Reduced to Minimum Wage?

By Nicole Freeman

“We do not want educated women, at the higher degree level, to deny them a career. If we want women of that calibre to have families, and we should, well we have to give them a fair dinkum chance to do so. That is what this scheme of paid parental leave is all about,” believes Tony Abbott. As elections loom, the topic of changing the parental leave policy is heavily debated between Tony Abbott, leader of the Opposition and Julia Gillard, the current Prime Minister.

The current parental leave policy covers 18 weeks of minimum wage pay, roughly $606 a week prior to tax, or $10,908 total. This policy costs $260 million a year out of general revenue. Abbott, however, proposes a more comprehensive parental leave program that would put Australia as one of the most generous parental leave programs, only falling behind the UK and Denmark. Abbott’s plan covers 26 weeks of full paid wages for a salary up to $150,00. This means the most a woman could receive would be $75,000 for 6 months. Abbott’s goal is to encourage workers, specifically women, to have both a family and a career, and not have to pick between the two. “We can’t really afford to lose so many highly capable women in the prime of life and from the workforce” believes Abbott. While the current parental leave policy works, Abbott’s signature reform benefits women more by paying them a more equivalent salary. Most women do not make more than $100,00 a year, so Abbott’s plan would benefit women who are still lowly paid but do not necessarily make minimum wage. The only criticism with Abbott’s plan is how expensive it will be. Abbott plans to pay for this parental leave by adding a 1.5% tax levy on 3200 of the biggest companies in Australia, estimating about $4.3 billion.

The question for debate is whether the government should fully compensate the mother for 6 months, or is 18 weeks of minimum wage satisfactory? Jacqueline Maley of the Sydney Morning Herald believes Abbott’s plan is more beneficial and fair for women as it could potentially put more money in their pockets, especially if they make more than minimum wage. Abbott also believes women should be fully compensated, not reduced to minimum wage during their leave. “When a woman takes leave because she is having a baby she should be paid at her wage just as if a bloke takes leave to go on holidays he should be paid at his wage,” argues Abbott. Women should not be penalized for having children, and the parental leave policy falls under a work or career related payment, not a welfare payment. Shadow Treasurer, Joe Hockey, believes women should not get a discount on parental leave. Employees are not penalized for annual or sick leave, so why should women for having children? ”If you believe in equality of pay why don’t you believe that someone on paid parental leave should receive the pay that they earn?,” argues Mr. Hockey. In the 2013 election season, Tony Abbott will fight for more equal compensation for women on a maternity leave.


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