KPMG backs Paid Parental Leave measure in Budget

KPMG welcomes the Budget proposal to enhance the Paid Parental Leave scheme – which picks up some of the recommendations made in a KPMG policy paper* issued last year as part of its gender equity series.

The key elements of the Enhanced Paid Parental Leave initiative, to be introduced no later than 1 March 2023 following consultations, are:

  1. 20 weeks in total accessible to either parent during the first two years of their child’s birth or adoption. It is fully flexible, allowing for family choice as to how the leave entitlement is split, with no distinction between primary and secondary carer. Single parents can receive a full 20-week entitlement. This replaces the existing scheme where primary carers were entitled to 18 weeks paid parental leave and secondary carers to 2 weeks leave.
  2. There is a broadening of the system: currently parents could only access paid parental leave if the primary carer was on an income of less than $151,350. Now it will be based on a household income threshold of $350,000.
  3. Fathers and partners will be able to receive leave in conjunction with employer paid leave, aligning with the treatment for mothers.

Alia Lum said: “We are thrilled that the government has enhanced and extended the PPL scheme – it is a major step in the right direction towards gender equity and boosting women’s economic participation in the workforce. In 2018-19, almost half of women cited caring for children as the main reason they are either not working at all, or not working more hours. By contrast, just 3 percent of men nominated caring for children as a principal barrier to working. An improved PPL system will help to address this.”

“For many families, the household division of caring responsibilities begins to be embedded at birth. This triggers a pattern of unequal care and work during prime working years for both parents, with the responsibility for care traditionally falling more heavily on women, resulting in women’s participation in the workforce still sitting well below that of men.”

“Parental leave is the starting point and Australia needs a system which encourages equality of parental responsibilities from day one. The current PPL scheme has been based on a traditional ‘primary carer/secondary carer’ model, with more than 99 percent of government PPL taken by women. Many large businesses had started to offer equal parental leave rights for both parents. The announcement tonight modernises the government scheme and is a welcome move towards greater equality in the workforce. The increased income thresholds now based on family income removes the bias which often led women to claim PPL as the primary carer, further entrenching the gender pay gap”

KPMG modelling had indicated that national household consumption could exceed the base case by a cumulative $140 billion (in current terms) over 20 years, if we could reduce the 2018 participation gap by half.

The KPMG paper was developed with the Business Council of Australia’s (BCA) Women’s Participation Taskforce

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