Paid Parental Leave legislation looks to cut red tape for business, with Centrelink in charge

The red tape surrounding the Paid Parental Leave scheme could be minimised for small business owners, with new legislation introduced into the House of Representatives.

Yesterday, the Coalition government put forward the Social Services and Other Legislation Amendment Bill 2013, which would see parental leave pay paid directly by Centrelink from March 1, 2014.

“The current system requires employers to process parental leave pay after receiving an employee’s entitlement from Centrelink,” Small Business Minister Bruce Billson said.

“It is unnecessarily complex, and forces small businesses to bear the costs of the extra workload and of restructuring their payroll and accounting systems.”

Billson said the change was in response to employers who have expressed opposition to the administration involved with the current scheme.

Employers will still be able to opt in to provide parental leave pay to their employees should both the employer and employee agree to this arrangement.

Council of Small Business of Australia chair Amanda Lynch told SmartCompany this morning that small business was “delighted” that the legislation was introduced into the House of Representatives.

“We’ve been working closely with Bruce Billson and Kevin Andrews to help reduce red tape for small business,” she says.

“Our members tell us their largest amount of time on paperwork administration is spent on paid parental leave legislation and superannuation.”

Lynch says that small business owners are “drowning in legislation”.

“Any move to remove compliance and operate more through Centrelink is most welcome,” she says.

The move is part of the Coalition government’s promise to cut $1 billion worth of administration from business per year, with parliamentary secretary to the Prime Minister, Josh Frydenberg in charge of the mission.

Frydenberg has recently been involved in meetings with key industry bodies including the Business Council of Australia, Australian Chamber of Commerce and Industry, Australian Institute of Company Directors and the Minerals Council of Australia.

Social Services Minister Kevin Andrews took the opportunity yesterday to speak about the government’s planned Paid Parental Leave scheme reform, which is designed to give new mothers six months leave based on their current actual wage. The scheme is an extension of the current limit of 18 weeks based on the national minimum wage. 

“This will give new mothers a better choice if they want to combine work with family and continue their career,” said Andrews.

The opposition and various industry bodies have criticised the proposed scheme for its potential to impact mortgage rates, shareholders in listed companies and the cost on taxpayers.