Some of Australia’s top female entrepreneurs have spoken out against Opposition Leader Tony Abbott’s plan to force large and medium businesses to fund a six-month paid parental leave scheme, saying the scheme will hurt businesses and could actually make it harder for women to be employed.
The plan, announced by Abbott on International Women’s Day, would see 3,200 companies with taxable income of more than $5 million slugged with a 1.7% levy.
The levy would raise $2.7 billion to fund a universal scheme that would allow parents to take six months paid leave at full salary (for salaries up to $150,000).
“There would be potential offsetting savings for those (mostly large) businesses that are already paying some parental leave,” Abbott said in his speech announcing the plan.
“Such a scheme would provide smaller businesses’ employees with a benefit that is funded by larger businesses.”
However, while the scheme is aimed at large companies, it is likely many profitable medium-sized companies – including firms with revenue of about $50 million and upwards – could be hit by the levy.
David Gregory, head of workplace policy at the Australian Chamber of Commerce and Industry, says his organisation is against the plan and concerned about smaller firms being forced to fund a universal parental leave scheme.
“It’s not necessarily related to business size in terms of employee numbers,” he says.
“You could have some IT companies, some relatively small mining companies in WA that would also be dragged in the net.”
And it’s this idea that has Australia’s top female entrepreneurs worried.
Sylvia Wilson, co-founder of international franchise Bark Busters, says she supports the idea of paid parental leave, providing it is subsidised by the Government. She doubts smaller companies will be able to meet another burden on top of their already high tax bills.
“If the Government wants to increase the population and they are prepared to subsidise it, then okay. I just don’t know how they expect some of the smaller businesses to pick up that bill,” she says.
“I just think they are going to send smaller business broke if they keep coming up with these ideas.”
Like many commentators, Wilson is concerned that the plan could actually act as a disincentive for some employers who will decided not to employ women because of the potential leave costs.
“Small business just won’t employ women – it will actually make the job of getting women into the workforce tougher.”
That concern is shared by Kate Beaconsfield, co-founder of leading maternity wear manufacturer and retailer Ripe Maternity Wear.
“We’re trying to get women into the workforce. As a country, purely from an economic point of view, we know that this is something that we need to do. But I am very nervous about discrimination effects if employers are forced to pay,” she says.
“At the small or medium end of business, if the employers are paying for it, it will lead to discrimination against women.”
While Beaconsfield believes Abbott’s plan is a clever political move (as the top end of town is likely to support the Opposition regardless of the scheme) she would be prefer to see a Government-funded scheme that does not mean large and medium companies are forced to pay more than their fair share.
Diana Williams, founder of the Fernwood chain of women-only health clubs, is a prominent employer of women and supports the idea of child care – to a point.
While she accepts that large companies can possibly absorb the costs of the scheme, she is concerned about the impact on medium-sized businesses, although she is hopeful her own business would not be affected.
“For us to pay for it would be out of the question. All businesses need to protect their bottom line and this is just another hit on the bottom line.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
