More women at work spells $5B economic boost

A new proposal aims to fix a broken system

More women at work spells $5B economic boost

Raising women’s labour force participation rate can bolster the Australian economy by $5bn, but the move entails fixing a broken system that tends to hinder working mothers. This means improving child care and parental leave benefits, according to guidance from the Business Council of Australia.

The country needs to realise the potential of its home-grown female talent by lifting barriers to workforce participation, said Jennifer Westacott, the council’s CEO. “More than 90,000 people across Australia said they weren’t in the workforce last year mainly because of the high cost of child care, according to the Productivity Commission,” Westacott said.

Read more: Employee benefits package – are you getting it right?

“Our childcare and paid parental leave systems are a barrier to women who want to get back into work and they don’t work for modern families,” she said. Overall, nearly 27,000 workers in New South Wales stepped out of the workforce because of child care duties. This was followed by Victoria (20,700), Queensland (17,900), and Western Australia (13,800).

Introducing a budget that centres on women’s needs, Westacott said, is “not just about fixing the cultural problems we’ve seen writ large across society – it’s also an economic imperative”. The changes BCA are proposing aim to “smooth the sharp financial cliffs in the system which discourage people from picking up extra hours or realising their full potential in their careers”.

“For every dollar we invest in child care, we’ll get $2 back. KPMG estimates that the cost of our child care plan would be around $2.5bn but it would deliver a boost to the economy of around $4bn to $5bn,” Westacott said.

Read more: This country will pay a ‘baby bonus’ to bump-up births

How the BCA proposal works

Fix the broken child care subsidy system. The BCA said: “The child care subsidy would grow from 85% to 95% for lower income households. Starting for families earning $80,000, the subsidy would taper off at one percentage point for every $4,000 in additional family income. For example, a family earning $80,000 will receive a 95% subsidy, a family earning $84,000 will receive a 94% subsidy.”

Make paid parental leave work for modern families. “Parents currently get 20 weeks of paid leave from the government divided between the primary carer, almost always mum, who gets 18 weeks and a secondary carer who gets two weeks. We’re proposing a more flexible system. Under our proposal, families would decide how many weeks each parent takes up to a maximum of 18 for one parent. Those who share more evenly would be rewarded with an additional one or two weeks each of funded leave. We’d grow the total available weeks up to 26 weeks through a gradual process,” the BCA said.

“Families should be able to make the decisions about who takes time off to care for kids without filling out hours of paperwork,” Westacott said. “Under our scheme, families would get to choose how they divide their leave based on what works best for them.”

The cost of fixing the paid parental leave system is estimated to be $1bn a year. “To put this in context, over the last 12 months we’ve spent $150bn on nation saving measures like JobKeeper to keep the economy afloat. For less than one percent of that, we can drive the country forward,” Westacott said.

Recent articles & video

Ai Group seeks 2.8% minimum wage hike in 2024

Australia's job vacancies fall 6.2% in February

Love and business: Can a break-up lead to unjust dismissal?

Worker claims unfair demotion after temporary supervisor role ended

Most Read Articles

Employer shoots down worker's request for 'mutual separation'

Payroll officer charged for stealing over $1 million from employer: reports

Fair Work: 'Workplace trauma' didn't lead to forced resignation