Senate report backs parental leave bill, but businesses slam red tape burden for SMEs

The Government’s paid parental scheme bill should be passed through the Senate, according to a report tabled yesterday, but businesses still aren’t happy with some key recommendations.

Business groups maintain SMEs shouldn’t be required to make the actual payments, even if they are funded by the Government, while others say an extension should be given for employers to fill out necessary paperwork.

The Senate report recommends the bill pass the Senate, but recommends some changes, including the addition of a comprehensive review two years after the scheme commences.

Additionally, the report says the Government should review the eligibility of requirements for contract, casual and seasonal workers, saying certain situations could impact their ability to access payments.

But Peter Strong, chief executive of the National Independent Retailers’ Association, says the most important issue is that businesses are still required to make the payments. He, along with business groups such as ACCI, wants that part of the bill scrapped.

“Every Government says they are going to decrease red tape, and here is another example of not coming through on that promise. There is no need for this red tape, and it really shows a lack of understanding of small businesses,” he says.

“They want to take more time off the small businesses. It’s a terrible recommendation because it’s completely unnecessary. It shows they have no understanding of small business and philosophy has come ahead of sensibility.”

The bill recommends businesses make the actual payments to employees in order to stay connected, even though those payments are actually funded by the Family Assistance Office. While Stanton says this is unneeded, yesterday’s report states businesses should remain connected with workers.

“The committee recognises the reason for and importance of employers providing the payroll function to encourage ongoing attachment to their workplace by employees on PPL,” the report states.

“Such an arrangement, while posing some administrative challenges for employers, is in keeping with the PPL scheme as a workforce entitlement and emphasises the goals of promoting ongoing workforce attachment and participation by parents, and particularly mothers, while on leave at the time of the birth of a child.”

Additionally, Stephen Smith, national director of industrial relations for Australian Industry Group, says their recommendations for a few technical changes were overlooked.

Currently the bill states employers have 14 days to reply to the Government after being sent confirmation of an employee’s eligibility for the scheme. Failure to reply could result in a $33,000 fine.

“They haven’t addressed that, but this is just a Senate report and it’s still up to the Government to decide what this wish to do in terms of amendments.”

The report also recommends the Government should ensure businesses and individuals have access to information about the scheme so misunderstandings don’t occur.

“The committee believes that government should have in place appropriate measures to ensure that both employees and employers are informed of their rights and obligations under the bill, and that both employees and employers have access to ongoing information and advice from government regarding the bill’s operation.”

Additionally, the report says a review of the scheme in two years’ time should determine whether the exclusion of superannuation payments is appropriate. It also says it has received assurance the Government is working with states to keep parental leave pay exempt from payroll tax.

It also stated the committee would be “disappointed if employers chose to reduce current PPL entitlements in response to the implementation of the bill”, and recommended the Government address this topic.