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Crossbench Senators David Pocock and Jacqui Lambie have secured a commitment from the Albanese Government to provide additional support to small businesses to manage changes to government paid parental leave.

The Paid Parental Leave Amendment (More Support for Working Families) Bill 2023 increases the total amount of government paid parental leave progressively to 26 weeks by 1 July 2026.

Senators Pocock and Lambie have argued that while these changes are welcome and should go further, Australia’s small business people shouldn’t bear the burden of administering this government payment. They argue the government payment should be made directly by Services Australia, as already happens almost 40% of the time.

Together with fellow crossbench Senator Ralph Babet, they are cosponsoring a range of potential amendments proposing either an opt-in or opt-out model for small business or compensation for small business people for their time in administering the government scheme.

While the government has not offered support for these amendments, they have agreed to provide $10 million over the forward estimates in funding to better support small business and streamline administration of the scheme. 

Social Services Minister Amanda Rishworth has invited Senators Pocock and Lambie to work jointly on the co-design of improvements that assist small businesses to administer the scheme, including potential technological enhancements with payroll software providers. This work would be undertaken with small business representatives alongside the Department of Social Services and Services Australia.

It follows a senate inquiry that Senators Pocock and Lambie succeeded in standing up last year that examined the potential impacts of the Commonwealth Paid Parental Leave (PPL) scheme on small businesses and their employees.

The inquiry heard evidence that most small business owners do not have dedicated human resources or finance staff and that this creates a far higher administrative burden for them.

A 2010–2014 evaluation of Commonwealth Paid Parental Leave found small businesses (private sector employers with 2–19 employees) administering PPL payments for at least one employee required 15.1 staff hours on average, with a median time of 5 hours.

The Committee majority report recommended that Services Australia directly administer government parental leave payments except in circumstances where a small business opts-in to do so.

“Government paid parental leave is a critically valuable entitlement, particularly for increasing women’s workforce participation and closing the gender pay and super gaps,” Senator Pocock said.

“The burden of administering this important government payment is felt disproportionately by small business people, many of whom are women.

“We need to be making it easier, not harder, to run a small business in Australia. I can’t see any downside for small businesses being free to choose whether or not to administer a scheme the government can administer itself, and already does in over a third of cases currently.”

“Small businesses already have too much red tape, these amendments give Australian small business a choice,” Senator Lambie said.

“They can either choose an opt-in or opt-out model or seek compensation for their time in administering the government scheme. 

“Once again, the crossbench can demonstrate to the Australian people that independents and micro parties come up with solutions that work.”

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