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PM’s parental leave backflip

John Howard has backed down on parental leave.
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Tony Abbott knows when the odds are against him.

Without a survival instinct he would not have lasted 20 years in parliament.

So when he faced the likelihood of a key election promise – the paid parental leave scheme – falling foul of senators from Labor, the Greens, the cross benches and the Nationals he had no choice but to modify it.

The coalition went to the September 2013 election promising that a woman earning $150,000 or more (about 1.7 per cent of Australians) would receive the maximum $75,000.

The Liberal Party’s key constituency – small and big business – felt it was too generous in tough economic times.

newdaily_270414_abbott
Tony Abbott

Labor attacked it as $5.5 billion going to the wives of millionaires at a time when the coalition was cutting payments to the orphans of war veterans.

The Greens offered an olive branch, supporting a scaled-back version but with the proviso that it be fully funded by a rise in corporate tax.

Under the new plan, the maximum payment for new mothers will be dropped from $75,000 to $50,000.

The plan, due to start in July 2015, now has a better chance of passing the Senate and avoids the embarrassment of watching Nationals senators cross the floor.

The government already has shown an ability to negotiate with the Greens, getting their nod to remove the debt ceiling – another modified election promise.

The parental leave scheme change has been hailed in coalition circles as pragmatic and a sign that Abbott – who has sat in on all of the budget razor gang meetings – is a leader who listens.

It also gives the government some political cover a day before the release of the national commission of audit’s report which is understood to be scathing of the policy.

Abbott is prepared to wear the Labor criticism that it is a broken promise, throwing the blame back on the previous government.

“Everyone from the top down is going to be part of fixing Labor’s debt and deficit mess, and, yes, that does include regrettably an adjustment to the paid parental leave scheme,” he says.

The downside is that he could face pressure to overturn other promises.

Mr Abbott blamed his backdown on the need to spread the burden of restoring order to the federal budget, which he said was facing a “debt and deficit disaster”.

“I don’t want any sectors of the community to feel they are getting special privileges,” he told reporters on Wednesday.

Adam Bandt
Adam Bandt

Greens support still not guaranteed

While the new threshold matches the previously stated policy of the Greens, the minor party now wants the government to guarantee the scheme is affordable.

That means it has to be fully funded from the planned 1.5 per cent levy on big business.

“We will not see this scheme funded by touching other areas of the budget,” deputy leader Adam Bandt said.

With few women earning $150,000, it’s unlikely the new threshold will save the government much from its original $5.5 billion cost.

The Greens are also demanding Mr Abbott prove his policy has the support of cabinet and coalition MPs.

Without backing from the Greens, the scheme won’t get through the Senate.

Labor certainly won’t support it, reiterating its opposition to what it has previously labelled a “gold-plated” scheme.

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