Parental leave scheme unfair: report

The Abbott government's paid parental leave scheme is expensive, unfair and will do nothing to boost numbers of working women, a new report argues.

Instead, the $22 billion scheme should be overhauled and replaced with a loans scheme similar to the Higher Education Contributions Scheme, The Centre for Independent Studies says in a report released on Monday.

Report author Matthew Taylor says the proposed government scheme is poorly targeted, delivering large amounts of cash to the highest-income families.

The timing of the proposal is also extraordinary, given the government's tough talk on ending an "age of entitlement" and budget savings measures, he says.

"Despite the Abbott government's claims that the scheme is a productivity measure, the additional $3 billion of expenditure will do nothing to increase women's labour force participation," he says.

"The coalition's PPL scheme is also unfair, giving $50,000 to women with incomes over $100,000, but only $16,172 to women earning the minimum wage."

The move took money from low-income families and gave it to those who could afford to self-finance their parental leave, he said.

The scheme was also excessively costly as many parents, especially those on high wages, already have access to paid parental leave from their employers.

If the scheme is implemented, its annual cost will rise to more than $5 billion by 2016-17, the report says.

But Mr Taylor argues it should be scrapped and replaced with a parental leave contribution scheme, which would be fairer and offer a more sustainable approach.

Under that model, money would be given to working families as a loan, to be paid back once they earned above a minimum threshold.

The government's leave scheme, scheduled to start in mid-2015, has been criticised for being too generous.

Prime Minister Tony Abbott has indicated legislating paid parental leave will take second place to other government promises.