NZ Herald 1 April 2015
Parents are getting two more weeks of paid leave after having a baby from today – but it is still less than a third of what mothers want.
Paid parental leave is increasing from 14 weeks to 16 weeks in the first of two steps, with a second step to 18 weeks due next April.
But the Growing Up in NZ study of about 7000 babies born in Auckland and Waikato in 2009-10 found that the median leave that mothers wanted was a full year.
Instead, 37 per cent went back to work within nine months. Most (71 per cent) of those said they went back because they “needed the money”.
This forced early return worries some child advocates. Children’s Commissioner Dr Russell Wills says we should “provide what financial support we can for parents to remain at home for as long as they can”.
“The best person to bring up your children is you,” he says.
A bill by Labour MP Sue Moroney to extend paid parental leave to six months, which would have roughly doubled the $170 million annual cost of the scheme, was voted down by the Government in February on the grounds it was unaffordable.
But politics is unpredictable, as Northland voters found last month when the Government found $69 million to replace 10 one-lane bridges. The debate about support for parents seems bound to continue.
How we stack up
This is partly because our 14 weeks of paid leave, until now, was near the bottom end of a scale which goes up to 39 weeks in Britain, 16 months in Sweden and just over three years in Slovakia. By next year we will catch up to the 18-week OECD average.
But our low ranking is also because our payment rate remains capped at just $504 a week, which is less than the $590 you would earn in 40 hours on the minimum wage of $14.75 an hour from today.
Australia pays mothers for 18 weeks at the full minimum wage of A$16.87 an hour ($17.36). Partners also get two weeks’ pay at the same rate, whereas NZ partners get no paid leave unless the mother transfers some of her entitlement.
Britain pays mothers 90 per cent of their previous earnings for six weeks but only 138.18 ($271) a week after that. Sweden’s social insurance payments, which can be split between mothers and fathers, pay 80 per cent of previous earnings for 13 months and then $194 a week.
Australia’s Tony Abbott proposed paying mothers 100 per cent of their previous incomes, up to a cap, but dropped the idea because of the cost.
However, paid parental leave is only part of the support for new babies in most countries.
In New Zealand only 42 per cent of new babies’ mothers got paid parental leave in 2012 because they had to have worked for the same employer for at least six months up to the birth. Only 0.8 per cent of the mothers who got paid leave transferred any of it to their partners.
Another 25 per cent of mothers received an income-tested parental tax credit of up to $150 a week for eight weeks. From today that increases to $220 a week for 10 weeks.
Parents of the other third of babies get nothing, because either they don’t apply, their incomes are too high, or they are beneficiaries, who are excluded because both schemes aim to encourage mothers to work.
In Australia, all parents who didn’t qualify for paid parental leave received a baby bonus of A$5000 up to 2013, but Mr Abbott has cut that to A$514 ($529) upfront plus an income-tested “newborn supplement” of up to A$119 ($122) a week for 13 weeks, adding up to a total of about the same as the NZ tax credit.
New Zealand has had a relatively high employment rate for women in two-parent families, but one of the lowest rates for sole parents in the developed world. However, this is changing dramatically. The proportion of partnered mothers in, or seeking, paid work has been rising slowly for many years. Those in, or seeking, work with preschool-aged children grew from 56.9 per cent in 2001 to 59.1 per cent in 2006, but fell to 58.2 per cent in 2013 as jobs dried up in the recession.
In contrast solo mothers, who were much less likely than partnered mothers to be in paid work 20 years ago, have almost caught up. Across all children under 18, the paid work participation gap between partnered mothers and solo mothers has closed from 19 percentage points in 1994 to 3.5 points last year. The gap widened in the first years of recession but has closed strongly in the past three years because of more jobs and more pressure from Work and Income.
Solo mums with preschoolers who are in, or seeking, paid work rose through the recession from 41.1 per cent in 2001 to 42.2 per cent in 2006 to 46.3 per cent in 2013. More than a third (37.1 per cent) of all mothers of babies under 1, and 56.9 per cent of mothers of 1-year-olds, are now in, or seeking, paid work. One result is that 15.3 per cent of babies under 1 and 43 per cent of 1-year-olds are in early childhood education.
The signs are we have pushed mothers back to work sooner than most want to, and that society may be ready for a swing back to more support to enable mothers and fathers to stay home longer.
The Growing Up in NZ study found 46 per cent of mothers who returned to paid work in their babies’ first nine months said they “enjoyed working and wanted to return to paid work”. That needs to be considered alongside the 71 per cent who said they simply “needed the money”.
But a 2007 Labour Department evaluation of paid parental leave, the only evaluation of the scheme that has been done, also asked mothers for their main reason for not taking the full 12 months of parental leave allowed by law (only 14 weeks of which was paid). When asked for that main reason, 61 per cent said “financial pressure” and only 7 per cent said they “felt ready to return to work” or “wanted adult company”.
Only 17 per cent said their “ideal” would be to go back to work within six months, 8 per cent said their ideal would be between seven and 11 months, and 70 per cent said their ideal would be at least a year.
A 2011 report by former Children’s Commissioner John Angus warned that placing babies and toddlers in formal childcare risked exposing them to infections and disrupting the “attachment” to a steady caregiver that infants need as a safe base.
He found that infants and toddlers could form attachments to childcare workers just as they did with their parents, but that only happened in centres with low staff turnover and where each infant was assigned to a single primary carer. He recommended “more support for parental care of those under 12 months old”.
His successor, Dr Wills, set up an expert group on child poverty which recommended a universal child payment for all preschool children that would reduce gradually as children get closer to school age and become income-tested after that. The payment would “support a parent to stay at home during infancy”.
“The problem with paid parental leave is that it doesn’t get to non-working parents, and of course their children are at much greater risk,” Dr Wills says. “So in many ways supporting those poorer parents is a more cost-effective investment.”
Child Forum founder Dr Sarah Farqhuar suggests the Government should pay parents directly all, or even half, of what it pays on early childhood education and childcare subsidies to “make it more affordable for more parents to stay home for the first year or to choose to use it for childcare”.
Although the Government rejected Ms Moroney’s bill, Prime Minister John Key said in February that the May 21 Budget would contain measures “to help families and children in material hardship”.
“As a first step, the Government will look hard at the billions of dollars already spent on vulnerable families and children to determine how this could be better used,” he said.
But he added: “Our focus will continue to be on getting parents into fulltime work because this is widely acknowledged to be the best way to raise children out of poverty.”
NZ behind in paid parental leave
Stuff co.nz 1 April 2015
Parents taking time off work to care for their children will have more money in their pockets – but compared with those in other developed countries they are getting a rough deal.