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BUDGET 2014: The case for more parental leave

It’s time the government put a stake in the ground on paid parental leave and its budget is the perfect time to do this.

Labour already has the high ground with plans to extend paid parental leave of $488.17 a week from 14 weeks to 26 weeks, coupled with the introduction of a $60 a week “baby bonus” to all parents who earn under $150,000 for the first year.

For parental leave to be extended, the first consideration needs to be: Who is going to pay for it? 

Under the present regulations, the government pays. However, Labour has indicated it will tax the wealthy, which in turn will have an impact on business owners.

The government’s books are certainly not in a good enough state to dramatically increase paid parental leave. But there is a way to satisfy both the government and parents – by gradually introducing an increase in paid parental leave, perhaps over a period of three years, adding an extra month each year. 

Of course, this should be on the condition that our fiscal position continues to improve. The government has been working hard to bring the country back to surplus and needs to maintain this position. 

Speaking from a mother’s perspective, six months’ maternity leave makes a lot more sense. Three months after the birth of my daughter, there was no way that I was ready to return to the workforce – it was not an appealing thought at all! 

Six months in, she was much more settled and I was more mentally prepared. I was more productive, less distracted and didn’t need matchsticks to hold my eyes open.  

Some schools of thought believe increasing the period of paid parental leave may keep women out of the workforce for longer, and therefore interrupt business. 

While an increase to six months may mean some women, who would be relying on this payment, stay out of work three months longer, every woman who meets the eligibility criteria is already entitled to 12 months’ parental leave.  

And surely a parent returning to work when she or he is more focused and engaged is better for business than one returning earlier with little motivation.

For me, the debate is not about should we increase paid maternity leave but more about by how much and when.

According to Essential Mums, New Zealand has one of the least generous paid parental leave provisions in the OECD, more akin to countries such as China (98 days at 100% of salary), India (12 weeks at 100% of salary) Egypt (90 days at 100% of salary) and Algeria (14 weeks at 100% of salary). Not countries we normally sit alongside. 

Across the Tasman, mothers in Australia receive 18 weeks at the federal minimum wage (around $NZ660 a week) and fathers or partners receive two weeks’ paid leave at the same rate. 

This is being lifted to 26 weeks at full replacement wage up to a maximum annual salary of $A150,000, plus superannuation. 

Change is needed and soon – for the sake of mothers and the productivity of business.

Stacey Davies is a partner at Grant Thornton New Zealand 

Read more Budget 2014 coverage here.

Comments and questions
7

Stacey. The government doesnt pay, taxpayers do. There is no such thing as government money.
You are totally ignoring what happens to the people you take the money from. PPL is pure politics in action.

Why should the government being paying for a Partner at an accounting firm to have a baby. This is not a personal attack but - we also took the money even though I couldn't understand why the govt was paying my family when we had our baby.

You could also ask why is the government paying for families that already have (say) 3 kids to have another baby.

Maybe a more targeted approach would allow the govt to provide a more generous parental leave for the same money. Having another kid means the entitlement for WFF increases which is far more target and sensible way to allocate tax dollars.

So you want more.

Is WFF not enough?? The biggest handout of all and you want more.

Our most able bodied people, our most healthy are on welfare and you want more. Time for some personal responsibility for your own actions.

You seem like a very intelligent woman so think where the money comes from. Dont expect others to pay for your decisions.

More support to encourage more dependency! My wife and I have raised six children relying solely on our own resources. Those children in turn are raising their own children and contributing significantly to this Nation's well being without any expectation other than a fair and equitable deal in our society. Start encouraging self reliance or we will reach a point where those of us who are productive can not afford to provide for the "dependants". The ignorance of those that think the government comes up with the "cash" from some magic box is unbelievable. Our education system does a very poor job of informing our children of their financial responsibilities when they face the "real world"

Take all the parental leave you want. Just pay for it yourselves. Since when have men contracted out their role of providing for their family when having children? And anyone who is a partner in an accounting firm can afford a baby without the taxpayer paying for leave.

The problem with all these sorts of things is that taken in isolation they can be quite attractive, but there are always consequences and we need to understand what they are - often even understanding some future unfortunate consequences we still move forward - but we do need to understand.

We had our children in the late 1970's and at that time it was still more normal for a mother not to work full time when the children arrived. We supplemented our low income with after hours work, sometimes my wife working on weekends, while I looked after the children, sometimes me working after work on other jobs.

As the children got older my wife started working.

Now we have as a society made choices about women working more (a good choice) but it did have consequences. Effectively as both partners started working the relative paying power of the one partner declined, and now both partners have to work and in many cases also have to take in the supplementary work as well.

Now we are starting to realise that non married people and or people with higher wages are having to, or are being asked to, supplement those people who are having families more and more (for the greater good)

The question for fairness I guess is do those people having the families have a right to ask others to support them - but notwithstanding that, this social change which has happened over the last nearly 40 years is a case of cause and effect.

I am happy to consider this maternity leave; my daugher in the UK has used it twice - fully paid by her company I might add - she was a VP/Executive director at JP Morgan and they thought the investment they had made in her was worth keeping.

But we do need to understand the consequences. E.g. the burden we are putting on highly educated, highly mobile, young single people with high student debt who are in high demand in other countries. When we lose them, we lose considerable investment - never mind the asset sales - this is serious money, a serious loss of investment if they do not return until perhaps retirement or ever.

It is of course an interesting discussion.

Why don't men get 28 weeks of paid recovery leave to have the "Testes" nicked!!! this is all getting so far out of kilter it is beyond reality!!!
Damit if 2 people decide to have a child they should account for it in their lifetime, just like we all did in our day, it was no drama no big deal and we were so happy to do so, jeepers you females need to get over your self imposed importance to this world!!!