CANBERRA OBSERVED: by national correspondentNews Weekly
Can Australia afford Abbott's paid parental leave scheme?
, June 22, 2013
Tony Abbott’s pet social policy — his business-levy-funded six-month paid parental leave (PPL) scheme — was up until recently an opposition leader’s policy fancy, but has gradually become an indulgence the country may not be able to afford.
When Abbott announced the policy proposal soon after he became leader, it drew a curious response. Prominent radical feminists praised it, while his erstwhile social conservative supporters were left scratching their heads.
Even up to late 2008, Abbott had been a vocal opponent of paid parental leave, describing Labor’s nascent plans as “misplaced political correctness”.
But, when he became leader, Abbott bowled his critics over by unveiling a Coalition plan that was far more generous than Labor’s.
In fact, at the last election, the ACTU was paralysed into silence, because Abbott’s proposal represented a far superior policy to anything being offered up by its comrades in the Labor Government.
Eventually, in 2009, Labor introduced its own modest scheme, which provides up to 18 weeks’ parental leave at minimum wage.
Mr Abbott now maintains his scheme is a natural extension of a normal workplace entitlement, such as holiday pay or long-service leave.
“If it’s right for the bloke on holiday to get paid at his real wage, if it right for the bloke on sick leave to get paid his real wage, why isn’t it right for the woman on parental leave to get paid her real wage?” Abbott has argued.
In a political sense for Abbott, the paid parental leave also represented an antidote to perceptions that he was “anti-women”, and showed that he was prepared to spend political capital assisting career women.
Inside the Coalition there has been a determined effort to fight the policy, particularly among conservative Nationals MPs, who saw greater merit in helping single-income two-parent families (particularly women who chose to stay at home looking after their children in their formative years) rather than providing handouts to affluent double-income families in a bid to subsidise women in paid employment.
But the conservatives failed to win over the shadow cabinet, and Mr Abbott prevailed.
More recently, several young fiscal conservatives inside the Liberal Party, who are opposed to the policy on the basis that it is another unnecessary impost on business, have also attempted to undermine Abbott’s policy.
And, as the Budget has deteriorated and shadow Treasurer Joe Hockey has grown more and more agitated about Abbott’s insistence on keeping various Labor policies on the table, six months’ paid parental leave has become a tougher sell.
The Melbourne Age recently reported that the Abbott scheme would be among the most generous in the world in terms of both its length and generosity.
Primary care givers whose salaries exceeded $150,000 would be eligible for the scheme, but their payments would be capped at the maximum amount of $75,000 over the six-month period.
Doubts about the policy remain on all the grounds listed above.
But, for the moment at least, Mr Abbott appears to be holding firm, arguing that the policy decision is already “settled”.
Pilloried by Labor for justifying the generosity of the scheme to assist what he called “women of calibre” to maintain their career momentum, Abbott is likely to be unbending in the lead-up to the election.
The Abbott scheme could cost more than $4 billion a year, according to some estimates, and would be paid for by a levy on the country’s largest 3,300 companies with taxable incomes of $5 million or more by a 1.5 per cent slug on the company tax rate.
Given the economy is weakening, and unemployment could rise over the coming year, and given the parlous state Labor has left the Budget, it is hard to see justification in giving welfare to women on $150,000 a year.
At the last election, Abbott’s policy was something of a political masterstroke, snookering his critics in the feminist and union movement.
But it was an indulgent policy, which could only be justified in the boom times, and regrettably those times appear to be fading fast.
And with the Coalition aiming to wind back middle-class welfare, introducing a new form of upper-class welfare handout of up to $75,000 seems something of an extravagance.