Working mothers are questioning the delay and the means testing
The plan to grant 18 weeks' paid parental leave to more than 100,000 women annually will come in a diminished form.
Key measures proposed by the Productivity Commission will be either cut back or left out completely in a bid to save nearly $200 million a year.
A proposed two-week "paternity payment" to fathers or partners has been chopped, it is believed, along with superannuation payments that the commission's preliminary report in September had recommended be paid by business.
The Government will also means test the payment so that primary carers who earn more than $150,000 a year will be ineligible.
The publicly funded scheme, to be announced in tomorrow's budget and introduced in 2011, will provide 18 weeks' leave at the minimum wage for primary carers, or $544 a week, in line with the commission report. Either parent would be eligible.
The introduction of paid maternity leave will see Australia finally catch up with the bulk of the developed world when it takes effect.
Australia and the US are the only two OECD countries not to have a Government-backed scheme. It comes after more than 30 years of campaigning by women's groups and unions.
ACTU president Sharan Burrow yesterday welcomed its "historic" introduction.
She described the absence of paid maternity leave in Australia as a "massive market failure" with two-thirds of women without it.
Ms Burrow said it would particularly help women in lower-paid jobs, such as in retail and hospitality, where few women had paid maternity leave.
Under its leaner proposal, paid parental leave would now cost the Government about $260 million a year, far less than the $450 million a year the Productivity Commission report had budgeted for its proposal.
Last night the Government would not release its costings or all the details of its scheme, saying that would occur on budget night when it would release the final commission report that it has kept under wraps since March.
But it has been confirmed that stay-at-home mothers would still not get access to the scheme, as the commission had recommended, and would instead retain existing payments such as the baby bonus and family tax benefit.
Treasurer Wayne Swan said yesterday that paid parental leave would help low and middle-income families, in particular, and he sees it as a way to boost workforce participation.
Employers have also been given a reprieve with a recommendation that they pay carers' superannuation while they are on leave - at an annual cost of about $75 million - to be scrapped.
Australian Chamber of Commerce and Industry chief executive Peter Anderson gave "cautious" support to the change but said there were still "unanswered questions" about the scheme. He said the Government was yet to indicate how it intended to compensate employers for administering paid parental leave.
The Federal Opposition said the long lag time - the scheme will take effect from January 2011, after the next election - might stop employers offering their own interim measures.
"My fear... is that the employers that want to continue, or to implement maternity schemes, will just simply pull up stumps," shadow treasury spokesman Joe Hockey told ABC television. "Now they know that the Rudd Government with taxpayers money is going to step into the breach, they don't need to do anything."
BHP Billiton announced generous paid parental leave last Friday, but most employers, particularly in small business, do not offer it.
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