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11/05/2009 2:24:00 PM

Less than 24 hours after the federal government’s announced plans to introduce paid parental leave, business groups are raising concerns about the cost.
The Australian Chamber of Commerce and Industry (ACCI) has called on Labor to compensate companies for administering the scheme which offers primary carers earning less than $150,000 a year 18 weeks of post-natal leave paid at the minimum wage.

ACCI chief executive Peter Anderson said the scheme, expected to cost taxpayers $260 million annually from 2011, could slug employers with higher workers compensation premiums and additional payroll tax.

He said employers should not be expected to pay staff the benefit and then seek reimbursement from the government at a later date.

“This carries a cost of accessing money, a red tape cost, and a cost of interest on borrowings until reimbursement is made,” Mr Anderson said in a statement on Monday.

But a spokeswoman for Families Minister Jenny Macklin said the government would provide employers with the money to fund the payments up-front.

Sex discrimination commissioner Elizabeth Broderick said it was essential that the proposal be carefully explained to avoid such confusion.

“This paid parental leave scheme could be a disincentive to the employment of women if business got the idea that business had to fund this,” she told ABC Radio.

“I think it’s important that underlying the delay to implementation that there is a lot of education material put out there and that people understand how the scheme works.”

Ms Macklin has defended the 2011 start date, saying legislation would pass through parliament before the next federal election, due in late 2010.

“There is a lot of working through to do before we put this scheme in place,” she said.

“We do understand just how critical it is to get this in place, but we also want to do it right.”

Ms Macklin said it was unlikely that businesses already offering paid parental leave would wind their schemes back in anticipation of Labor’s new law.

“Businesses which have already implemented paid maternity leave or paternity leave schemes have done so so they can hold onto their good employees,” she said.

“I have no doubt that many of them will use this as an opportunity to add to their paid parental leave arrangements.”

Opposition Leader Malcolm Turnbull has given in-principle support to the scheme.


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