A beginner’s guide to parental leave in Australia

By David Donaldson | 07 Sep 12

By David Donaldson. This piece is part of our September focus on Women’s Rights. See all of this month’s articles here.

An effective and fair parental leave system is an important element in ensuring women’s financial independence. And it’s not just mothers we need to think about – making sure fathers do their bit is essential if we want real equality.

In Australia, the Gillard government introduced Australia’s first government-funded Paid Parental Leave program in 2011. Up until this point, Australia and the United States had been the only two OECD countries without a comprehensive parental leave scheme.

New parents in Australia are eligible for up to 18 weeks’ pay at the national minimum wage. Only the primary care giving parent (usually the mother) is eligible, though payments can be transferred to the other parent (usually the father) if the recipient decides to go back to work.

Employees are also each entitled to a minimum of 12 months’ unpaid parental leave.

On top of this, from next year fathers and partners will be eligible for two weeks’ pay at the minimum wage in addition to the current 18 weeks for the primary carer.

Although workplace participation for Australian women is among the highest in the world, it is significantly lower than many comparable countries during peak child-bearing age. Parental leave, and especially paid parental leave, is an important way of ensuring that women can remain engaged in the workforce.

Without parental leave, women faced a stark choice between work and children. But rather than having to quit their jobs to have children, parental leave allows women to take time off and re-enter employment after a shorter interval.

And apart from the ethical argument for gender equality, it is estimated that eliminating the gap in workforce participation between men and women would boost Australia’s GDP by 13 per cent. It makes neither moral nor economic sense to limit the chances of half the population.

Sweden, which enjoys one of the highest female workforce participation rates in the world, is a shining example on parental leave. It offers generous parental leave entitlements of up to 13 months per couple, and has for the past thirty years had a special focus on the role of fathers.

Currently, two months of the Swedish entitlement must be taken by the second partner, which generally means the father. This has led to higher levels of male participation in child-raising, and has helped to normalise the sight of pram-pushing ‘latte dads’ on the streets of Stockholm, and even of burly rural hunters carrying kids on their backs. Some politicians are now proposing extending the paternal leave entitlement to three months.

Although couples can choose how to divide the majority of their leave based on individual circumstances, allotting a certain portion for the sole use of fathers reduces the expectation in society and among employers that women are higher-cost employees more likely to take time off.

Of course, this policy has not solved the problem of female disadvantage in Sweden. Women continue to take 85 per cent of parental leave. Only two of the country’s 282 listed companies have female executives.

But though it is difficult to quantify, the change in culture that legislated paternity leave brings will likely have positive long term effects. There are plenty of anecdotes about men gaining a greater understanding of what mothers have to go through, and there is evidence that fathers who look after young children are more likely to stay in contact if the family is divided. Women enjoy greater financial and social equality, whilst men benefit by getting to know their children better. And children develop a closer bond to their parents.

Although Australia still has a long way to go in eliminating pay gaps and workplace participation for women, the introduction of our first national paid parental leave scheme is a good step in the right direction.