Unions and businesses say the Abbott Government's move to stop new mums "double- dipping" on paid parental leave could lead to some companies dumping their own schemes.
The surprise decision to restrict access to taxpayer- funded baby leave came as Nationals MPs criticised the Government's plan to strip childcare subsidies from stay-at-home parents.
Under the current universal scheme, new mothers on less than $150,000 a year are entitled to 18 weeks paid parental leave, set at the minimum wage, to allow them to take time off work. It is currently worth $11,500.
But in a move to save almost $1 billion over four years, mothers will no longer be able to access the Government payment and paid parental leave offered by their employer, including State public servants.
About 45,000 mothers a year will now only get a part-payment from Canberra, while 34,000 will miss out. Business groups cautioned that ending double-dipping would have unintended consequences.
"It would be surprising if any business chose to wholly foot the bill instead of restructuring their program in such a way that included contributions from the Government," WA Chamber of Commerce and Industry chief Deidre Willmott said.
FEDERAL PACKAGE TO ENERGISE SMALL BUSINESS
MAKE OR BREAK BUDGET
CONFIDENCE LIFT SOUGHT
MORE TO FIGHT HOMEGROWN TERROR
QUESTIONS OVER CHILDCARE JOBS PLAN FAMILIES WELCOME HELP ON FEES
PARENTAL LEAVE CHANGE IS FAIR: CORMANN
DOUBLE-UP PARENTAL LEAVE CUT
CHANCES OF SURPLUS THIS DECADE GONE
MORE FEDERAL GOVT AGENCIES TO GO
Australian Council of Trade Unions president Ged Kearney said to accuse women of double-dipping "fundamentally misrepresents" that the taxpayer-funded leave scheme was always intended to complement employer-based entitlements.
Treasurer Joe Hockey dismissed concerns businesses would get rid of their schemes, saying many were doing it to keep their employees.
"If they are going to create artificial constructs in order to avoid paying something that should be in my view the normal course of business, then sooner or later it will catch up with them," he said.
Premier Colin Barnett last night ruled out transferring responsibility to the Commonwealth for WA public servants' paid parental leave schemes.
The new restriction comes despite Prime Minister Tony Abbott making the provision of taxpayer-funded paid leave at the parent's replacement wage for six months one of his signature policies because it was good for a child's development. He dropped that policy in February in favour of extra spending on child care.
The Government faces an internal backlash over part of its childcare package to end subsidies for families with a single breadwinner earning more than $65,000 a year.
"I am disappointed there's not more, or even something, for parents that decide to look after their own children," Queensland senator Matt Canavan said.