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Groups suggests loans for maternity leave

Date Published : Tuesday, July 01, 2008

Parents exploring ways of remaining a home while their children are babies should be able to apply for a loan to provide them with paid leave.

A report commissioned by the Committee for Economic Development of Australia (CEDA) proposes establishing a HECS-style loan system that would fund up to nine months' of paid leave.

The think tank recommends that a 'user-pays' approach could be used to supplement government-funded maternity and paternity leave, enabling parents to access more paid leave if they chose to do so.

According to a new paper by the committee, politicians need to adopt a more progressive approach to parental leave in order to improve current provision for parents and businesses.

Davis Byers, chief executive of CEDA, stated: "Most of the current debate centres around consideration of proposals for a much shorter period of paid maternity leave of 14 weeks funded by the government.

"A longer period of parental leave would provide a better opportunity for maintaining a parent's longer-term attachment to the workforce. It would also increase the likelihood that parents would return to work with the same employer."

The report proposes creating a scheme offering a loan of around $14,000 to parents wanting to stay at home with their children for six months, complementing a government-funded scheme providing 14 weeks of paid maternity leave.

Created by economists Professor Bruce Chapman and Tim Higgins of the Australian National University, the plans include a repayments system that would come into force when households cross a certain income threshold.

HECS-HELP is a loan provided to students by the Australian Government, which pays the loan amount directly to the higher education provider and records the debt with the tax office.

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