Nicholas Way

Labor’s maternity leave proposal might sound fine, but it would be disastrous for small business.

Maternity leave of his senses

Opposition Leader Kevin Rudd has a big positive working for him as he prepares for his tilt at the Lodge later this year. Mark Latham, who led Labor to the polls in 2004, left a textbook example on how to lose an election. In particular, he comprehensively alienated business – from the big end of town to the individual contractor.

Rudd has learnt the lesson: the public face of big business might be well-heeled men drinking G&Ts in the toffy clubs that dot the CBDs but that ignores their employees and shareholders – a seven-figure number.

So it was no surprise to see Rudd recently playing footsies with the Business Council of Australia, which represents our top 100 companies. He knows wooing business is critical to winning office.

But he has to understand big business is not the only game in town. Policies that big business can accommodate with little fuss would be disastrous at the small end of town.

There’s no better example of this than reports that Labor is toying with the idea of allowing women two years’ unpaid maternity leave and then have the right to part-time employment on returning to work.

Predictably – and totally understandably – small business organisations are queuing to condemn this proposal. It might go down well in the coffee shops in Fitzroy and Paddington but it could cripple small businesses.

Imagine a business with five employees where a woman takes two years’ maternity leave. Obviously a replacement has to be found and trained – at some cost to the employer. Two years later, the employer has to turn around and find a part-time job.

In this instance, it’s clearly a policy that only “protects” the welfare of one person; it ignores the “rights” of the other four employees, to say nothing of the owner of the business.

That said, many small businesses will welcome back such employees on a part-time basis; some will even come to terms with two years’ maternity leave, as difficult as that might be organisationally. They know better than anyone that valued employees add value.

But to make it compulsory is ridiculous. Why do you instinctively suspect that employees who you would happily offer that arrangement are the very ones who won’t ask and the ones you would happily see out the backdoor will be queuing up to take advantage of it?

Rudd has made a lot of right noises on industrial relations. Clearly, he’s rethinking Labor’s response to WorkChoices. And his choice of Craig Emerson as Labor’s small business spokesperson sent the right message. But two years’ maternity leave? It’s not worth labouring with.