I really have missed this place. I've missed the chutzpah that comes from this chamber. I've missed in the last three months the hypocrisy that is given with a straight face so often in this chamber. It's something I haven't had to experience too much in the last few months back home in north Queensland, where you don't really get away with that kind of stuff. You don't really get away with two-faced statements like we just heard from Senator O'Neill.
She made some useful contributions, but they were undermined by the fact that she's trying to criticise this Liberal-National government for not doing things that the Labor government that she was a member of didn't do when they were in government.
They introduced the Paid Parental Leave scheme we have. I recognise that, and it was an important reform that we have maintained, but Senator O'Neill just then said: 'Because you haven't changed it from what we did when we were in government, you're culpable. You're worthy of criticism because you haven't done what I'd like to do.' As I said, Senator O'Neill made some useful contributions, but her arguments would be much more forceful if she applied the same test to the government that she was a member of not that long ago—six or seven years ago. So it's a bit late now to start criticising just one side about those things.
Fortunately, from what I heard there, Senator O'Neill and the Labor Party will support these sensible changes. This is a commonsense bill really; you could sum it up in those words. They're commonsense changes to a system that is a good one; it's good that we offer and provide paid parental leave. I recognise we can't provide it as far and as expensively as Senator O'Neill would like. These things are always a balance—a balance that the Gillard government had to weigh up and that all governments have to weigh up in terms of government spending and the welfare we can provide to Australians. But these changes are very sensible, because they will ensure that mothers and fathers who are seeking to take paid parental leave can do so in a flexible way over the first 18 months of their child's life. My understanding is that currently the paid parental leave has to be taken in a block, so to speak, of 18 consecutive weeks. These changes will allow mothers—primarily mothers, I presume, are taking the paid parental leave—to do so in a block of 12 weeks within 12 months of the birth of the child. The remaining six weeks can then be used within two years of the birth or adoption, in blocks as small as a day at a time to allow flexible working arrangements. That's all a commonsense change. It's the kind of change about which we say: 'Why didn't we think of that earlier? Why didn't we think of that when it came in?' Some of these things can be missed, but it seems to be well supported across this chamber, which is very good.
I think it is very important that we do support family formation in this country, that we do support people having children in Australia. We are fortunate not to have the seriously low fertility rates of European countries, but our fertility rate is below replacement level, and keep in mind that over the next few years our migration program will be very much curtailed. It's important that Australians continue to have children and we continue to grow and develop our country and our nation. We should support families to do that.
We should also support those families that are in the workforce and have to juggle that. This scheme helps do that. But I do want to stress that I think the most important reason to provide paid parental leave, to provide this assistance, is the child, not the parents, not the mother or the father. The reason I strongly support schemes like this is that it's incredibly important for the children's welfare to spend time with their mother or father—particularly their mother, obviously, for reasons of breastfeeding et cetera—in those early years of life. I am fortunate to have had five children. It never gets tired and it's always a journey. It's been a more interesting journey in the last few months, spending more time with them, but we were very fortunate for my wife to be able to take time off work for her first two children, and then after that, she was staying at home anyway. I shouldn't say that, because I will get in trouble; she was working at home, not staying at home—very much hardworking at home, looking after our children. It was very important I think to spend that time.
It is not just from personal experience; this is laid out in evidence. There was an OECD report. It's a little dated now, but I don't think children have changed much since 2007. The OECD said:
Taking stock of the evidence, it seems that child development is negatively affected when an infant does not receive full-time personal care … for at least the first 6 to 12 months of his/her life.
A study by the Productivity Commission in 2009 into child care and paid parental leave issues—actually I think it was the study that helped lead to this scheme—said:
Most of the more recent evidence tends to support the view that the use of nonparental care/child care (usually necessitated by maternal employment) when initiated within the first year of a child's life can contribute to behavioural problems and, in some contexts, delayed cognitive development.
The Productivity Commission quoted a range of different scientific studies there to back that evidence up. It is important that we try to support parents to be able to look after their children. I think that's the primary purpose of getting behind these schemes.
I find sometimes the debate seems to be more about encouraging more female participation in the workforce. I think that that is important, but sometimes the claims for the need for that are overblown in the Australian context. We have average female labour force participation rates across developed countries in the OECD. Countries that have higher females labour force participation rates almost solely are countries with much lower fertility rates than us. Of course countries that have higher fertility rates are going to have lower female workforce participation because parents are going to choose, because of the evidence I just read out, to spend time with their children.
There are a couple of exceptions. Canada and New Zealand have higher female workforce participation rates, although Canada has a lower fertility rate—not as low as some of the European countries but lower than us. The one thing that is never actually mentioned that I think is really important is that the way we count female workforce participation is very different to almost every other country in the world, including Canada and New Zealand, who are often held up as comparators to our workforce participation rates. When a mother is on paid or non-paid parental leave in Australia they are not counted as being in our workforce. In Canada and New Zealand, as is the case in most other countries in the world, if a mother is on paid or non-paid parental leave they are counted as being in the workforce. That gap, difference and statistical quirk accounts for apparently, according to a different Productivity Commission study, about a two to three percentage point difference. About half of the gap between Australia and Canada and New Zealand is accounted for in that.
When you drill down further and look at female workforce participation rates in child-rearing age groups—from memory, usually from about 18 to 45—it is about the same between Australia and New Zealand. We depart when it's above 45. No-one can really explain that. But, possibly, if we increased paid parental leave schemes, that gap would close because we've already got the same gap for the years mothers have children.
I think Senator O'Neill made some useful contributions, albeit partisanly applied. It would be good to support families to take more time off to look after children, particularly at very young ages—particularly below the age of one, as was stated in those studies I mentioned. The question here though is: who should fund that? Who can we call on to pay for that benefit? Yes, there is a role for government, as we're doing through these schemes, but I also think it would be better if we could help support families themselves to help fund those choices in life, because they're in the best place to make these choices. All families are different. Some families have great grandparent support and don't necessarily need to take time off work. Others have other support mechanisms. Others don't. All families are different. It would be a good thing if we could provide more choice and flexibility at the family level. Unfortunately, in our country with the way our tax system works we don't provide particularly easy choices for families that would like to take more time off to look after a child. Our tax system is based on the individuals, not families, who put in a tax return individually and are taxed individually. About half of other OECD countries actually have a family based taxation system. They have certain arrangements that allow for the spreading of income between parents or between partners to allow for the fact that, really, most families do their budgets and spend their money on a collective basis. A lot of our welfare schemes are based on that. The family income is the test for the HomeBuilder scheme that's coming in. Family income is the test for family tax benefit, at least for family tax benefit A, but for the tax system it's on an individual basis.
An OECD study from 2012 showed that Australian single-income families pay more tax and have a greater gap between the tax that they pay and that a double-income family pays, which is the fifth highest gap in the OECD. Only four other countries have a higher gap between the effects of our tax system on single-income and double-income families than in Australia.
I just updated some calculations. I did quite a lot of work on this in the past, and I just had a look. I got out the ATO tax calculator before and had a look at what the current situation is. For a single-income family, if you're a family with a couple of kids and only one of the parents is working—let's say they earn $100,000 just for round numbers—according to the ATO that family would be liable for $24,497 of tax in a year. Their take-home pay would be about 75 grand. For a family with a couple of kids and both parents working—let's just say they earn $50,000 each—which is $100,000 in total, which is the same family income as the other family, they would individually pay $7,797 worth of tax. In total as a family that's $15,594 for a take-home pay of about $85,000. That's an $8,900 difference between those two families. They're on the same family incomes. They're on 100 grand a year, which is not much more than the average full-time wage currently, so it's about that for an average family in this country and it's a $9,000 difference in tax. That's a lot of money and it doesn't particularly support families making choices to look after their own children and potentially have just one breadwinner, at least for a period of time while they have young children in the household. If they make that choice, if they decide, 'Yes, one of us should stay home and look after the child,' they are at a $9,000 disadvantage a year. When you've got a young child and you've got the costs of having a new family, that is a big, big hit. That is a massive hit, and it's going to influence and change decisions.
While I support Senator O'Neill's sentiment that we should help support more families in these times of their lives, I think it would be better if we tried to move to a family paid parental leave scheme rather than a government paid parental leave scheme, because that would help support a family choice and that would help support potentially better outcomes for children's development, based on the best interest of that family and the choices of those mothers and fathers, not the government and not some bureaucrats. It would give families the flexibility to make those decisions. We could and should have a better tax system based on family needs, not just on individual needs.