Rebalancing the load of unpaid care and work

Submission to the Senate Select Committee on Work and Care

Australian women perform more unpaid domestic and caring responsibilities for children, elderly relatives or people with disability than Australian men – a burden that has increased as a result of the COVID-19 pandemic.

Unsurprisingly Australian women’s workforce participation lags Australian men.

This submission responds to Terms of Reference b), c), d), f), and g) of the Committee’s Inquiry.

It draws attention to gender inequalities in the provision of unpaid care and describes the flow-on effects for women’s labour market participation, wages and job quality.

This submission makes the case that, in order to lift Australian women’s workforce participation and enable more women to better balance work and caring responsibilities, there is a need to:

  • Redistribute care between men and women, as well as between the family and the state; and
  • Create more high-quality, secure and flexible work opportunities for unpaid carers.   

The Commonwealth Government has a number of levers at its disposal to effect transformational change for Australians who provide unpaid care, and for those that receive it.

This submission urges the Commonwealth Government to use those levers to positively reform industrial relations, improve Australia’s social security system (including changing ParentsNext) and improve the childcare subsidy.

Enacting progressive reform in these areas would significantly improve wellbeing for both recipients of care and care givers, boost women’s workforce participation and deliver significant economic gains for Australia.

As the Victorian Government’s recent Inquiry into Economic Equity for Victorian Women noted:

“The continued undervaluation of care work by women at home, in the workplace and in the community has to change. We need to rebalance the load of unpaid care and work, and start viewing care as an essential service. Just as we invest in physical infrastructure, we need to invest in and value ‘human infrastructure’.”[1]

[1] Inquiry into Economic Equity for Victorian Women, Final Report, January 2022, https://www.vic.gov.au/economic-equity-victorian-women-inquiry 

VCOSS is the peak body for Victoria’s social and community sector, and the state’s premier social advocacy body.

We work towards a Victoria free from poverty and disadvantage, where every person and community experiences genuine wellbeing. Read more.

We welcome the opportunity to provide this input.

PRIMARY AUTHOR

Charlotte Newbold

Summary of Recommendations

Create the conditions for the redistribution of care

  • Increase funding to the Carer Gateway.
  • Fully fund the implementation of all actions in the finalised 10-Year National Plan to Reduce Violence Against Women and their Children 2022-32 – including impact evaluation of funded gender equity initiatives, building the evidence base about what works, and using this to drive further future investment.
  • Implement in full all recommendations of the Royal Commission into Aged Care.
  • Progress the review of the NDIS and ensure this is co-designed with people with disabilities and families/carers, as per the Government’s pre-election commitment.

Reform Australia’s industrial relations system

  • Accelerate extending the powers of the Fair Work Commission to include “employee-like” forms of work, allowing it to make orders for minimum employment standards for new forms of work, such as gig work.

Improve Australia’s social security system

  • Adjust taper rates to encourage more people to increase their paid work hours.
  • Lift the income-free thresholds for working-age payments.
  • Increase Jobseeker and related payments to at least $73 per day to ensure no one is left behind.
  • Establish a Social Security Commission that will advise Parliament on the ongoing adequacy of income support payments.

Create an accessible, affordable and high-quality early childhood education and care system

  • Abolish the childcare subsidy activity test.
  • Introduce free, universal childcare to boost women’s workforce participation.

Improve Australia’s paid parental leave system

  • Introduce at least 26 weeks of paid parental leave under the National Employment Standards for each parent.
  • Ensure all government funded Paid Parental Leave and Dad and Partner Pay payments receive superannuation.
  • Require employers to pay superannuation while a parent is receiving employer funded paid parental leave payments.

Reform ParentsNext

  • Redesign ParentsNext in consultation with the community sector – including representative peak bodies and advocacy organisations – to be a voluntary, pre-employment program that provides flexible, wraparound support to participants.

Overview of some of the challenges people face in balancing care and work

This section responds to Term of Reference b: the impact of combining various types of work and care (including of children, the aged, those with disability) upon the well-being of workers, carers and those they care for.

Deloitte Access Economics has estimated that in 2020 nearly 2.2 billion hours of care was provided and it would cost $77 billion to replace all informal care in that year.[1]

The provision of unpaid care sustains individual households and our entire economic system – but this important work is under-valued and frequently overlooked in broader policy reforms.

This costs Australian women, who carry a disproportionate share of unpaid domestic and caring responsibilities: women do almost twice as much unpaid care work as men.[2] Despite graduating in higher rates than men from university, women are not participating in the economy to their full capability. Women’s workforce participation rate is currently 62.2%, substantially lower than men’s at 70.8%.[3] 

Women often scale back their hours or delay re-entering the paid workforce to better meet their caring and domestic responsibilities.

The unequal distribution of care responsibilities can also be seen in workplace data on who accesses carers leave entitlements. For example, Victoria’s Commission for Gender Equality in the Public Sector recently found that women make up more than two-thirds (68%) of those who access carers leave in the Victorian public sector.[4]

The Commission observed:

“This imbalance reinforces unhealthy gender stereotypes and norms, where women are disproportionately burdened with unpaid work and care responsibilities.”[5]

Survey data from a Household Income and Labour Dynamics (HILDA) study shows that the “motherhood penalty” is real, with evidence that:

“the first child lowers a mother’s future hourly wage by around 5 per cent and having two or more children lowers her wages by around 9 per cent. The motherhood penalty emerges over time, rather than immediately, largely because mothers are more likely to work part-time (reflecting their higher unpaid caring and domestic load) so their wages grow more slowly.”[6]

However, raising and caring for children is only one part of Australians’ unpaid care and domestic workload. More than 12 percent of women and 9 percent of men care for a person with disability or an elderly person.[7]

In Victoria, over 700,000 people are in unpaid caring roles.[8] In comparison to non-carers, carers have lower rates of employment and often reduce their hours or take on lower-paid roles to accommodate their caring responsibilities.

Carers also experience higher degrees of loneliness than the general population and are less satisfied with their life.[9] Securing flexible employment is key to helping support more carers balance their employment with their caring role.[10]  

‘De-feminising’ care is also central to the rebalancing of work and care, and women’s economic empowerment.

As the Victorian Government’s Inquiry into Economic Equity for Victorian Women observed:

“… men must step up and share the load of unpaid work. Without this fundamental rebalancing, women will continue to be much worse off economically. The triple load of caring, domestic and paid work responsibilities means women’s lifetime earnings are usually half those of men.”[11]

Government has an important contribution to make in this rebalancing.  

For example, providing greater support to carers and enabling more women to engage in paid work will increase women’s earnings, reduce their risk of poverty and add to Australia’s GDP.[12]

The Inquiry into Economic Equity for Victorian Women, referenced earlier in this submission, states that:

“Closing the employment gap between men and women would boost GDP by around 11 per cent, and it has been estimated that closing the gender productivity gap would raise this to 20 per cent.”[13]

VCOSS notes that solutions must be intersectional, taking into account the additional barriers experienced by some groups as a consequence of intersecting and compounding forms of discrimination and disadvantage.

For example, for women from culturally and linguistically diverse (CALD) backgrounds, it is relevant to consider low rates of reporting or identification of the caring role within this cohort and their under-representation in carer support services;[14]the systemic barriers, racism and attitudinal barriers that make it difficult for CALD families to access early childhood education and care;[15] and the disproportionate social and economic impact of the COVID-19 pandemic on migrant, refugee and multicultural women.[16]

 

[1] Deloitte Access Economics, The value of unpaid care in 2020, https://www2.deloitte.com/au/en/pages/economics/articles/value-of-informal-care-2020.html

[2] Inquiry into Economic Equity for Victorian Women, Final Report, January 2022, https://www.vic.gov.au/economic-equity-victorian-women-inquiry page 59.

[3] Australian Bureau of Statistics, Labour Force Australia, July 2022, released 18 August 2022, https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release#:~:text=Key%20statistics,-Seasonally%20adjusted%20estimates&text=participation%20rate%20decreased%20to%2066.4,underemployment%20rate%20decreased%20to%206.0%25

[4] Commission for Gender Equality in the public sector, Baseline report – 2021 workplace gender audit data analysis, https://content.vic.gov.au/sites/default/files/2022-08/CGE%202207009_CGEPS%20Baseline%20Audit%20Report_v7.pdf

[5] Commission for Gender Equality in the public sector, https://www.linkedin.com/company/gender-equality-commission-vic/posts/?feedView=all

[6] Ibid.

[7] Inquiry into Economic Equity for Victorian Women, Final Report, January 2022, https://www.vic.gov.au/economic-equity-victorian-women-inquiry page 61.

[8] Carers Victoria, Care for Victorians Carers Victoria Policy Platform 2022 Summary, 2022.

[9] Ibid.

[10] Carers Australia, Response to the Australian Government Select Senate Community Affairs Inquiry on Work and Care September 2022.

[11] Inquiry into Economic Equity for Victorian Women, Final Report, January 2022, https://www.vic.gov.au/economic-equity-victorian-women-inquiry page 10.

[12] Ibid, page 59.

[13] Ibid, page 10.

[14] ECCV, Recognising and respecting carers, https://eccv.org.au/recognising-and-respecting-carers-from-cald-backgrounds/

[15] Parliament of Victoria, Legislative Assembly, Legal and Social Issues Committee, Inquiry into early childhood engagement of culturally and linguistically diverse communities, September 2020, https://www.parliament.vic.gov.au/images/stories/committees/lsic-LA/Early_childhood_engagement_in_CALD_communities/Report/LA_LSIC_59-01_Inquiry_into_early_childhood_engagement_of_CALD_Communities.pdf

[16]  Inquiry into Economic Equity for Victorian Women, Final Report, January 2022, https://www.vic.gov.au/economic-equity-victorian-women-inquiry

COVID-19’s impact on caring responsibilities

This section responds to Term of Reference f: the impact and lessons arising from the COVID-19 crisis for Australia’s system of work and care.

COVID-19 has increased the burden of unpaid care. Across six lockdowns in Victoria, responsibility for childcare and supervising children’s home learning disproportionately fell on women.

Victorian women have also disproportionately carried care responsibility for other family members, such as aged, disabled or sick parents who are not able to draw on formal supports because of health risks, fear or access barriers. 

Alongside being saddled with increased caring, domestic and childcare responsibilities, women also lost more jobs than men and had their hours cut during the pandemic.[1]

According to ABS data, “[b]etween March 2020 and September 2021, 133,000 Victorian women and 105,000 Victorian men lost their jobs.”[2] This led to an increase in the gender pay gap of 2.6 per cent to a total of 12.2 per cent.[3]

Some women left the labour market by choice – albeit a ‘forced choice’ – in order to better balance their domestic and childcare responsibilities.

Single parents, and particularly single mothers were far more likely to lose or leave their jobs compared to coupled parents.[4]

A recent survey conducted by Carers Victoria found that as a result of the pandemic:

“47% of respondents changed their employment arrangements to accommodate their care relationships during the pandemic, 12% resigning or retiring to do so. Of respondents, 9% wanted help finding paid employment.”[5]

Lack of access to affordable childcare and difficulties obtaining permanent part-time positions are key issues for many women in this circumstance. Coupled with a loss of social security support, this acts as a significant deterrent to entering the workforce. Some single mothers delay returning to work until their children are older.

This can have long-tail effects for women, impacting their careers and superannuation balances. It also has a negative impact on society, leading to more disadvantage and discrimination.[6]

[1] Ibid, page 34.

[2] Inquiry into Economic Equity for Victorian Women, Final Report, January 2022, https://www.vic.gov.au/economic-equity-victorian-women-inquiry page 45 citing Australian Bureau of Statistics (ABS), Labour Force, Australia, ABS website, October 2021.

[3] Ibid, page 34.

[4] Ibid, page 50.

[5] Ibid.

[6] Ibid.

Create the conditions for the redistribution of care

This section responds to Term of Reference g: consideration of gendered, regional and socio-economic differences in experience and in potential responses including for First Nations working carers, and potential workers.

Preceding pages of this submission have highlighted that women carry a disproportionate share of unpaid domestic and caring responsibilities.

VCOSS agrees with the OECD that: “[Care] … should be redistributed between men and women, as well as between the family and the State” and that inadequate government investment in informal care and formal care services “increases the burden for communities, families and especially women”.[1]

This rebalancing should be a key focus for government.

Redistributing care between men and women

The Commonwealth Government has a key role to play in tackling rigid gender roles and stereotyped constructions of masculinity and femininity to “defeminise caregiving and shape gender norms that prevent men from assuming equal caring responsibilities”.[2]  

A key lever is the 10-Year National Plan to Reduce Violence Against Women and their Children, which the Commonwealth Government has been working with the States and Territories to finalise following a renewed process of stakeholder engagement.

In particular, the Plan’s focus on investing in primary prevention is critical to helping redress gender inequities and helping stop violence before it occurs. By changing community attitudes that excuse, justify or downplay violence against women and children, and stopping violence before it occurs, this will ensure less women need to access paid/unpaid domestic violence leave and enable them to more fully participate in paid employment.

VCOSS is supportive of prevention underpinning the foundations of the long-term strategy and tailoring activities across different settings including in homes, educational institutions and workplaces etc. We were pleased to see Our Watch receive an increase in funding, however we would like to see this Committee champion further investment in long-term primary prevention activities.

The Commonwealth Government should create the conditions for the redistribution of care by fully funding the implementation of all actions in the finalised 10-Year National Plan to Reduce Violence Against Women and their Children 2022-32 – including impact evaluation of funded gender equity initiatives, building the evidence base about what works, and using this to drive further future investment.

The Commonwealth Government can also encourage greater equity between men and women by reforming its Parental Leave Pay schemes. Page 26 of this submission describes how the current settings reinforce problematic gender norms and recommends changes.

Redistributing care between the family and the state

To assist unpaid carers to better balance care and paid work, the Commonwealth Government should also take action to improve access to formal care, including child care (refer to page 23 of this submission), aged care and disability support.

Specifically, the Government should implement measures that provide care recipients and unpaid carers with the confidence to access formal supports. This confidence could be built by implementing quality and safeguarding improvements recommended by Royal Commissions and other independent review processes, and by using funding levers to improve cultural safety and inclusion for diverse communities. For example, in Victoria, the State Government requires all funded family violence services to achieve Rainbow Tick accreditation.

The Government should also make it easier to access formal care by dismantling financial barriers for unpaid carers who experience socio-economic disadvantage, such as single mothers. For example, page 23 of this submission highlights opportunities to provide greater access to childcare.

The Government can also better support carers by increasing funding in the Carer Gateway. The Gateway provides access to peer support groups, counselling, coaching, online skills courses, tailored support packages and emergency respite care.[3] However, funding is not currently sufficient. According to Carers Australia:

“… with a limited number of carer-directed support packages available nationally at an average of $3,000 per annum, these are insufficient to enable an employed carer to purchase substitute care while they participate in the workforce.”[4] 

Another way the Government can assist care providers is by addressing immediate workforce shortages in the care economy, building a long-term pipeline of new workers to meet projected demand, and supporting the sector to hold onto those workers because – as Carers Victoria has noted – “where those workers can’t be found, families, friends and others [must] step in to provide … care”[5].

The recent Jobs and Skills Summit provided a range of innovative ideas that can assist this Committee’s Inquiry process. VCOSS particularly commends proposals put by our colleagues at the Australian Council of Social Service (ACOSS).[6] We also note the Commonwealth Government’s public statements[7] on ending drip-funding for community services and introducing long-term government contracts are two important ways that the Commonwealth can positively effect change. VCOSS has been advocating for these reforms at a State level.

Thin markets are also relevant to this Inquiry. In disability support, the National Disability Insurance Agency (NDIA) continues to identify gaps in provision in some regional and rural areas, as well as gaps for some participants related to their specific support needs.

The NDIA has tended to favour market facilitation interventions that improve connections between providers and participants. These often rely on the use of Information Linkages and Capacity (ILC) Building funding to support organisations to link people to their local communities.[8] However, Victorian disability advocacy organisations and self-advocacy groups have told VCOSS that the capacity built over the course of an ILC-funded project period cannot be easily sustained. Furthermore, some organisations don’t have the resources to put forward competitive applications in the first place.

Victorian organisations have highlighted to VCOSS a need for a major rethink around how the ILC funding is applied to ensure that priorities are driven by and for people with disability, and to allow for continued funding and scaling up of successful projects and ideas. The ILC program should be included in the Government’s upcoming root and branch review of the NDIS.

Finally, there is a need for the Commonwealth Government (and its state and territory counterparts) to improve access to formal care by increasing the quantum of service provision to match the needs of an ageing population and other demographic trends – including new and emerging care needs associated with COVID-19, such as long COVID.

For example, VCOSS notes that the final report of the Royal Commission into Aged Care recognised the contribution of unpaid carers in providing informal aged care. Commissioners made a number of findings that are highly relevant to this Committee’s Inquiry into Care and Work, including the need for:

  • “an integrated system of supports”; and
  • “a redesigned program of funded services to deliver high quality and safe care to older people in their homes, in the community [as well as] residential facilities”.

Government action to improve the availability and quality of aged care services would benefit both older Australians who need care and those who are providing unpaid care/informal support.[9] The Commonwealth should implement in full all recommendations of the Royal Commission into Aged Care.

In particular, VCOSS highlights the relevance of the following recommendations to the Committee’s Inquiry process:

  • Royal Commission Recommendation 2: Enshrining the rights of older people receiving aged care in a new Aged Care Act. This Royal Commission recommendation encompasses a right to equitable access to care services and, for people providing informal care, a right to reasonable access to supports.
  • Royal Commission Recommendation 4: Developing an integrated long-term support and care for older people through a National Cabinet Reform Committee on Ageing and Older Australians.[10]

Similarly, the promised NDIS review – intended to improve the participant experience –should produce complementary benefits for unpaid carers who provide informal supports. For example, improvements to participant plans to assure funding for ‘reasonable and necessary supports’ should enable more carers to engage in the labour market. This review of the NDIS should be progressed by the Commonwealth Government as soon as possible.

The measures would need to be paired with other strategies set out in this submission, such as industrial relations reforms, improvements to social security, and more funded carer supports (for example, counselling, respite, peer networks, employment and training support). Other complementary reforms are recommended in other sections of this submission (for example, ‘Improve Australia’s paid parental leave system’ on page 26).

  RECOMMENDATIONS

  • Increase funding to the Carer Gateway.
  • Fully fund the implementation of all actions in the finalised Ten-Year National Plan to Reduce Violence Against Women and their Children 2022-32 including impact evaluation of funded gender equity initiatives, building the evidence base about what works, and using this to drive further future investment.
  • Implement in full all recommendations of the Royal Commission into Aged Care.
  • Progress the review of the NDIS and ensure this is co-designed with people with disabilities and families/carers, as per the Government’s pre-election commitment.

[1] Gaëlle Ferrant, Luca Maria Pesando and Keiko Nowacka, Unpaid Care Work: The missing link in the analysis of gender gaps in labour outcomes, OECD Development Centre, December 2014, https://www.oecd.org/dev/development-gender/Unpaid_care_work.pdf

[2] Ibid.

[3] Australian Government, Carer Gateway, Services and support, https://www.carergateway.gov.au/services-and-support#a1

[4] Carer Australia, Submission to the Senate Inquiry on Work and Care, September 2022.

[5] Carers Victoria, Over one million carers by 2025, fact sheet published September 2022.

[6] ACOSS, Restoring Full Employment policies for the hobs and skills summit, https://www.acoss.org.au/acoss_restoring-full-employment_policies-for-the-jobs-and-skills-summit_2022/

[7] Geoff Chambers, ‘Boost for charity sector security’, The Australian, published 10 August 2022, https://www.theaustralian.com.au/nation/politics/boost-for-charity-sector-security/news-story/4d7aa5078389717639a519ad6c068aa5 

[8] Rob Woolley, Thinking Thin Markets, September 2021, https://teamdsc.com.au/resources/thinking-thin-markets?_kx=lEap_PrrJWimAki0aGLxZSRLq-DqMdMCQW9jzjoaIj9O7Evd_v0kbxU40Rf7tZdemH1IJ3H947CdvxARL8WXgA%3D%3D.X8eRsJ

[9] Royal Commission into Aged Care, Final Report, https://agedcare.royalcommission.gov.au/sites/default/files/2021-03/final-report-executive-summary.pdf

[10] Ibid.

Reform Australia’s industrial relations system

This section responds to Term of Reference c: the adequacy of workplace laws in relation to work and care and proposals for reform.

Australia’s industrial relations laws have not kept pace with modern society and changing labour market conditions. The industrial relations system assumes a traditional, full-time employer-employee relationship, however only approximately 50% of workers fall in this category.

Around 20% of employees are casual and around 8% are employed as independent contractors (including gig workers).[1] This means that nearly 30% of Australia’s workforce do not receive paid leave entitlements.

Independent contractors are not covered by the 10 minimum entitlements under the National Employment Standards, which include annual leave, maximum weekly hours, sick leave, parental leave and notice of termination and redundancy pay.[2] Casual employees are also excluded from many of these protections (notably annual leave, paid sick leave, notice of termination and redundancy pay).

This context is relevant to the Committee’s Inquiry because, for example, according to Council of Single Mothers, there are “high levels of employment casualisation in this group [single mothers]”.[3] As a result, many people are having to juggle their caring responsibilities without paid leave entitlements. This creates difficulties for many single parents who may be caring for an unwell child, or carers who have caring responsibilities for aged parents or people with a disability.   

Not only does the ‘work status’ of workers determine their employment entitlements, it also impacts their “protections and obligations under superannuation laws, health and safety, insurance for work injuries and tax”.[4]

The Fair Work Act 2009 (Cth) is the most prominent lever to strengthen employment protections for all workers. Significant reforms are needed to ensure that all workers in Australia can access the minimum employment rights to ensure that they can not only meet their basic needs, but can flourish and fully participate in life.

By ensuring that people can access minimum employment entitlements like paid sick leave, this would help those with caring responsibilities care for unwell children or family members, whilst retaining their connection to the paid workforce.   

The coronavirus pandemic has reinforced that minimum employment entitlements benefit not just individuals, but the whole community.

VCOSS supports the Federal Government’s commitment to “[e]xtend the powers of the Fair Work Commission to include “employee-like” forms of work, allowing it to make orders for minimum [employment] standards for new forms of work, such as gig work”.[5] This would significantly benefit many low-income gig workers who are currently missing out on many employment entitlements and should be implemented as a priority.

In Victoria, the State Government has introduced a Sick Pay Guarantee scheme.

The Sick Pay Guarantee provides over 150,000 eligible casual and contract workers with up to 5 days of paid sick / carers leave at the national minimum wage to enable them to take time off when they are sick or need to care for loved ones.[6]

Currently the Sick Pay Guarantee supports workers in retail, hospitality, cleaning, security and aged and disability care, with nearly $250 million allocated for the two-year pilot in the 2022-2023 Victorian State Budget.

The challenge of a lack of personal/carers leave is not just emblematic of casual workers. The COVID-19 pandemic has also demonstrated difficulties for people who have ongoing health issues or caring responsibilities – whether it is aged parents, young children or people with a disability – with the national minimum standard of 10 days paid personal/carers leave not being enough to cover their leave requirements.

VCOSS is aware that a separate parliamentary inquiry has been established into COVID reinfections and long COVID and the Productivity Commission is also undertaking an inquiry into carers leave. Their findings and recommendations will be highly relevant to the work of this Committee.

 RECOMMENDATION

• Accelerate extending the powers of the Fair Work Commission to include “employee-like” forms of work, allowing it to make orders for minimum standards for new forms of work, such as gig work.

[1] Department of Premier and Cabinet, Report of the Inquiry into the Victorian On-Demand Workforce, July 2020, https://s3.ap-southeast-2.amazonaws.com/hdp.au.prod.app.vic-engage.files/4915/9469/1146/Report_of_the_Inquiry_into_the_Victorian_On-Demand_Workforce-reduced_size.pdf

[2] Fair Work Ombudsman, National Employment Standards, https://www.fairwork.gov.au/employee-entitlements/national-employment-standards

[3] Council of Single Mothers, Reform ideas Supporting single mothers into & in employment.

[4] Department of Premier and Cabinet, Report of the Inquiry into the Victorian On-Demand Workforce, July 2020, https://s3.ap-southeast-2.amazonaws.com/hdp.au.prod.app.vic-engage.files/4915/9469/1146/Report_of_the_Inquiry_into_the_Victorian_On-Demand_Workforce-reduced_size.pdf

[5] Jobs and Skills Summit September 2022 – Outcomes, https://treasury.gov.au/sites/default/files/inline-files/Jobs-and-Skills-Summit-Outcomes-Document.pdf  

[6] Victorian Sick Pay Guarantee, https://www.vic.gov.au/sick-pay-guarantee

Improve Australia’s social security system

This section responds to Term of Reference d: the adequacy of current work and care supports, systems, legislation and other relevant policies across Australian workplaces and society.

Employment, social security and care legislation and policies often limit choices for people around entering paid work and can, in fact, create ‘poverty traps’.

For those receiving working age social security payments such as Disability Support Pension, Carer Payment, Parenting Payment and Jobseeker “[t]heir financial stress and poverty levels have worsened through Australia’s long economic boom of the last 30 years.”[1]

Research by ANU shows that “[l]ower income families are nearly four times more likely to be in severe financial stress compared to middle income families in 2015.”[2]

For those balancing paid work and care responsibilities, a lack of access to decent work leaves many parents, including single mothers reliant on social security and charity.[3] However, high effective marginal tax rates means for many single parents, earning more income can result in a loss of income support and associated concessions whilst increasing transport and childcare costs.[4]

As the Brotherhood of St Laurence notes in their submission to this inquiry:

“For couple families, Parenting Payment and Family Tax Benefit create high effective marginal tax rates (EMTRs) on second income earners. This has led to families facing EMTRs of 80% compared to the statutory marginal tax rate of 47%, creating an in-built barrier to work, particularly for women.”[5]

If we are to encourage more people into paid work, social security reform including adjustment of taper rates is urgently needed.

VCOSS would also like to see the income free thresholds lifted for working-age payments. At the Jobs and Skills Summit, it was recently agreed to “[p]rovide Age pensioners with a temporary upfront $4,000 income bank credit to allow them to work and earn more before their pension is reduced.” VCOSS would like this to be similarly applied to other working-age payments to encourage more people to combine paid work and caring responsibilities.

While the rate of JobSeeker increased by $1.80 per day from 20 September, lifting the daily rate to $48 – this increase isn’t enough to support someone to meet their increasing cost of living while searching for paid employment. The JobSeeker rate must be urgently lifted to $73 per day so that people can meet their living costs and search for work.

Alongside reforms to JobSeeker, we join with ACOSS in calling for the establishment of a Social Security Commission that will advise Parliament on the ongoing adequacy of income support payments. We are pleased to see the establishment of the Senate Committee inquiry into the extent and nature of poverty in Australia.[6]

Adequately increasing the JobSeeker payment will help lift people out of poverty and remove barriers to combining work and care.

  RECOMMENDATIONS

  • Adjust taper rates to encourage more people to increase their paid work hours.
  • Lift the income-free thresholds for working-age payments.
  • Increase Jobseeker and related payments to at least $73 per day to ensure no one is left behind.
  • Establish a Social Security Commission that will advise Parliament on the ongoing adequacy of income support payments.


 

[1] Ben Phillips and Vivikth Narayanan, Financial Stress and Social Security Settings in Australia, ANU Centre for Social Research and Methods, April 2021, https://csrm.cass.anu.edu.au/sites/default/files/docs/2021/5/FS_and_OPM_paper_SVA_PDF_0.pdf

[2] Ibid.

[3] Ibid.

[4] Brotherhood of St Laurence, Submission to the Select Committee on Work and Care, September 2022.

[5] Ibid.

[6] Parliament of Australia, The extent and nature of poverty in Australia, https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Community_Affairs/PovertyinAustralia

Create an accessible, affordable and high-quality early childhood education and care system

This section responds to Term of Reference d: the adequacy of current work and care supports, systems, legislation and other relevant policies across Australian workplaces and society.

One of the biggest barriers to women’s workforce participation is lack of access to affordable, high-quality childcare.

In Victoria, the State Government has identified that 26,600 women are locked out of the workforce because of a lack of access to childcare. This is costing the State economy $1.5 billion a year.[1] Many women are also working reduced hours.

The Mitchell Institute recently reported that many low-income families and families living in regional areas are missing out on the benefits of childcare as:

“About nine million Australians, 35% of the population, live in neighbourhoods we classify as a childcare desert. A childcare desert is a populated area where there are more than three children per childcare place, or less than 0.333 places per child aged four or under.”[2]

The “crippling” cost of early childhood education is also preventing families’ participation, with analysis of the OECD data by The Parenthood revealing that: 

“A couple with children in full time care will spend 60 per cent of average earnings in gross childcare fees, second only to Switzerland.

In net fees Australia has jumped to 7th in the world, with families spending 26% of average earnings or 20% of net family income on early learning. This compares to the OECD average of 14% and 10% respectively.”

Cost and accessibility is also a major barrier to many single parents, and particularly single parents from culturally and linguistically diverse communities participation in the paid workforce. Childcare hours are also inflexible for many families and this restricts the type of work that parents can engage in.

Many low-income families and those working in casual employment are missing out on the benefits of childcare, with a recent report by Impact Economics and Policy finding that:

 “At least 126,000 children from the poorest households [miss] out on critical early childhood education and care.”[3]

Eligibility for childcare subsidy is currently restricted based on the number of hours a parent engages in a ‘recognised activity’.[4] According to an Impact Economics and Policy report:

“While the activity test aims to encourage participation in the workforce, it does the opposite by creating significant uncertainty for parents in casual employment due to the ongoing risk that they will fail to meet the test and generate overpayment debts”.[5]

The 2018 Child Care Package also cut the minimum amount of care that low-income families could receive from two days a week to one day. This resulted in 42,000 families less receiving the minimum entitlement. 

An Impact Economics and Policy report recommends abolishing the activity test as this will not only improve access to low-income families to early childhood education and care, it will also reduce red tape and improve participation of low-income parents that are currently dissuaded from work “due to the uncertainty created by the activity test and risk of incurring debts with Centrelink.”[6]

For these reasons, VCOSS recommends that the activity test be abolished.

According to the Grattan Institute,

“As women do more paid work and their incomes rise, they tend to lose some of their family benefits and their childcare subsidy on existing days worked. The ‘workforce disincentive rate’ – the proportion of income lost through higher taxes, lost family benefits, and higher childcare costs – is particularly punishing for women thinking about a fourth or fifth day of paid work in a week.”[7]

As part of its election commitments, the Commonwealth Government has promised to reform Australia’s early childhood education and care system including lifting the maximum child care subsidy rate to 90 per cent for families for the first child in care; and increasing child care subsidy rates for every family with one child in care earning less than $530,000 in household income.[8] These changes are expected to come into effect in July 2023.

Universal childcare is considered a social and economic good that has wide ranging benefits across society. Equity Economics has estimated that “providing free and high quality ECEC to all Australian children would represent international best practice. The total cost of such a system is estimated at close to $20 billion per year.”[9]

By investing in free, universal early childhood education and care, it is estimated that a lift in women’s workforce participation could increase GDP by up to $47.2 billion or 1.2 percent by 2050.[10]  

VCOSS recommends that Australia should move towards introducing free, universal childcare to better support parent’s workforce participation, and in particular helping lift women’s participation rate. 

  RECOMMENDATIONS

  • Abolish the childcare subsidy activity test.
  • Introduce free, universal childcare to boost women’s workforce participation.


 

[1] Improving childcare to get more women into work ‘biggest lever that we can pull’: Andrews, The Age, 1 September 2022, https://www.theage.com.au/politics/federal/improving-childcare-to-get-more-women-into-work-biggest-lever-that-we-can-pull-andrews-20220901-p5bek2.html

[2] Mitchell Institute, Victoria University, Deserts and oases: How accessible is childcare in Australia? March 2022, https://www.vu.edu.au/mitchell-institute/early-learning/childcare-deserts-oases-how-accessible-is-childcare-in-australia

[3] Impact Economics and Policy, Child care subsidy activity test: undermining child development and parental participation, August 2022, https://static1.squarespace.com/static/61e32e62c8c8337e6fd7a1e6/t/630de5c741a8de08ad48d593/1661855185396/Undermining+Child+Development+And+Parental+Participation+Report_FINAL.pdf

[4] Services Australia, Activity level and subsidised care for child care subsidy, https://www.servicesaustralia.gov.au/activity-level-and-subsidised-care-for-child-care-subsidy?context=41186

[5] mpact Economics and Policy, Child care subsidy activity test: undermining child development and parental participation, August 2022, https://static1.squarespace.com/static/61e32e62c8c8337e6fd7a1e6/t/630de5c741a8de08ad48d593/1661855185396/Undermining+Child+Development+And+Parental+Participation+Report_FINAL.pdf

[6] Ibid.

[7] Inquiry into Economic Equity for Victorian Women, Final Report, January 2022, https://www.vic.gov.au/economic-equity-victorian-women-inquiry page 70.

[8] Labor, Labor’s plan for cheaper childcare, https://www.alp.org.au/policies/cheaper-child-care

[9] The ParentHood and Equity Economics, Making Australia the best place in the world to be a parent,  https://d3n8a8pro7vhmx.cloudfront.net/theparenthood/pages/669/attachments/original/1613473151/Final_Report_-_Making_Australia_The_Best_Place_In_The_World_To_Be_A_Parent.pdf?1613473151 page 6

[10] Ibid.


 

Improve Australia’s paid paternal leave system

This section responds to Term of Reference d: the adequacy of current work and care supports, systems, legislation and other relevant policies across Australian workplaces and society.

Australia’s national parental leave scheme currently comprises:

  • 12 months’ unpaid parental leave per parent under the National Employment Standards;
  • Commonwealth government-funded Parental Leave Pay scheme – 18 weeks’ pay at the minimum wage to the primary carer (available if, among other things, they earn less than $150,000 per year); and
  • 2 weeks Dad and Partner Pay.

Many workers are also able to access additional leave provided by employers through their enterprise agreements, with a number of leading Australian businesses providing up to 26 weeks of flexible paid parental leave.[1]

The Victoria Public Service’s enterprise agreement provides staff with 16 weeks for primary carers and 4 weeks for secondary carers (and additional 12 weeks if they take over the primary responsibility for the care of the child within the first 78 weeks).[2] Superannuation is also paid on all paid and unpaid parental leave for the primary carer as a lump sum when the employee returns to work.[3]

While many organisations, government and businesses are removing the distinction between primary and secondary carers from their enterprise agreements, Australia’s federal parental scheme has not been significantly revised since it was first introduced in 2011.

Take up of Dad and Partner Pay also remains very low. We note that changes to the scheme are expected to proceed in March 2023, with the Federal Government merging the two-week Dad and Partner Pay scheme with the 18 weeks of Paid Parental Leave to create an “enhanced” 20-week scheme, paid at the minimum wage.[4] This will allow single parents to receive 20 weeks of paid leave and two-parent households to split the paid parental leave entitlement.

VCOSS welcomed reports that both unions and business groups called for an increase to Commonwealth-funded paid parental leave from 18 to 26 weeks to help close the gender pay gap at the recent Jobs and Skills summit (although we note this did not feature in the official outcomes communique).[5]

In line with the Productivity Commission recommendations that parents need 6-12 months in order to support the best outcomes for their children,[6] VCOSS recommends that the Commonwealth introduce at least 26 weeks of paid parental leave under the National Employment Standards. This would enable each parent to access 26 weeks of leave and provide a family with 12 months of care. Twenty-six (26) weeks is also in line with the World Health Organisation’s recommendation around breastfeeding.[7]

An employer does not have to pay superannuation when an employee is on paid or unpaid parental leave. The government parental leave scheme also does not attract the superannuation guarantee. Given the low superannuation balances of women, this should be rectified with a requirement that superannuation be paid on top of both employer and government funded paid parental leave payments.

  RECOMMENDATIONS

  • Introduce at least 26 weeks of paid parental leave under the National Employment Standards for each parent.
  • Ensure all government funded Paid Parental Leave and Dad and Partner Pay payments receive superannuation.
  • Require employers to pay superannuation while a parent is receiving employer funded paid parental leave payments.

[1] For example, see KPMG, KPMG introduces 26 weeks of flexible paid parental leave, 2021, https://www.consultancy.com.au/news/3581/kpmg-introduces-26-weeks-of-flexible-paid-parental-leave#:~:text=Professional%20services%20firm%20KPMG%20has,of%2026%20weeks%20paid%20leave.&text=The%20firm%20has%20also%20extended,cultural%20flexibility%20around%20public%20holidays.

[2] Victorian Public Service Enterprise Agreement 2020, https://www.dtf.vic.gov.au/funds-programs-and-policies/victorian-public-service-enterprise-agreement-2020

[3] Inquiry into Economic Equity for Victorian Women, Final Report, January 2022, https://www.vic.gov.au/economic-equity-victorian-women-inquiry page 63.

[4]ABC News, Paid parental leave boost in budget for dads and single mothers, 29 March 2022,  https://www.abc.net.au/news/2022-03-29/budget-paid-parental-leave-boost-dads-single-mothers/100948616

[5] ABC News, Paid Parental Leave increase after jobs summit, 4 September 2022, https://www.abc.net.au/news/2022-09-04/paid-parental-leave-increase-after-jobs-summit/101403852

[6] Australian Government Productivity Commission, Paid Parental Leave: Support for Parents with Newborn Children No 47, 28 February 2009.

[7] World Health Organisation, Breastfeeding,https://www.who.int/health-topics/breastfeeding#tab=tab_1


 


 

Reform ParentsNext

This section responds to Term of Reference d: the adequacy of current work and care supports, systems, legislation and other relevant policies across Australian workplaces and society.

ParentsNext is a pre-employment program for parents whose children are aged between nine months and five years old, and who receive government income support through the Parenting Payment.[1]

Its stated aim is to assist disadvantaged parents including early school leavers and those assessed with high barriers to employment to prepare for future study or to re-enter the workforce, using early intervention strategies.[2] This requires participants to attend scheduled appointments with a ParentsNext provider and agree to certain activities in a participation plan in order to receive their Parenting Payment.

While ParentsNext intends to support parents to re-enter the workforce, this is undermined by the requirement to compulsorily participate and a punitive Targeted Compliance Framework, which can result in Parenting Payment suspensions due to a failure to participate in an agreed activity.

The program is highly gendered, with 95 per cent of participants women. Further, 18 per cent of participants are Indigenous, 21 per cent are culturally and linguistically diverse and 15 per cent have a disability.[3]

ParentsNext has been criticised on the basis that it is not necessarily beneficial to parents and does not improve financial security.[4] A 2019 Senate inquiry into ParentsNext found that:

“In fact, evidence to the committee suggests that placing conditions on social security through compliance programs, such as ParentsNext, is likely to result in negative outcomes for participants.”[5]

The Joint Parliamentary Committee on Human Rights also found in 2021 that the compulsory nature of the program limited human rights, noting that:

“by making such participation compulsory, and providing that a person who fails to participate may have their parenting payment reduced, suspended or cancelled, this measure also engages and may limit several other human rights including the rights to: social security; an adequate standard of living; a private life; equality and nondiscrimination; and the rights of the child.”[6]

This report notes a significant number of payment suspensions have been applied to participants with “159,000 suspensions to approximately one third of all participants lasting an average of five days”.[7]

Given these significant issues, the 2019 Senate Inquiry report recommended:

“ParentsNext be reshaped, through a process of co-design with parents and experts, into a more supportive preemployment program which meets the needs of parents and acknowledges and addresses the structural barriers to employment which they face.” [8]

Such structural barriers include lack of access to flexible childcare and opportunities to obtain secure and fairly renumerated employment.

Given the issues with the current design of the program, VCOSS agrees that it should be redesigned, with a focus on developing a voluntary, preemployment program that provides flexible, wraparound support to participants and focuses on activities that are in the best interests of the parent and child – without the coercive stick of payment suspensions.

By making the program flexible and tailored towards the needs of the parent, this will help strengthen employment prospects. A voluntary approach would also recognise parental autonomy and choice.

  RECOMMENDATION

  • Redesign ParentsNext in consultation with the community sector – including representative peak bodies and advocacy organisations – to be a voluntary, pre-employment program that provides flexible, wraparound support to participants.

[1] The Senate Community Affairs References Committee, ParentsNext, including its trial and subsequent broader rollout, https://parlinfo.aph.gov.au/parlInfo/download/committees/reportsen/024267/toc_pdf/ParentsNext,includingitstrialandsubsequentbroaderrollout.pdf;fileType=application%2Fpdf

[2] Ibid.

[3] Parliamentary Joint Committee on Human Rights, Inquiry Report, ParentsNext: examination of Social Security (Parenting payment participation requirements–class of persons) Instrument 2021, page 83

[4] The Senate Community Affairs References Committee, ParentsNext, including its trial and subsequent broader rollout, https://parlinfo.aph.gov.au/parlInfo/download/committees/reportsen/024267/toc_pdf/ParentsNext,includingitstrialandsubsequentbroaderrollout.pdf;fileType=application%2Fpdf page 37; Single mother says she had to miss paid work to attend ParentsNext appointment, The Guardian, 7 September 2022, https://www.theguardian.com/australia-news/2022/sep/07/single-mother-says-she-had-to-miss-paid-work-to-attend-parentsnext-appointment?CMP=soc_567

[5] The Senate Community Affairs References Committee, ParentsNext, including its trial and subsequent broader rollout, https://parlinfo.aph.gov.au/parlInfo/download/committees/reportsen/024267/toc_pdf/ParentsNext,includingitstrialandsubsequentbroaderrollout.pdf;fileType=application%2Fpdf page 37

[6] Parliamentary Joint Committee on Human Rights, Inquiry Report, ParentsNext: examination of Social Security (Parenting payment participation requirements–class of persons) Instrument 2021, page 9

[7] Ibid, page 108.

[8] The Senate Community Affairs References Committee, ParentsNext, including its trial and subsequent broader rollout, https://parlinfo.aph.gov.au/parlInfo/download/committees/reportsen/024267/toc_pdf/ParentsNext,includingitstrialandsubsequentbroaderrollout.pdf;fileType=application%2Fpdf


 


 

VCOSS acknowledges the Traditional Owners of Country. We pay respect to Elders past and present, and to emerging leaders. Our business is conducted our business on sovereign, unceded Aboriginal land.

We support a First Nations Voice to Federal Parliament. This year, you have the opportunity to vote YES for change.