WORK and FAMILY - Achieving a better balance

Peter McDonald outlines a new program of government assistance THE Prime Minister has stated that providing a better balance of work and family life is a high priority for this term of office. Famously, he has described the issue as a ‘barbecue stopper’, but, so far, no reforms have emerged. There is widespread recognition of an urgent need for reform, but what are the main problems? First, as measured by the level of financial support from government, the social value of children, particularly the majority of children who live in middle-income families, has been whittled away over the past 25 years. In Australia, Robert Menzies established the principle that government should recognise that parents who are raising the society’s next generation should receive financial recognition for the additional costs this entails. But since 1976, compared with average wages, the values of standard child payments have been eroded, payments have been increasingly tested against income leading to sharp reductions as family income rises above (a very low) $30,000 a year, and the additional costs for middle-income families with children were inadequately recognised when the GST was introduced (compensation was 90 cents a child a week). Second, the parent at home with a child wanting to return to paid work is faced with such large losses of government payments and such large costs of working that the transition is often not worthwhile. For example, a woman whose husband earns $600 a week who wants to return to work herself for $300 a week would effectively make just $1.88 an hour. This is because existing payments are contingent upon workforce participation and income, arrangements that grossly impede choice. The existing family support system is a $17 billion mish-mash of new and amended policies bolted together over five decades. It has become an illogical, inefficient, complex jumble of conflicting principles. Here, the solution is obvious. Payments should be determined by the age of the child, not by the work circumstances of the parents or by their income (except at the extremes). Third, there is now substantial recognition of the importance of the early years in child development. However, unfairly, geographic and financial access to early childhood education varies across Australia. This is due largely to the inefficient, dual system of early childhood education and care consisting of child care on one side and preschools on the other side. Reform in this area must deal with difficult federal-state relationships, the shoal upon which much good social policy in Australia founders. Cost-shifting games played by state and federal governments in this area of policy are a gross indignity to Australian children. Fourth, the reforms that have already been made in relation to work-place arrangements for parents with children need to be enhanced. This applies in particular to leave arrangements (including paid maternity leave) and access to part-time work. What needs to be done? Applying a cost-neutral restructuring of existing payments, we could have: 1. A new universal cash payment for all children aged 0-2 of $6500 a year. Part of the payment at age 0 would be contingent upon the mother remaining out of the labour force for three months after the birth (to fulfil the health criterion of maternity leave) and part of the payment at age 1 would be the Child Immunisation Allowance. 2. A non-contingent cash payment of $2500 a year for all children aged 3 and 4, plus allocation by the Commonwealth of $4000 a child aged 3-4 to a new, early childhood education and care scheme. States and territories would contribute matching funds. All 3 and 4-year-olds would have a right of free access for 20 hours a week to early childhood education provided by this scheme. The new system would also deliver child care to 3 to 4-year-olds beyond the free hours and to children of other ages upon payment by parents. 3. The payments described would be available equally to all families with children up to a threshold of about $100,000. Low-income families (incomes under about $30,000) would receive higher payments, as at present. 4. To prevent future erosion, all payments and thresholds in the family payments system would be indexed to changes in wages rather than to changes in prices. 5. Development of an enhanced, universally accessible, out-of-school-hours care program for primary school children funded jointly by the Commonwealth and the states and territories. 6. Negotiation of a right to part-time work in their own job (80 per cent) for all parents of children of primary school age or lower, including both fathers and mothers. 7. Extension of the existing unpaid leave entitlement of each parent after the birth of a child to 18 months. 8. Extension of incentives for employers to provide family-friendly workplaces and additional parental leave entitlements, especially wage-related paid maternity leave. 9. Provision of incentives that in all areas of life promote a child-friendly society. Professor Peter McDonald is head of the demography and sociology program at the Australian National University. This article originally appeared in the Age, and draws from his paper in the latest issue of the Monash University journal People and Place