The Australian Chamber of Commerce and Industry ("the ACCI") has told the Productivity Commission that it needs to revise the proposed paid parental leave scheme to take direct costs off employers and small business.
According to the ACCI the proposed paid parental leave scheme fails to meet the objective of a government funded scheme aimed at promoting female workforce participation.
Mr Peter Anderson, Chief Executive of the ACCI, said that the failure of the Productivity Commission to remove or compensate business and small employers for the direct costs will make the scheme unviable at a time of economic downturn and serious business stress.
In its second submission to the Productivity Commission on the proposed paid parental leave scheme the ACCI has identified a number of direct and indirect costs on employers and small business including:
- Costs associated with accessing additional funds of $452 million a year;
- Costs of administering the paid parental leave scheme for the government;
- Extra superannuation costs estimated at $74 million;
- Extra annual leave, sick leave and long service leave accruals;
- Extra payroll tax; and
- Additional workers' compensation premiums.
The ACCI has further submitted to the Productivity Commission that unlike the voluntary paid parental leave schemes that exist, a mandatory economy-wide scheme that imposed large costs on business would make the employment of women less secure. Adding to this problem is the worsening economic conditions where female dominated services are among the first to feel the brunt of the economic downturn.
Mr Peter Anderson, the Chief Executive of the ACCI, has warned that in a tight credit market employers and small business will find it difficult to access the cash needed to administer the scheme, even if reimbursement is subsequently made by the government. According to Mr Anderson the proposed parental leave scheme will only be economically responsible in budget terms if the government scrapped or significantly pared back the current baby bonus scheme.
The ACCI presented its second submission paper on the proposed parental leave scheme and its effect on employers and small business to the Productivity Commission on the 21st November, 2008. The final report of the Productivity Commission Report into the proposed parental leave scheme is not expected until next year.