Federal Treasurer Josh Frydenberg says that under the government's $346-million paid parental leave scheme outlined in his budget, families get the choice to decide whether the mother or father takes paid leave after they have a child.
The budget changes allow fathers to access parental leave at the same time as any employer-funded leave, the same way mothers can.
Before Tuesday night's budget, only the primary carer — typically women — was eligible to take 18 weeks and the secondary carer just two weeks.
In Tuesday's budget, the federal government merged the two-week Dad and Partner Pay scheme with the 18 weeks of Paid Parental Leave (PPL) scheme to create an "enhanced" 20-week scheme, paid at the minimum wage.
Single parents also get an extra two weeks of government-funded paid parental leave.
The government also broadened eligibility, allowing households earning up to $350,000 a year to qualify for the scheme.
To date, it has been limited to women earning up to $151,350 and, according to Treasury, the number of women earning more than $150,000 a year more than doubled, from 99,800 to 209,600, between 2010 and 2017.
The government says its changes will benefit the roughly 260,000 parents who access paid parental leave annually, with an additional 2,200 families gaining access who were previously not eligible.
Without a 'use-it-or-lose-it provision', most men will not opt to be primary carer
In 2020-21, less than 90,000 fathers and partners received Dad and Partner Pay, which accounts for only around 30 per cent of births each year.
Dr Angela Jackson, the lead economist at Impact Economics and Policy, says moving from 18 to 20 weeks for single parents is a good move because it equalises single households with couple households.
And, she says, allowing paid parental leave to be shared is also a positive, but she notes that the change falls short of policies proposed by The Grattan Institute and Chief Executive Women (CEW), which had advocated for an increase to 26 weeks' Paid Parental Leave with a "clear, use-it-or-lose-it" component to encourage more take-up by fathers.
Dr Jackson uses the examples of Sweden and Canada, which both have "use-it-or-lose-it" provisions, which has resulted in more fathers opting to take on primary carer roles for longer periods.
She says the Treasurer's comment about giving parents a "choice" sounds good in theory, but the reality of the way the tax and transfer system is structured means that women typically earn less than men and are penalised when they opt to increase their working hours.
This is because women are typically the second income earners in a household and are worst hit by "effective marginal tax rates".
That is, the proportion of every extra dollar earned that is lost to the family after taking account of additional income tax paid, loss of family payments and loss of childcare subsidies.
"If you don't understand how those choices are being made, you are potentially locking women into their roles as society's unpaid carers," Dr Jackson said.
"The key thing in this policy space is having use it or lose it. It really increases the rate of take-up [by fathers] and flows on to higher participation and higher earnings for women."
Dr Jackson is also disappointed that the government moved to a household income test.
"What we do in this country is rather than seeing men and women as individuals making decisions, we treat the household as an economic unit … that's an antiquated view that locks women into doing all or most of the unpaid work."
She adds that, with rising cost-of-living pressures for families, the government could have also announced childcare reforms that give people access to more affordable childcare.
Sweden's model has seen more dads take leave, and mums heading back to work
Deakin University's Professor Andrew Scott — who is the convenor of the Australia Institute's Nordic policy centre — says that, "If the government was serious about genuine parental leave reform, it would extend paid parental leave to six months at a replacement wage and provide a further month of non-transferable parental leave to be taken by the father or other secondary caregiver".
He says that, as a result, the proportion of women in full-time employment is almost 83 per cent, whereas in Australia it is less than 63 per cent.
Equality Rights Alliance (ERA) is the largest alliance of women's organisations in Australia. Its convenor, Helen Dalley Fisher, agrees that the government's budget announcement should have included a "use-it-or-lose-it" provision.
She says that, because women are typically on lower incomes than their partners, the impact might be that men don't take the extra leave offered, and women will take the full 20 weeks.
Paid parental leave should be paid on top of super, and childcare reform needed
Industry Super Australia chief executive Bernie Dean said the budget was "another missed opportunity to narrow the gender super gap".
He says that paying superannuation on top of the Commonwealth's Paid Parental Leave would add up to $14,000 to the retirement balance of a mother of two.
"It's disappointing the government did not make a modest investment in the financial future of millions of mums and pay super on parental leave," Mr Dean said.
To lift women's economic participation, there's also a view that the federal government could have built on measures that were in last year's budget, in which the government lifted childcare subsidies for a family's second child.
Previously subsidies were applied at the same rate per child, no matter how many children a family had in care.
But that changed from March 7, when an increase in the subsidy was made available to families with more than one child aged five or under attending childcare.
According to federal treasury figures cited in the 2021 budget, a family with three children and an annual household income of $80,000, would have their subsidy increased from 82 per cent to 95 per cent for their second and third child, and be $108 better off each week for four days of care.
But a recent government-commissioned review of the measure found that "the introduction of the Child Care Package has had little impact on the accessibility or flexibility of child care provision" and that "evidence suggests that the package has had diverse impacts on parents' participation in employment".
The review made a number of recommendations about improving the current subsidy, as well as a broader look at early childhood education and care, and how it can lift parental workforce participation and build "child development and as an instrument to address disadvantage".
Chief Executive Women (CEW) president Sam Mostyn says Tuesday's budget did include investment in up to 20 new early childhood centres in rural and regional centres.
But she was disappointed that there were no new budget measures to ease the cost of early childhood education and care, nor address the workforce disincentives in the current childcare subsidy.
"This so-called 'cost-of-living' budget ignores the reality that, for many families, early childhood education and care is one of the biggest outgoings in the family budget. Right now, there are women who reluctantly say no to extra days of work simply because of the cost of childcare," she said.
