TAX credits for employers who offered paid parental leave would be a less discriminatory way of helping families juggle caring and work responsibilities, a forum on maternity leave heard yesterday.
Economist Joshua Gans, from the Melbourne Business School, said paid parental leave could appear as a red flag to employers against hiring women.
But any such disincentive could be removed if employers were remunerated when a parent returned to work, he told the forum at Australian National University.
"While working out ways it can be easier for parents to take leave following the birth of a child, you can't ignore the costs this imposes on the workplace," Professor Gans said.
"It shouldn't surprise us that anticipating the difficulties family-oriented employees have in juggling work and home is a potential deterrent for employers and a source of discrimination in labour markets."
The Federal Government might introduce paid maternity leave next year. The Productivity Commission will report on what such a scheme could look like next month. But the Government is already preparing to fund people for 14 weeks at home after childbirth at the minimum wage.
It announced in May that from next year the baby bonus will no longer be paid in a lump sum but in instalments that are roughly equivalent to the minimum wage.
Some economists have suggested a HECS-style system would be preferable because it would allow parents to stay at home for longer if they wanted to.
But Professor Gans said employers needed to be encouraged to think differently about parental leave policies.
If they were given tax credits when a parent returned to work that would act as an incentive to hire people who had or were considering having children, Professor Gans said.