The Business Council of Australia (BCA) has welcomed a Productivity Commission draft report that recommends 18 weeks of paid parental leave, but the Australian Chamber of Commerce and Industry (ACCI) has rejected the proposal as placing too much of a burden on businesses.

BCA Chief Executive Katie Lahey said the proposed scheme released yesterday would help to ensure that both work and family are possible for Australian women.

“At the same time, it eases the path back to the workforce for women with children. This is crucial for Australia at a time when we are seeking to raise workforce participation,” she said.

Ms Lahey said the Commission’s proposal was broadly in line with the BCA’s submission to the commission earlier this year.

She said it recognises parental leave’s positive effects on workforce participation, on educational outcomes and on child and maternal health.

“The scheme rationalises current family support payments and tax arrangements, with greatest support going to the lowest-paid.”
“That will create a well-focused scheme for only a modest increase in government outlays."

Australia’s largest and most representative business and employer organisation however believes that the scheme would place excessive and unnecessary additional burdens on employers.

According to the Australian Chamber of Commerce and Industry (ACCI), changes need to be made if the proposed scheme is to receive widespread industry and small business support.

“Employers are already concerned at being the tax collector for government on issues like the GST, and they will not respond well to being the paymaster of government social payments,” said ACCI CEO Peter Anderson.

 “ACCI and business support a government-funded scheme of 14 weeks provided that it is affordable to the budget and does not increase employer costs.”

Ms Lahey recommended that once parental leave issues have been addressed, the government should turn its attention to boosting workforce participation by widening the fringe benefits tax exemption for employer-provided childcare.