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Category Archives: Demographic change

By Michael Edwards for AM

Big ask: Unions say telling manual workers to toil past the age of 65 is not on (ABC News: Giulio Saggin, file photo)

The Federal Government is facing a protest from two of the country’s biggest blue-collar unions against its plans to raise the pension age to 67 by 2023.

The Construction, Forestry, Mining and Energy Union (CFMEU) and the Australian Manufacturing Workers Union (AMWU) say it is unpalatable to expect people in arduous jobs to work to that age.

The pension age increase was announced in the Federal Budget and unions say they will fight the decision.

They say it is not only bad for workers but it also represents a false economy, as the age increase will only lead to more compensation claims from older workers.

John Byrnes, a 62-year-old Sydney construction worker, says his line of work is tough at that age.

“The last five years of my life, five to seven years, I’ve had more things go wrong with me,” he said.

“Honestly, six weeks ago I just had both my knees operated on; I got a crook back and bad shoulder, arthritis. These are age things but a lot of it is work-related. Just doing heavy work for a long period of time. You just break down, the body breaks down.”

Mr Byrnes says while he is looking forward to his retirement in a few years’ time, the increase in the pension age range has alarmed many of his younger colleagues.

He says the Government is taking a free kick at vulnerable people.

“I was scandalised, honestly,” he said.

“I didn’t like it at all. I was in the smoker’s shed at work. There’s about 30 of us sort of sitting in the same shed at smoko and it was a big subject. It was me and a couple of guys around about the same age as me and it was a bit of black humour. We said, ‘Oh well, we’re lucky, we’re escaping that’.

“But the guys running about in their early-50s, mid-50s, well it sort of sunk in. They weren’t happy, you know? And I don’t blame them. I don’t blame them at all.”

Mr Byrnes says blue-collar jobs such as construction are hard enough at the best of times and he says it is ridiculous to think someone over the age of 65 could manage them.

It is an issue which the CFMEU and AMWU intend to fight the Government about.

The unions have written to Prime Minister Kevin Rudd relating their concerns about raising the retirement age.

The national secretary of the CFMEU, John Sutton, says he is astonished by the policy.

“Many of our members of course left school at age 15 or 16,” he said.

“They’ve been working with their bodies in heavy industry of one sort or another for many years. By the time you reach 65 you’ve basically done about 50 years in hard physical labour.

“To be turning around and saying to people that ‘I’m sorry, they’re not going to be getting the aged pension, they’ve got to work on to age 67′, is a pretty big ask.

“A lot of our building workers’ bodies are not in very good shape by the age of 50, let alone 67, so we think that this decision needs a serious rethink in relation to workers doing heavy manual work.”

Mr Sutton says if the change is about saving money then it is a false economy.

“If they really are going to be telling people at 65 and 66 they’ve got to work on in manual industries then I anticipate a hell of a lot of injuries and a hell of a lot of downtime,” he said.

“And I don’t see where that would actually make money for employers or the Commonwealth.”

The Federal Government says increasing the pension age is a responsible reform to meet the challenge of an ageing population and the economic impact it will have for all Australians.

A spokeswoman for the Prime Minister says Australia’s shift in pension age is in line with what is happening in other countries such as the USA, Germany and Denmark.

Michelle Grattan
May 17, 2009

The Coalition has slashed Labor’s lead and Prime Minister Kevin Rudd’s popularity has fallen 10 points in an Age/Nielsen poll that also finds people don’t like the budget plan to raise the pension age.

Although most people believe the budget is fair and economically responsible, fewer are happy than with last year’s budget. Significantly more (38 per cent) say they personally will be worse off.

Labor’s two-party vote has fallen five points since March to 53 per cent, while the Opposition has risen five points to 47.

The poll is a reality check for the Government, and should scotch speculation about an early election.

Although they will hearten Opposition ranks, the figures still only take the Coalition back to its 2007 election position.

The Coalition’s primary vote has jumped six points in the past two months, with Labor falling three points. The ALP is now only one point ahead on primaries — 44 to 43 per cent.

This is the highest primary vote the Coalition has had since the election, although last September, with a lower vote, it led Labor on primaries.

In Victoria, the Coalition is five points ahead of Labor on primary votes — from being 20 points behind in March.

Mr Rudd’s approval is down sharply from his peak of 74 per cent but remains at a high 64 per cent; his disapproval has risen 10 points to 32 per cent. Opposition Leader Malcolm Turnbull is steady on 43 per cent approval and 47 per cent disapproval.

Mr Rudd has fallen five points to 64 per cent as preferred PM and Mr Turnbull is up four points to 28 per cent.

The national opinion poll of 1400 was taken from Thursday to Saturday.

Pollster John Stirton said that while Mr Rudd’s approval had dropped significantly, John Howard’s approval during his years as prime minister was 64 or better only four times.

Only 40 per cent backed the big budget surprise of a rise — phased in between 2017 and 2023 — from 65 to 67 in the eligibility age for the pension. This is designed to help finance the higher pension rate, boosted in the budget, for an ageing population. The increase was opposed by 56 per cent.

The budget was seen as fair by 56 per cent (down one point compared with the response after last year’s budget); 62 per cent were satisfied with it (down four points), while 52 per cent thought it economically responsible, and 38 per cent said it was not.

People feel notably more disadvantaged by this year’s budget than they did by the first Swan budget. There has been an eight-point fall on a year ago in those who say they will be better off (23 per cent), and an eight-point rise in those believing they will be worse off (38 per cent).

Mr Turnbull confirmed yesterday that the Opposition is set to let through the Government’s $1.3 billion alcopops legislation from last year’s budget, rejected earlier this year, which comes back into Parliament next month. It had been expected to become “trigger” legislation if the Government decided to have a double dissolution.

“We’ve got to take into account the budgetary environment has changed,” Mr Turnbull told Channel Nine. “Last year the budget was solidly in surplus, this year we have a record deficit.”

But the Coalition will vote against the means test on the health insurance rebate, which is worth $1.9 billion over the budget period.

Mr Turnbull said the means test was “an ideological political move to attack private health insurance and had nothing to do with budgetary or financial necessity”.

Treasurer Wayne Swan said he had always had private health insurance, “but I don’t expect to be subsidised by taxpayers on low and middle incomes, many of whom can’t afford private health insurance themselves”.

Jacob Saulwick
May 15, 2009

JOBLESSNESS in the inner city is already approaching 10 per cent, while working hours are also falling as recession eats into working conditions.

Detailed labour force figures released yesterday by the Bureau of Statistics show the uneven spread of job losses throughout Sydney and NSW.

In the inner city, for example, the number of unemployed has more than doubled since the end of last year – from 15,800 in December to 31,900 in April.

The figures are sketchy – the bureau urges caution because of small sample sizes – but trends are emerging in the geographic sweep of joblessness.

The unemployment rate in inner Sydney and in the inner west increased every month from the end of last year, from 4.6 per cent in December to 9 per cent in April. For men in the area, unemployment has hit 12 per cent, while the female rate is about 6 per cent. For most of last year unemployment in the region was closer to 4 per cent.

Sydney, with the nation’s highest concentration of finance sector workers, has been an early victim of the downturn. But while finance companies have been steadily laying off staff for the best part of a year, it is only in recent months that rising unemployment has started to emerge in official figures.

Outer suburbs – Fairfield, Bankstown, north-west Sydney – have had higher unemployment in the past couple of years. But they have not had the same level of increase since the financial crisis escalated last September.

Yesterday’s report provides more detail than the Bureau’s release last week, which showed the national unemployment rate dropping from 5.7 per cent to 5.4 per cent, and NSW unemployment falling from 6.8 per cent to 6 per cent.

The report also showed employees have started to work shorter hours, typically a precursor to rising joblessness. For the first time since figures were collected eight years ago, the average male working week dropped below 41 hours. For females, it dropped less sharply, to 31 hours.

The report comes as a range of indicators point to improvements in economic confidence.

A consumer confidence index compiled by Roy Morgan rose more than seven points last month to 104.5, and is now seven points higher than a year ago.

Some 38 per cent of Australians – 5 per cent more than the previous month – expected their family to be “better off financially” by the same time next year. Only 17 per cent – a fall of 5 per cent – expected to be worse off, the survey, conducted before the budget, showed.

A separate report from the Bureau of Statistics highlighted emerging strength in the first-home market, with housing finance increasing 7.3 per cent in March. And loans to build new homes have increased by more than 40 per cent in the past seven months, spurred on by the $21,000 government grant.

The success of the first-home owner’s grant has raised hopes Australia will avoid the precipitous falls in home prices that have hit the US and Britain.

But a Royal Bank of Scotland economist, Kieran Davies, warned that lower interest rates and limited new housing supply might not support house prices in the coming year.

“House price dynamics can develop a life of their own … Prices may fall further independently of what happens to unemployment,” he said.

It’ll make you a better employee, according to an Australian study that shows surfing the Internet for fun during office hours increases productivity.

The University of Melbourne study showed that people who use the Internet for personal reasons at work are about 9 percent more productive that those who do not.

Study author Brent Coker, from the department of management and marketing, said “workplace Internet leisure browsing,” or WILB, helped to sharpened workers’ concentration.

“People need to zone out for a bit to get back their concentration,” Coker said on the university’s website (

“Short and unobtrusive breaks, such as a quick surf of the Internet, enables the mind to rest itself, leading to a higher total net concentration for a days’ work, and as a result, increased productivity,” he said.

According to the study of 300 workers, 70 percent of people who use the Internet at work engage in WILB.

Among the most popular WILB activities are searching for information about products, reading online news sites, playing online games and watching videos on YouTube.

“Firms spend millions on software to block their employees from watching videos, using social networking sites or shopping online under the pretence that it costs millions in lost productivity,” said Coker. “That’s not always the case.”

However, Coker said the study looked at people who browsed in moderation, or were on the Internet for less than 20 percent of their total time in the office.

“Those who behave with Internet addiction tendencies will have a lower productivity than those without,” he said.

(Writing by Miral Fahmy; Editing by Valerie Lee);_ylt=Ajv93cQKOzgitgxsVSCbHBsDW7oF

14 May 2009 8:07am

Many employers will be faced with a new battle to retain their best workers after the Federal Government announced plans to invest $22 billion of its 2009/10 budget in the nation’s infrastructure, says Hewitt’s Australia and New Zealand managing director, David Brown.

“We will see some talent migration due to opportunities that will open up in the infrastructure sector,” Brown told HR Daily.

“Organisations that win tenders will take advantage of the tight talent market.”

Engineers, scientists and others with specialist skills will be in particular demand, he says, and will be difficult to retain as new projects get off the ground.

In the budget papers released on Tuesday night, the Government says that the $22 billion will be invested in roads, rail and ports; education and research projects; hospitals and other treatment facilities; and a clean energy initiative.

It will also contribute $4.7 billion towards the development of a superfast broadband network.

The Government has also committed to:
establishing a paid parental leave scheme (see related article), in which eligible parents will receive 18 weeks’ paid leave at the minimum wage (currently at $543.78) after the birth or adoption of a child;

investing nearly $150 million over four years in the implementation of Fair Work Australia, plus $14.3 million to inform and educate employers and employees on the new workplace relations legislation;

ditching the alternative dispute resolution assistance scheme, in favour of the “less legalistic” approach to dispute resolution allowed for in the above legislation;

investing $1.5 million in training initiatives;

increasing the small and general business tax break to 50 per cent for eligible assets;

increasing the retirement age from 65 to 67 by 2023; and

cutting concessional superannuation contribution caps.
Baby boomers left short with superannuation instability
A reduction in the concessional contribution tax limit – from $50,000 to $25,000 – could leave workers closer to retirement with less opportunity to top up their super and make up for recent significant investment losses, according to Mercer’s chief executive, Peter Promnitz.

Long-term changes to pension-age policy are necessary, Promnitz says, but the concessional cuts appear to have been made in isolation from a clear retirement-income framework.

“Tinkering with the system and making piecemeal changes will potentially damage Australians’ confidence in the stability of superannuation rules,” he says.

“Halving the cap on concessional contributions may provide short-term budgetary relief but lacks a long-term plan or foresight.

“Anyone playing catch-up for their retirement income – baby boomers nearing retirement or women out of the workforce for extended periods – will be hit by these changes.”

HR must “recalibrate” retirement planning
Brown says that HR personnel will now need to “recalibrate and think a little harder about retirement planning”, with changes to the superannuation platform and the increase of the retirement age likely to be the areas where the budget has its biggest impact.

The new super rules will affect organisations at all employment levels, he says, leaving employers with the difficult task of determining how to factor in contributions and how to “fit” super into job offers or frame it as a perk.

He says the budget papers also hint at the restriction or removal of executive share options, in line with the general tightening of executive remuneration, although the language used in the budget does not make the nature of the new restrictions particularly clear.

Brown notes that the increased retirement age will be a boon to baby boomers who haven’t yet prepared for their exit from the workplace, but that it could create a “squeeze” as Gen X employees, working their way through the ranks, are blocked from opportunities they would have otherwise expected.

Mixed feelings from business advocate
ACCI chief executive Peter Anderson says that while a boost in infrastructure spending is a “big plus” for employers, the budget doesn’t go far enough to take the pressure off the cost of doing business at a time when the private sector is “doing it very tough”.

Cuts to the skilled migration program could damage labour-market efficiency, he says, and the paid parental leave scheme will expose employers to indirect labour and administrative costs.

“It’s a budget aimed at these tougher times,” he says, “but the mix of big spending and moderated saving is a risky high-wire act.”

Employee advocates are a little more enthused.

“This is a budget for jobs, jobs and jobs, with a bit of tough love on the side,” says ACTU president, Sharan Burrow.

“The achievement of a national paid maternity leave scheme is an historic win for working women.”

Adele Horin
May 14, 2009

“I’m jack of it “…sewer repairer Richard Bishop wants to retire but the later eligibility for the age pension will affect his plans. Photo: James Brickwood

RICHARD BISHOP began working at 14 and after decades of hard manual labour he is keen to retire as soon as possible.

“I’m jack of it,” said the 57-year old who repairs sewers for a living. “I’ve just had a knee reconstruction and by the time I’m 60 I don’t think I’m going to be getting any better. I want to enjoy what I’ve got left.”

Mr Bishop’s plans to put his feet up have been derailed by the Federal Government’s plan progressively to raise the pension eligibility age to 67 from 2017.

He admits the plan will hurt him and he is not alone – most Australian workers will not applaud the initiative, according to social researcher Julia Perry.

“Employers don’t want older workers, and a lot of mature-age workers want out, too,” said Ms Perry, who produced the Too Young To Go report on older workers for the NSW Government.

To prefer to work beyond 60 has always been a minority taste. At most, 25 per cent of mature-age workers enjoy their jobs so much they want to keep going beyond the usual retirement age, research consistently shows. “Only a minority of workers have the kind of job that is exciting or fulfilling,” said Sol Encel, emeritus professor at the University of NSW who is an expert on the ageing population. “Work is a chore for most people, especially as they age.”

Yet most experts agree the decision to lift the pension age is a necessity in the absence of higher tax rates to fund burgeoning health and aged care services, as well as pensions and superannuation concessions for a greying population. Australia is following a trend set by the US, Germany, Iceland, Norway and Denmark. In Britain 68 is the age for pension eligibility.

Australia’s plan will affect workers now aged 57 or younger. Those aged 55.5 to 57 will not be eligible for a pension until they are 65.5 and those aged 52.5 or younger not until 67.

Australians appeared to be resigned to their fate, Professor Encel said.

In the past decade, workers have reversed the trend to early retirement. Since 1998, the proportion of men aged 60-64 in the workforce has risen from 43 per cent to 52 per cent, and the proportion aged 65-69 has jumped from 19 per cent to 27 per cent, with most working part-time. For women the proportion of those aged 60-64 in work has almost doubled to 36 per cent.

But most, Professor Encel said, were economic conscripts. “The boomers have come to realise they don’t have the money to retire at 60. They’ve got responsibilities upscale and downscale – ageing parents and dependent children,” he said. “And they know if they have to rely on the pension, they’ll suffer a dramatic drop in lifestyle.”

Ms Perry said it was regrettable to compel low-skilled and low-paid workers, many with health problems, to work longer for the pension if highly skilled workers continued to be able to retire early by accessing superannuation at 55 or getting it tax free at 60.

The Henry review of the tax system recommended the preservation age for super be aligned with the age pension age.

If employees are expected to work longer, employer attitudes will need to change, experts say. “It’s a good idea to encourage people to work longer but you have to encourage employers to employ them longer,” Ms Perry said.

David Murray, 57, a company director, said though he was unlikely to be affected by the change in the eligibility age, he had lost retirement savings in the downturn. “Most people have lost 25 to 30 per cent of their retirement funds, so it’s going to take them another four to eight years before they can start to recoup some of that. Most retirements have been pushed out anyway.”

with Jonathan Dart

Misha Schubert, Daniella Miletic and Peter Martin
May 14, 2009

AUSTRALIANS could be forced to wait until they are 67 to get access to their superannuation savings under a radical proposal to be considered later this year by the Rudd Government.

A day after flagging a rise in the pension age to 67, the Government has confirmed it will look at introducing the same age limit for super access – in effect making 67 a universal minimum retirement age.

Bringing the superannuation age into line with a higher pension age was recommended by Treasury secretary Ken Henry in a review published with the federal budget papers on Tuesday.

Dr Henry’s plan, for a phased lifting of the super age from 60 to 67 from 2024, is part of a broad push to keep Australians at work longer to help the nation cope financially with its ageing population.

A spokesman for Treasurer Wayne Swan said the Government would “thoroughly assess the findings of the Henry review when they are delivered at the end of the year”. But he stressed that the super issue would not be considered before then.

The plan could be even more controversial than the budget decision to lift the pension age.

Jane Chisholm, 53, was unhappy enough at the idea of having to stay in the workforce beyond 65 before she could even think about applying for the age pension.

“They are finally getting us baby boomers back, I guess,” said Ms Chisholm, marketing manager of Gasworks Arts Park in Albert Park.

But she expressed stronger misgivings at the proposal to lift the super access age. While she understood the need to prepare the nation for people living and working longer, she said the super proposal was cruel.

“People like to think they could have control of the money that is there for their retirement,” Ms Chisholm said. “If you want to go travelling and do some of the things you want to do, it’s just putting it closer to the 70 mark, when you can’t count on your health.”

The move to raise the pension age sparked fierce debate, with critics saying it would entrench inequality and force more old people into poverty.

Mr Swan said the decision was needed to keep pensions sustainable. “Currently we have five workers in Australia for every person aged 65 and over and by 2050, that will be 2½,” he said in a post-budget interview.

“Life expectancy has increased by 23 years since the age pension came in,” he said. “Twice as many people are going on it for twice as long.”

Opposition Leader Malcolm Turnbull supported the pension age increase, saying his only concern was that it would not come in soon enough.

National Seniors also backed the move, noting that it would not come in until 2023.

But critics highlighted the contrast between the rich getting access to super at 60 (at least under existing rules), while the poor were being forced to work or stay on the dole until 67.

The Combined Pensioners and Superannuants Association warned the move would add to poverty among over-65s and force some to toil longer at hard physical labour. “People in their 50s and 60s are often unable to find adequate employment,” said the association’s policy officer, Charmaine Crowe.

But she backed the idea of aligning the pension and superannuation ages, saying it would ensure more equality between richer and poor retirees, keep skilled people in the workforce longer and boost super savings.

Sydney University workplace relations centre analyst Michael Rafferty said increasing the pension age would entrench inequality and force some of the hardest working people in the world to work even longer.

He also pointed to what he said was a disparity between the pension decision and the mild cuts in the budget to tax breaks on superannuation. “The rich have been hit with a feather duster and the poor have been told you are going to work longer and harder,” he said.

Australian Council of Social Service chief Clare Martin said lifting the pension age to 67 might disadvantage “lower-income, mature-age people with limited job prospects, who will have to remain on lower income support payments for longer”.

UNSW Centre for Pensions and Superannuation deputy director John Evans said the pension age rise was a “knee-jerk” decision that could damage the vulnerable.

But Brotherhood of St Laurence chief executive Tony Nicholson said raising the pension age was inevitable to ensure the long-term sustainability of the system.

David Knox, a partner at Mercer Consulting who proposed the 67 pension age in a paper prepared for the Committee for the Economic Development of Australia, also welcomed the decision.

But he expressed dismay at the proposal to lift the super preservation age to 67.

“The superannuation access age should generally be about five years younger than the pension age in order to provide flexibility. You cannot assume that everyone will retire at the same age, in fact today most people retire before 65.”

Superannuation access is at present available at 55, with the age set to climb to 60 by 2024. The Henry Review recommends a further staged increased to 67, after which it would remain aligned with the pension age in order to stop Australians spending their super payout quickly and then getting access to the part-pension.

By Joe Hildebrand
The Daily Telegraph
May 12, 2009 12:01am

SYDNEY grandmother Patricia Pitfield was forced out of her job by retail giant Myer – because she could not do squats.

Bosses told the 61-year-old, who has been with the company for three decades, to stay home without pay after they ruled she was not physically fit enough for the clerical job she has done for the past 10 years.

Ms Pitfield was asked to squat in front of a human resources manager and attempt to climb steps without holding a railing. When she was unable to do so she was sent home.

Myer claims that without being able to do a full squat Ms Pitfield will be unable to open a bottom drawer or plug in a cash register and is therefore unfit for work – even though her doctor has declared her able.

Yet despite having no income, she cannot take unfair dismissal action or even claim Centrelink benefits because Myer has not fired her.

Nor can she pursue a worker’s compensation claim because her condition was not caused by her job.

She said she was first sent home in January after she produced a doctor’s report stating she was unable to fully squat because of a bad back and knee replacement surgery.

She had to use all her sick and annual leave which ran out after a few weeks and then was paid nothing.

The United Services Union took the company to the Industrial Relations Commission in early April but the commission was unable to rule her dismissal had been unfair as she had not actually been fired.

During the conciliation process Myer said it would re-employ Ms Pitfield, yet when she went to work three weeks ago a human resources officer asked her to squat while keeping her back straight. She protested she could not do that, only a “semi-squat”.

“As soon as I went back in they made me do the safe workplace practices test (a written test for which she got a perfect score) and they said to do this squatting,” she said.

“The same day they sent me home after I failed the test. They said, ‘You’re still employed but we’ve got no work for you.’ They said, ‘We’re not paying you’.”

Ms Pitfield said the process was degrading.

The USU, which branded the store’s actions “barbaric”, is now considering legal action including suing for lost wages and going to the Anti-Discrimination Board.

Myer confirmed she wasn’t allowed to work due to health issues and backed its move not to pay her when she was away.,27753,25465168-5012426,00.html

Marissa Calligeros
May 11, 2009

The federal government’s paid parental leave plan will bump up Australia’s birth rate by five per cent in 2011 as working women wait to take advantage of the pay scheme, according to a population expert.

Leading demographer Bernard Salt said the promised 18 weeks’ paid parental leave for parents from January 2011, announced yesterday, will contribute to a “baby blip” early next decade.

“As significant as this event will be, it will not in the same magnitude as a baby boom. At best it will be a baby blip,” Mr Salt said.

“People are always more interested in investing in a child once their economic prospects are more certain.”

About 280,000 babies are born in Australia each year since the last significant birth rate rise in 2000. That equates to about 1.9 children per woman.

Mr Salt said it was likely 14,000 more babies would be born in 2011 as a result of the parental leave provision, resulting in about 294,000 total births.

“Basically having kids is a vote of confidence in the future, so when times are uncertain people delay or postpone having kids,” he said.

“No one really knows what is happening during the downturn. The expectation is though that the birth rate will have dropped to 265,000 (babies born), compared to 280,000 children born in the year to December 2007.”

However, women who have postponed having children should jump back on the baby bandwagon from 2011, he said.

Mr Salt joined businesses and unions in welcoming the taxpayer-funded scheme, which will see parents earning less that $150,000 a year entitled to $543.78 for 18 weeks.

He said the 30-year-long battle for paid parental leave signalled a dramatic shift in Australian working culture.

“The reality is that we will find that a whole series of measures, baby bonus, paid parental leave, and more flexible work hours from employers will contribute to a cultural change.

“We will evolve a culture, certainly over the next 10 years, which will be highly supportive of having children.”

Queensland Council of Social Services (QCOSS) president Karyn Walsh said the scheme would afford low income workers the confidence to have children without the fear of losing vital pay.

“This is a blessing that will give a lot a parents security and reassurance,” Ms Walsh said.

“It gives people the confidence that they will be able to have time with their child and have an income.

“People in low income jobs were least likely to get paid parental leave from their employer, because some businesses really just don’t have the money to do that.

“It will save families from having to rely on one income, during which time they might not be able to maintain their mortgages or have enough money for transport or electricity.”

Mother-of-five Anna Wright, celebrating Mothers’ Day in New Farm Park yesterday, said she would not have waited for the scheme to become effective if she were planning to have another child, but welcomed paid parental leave as another vital option for mothers.

“If I were having children now, I don’t think it would change what I would do or my plans for the future, but what’s important is that the option is there for women and it is the option that is critical to women,” she said.

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.