The plan, announced by Abbott on International Women's Day, would see 3,200 companies with taxable income of more than $5 million slugged with a 1.7% levy.
The levy would raise $2.7 billion to fund a universal scheme that would allow parents to take six months paid leave at full salary (for salaries up to $150,000).
"There would be potential offsetting savings for those (mostly large) businesses that are already paying some parental leave," Abbott said in his speech announcing the plan.
"Such a scheme would provide smaller businesses' employees with a benefit that is funded by larger businesses."
However, while the scheme is aimed at large companies, it is likely many profitable medium-sized companies – including firms with revenue of about $50 million and upwards - could be hit by the levy.
David Gregory, head of workplace policy at the Australian Chamber of Commerce and Industry, says his organisation is against the plan and concerned about smaller firms being forced to fund a universal parental leave scheme.
"It's not necessarily related to business size in terms of employee numbers," he says.
"You could have some IT companies, some relatively small mining companies in WA that would also be dragged in the net."
And it's this idea that has Australia's top female entrepreneurs worried.
Sylvia Wilson, co-founder of international franchise Bark Busters, says she supports the idea of paid parental leave, providing it is subsidised by the Government. She doubts smaller companies will be able to meet another burden on top of their already high tax bills.
"If the Government wants to increase the population and they are prepared to subsidise it, then okay. I just don't know how they expect some of the smaller businesses to pick up that bill," she says.
"I just think they are going to send smaller business broke if they keep coming up with these ideas."
Like many commentators, Wilson is concerned that the plan could actually act as a disincentive for some employers who will decided not to employ women because of the potential leave costs.
"Small business just won't employ women - it will actually make the job of getting women into the workforce tougher."
That concern is shared by Kate Beaconsfield, co-founder of leading maternity wear manufacturer and retailer Ripe Maternity Wear.
"We're trying to get women into the workforce. As a country, purely from an economic point of view, we know that this is something that we need to do. But I am very nervous about discrimination effects if employers are forced to pay," she says.
"At the small or medium end of business, if the employers are paying for it, it will lead to discrimination against women."
While Beaconsfield believes Abbott's plan is a clever political move (as the top end of town is likely to support the Opposition regardless of the scheme) she would be prefer to see a Government-funded scheme that does not mean large and medium companies are forced to pay more than their fair share.
Diana Williams, founder of the Fernwood chain of women-only health clubs, is a prominent employer of women and supports the idea of child care – to a point.
While she accepts that large companies can possibly absorb the costs of the scheme, she is concerned about the impact on medium-sized businesses, although she is hopeful her own business would not be affected.
"For us to pay for it would be out of the question. All businesses need to protect their bottom line and this is just another hit on the bottom line."
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written by Belinda Marsh, March 09, 2010
Whilst it's easy to throw ideas from the sidelines, here's one to chew over - why does the levy have to be applied to business at all? Why can the funding not be pulled from another income source that is not going to directly incentivise the exact opposite behaviour amongst businesses that the policy is seeking to address in the first place?
Whilst not a breeder myself, blind Freddie can compute that our capitalist society needs more consumers - it is in the interests of business that we continue to go forth & multiply - & in the interests of younger generations that we continue to try & weight the pyramid at the bottom end so as someone is generating the tax income to pay for the cost burden of the growing aging population. (All this multiplication is perhaps not in the best interests of the environment, but that's another debate altogether).
Surely the more sensible thing to do is pull funding from a generalised tax base?
And here's another idea to chew over - it takes two to tango to bring a baby into the world in the first place - why not look at structuring the leave entitlement so that, where two people are parenting together, the maximum each is allowed to take is 3 months (and yes, enforcement may be tricky)? This may incentivise men & women to take a more even share of parenting in the early months & reduce the risk of employer discrimination against women.
I'm sure neither of the above ideas are perfect, howeve Abbott has definately opened the door for some serious debate. If Rudd & co mangle healthcare like they mangled insulation, then a return to the Liberals may be sooner than we think. The prospect of returning to the 1950s (oops - we're winding back even further now), with the church as well as the govt. in everyone's bedrooms, is enough to keep me awake at night...
written by steve sherlock, March 09, 2010
his comments back then sounded like a Liberal, but his comments now sound like a politician in election mode, making promises he probably knows wont happen..
written by Peter D, March 09, 2010
And aren't male employees also eligible for the leave if they so choose? It's being called a "parental" leave after all, and not a maternal one. I like Belinda's idea that some portion of the leave should only be paid out if it's taken by the other parent.
Wake up and get real Tony.