Paid maternity leave needed to win global war for talent

I’m a professional woman in my early 30s and all my friends are having babies. That’s not unusual - except that many of them are doing it overseas.

Last year Kevin Rudd was cuddling babies and promoting the benefits of a paid maternity leave scheme. Now, with the financial crisis mauling our economy, it looks like any such scheme will bite the dust come budget time. But Australia needs to urgently adopt paid maternity provisions if it is to compete in the global war for talent.

Australia is one of only a handful of Western countries in the world that doesn’t offer paid parental leave. The generous maternity provisions in many other countries are fuelling a brain drain by luring Australian expats to stay overseas for longer so they can maintain their lifestyles post-baby.

Sydney professionals Margaret and her husband didn’t factor kids into the equation when they decided to move to the UK a few years ago. But the availability of maternity leave means they will be staying there longer now that they have had their first child. “If not for maternity leave, I would rather have had the baby in Australia ... but the financial assistance is significant,” Margaret said.

Margaret said “what mat leave means is that we will definitely stay here for the year that I can take off as maternity leave, plus four to five months after that when I go back to work. So the UK, instead of Australia, gets the benefit of my husband’s brain for the next year and then both of us for the four to five months post-maternity leave when we are both back at work.”

Australians heading overseas tend to be young, well educated, and have professional careers. Recent ABS data shows that most Australians heading overseas are 30- to 39-years-old - prime child-bearing age. And a survey last year by HSBC found that 39 per cent of Australian expats living overseas earned more than £100,000 (AU$220,000) a year. So they have more to gain from maternity schemes that are often based in part on the woman’s income before childbirth.

A woman on an income of £45,000 (AU$100,000) who has worked for the same employer for most of the year before giving birth would receive the equivalent of AU$19,000 in maternity pay over nine months in the UK. The same woman in Australia, depending on her partner’s income, may just sneak in for the means tested $5,000 baby bonus.

It’s not just the Aussies who are staying overseas for longer to take advantage of these extra dollars. Potential migrants to Australia in their childbearing years also sometimes choose more financially friendly destinations or delay their arrival to Australia until the children are toddlers.

Fred and Patricia, a Canadian couple living in the UK, plan to take up their Australian permanent residence visa later this year, when their second child will be six-months-old. “I think our decision to stay in the UK longer was a wise one because of the maternity benefits. I think it would definitely prompt people to wait until their kids were at least one-year-old, or to move while they were on maternity leave from their jobs in the UK, which is what I'm hoping to do,” Patricia said.

There is a definite, but hard to quantify cost to the Australian economy when our brightest talents and their partners nest overseas, or when we fail to attract overseas talent in their childbearing years to our own shores. We lose tax revenue, consumption dollars and intellectual capital.

Of course expat communities also bring benefits to Australia, especially if they return, which many do. They bring back business contacts, new ideas and skills. Plus taxpayers or employers in other countries fund the cost of raising their babies.

But overall, when factoring in working partners, the cost of bright Aussies staying overseas for longer is still likely to outweigh the benefits.

Brisbane-based Danielle and her husband had their son Oliver in the UK but moved back to Australia when he was one-year-old. “The only downside was being away from family with a new baby and being without support. In the end we moved back home to be closer to family because we wanted help, we also wanted Oliver to grow up an Aussie and not a Pom,” Danielle said.

Maternity leave payments are not the reason why many Australians in their child bearing years head overseas, but Australia should offer such payments to encourage them to come home to nest. In the meantime, Aussies will continue to vote with their feet. My partner and I are giving some serious thought to spending a few years back in my native Austria soon. Life would definitely be a little easier there with the equivalent of an extra AU$55,000 to raise a baby.