Women's Workforce Participation Adjournment

12 May 2011

Tonight I want to speak briefly about women's work and the contribution that women's paid work has made to their own empowerment, to the financial security of their families and to the productive capacity of this nation. I also want to touch on the barriers that remain to women's full participation in the workforce. These are barriers that constrain women's personal development, limit their capacity to provide a secure economic future for themselves and their families, and restrict their contribution to Australia's productivity. They are barriers that see Australian women with significantly lower incomes than men throughout their working lives—and with woefully inadequate retirement incomes.

The women's budget statement this week highlights that, even in times of economic strength, Australia has a high proportion of long-term jobless families compared to other OECD countries. Around 70 per cent of these families with children under 15 are single parent families and the majority of these are headed by single mothers. We know that extended periods on income support can lead to significant barriers to workforce participation and entrench the disadvantage that these families experience.

There is no doubt that access to paid work and the benefits that flow from it are central to the empowerment of women. This is a fact that has long been recognised by labour feminists. Access to work under reasonable conditions and for fair reward is vital to women's economic and social wellbeing, and it is equally important to women's dependants, especially their children. As the OECD has recognised, increasing maternal employment is one of the most effective means of raising family incomes and reducing the risk of child poverty. It is certainly pleasing to see this as an emphasis within this week's budget.

On average across the OECD, children in households without an adult in work are three times more likely to grow up in poverty than children in one-earner households. And children in one-earner households are three times more likely to grow up in poverty than children in dual-earner households. In short, women who go back to work are helping protect their children from poverty, just as surely as they are advancing their own economic and social wellbeing.

We know that increasing women's employment has also contributed a great deal to Australia's economic growth in recent decades. One recent study by Goldman Sachs estimates that progress in closing the gender gap in the employment rate has already added 22 per cent to Australia's GDP since 1974. And increasing women's workforce participation has become more urgent as our population ages and as Australia confronts looming skills shortages as a result of the current resources boom.

There is now a positive correlation between employment rates and fertility rates in developed countries. Women in Scandinavia, for example, are both more likely to work and more likely to have children than their sisters in Italy or Japan. So it seems that when women are not forced to choose between child rearing and paid work, most women will in fact choose to do both. In other words, we can have both more children and more working mothers—a double benefit in terms of our ageing population—if we get the policy settings right.

Given how important access to paid work is for women and their children and for the Australian economy, it is concerning that Australia has fallen behind many other developed nations on this front. While women's workforce participation rates in Australia have continued to rise over the past 20 years, they have risen slowly, much more slowly than in other comparable countries. So it is pleasing that in this week's budget we have seen significant measures to lift women's workforce participation.

I think it really does matter that women with young children are less likely to work in Australia than in many other comparable countries. When women disengage from the workforce because of child-rearing responsibilities, either by not working or by working part time, they are less likely and less likely to work full time in the future. They are also more likely to earn less later in life and more likely to retire on an inadequate income. Taking a career break to have children will in all probability affect a woman's financial security not just at the time but, indeed, for the rest of her life.

We know that much of the gender pay gap can be explained by the impact of parental and marital status on men's and women's earnings. So if we care about equal employ­ment opportunity, if we care about pay equity, if we care about women's retirement incomes, if we care about child poverty and family income inequality and if we care about Australia's future productivity and prosperity, we need to confront the fact that parenthood is exacerbating gender inequality in our workforce. We need work that works for women in this country, including women with children, so that fewer women have to choose between children and a rewarding career and more women can choose to have both.

The question is: how do we do this? We have met many of the required policy milestones, which include: early childhood education for preschoolers, three- to five-year-olds; publicly funded child care for very young children; universal, moderate length, job protected, unpaid parental leave; short-term paid maternity and paternity leave; ensuring that work benefits that help parents manage work and family responsibilities, such as flex time, are readily available and that employees are not penalised for using them; and, importantly, reducing disincent­ives to work for second earners within the tax/welfare system. I am pleased that within this budget and with many of our previous achievements we have done things like roll out early childhood education, in the years prior to school, of 15 hours per week for 40 weeks per year for four-year-olds. We have boosted public support for child care by increasing the childcare tax rebate substan­tially as well as by increasing the quality of care children in this nation receive. We have also introduced the nation's first national paid parental leave.

In this budget, we are investing $7.1 million over four years to provide support to help jobless parents living in 10 disad­vantaged locations—parents who have been on income support for at least two years or who are under 23 years of age and who are not currently working or studying. We will also help more parents with the costs of child care with the Jobs, Education, Training and Childcare Fee Assistance, JETCCFA, package being extended from 26 to 52 weeks for employment related activities. We are focused on helping single parents enter the workforce with career advisory services and investments to help single parents improve their skills and plan for their transition into the workforce.

Most importantly, we have provided incentives to single parents through parent­ing payment reforms. We are rewarding people, most of whom are women, who are earning an income while on Newstart and establishing their connection to the labour force. To achieve this, we are adjusting the taper rate. I am not going to explain the technical details of that tonight, but it means that many recipients will be able to earn almost $400 extra per fortnight, to a total of $1,346 per fortnight, before they lose any eligibility for at least some form of income support. You can see that that is a significant incentive to help single parents, most of whom are women, back into the workforce. We have also increased the low-income tax offset, but I do not have time to go into that this evening.

Clearly, there is much to be done to ensure that all women in Australia can choose to have children and a rewarding career. We have taken important steps since we have been elected, and indeed in this budget, to ensure that this is the case. As our Prime Minister has highlighted, Australians should not be denied the benefits and dignity of work. These benefits are vital not only to women but also to their dependent children. As I have highlighted, Labor has taken many steps since first being elected but there is much more to do in the future still to advance this agenda.