Abbott Dumps Paid Parental Leave Scheme
3 February 2015 at 10:42 am
In a speech that came at a critical point in his leadership, Prime Minister Tony Abbott told the National Press Club in Canberra that he would scrap the Federal Government's paid parental leave scheme, conceding that “what’s desirable is not always doable”.
The dumping of what the PM had previously described as a “signature” policy was one of several strategies he said were part of efforts to to build a stronger economy.
In his first formal address at the National Press Club since winning the 2013 Federal Election, Abbott announced that a new families package is to be released in the coming months, and provided details of a new small business and jobs package – including a small business company tax cut starting on July 1.
“These are testing times for our country…we need to be candid about the challenges we face,” Abbott said.
“Our problem is not that taxes are too low; our problem is that Government spending is too high.
“I admire stay-at-home mums…I accept, though, that what’s desirable is not always doable, especially when times are tough and budgets are tight. So a bigger parental leave scheme is off the table.
“During 2015, our priority will be creating more jobs, easing the pressure on families, building roads, strengthening national security, and promoting more opportunity for all — with a new families policy and a new small business and jobs policy.
“Any new spending will strictly be directed to making the economy stronger so that long-term revenue increases.”
The $5.5 billion scheme Abbott took to the 2013 Federal Election would have paid women their full salary capped at $150,000 annually, funded by a 1.5 per cent levy on big business. In August 2014, the cap was reduced to $100,000.
Warning that there would be “intergenerational theft against our children and grandchildren” if spending was not tightened, the PM flagged childcare focus for his new families package.
“We’ll now consult widely on a way to improve the system of multiple payments, keep costs down, and put more money into parents’ pockets.
“As the Productivity Commission has said, and as mums and dads around Australia have reminded me, the focus really does have to be on childcare if we want higher participation and a stronger economy.
“More affordable and more available childcare means less pressure on the family budget. More parents in the workforce mean that more people will make a bigger economic contribution as well as a social contribution to our country.
“Women, after all, are our country’s most underutilised source of skills and entrepreneurship — if female participation in Australia were six per cent higher, at Canada’s level, GDP would be higher by $25 billion a year. So a better childcare policy is good economic policy as well as fairer family policy.”
Welfare peak body, ACOSS responded to the speech with a call for greater community consultation in the development of the new families package.
“Sadly both sides of politics have failed, not only to explain Government decisions but more importantly, to listen and include the community before big decisions are made,” ACOSS CEO Dr Cassandra Goldie said.
“We look forward to the Government consulting widely in developing a new families package to ensure it delivers benefits for families most in need of assistance – low income families and the children.
“The package should be designed to deliver improved educational outcomes for all children, including those experiencing disadvantage, as well as improved workforce participation for women.
“We also seek clarity on the status of the 1.5 per cent company levy, originally for the purpose of funding the Government’s amended Paid Parental Leave Scheme. We urge the Government to include the future of the levy in discussions about the families package.”
She also urged the Government to develop a national jobs plan, with unemployment expected to increase to as much as 6.5 per cent mid-year.
“It’s hard to see how a 1.5 per cent tax cut to small business will help address the current revenue problem facing our Federal Budget or help those disadvantaged in the labour market to get a job,” Goldie said.
