Business groups have backed a proposal to increase the number of weeks offered under the paid parental leave scheme.

The federal government introduced legislation last year which would extend the scheme by two weeks each year from July 1, to eventually reach 26 weeks in mid-2026.

The number of weeks reserved for each parent will increase to four weeks in a bid to encourage sharing of care and household responsibilities.

Under the legislation, both parents would be able to take four weeks off at the same time from 2026.

The Australian Industry Group and Australian Chamber of Commerce and Industry will tell a parliamentary inquiry into the legislation, the move will help address skills shortages in addition to boosting labour force participation.

But AiGroup has suggested a statutory review three years after the proposed law comes into effect.

The chamber raised concerns about how paid parental leave is administered, and the impacts on small businesses.

“The imposition on employers of the responsibility to provide government-funded paid parental leave is significant,” the submission reads.

“In particular, the additional administrative burden and payroll processing time has an undesirable impact on small businesses with minimal countervailing benefits.”

Advocacy organisation The Parenthood, says increasing paid parental leave will enable more women to go back to work after having children.

“Extended paid parental leave will enhance gender equality through the redistribution of unpaid care and increase women’s workforce participation,” it said.

The Parenthood recommended the introduction of a six week “use it or lose it” provision in the expanded scheme to incentivise men to access it.

In its submission, the organisation said the policy change was a “huge win” but was still short of the more than 50 weeks that families in the Organisation for Economic Co-operation and Development have access to.

Tess Ikonomou
(Australian Associated Press)