Tony Abbott’s paid parental leave scheme should be watered down further and more money directed into expanding child care support, the national commission of audit believes.
The prime minister announced this week the wage cap for his signature policy would be reduced to $100,000 a year, from $150,000.
That means women who would have received up to $75,000 for 26 weeks leave will now receive a maximum of $50,000.
But the commission of audit wants the government to go further.
“Steps should be taken to better balance the objectives of the scheme with the need to restore government finances and to target expenditure to those most in need,” its report says.
It believes average earnings, which now stand at $57,460 a year, would be a more appropriate cap.
That would see women get less than $30,000 over 26 weeks.
That’s still significantly more than they get under a scheme introduced by Labor.
It currently provides assistance equivalent to the minimum wage, or $622 a week, for a maximum of 18 weeks.
The commission also believes the 1.5 per cent levy on taxable company income to fund the Abbott scheme should be retained.
“The savings from the lower cap should be redirected to fund a proposal to expand eligibility for child care assistance,” it says.
The commission wants a simpler, more streamlined child care support system.
It wants the Child Care Rebate and Child Care Benefit merged into a single, means-tested payment that reimburses parents for a proportion of child care costs.
The new payment would cover in-home care like nannies and au pairs, as well as daycare and family daycare centres.