SYDNEY: Working mothers will be entitled to 18 weeks of paid maternity leave under a ground-breaking scheme expected to be backed by the Australian government.

Fathers will also benefit under the plan, which will entitle them to a fortnight's paid leave to help look after their children.

The scheme, which is expected to have an overall cost of more than A$500 million (S$590 million) a year, was yesterday unveiled by Australia's Productivity Commission.

The recommendations, which are significantly more generous than had been anticipated, will benefit about 140,000 women annually.

Mothers will receive A$544 a week, the equivalent of the country's minimum wage. Along with the two weeks' paternity leave, the scheme will put nearly A$11,000 into the pockets of working parents.

The payment will replace the so-called baby bonus, a one-off A$5,000 which new mothers received for every baby, and will come on top of parental leave separately negotiated with employers.

Stay-at-home mums will still be paid an equivalent to the A$5,000 baby bonus.

The new scheme, which is likely to have government backing, is expected to be formalised next year.

Speaking before the official announcement, Prime Minister Kevin Rudd said it was high time the government took action on paid maternity leave.

'It's time Australia bit the bullet on this,' he added.

Apart from the United States, Australia is the only country in the Organisation for Economic Cooperation and Development that does not offer publicly funded maternity leave.

Current legislation entitles parents to 12 months' unpaid leave after the birth of a child, although some private sector organisations have recently introduced paid maternity leave for their female employees as part of their salary package.

Although the new payment will be funded by the government, superannuation contributions will continue to be paid by employers.

The move is expected to receive widespread community support, especially among working women in low-income jobs who do not receive any paid maternity leave.

Trade union leader Sharan Burrow said: 'Working women right across Australia will be smiling today. Eighteen weeks of paid maternity leave and indeed two weeks of paternity leave, allowing fathers or partners to be part of the birth process, this is terrific news.'

But business leaders were more cautious. Under the scheme, employers will be required to pay the money before being reimbursed by the government. Mr Peter Anderson of the Australian Chamber of Commerce and Industry said businesses would be faced with higher administration costs.

'Employers are already concerned at being the tax collector for governments and they will not respond well to being the paymaster of government social payments,' he said.

But the Productivity Commission's Ms Angela MacRae, who helped design the recommendations, said it was vital for parents to be able to spend more time with their babies in the early stage of their life.

'We want to enable mothers to stay at home for at least the first six months of their babies' life, since this is the most critical time for the nurturing of a newborn child,' she explained.

'Given that parents usually are able to take off some months on their own account, 18 weeks' additional paid leave will allow six months at home for almost all parents, particularly low-wage mothers,' she pointed out.

Nearly 300,000 babies were born in Australia last year, more than half to women who had jobs. The birth rate increased under the previous government, which introduced the A$5,000 baby bonus to boost Australia's population.

While the birth rate continues to grow, many Australians doubt the wisdom of the bonus.

Although it has had the desired effect of encouraging more women to get pregnant, the money itself was often used to fund luxuries such as holidays and plasma television, instead of being spent on the baby.

This article was first published in The Straits Times on Sep 30, 2008.