Parental leave: a cost we all bear

By SELWYN PARKER

Parental leave is one of those lovely ideas that just about everybody would like to see happen, provided they are not paying for it.

Who would not want to spend a couple of months at home with the kids at the expense of their employer or fellow taxpayers?

The problem with compulsory provisions for parental leave, whether they are funded by employers, employees or taxpayers or a combination of the three, is that they are fundamentally unfair.

Take employer-funded parental leave. For a start, most small businesses cannot afford it, as the Prime Minister seemed to recognise when she dropped the axe last week on the Alliance's scheme.

But there is a bigger argument than the financial one against mandatory provisions for parental leave. It is not the state's business to tell employers how to spend their money on staff. They are already doing enough by boosting GDP, employing people and paying taxes.

Compulsory parental leave also fails to appreciate the dramatic differences between workplaces in today's open economy. Some companies offer parental leave because they have a large percentage of female staff whom they value and want to keep. That is voluntary contracting.

But other companies with, say, a high percentage of casual employees would probably find their employees wanted the money that would otherwise go into parental leave for a few to be converted instead into higher wages for all.

It is hard to see why employees who are childless, whose children are off their hands, or who are single should have to pay for somebody else's parental leave. That would be a cross-subsidy borne by those who do not benefit from it.

As for employer-funded parental leave, Jim Anderton is impossibly out of touch. In most of Western Europe - Germany, France and Austria, for example - there is only basic maternity leave with minimal replacement of income (small businesses in France are exempt from even this diluted scheme). The Netherlands allows only reduced working hours. And throughout Southern Europe, parental leave is unpaid.

Certainly, Scandinavian countries offer elaborate forms of parental leave but even historically socialist Sweden requires only an 80 per cent subsidy from employers.

In Australia, parents have the right of parental leave but they get little or zero financial compensation. In Canada, you have to buy parental leave in the form of insurance.

And in Tony Blair's Labour-led Britain, an employer-funded scheme is not remotely on the cards. In fact, there is no rush to introduce any form of parental leave - only 3 per cent of companies offer schemes.

But surely the whole parental leave debate should be a dinosaur. These days, many can work from home, stay in touch with the office and still keep an eye on the kids.