Loading Replay Replay video Play video Play video The Coalition's $5.5 billion plan will provide mothers with 26 weeks' paid leave, at full replacement wage up to an annual salary of $150,000 (or a maximum of $75,000) - or the minimum wage if it is greater. This strategy of ''wage replacement'' is fundamentally different to Labor's $1.8 billion scheme, introduced in January 2011. It provides mothers the minimum wage for 18 weeks. All workers - part-time and full-time - who earn less than $150,000 a year are eligible for the flat-rate payment. Tony Abbott in Liverpool, NSW, on Monday. Credit:Alex Ellinghausen Sociologist Eva Cox said the Coalition scheme would go some way to reducing the vast disparity in the average lifetime earnings of men and women.

''It costs women a lot of money to take time out and have babies,'' she said. ''If you look at the lifetime earnings of women with kids, they are about 60 to 70 per cent of male lifetime earnings. So you could regard them getting six months' pay at their normal income as a minor form of compensation.'' The Coalition's leave scheme will also pay superannuation and it claims a worker on the average female full-time salary of $65,000 would be about $50,000 better off in retirement than she would be under the Labor scheme, which does not include superannuation. But do the benefits justify the considerable cost? The Coalition claims its paid parental leave policy would be an ''economic driver'' and boost female workforce participation rates, but the document makes no specific forecasts on how much it would affect participation. The scheme imposes a major long-term burden on an already overstretched budget and experts have questioned whether it will deliver sufficient productivity benefits to justify the price tag.

A recent Productivity Commission report found that providing full replacement wages for highly educated, well-paid women would be expensive and might not make much difference to workforce participation. Sydney University's Professor Marian Baird said that while Mr Abbott's parental leave policy would help equalise the long-term wage outcomes of men and women, it needed to be matched by improvements to childcare. ''Paid parental leave is one important factor influencing women's workforce participation, but with a government scheme in operation, childcare is now more important and is the next key element of the work-family public policy Australia must address,'' she said. The $5.5 billion annual price tag of the Coalition's parental leave scheme is similar to the amount the Commonwealth government spends each year in subsidies to all parents using childcare. The Coalition's plan is a clear pitch to small businesses, which often cannot match the maternity leave provisions offered by large corporations. The scheme effectively delivers small businesses a generous parental leave package for workers that they don't have to pay for.

The Coalition also claims its scheme would reduce the compliance cost the current parental leave system imposes on business. Australian Chamber of Commerce and Industry chief economist Greg Evans said on Monday ''there is no doubt'' the Coalition's scheme would benefit small business. Julie Smith from the Australian Centre for Economic Research on Health at the Australian National University in Canberra said the six months' leave offered by the Coalition ''was good for mothers and babies and it's good for reducing health costs'' by supporting mothers to breastfeed for longer. Sections of the union movement gave cautious support for aspects of Mr Abbot's parental leave scheme. The national president of the National Tertiary Education Union, Jeannie Rea, said the union had lobbied hard to get more paid time off for mothers, and higher replacement salaries. ''We supported Labor's scheme, but we don't think it goes far enough, and we also think Tony Abbott has a point that employers should be picking up the bill for his scheme,'' she said.

Ms Rea said that Australia had lagged badly behind other developed countries in bringing in paid parental leave. Loading ''It has been a really shameful thing that Australia has been so slow,'' she said. She said that it was really pleasing that Australia was now having a debate ''about better parental leave''.