation
The OECD released a report on 12 April 2016 examining the effects of tax
and benefit systems, including tax and benefit provisions targeted at children,
on the incentives for second earners to enter (or re-enter) the workforce in
OECD countries. The report outlined the effect of family-based taxation on
second earners. It stated:
Family-based taxation has been adopted by a number of
countries for equity purposes as it ensures that families with the same total
income pay the same total income tax—irrespective of who earned the income.
However, in such a system a second earner is effectively taxed at higher
marginal tax rates than a single individual would be. Similarly, the withdrawal
of tax allowances and credits on the basis of family income and the presence of
dependent spouse allowances (which are both strongly justifiable on equity
grounds) can act to reduce second earner participation incentives.
The OECD's findings were reflected in the views presented by witnesses
to the committee. Professor Miranda Stewart noted that the 'combined effective
marginal tax rate on women, as a result of taxes on work combined with
withdrawal of family benefits and childcare support, is a substantial
disincentive to work'.
The Grattan Institute indicated that the high effective marginal tax
rates experienced by second-income earners is linked to comparatively low
female workforce participation in Australia.
The Australian Institute of Superannuation Trustees (AIST) observed that
Canada has significantly increased its women's workforce participation rates by
reducing the effective marginal tax rate for second earners. The workforce participation
gap for Canadian women is approximately 86 per cent of men's compared with 82
per cent in Australia.
WiSER (Women in Social Economic Research) from Curtin University pointed
to an apparent contradiction between, on the one hand, the provision of tax
subsidies to encourage retirement savings, and, on the other, income tax and
Family Tax Benefit policy settings that reduce financial incentives for second
earners in families with children to engage in paid work. It explained:
...whilst the individual is ostensibly the formal unit of
assessment in Australia's income tax system, Family Tax Benefits Parts A and B
shift the tax-transfer system towards a family unit based system. The tax
benefits impose very high effective marginal tax rates on second earners (most
commonly women) in households. Part A is means tested and withdrawn at rates of
30 per cent and an additional 20 per cent if the family qualifies. When added
to the marginal tax rate, these withdrawals can cause a second earner to lose
80–90 per cent of gross earnings on returning to work, and this is before
childcare costs are met.
Dr Helen Hodgson, National Foundation for Australian Women (NFAW), observed
that second earners who are returning to work part-time are most affected, as the
interplay between income tax, the family tax benefit and cost of childcare may
result in second-earners losing more than they earn.
The committee considers that further investigation is necessary to
examine the way in which income tax, the Family Tax Benefits and the cost of
child care combine to provide a disincentive for second income earners to
participate in paid work and to identify mechanisms to ameliorate such
The committee recommends that the Australian Government refer the
question of effective marginal tax rates for second-earners to the Productivity
Commission for review, noting the significance of women's workforce
Access to affordable childcare
The Productivity Commission's 2014 report on childcare and early
childhood learning found that women's workforce participation could be
increased through access to affordable childcare. Child care costs,
particularly for women returning to work part-time, may serve as a disincentive
to return to the workforce.
One witness noted the International Monetary Fund 2013 report, Women,
work, and the economy: macroeconomic gains from gender equity, which found
...where childcare costs go down by 50 per cent, the women's
workforce participation rate can increase by up to 10 per cent. They also find
that in OECD countries where greater percentages of GDP are spent on child care
and education for under fives there are also greater female workforce
The ACTU argued that the provision of universal access to quality,
affordable early childhood education and care (ECEC) was one of the most
significant changes that could be made to support women's workforce
participation and bolster women's retirement incomes.
National Seniors Australia pointed to international examples where
accessible childcare has positively affected women's workforce participation.
In countries where the cost of childcare is low and heavily
subsidised, there is a correspondingly high uptake of childcare. In Denmark,
for example, where there is a high proportion of children in childcare, mothers
do not report childcare price as being reasons for not working or working only
part-time. In Australia, where the proportion of children in care is much
lower, there are constant complaints that the cost is too high and the
availability of childcare is low.
Submissions included a number of proposals to improve access to quality
affordable childcare. These included:
reviewing current fringe benefits tax legislation and revising it
to allow organisations to provide more cost-effectively subsidised childcare,
healthcare and aged parent care assistance as employee benefits; and
adjusting means testing to achieve a progressive scale of the
proportion of household disposable income spent on childcare costs.
To demonstrate the link between affordable childcare and increased
workforce participation, Mrs Sandra Buckley, Women in Super, drew on the
Canadian experience, noting that Canada is often seen as culturally similar to
Australia. She stated:
In the eighties, I believe Canada introduced a large subsidy
program for child care. They did not necessarily make it extremely mean. There
was tapering but, essentially, if you wanted access to child care, you got
access to substantially reduced [costs of] child care. Sometimes it was as low
as $5 a day. Within 10 years, the female workforce participation rate had
increased to 80 per cent, so there was a direct lineal transaction, if you
like. I guess the point is that there are a lot of structural barriers.
The Family Assistance Legislation Amendment (Jobs for Families Child
Care Package) Bill 2015 is currently before the Parliament. The Bill forms part
of the government's Jobs for Families Child Care Package, which as a whole is a
response to the Productivity Commission's report on childcare and early
childhood learning. The Bill proposes to introduce the Child Care Subsidy which
will a replace the Child Care Benefit and Child Care Rebate with a single,
means tested subsidy.
The St Vincent De Paul Society expressed concerns that the government's
current proposal may disadvantage low-income women if access to childcare is
made contingent upon participation requirements.
The ACTU welcomed the government's commitment to increase funding for the
early education and child care sector from 1 July 2017. However, in its view,
'public investment continues to fall short of levels needed to enable families
to access ECEC services and fully participate in the workforce'. The ACTU
Australia has one of the lowest expenditures on early
childhood education and care of all OECD countries spending 0.45% of GDP
compared to the OECD average of 0.6%.
The fact that the families package is contingent on proposed
cuts to family tax benefits is highly inequitable and is likely to push
low-income women with dependent children into poverty thereby eliminating any
possibility of saving for their retirement.
The Women and Work Research Group observed that it was unclear how
proposed changes to the childcare package would affect female labour force
engagement, especially as they are linked to cuts to family tax benefits.
Recognition for grandparents
National Seniors Australia noted the high number of grandparents
providing childcare and proposed consideration of a scheme to provide some
remuneration to grandparents. At the moment they can receive 69c per hour for
looking after a non-school-aged child. Dr Radford remarked that 'it is the
equivalent of $34.80 for 50 hours of work, which is quite horrendous,
National Seniors Australia noted:
As a recent National
Seniors report has shown, grandmothers already provide a significant amount of
informal childcare in Australia. Many grandmothers are already sacrificing
their own incomes so that daughters and daughters-in-law can return to the
workforce. Many of these women are also carrying the burden of care for elderly
dependents at the expense of their own financial security.
The Productivity Commission, international experiences and evidence
before the committee highlight the significance of access to affordable child
care in promoting women's workforce participation. The committee considers that
access to affordable childcare, now and in the future, is one of the factors
that will contribute to improving women's economic security in retirement
through increased workforce participation.
Paid parental leave
Many submissions drew attention to the importance of paid parental leave
for women's workforce participation.
All employees in Australia are entitled to Paid Parental Leave (PPL), subject
to meeting certain requirements:
Employees can receive parental leave pay from the Australian
Government (18 weeks at the minimum wage) and paid parental leave from their
employer. Not all employers offer paid parental leave, however those employees
who get paid parental leave from their employer are also entitled to the
Australian Government's Paid Parental Leave. Employees whose employers do not
provide paid parental leave are still entitled by law to parental leave.
The government has proposed changes to PPL to prevent employees with
access to employer-provided parental leave from accessing the government's PPL
scheme (so-called 'double dipping'). The changes, which are contained in the
Fairer Paid Parental Leave Bill 2015, are summarised in the explanatory
memorandum to the bill:
Currently, eligible primary carers can receive
employer-provided paid maternity leave and Government-funded Parental Leave
Pay. Under the amendment to the Paid Parental Leave scheme, primary carers
will no longer receive both their employer provided paid maternity leave and
the full 18 weeks of Government-funded Parental Leave Pay.
Eligible mothers without access to employer-provided paid
maternity leave will continue to be eligible for the full 18 weeks of Parental
Leave Pay at the rate of the national minimum wage, and mothers who receive
less than the total value of Government-funded Parental Leave Pay from their
employer will be entitled to the residual amount from the Government.
Many submissions raised concerns about changes to PPL which have been
proposed by the government.
For example, the Women and Work Research Group expressed concern about the
effect of any proposed cuts to the PPL scheme, especially as the current scheme
has been shown to encourage women's workforce retention.
The Police Federation of Australia calculated that its members would be
$11,500 worse off under the proposed changes to the PPL. It reasoned that the
proposed changes will likely reduce the amount of time on parental leave for
some of its members, while for others it may result in a separation from the
The Financial Services Council noted that the government's original PPL
policy was to implement a parental leave scheme that would have provided
mothers with 26 weeks of paid parental leave at their actual wage or the
national minimum wage (whichever is greater), plus superannuation (superannuation
contributions for PPL are discussed in chapter 5). While the Financial Services
Council supported the scheme, it acknowledged the government's argument that
the proposed scheme is currently unaffordable due to the Commonwealth's fiscal
The ACTU argued that the 18 weeks available leave on the PPL is
significantly shorter than the period of paid leave available in other OECD
countries which have similar social, demographic and economic circumstances.
For example, Canada provides 35 weeks paid leave, the UK provides 39 weeks and
Sweden provides 60 weeks. It also noted that Australia is one of only two OECD
countries that does not pay leave based on a replacement wage. As such, the
ACTU recommended that the minimum period of paid parental leave should be 26
weeks at no less than the national minimum wage.
Unions NSW also recommended that PPL should be extended to 26 week, but in its
view PPL should provide full wage replacement.
The ACTU and Unions NSW support for 26 weeks PPL is in line with
recommendations by the World Health Organisation.
The committee notes that the Hon Christian Porter, Social Services
Minister, recently announced that proposed changes to the PPL contained in the
Fairer Paid Parental Leave Bill 2015 were unlikely to be passed in the current
Parliament. However, the government indicated that it was committed to making
the changes if re-elected.
The committee considers that any proposed changes to the PPL should be assessed
in terms of workforce participation and retention. The committee sees significant
benefits in providing 26 weeks paid parental leave through a combination of
government and employer funding.
The committee recommends that the Commonwealth Paid Parental Leave
Scheme continue to be improved over time to allow for 26 weeks paid parental
leave through the combination of government and employer funding.
Sharing caring responsibilities
Inkling Women argued that parental leave, rather than maternity leave,
must become the norm. It noted:
For both men and women to accommodate a more equitable
balance of work and familial/caring responsibilities, greater flexibility is
required in workplaces. It is essential that parental leave is parental, with
equivalent respect and acceptance for men temporarily stepping away from the workplace
as for women. Parental leave must be as available, generous and accepted for
men as it is for women.
National Seniors noted that the current leave arrangements for fathers
is only two weeks.
It suggested that while the shift from maternal to parental leave makes it
possible in theory for either parent to take on caring activities, it is more
often the case that women take the leave rather than men—this has been the case
in Sweden and Denmark. National Seniors noted:
International evidence has shown that leave entitlements for
fathers need to be of an adequate duration, well paid at a rate of between 60
to 80 per cent of average wages, dedicated to men on a 'use it or lose it'
basis and unable to be taken at the same time as a spouse in order to be most
Norway, Sweden and Finland provide men with generous leave
entitlements that are both long in duration and high in amount. Norway, in
particular, has had great success with its paternal leave system, which
provides 14 weeks of dedicated leave to fathers paid at 90.8 per cent of
average income. In contrast the Netherlands provide men with leave at only very
low level of income which discourages uptake.
One of the key aspects of the Norwegian scheme is that men
cannot take the leave at the same time as the spouse. As a result of this there
has been a relatively high take up of father-specific leave in Norway providing
women with an opportunity to reenter the workforce while their male spouse
undertakes care duties.
Dr Helen Hodgson, NFAW, observed that women's workforce participation,
in particular full-time employment, is unlikely to increase unless there is a
cultural shift, with men taking on a greater share of unpaid work. She stated:
There is this issue around balancing unpaid work in the home
and caring responsibilities with paid work. I think Australian women have
reached a point where I am not sure that there will be much more growth there
until there is better support for the unpaid work at home. That involves the
child care. That involves changing gender distribution of household work. I do
not research in that area myself, but I have heard a lot of the research around
that. It is a combination of a cultural and attitudinal shift within the
household and real support that will pick up some of those responsibilities
outside the household that will allow women to then take on that extra day a
week of work. I know this is a significant factor in the work that the
Productivity Commission has been doing in the childcare review.
In order to encourage sharing of caring duties, workplace discrimination
also needs to be addressed for fathers and partners. In a 2014 report, the
Australian Human Rights Commission found that over a quarter of fathers and
partners reported experiencing discrimination relating to parental leave and
return to work.
Older women and carers
The Age and Disability Discrimination Commissioner highlighted the
importance of workforce participation for older women. She stated:
My own view is that boosting the participation rates and
making it possible for older women to maintain employment is the strongest
change we can make in terms of enabling those women to save more, to have more
savings for retirement, and also to have better health when they go into
retirement. Australia is about the middle. I would not say that we could find
another country that has a model retirement savings scheme. As senators will be
aware, the Australian compulsory mandated superannuation guarantee sees us as
world's best. So we are looking at the other factors. As I said, Australia
could be at the top of the OECD in workforce participation, there is nothing
intrinsic to the Australian economy that would not permit that, and yet we are
only kind of around the middle.
ACOSS explained that the main barrier to increasing workforce participation
among older people is the labour market failing to adapt to the aging
workforce. It explained:
Age discrimination is rife. Neither employers nor mature age
workers invest sufficiently in updating their skills. Older workers and their
employers have not adapted well to structural changes in the labour market,
especially the decline of manual jobs.
The NSW Council of Social Service (NCOSS) noted that access to education
and training over the lifecycle is a key factor for women, influencing paid
workforce participation and lifetime earnings. NCOSS supported funding for
outreach courses for women re-entering the workforce, particularly after
periods of care or establishing economic independence after a separation.
Dr Brendon Radford, National Seniors, explained that in order to ensure
mature age workers remain attached to the workforce:
...we need to focus on people before they become unemployed,
because this is a group of people who are at most risk. They are very vulnerable
to being long-term unemployed or unemployed as they age. We need to find a way
to target them and give them opportunities to career plan, link them up with
skills and retrain them before they become unemployed, because it might keep
them in the job that they are in or, if they do actually become unemployed,
give them a head start. We have had a paper come out recently that says that
people in later life do not perform career planning. This is something that
really needs to happen, because they end up unemployed and they do not know
what to do.
The National Australia Bank supported the provision of tax incentives
for employers to engage older workers.
Ms Susan McGrath, COTA Australia, argued that labour market programs such as
Restart, a program that provides a wage subsidy to businesses that employ
workers 50 years or older,
should begin immediately after a mature age worker becomes unemployed. She
That period is critical if somebody is not supported
instantly, given the combination of factors they face around age
discrimination. It is absolutely crucial that they are moved immediately in and
that there is a well-organised level of support to get them back into work. We
feel that much more can be made of labour market programs like Restart. They
can be much more tightly targeted around specific labour markets. Much more
work can be done in that space.
Mr Ian Yates, COTA Australia, observed that there is a risk that some
older people, aged 55 to 65, who become unemployed may rely on superannuation
savings rather than unemployment benefits. He stated:
So you get a compound of the effect of loss of income,
drawing down of other assets and then drawing down of super, which means that
they then approach retirement or the age pension age having exhausted,
essentially, the buffers that they intended to have.
Professor Miranda Stewart argued that the Age Pension assets test
creates a disincentive to work and save. She stated:
The age pension means test (which is an income test and an
alternative asset test) creates perverse disincentives both to work in mature
age and to save earlier during the lifecourse. These disincentives affect both
men and women on the age pension, although they do not affect the top 20 per
cent who do not receive the age pension. Encouragement to do paid work in
retirement may be of particular importance for women who have long life
Mr Yates explained that New Zealand has a significantly higher mature
age workforce participation rate than Australia.
Professor Stewart similarly informed the committee that New Zealand has
significantly higher workforce participation rates among mature-aged workers
aged between 55 and 69 than Australia. She explained:
Labour force participation among men aged 65 to 69 is 33 per
cent in Australia but is 15 percentage points higher in NZ, at 47 per cent.
Among women the corresponding figures are 20 per cent in Australia and 34 per
cent in NZ, a difference of 14 percentage points. The Australian figures are
very close to the OECD averages, but the NZ figures show there is considerable
room for increase.
In New Zealand, the only criterion for the public age pension is age (65 years);
unlike Australia, the New Zealand pension is not means tested. Instead:
New Zealand has a relatively high universal basic pension
which is taxed 'from the first dollar' in the personal income tax, so that a
net pension is paid. The NZ universal pension is taxed at a marginal tax rate
of 10.5 per cent or 17.5 per cent.
Professor Stewart noted that it seems likely that the higher rates of
mature age workforce participation in New Zealand are the result of its pension
Carer payment 25-hour rule
Carers Australia highlighted the fact that the current '25 hour rule'
for Carer Payment recipients restricts their capacity to remain engaged with
the workforce while caring.
Paid employment or unpaid voluntary work does not affect the carer's
qualification for the Carer Payment, except when the cessation of care to
undertake the paid employment or voluntary work (including the carer's travel
time) exceeds 25 hours per week.
Carers Australia argued for a more flexible approach where carers could engage
in employment, education and training under certain circumstances. Ms Anna
Morrison, Carers Australia, explained:
The advantage of that is either that you keep your toe in the
water, if it is about maintaining some attachment to the workforce, or for
someone that has been caring for 10 or 15 years and has been on carer payment
it is an opportunity to start thinking: 'Right, what's going to happen when all
of this ends and I am back on Newstart allowance? How can I start to get myself
job ready? How can I update my skills? Can I get any work experience?'
The committee considers that increasing older women's workforce
participation will improve the financial circumstances of many women
approaching retirement, enabling them to continue saving. The committee
considers that programs such as Restart should be reviewed to ensure they are providing
the most effective assistance to mature workers. The committee sees significant
benefit in further investigation of the way in which means testing of the Age
Pension may act as a disincentive to mature age workforce participation.
The committee recommends the Australian Government investigate further
the interaction between means testing of the Age Pension and mature age
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