The CIS wants parents to have the option of a loan equal to the pre-baby wages of the primary carer, up to the Coalition's income cap of $100,000 a year, for 26 weeks.

All but $5000 of the loan would need to be repaid once parents were working again and meeting the minimum wage.

This would allow them to ''self-finance'' parental leave, according to report author Matthew Taylor.

Mr Taylor estimates that a high-income family - with two university educated parents - would take four years to repay the loan for one child and five years for a two-child family. The repayments would not be more than 6 per cent of family earnings.

A low-income family - where both parents have not finished year 12 - would take six years to pay off the loan for one child and eight years for two, with repayments not exceeding 4 per cent of family earnings.