The Business Council of Australia welcomes the Productivity Commission’s draft report recommending 18 weeks of paid parental leave.

“This proposal would help to ensure that both work and family are possible for Australian women,” said BCA Chief Executive Katie Lahey.

“At the same time, it eases the path back to the workforce for women with children. This is crucial for Australia at a time when we are seeking to raise workforce participation.”

The commission’s proposal is broadly in line with the BCA’s submission to the commission earlier this year. It recognises parental leave’s positive effects on workforce participation, on educational outcomes and on child and maternal health.

“The scheme rationalises current family support payments and tax arrangements, with greatest support going to the lowest-paid,” Ms Lahey said.

“That will create a well-focused scheme for only a modest increase in government outlays.

Ms Lahey noted that for most large businesses, paid maternity leave is nothing new. This proposal, however, extends the benefits of parental leave to people working in many smaller businesses, and to casual workers.”

“Some 40 per cent of women in the workforce have access to some paid maternity leave,” she said.

“Those that typically do not are generally the lower paid, and those employed casually. The BCA sees paid parental leave as an important social support for these women.

“It is also important to note that parental leave has been shown to improve the mental health of both children and mothers, and that it improves children’s educational achievements.”

Ms Lahey added that once parental leave issues have been addressed, the government should turn its attention to boosting workforce participation by widening the fringe benefits tax exemption for employer-provided childcare.

The BCA is an association of chief executives of 100 of Australia’s leading companies. These companies are major contributors to Australia’s economy, employing nearly one million Australians.