The Australian Retailers Association has cautiously welcomed the Productivity CommissionÍs recommendation that a paid parental leave scheme would be tax-payer funded.

However the associationÍs executive director Richard Evans highlighted the financial strain on SME retailers who would be caught by the compliance costs associated with industry-wide maternity, paternity and parental leave scheme and find themselves paying capped superannuation contributions for the period of leave taken.

ñParents taking time off to care for children is a good thing for society but businesses shouldnÍt have to pay _ and while retailers will welcome the Productivity CommissionÍs decision for parental leave to be tax-payer funded – questions about financial burden associated with compulsory administration still remain,î he said.

ñOur submission to the Productivity Commission indicated that retailers would support a six-week taxpayer-funded scheme. The draft report goes well beyond this, proposing paid parental leave of 18 weeks but fails to address essential rebates to small business operators for its administration on behalf of the Government. This could be crippling for SME retailers,î Evans said.

ñRetailers will support the concept of paid parental leave that provides employees certainty and security as long as itÍs designed in a way that eliminates any cost to employers.

ñCalls by unions for employers to contribute more to the proposed parental leave scheme confirm that they are only interested with big business and are out of touch with the modern small business workplace,î he added.

The ARA will continue to consult with its 400 largest members before making any further submission to the Productivity Commission by the due date of 14 November.