Prime Minister Tony Abbott says given “all the circumstances” the new PPL cap is “fair” and “reasonable”. Photo: Penny StephensPrime Minister Tony Abbott has been forced to scale back his ambitious paid parental leave scheme but still faces a Senate fight to introduce the package with the Greens signalling further changes will be needed before they would support it.
On Wednesday, Mr Abbott confirmed he would reduce the $150,000 upper limit on the scheme to $100,000, just a day after saying such a change would deliver only “very modest” savings to the budget. He blamed a “budget emergency” created by the former Labor government for the shift.
The backdown came as Mr Abbott again refused to rule out the prospect of a “deficit levy” or temporary rise in the top two marginal tax rates to help pay back government debt and amid rising internal dissent over the surprise levy proposal and the paid parental leave scheme, which could cost as much as $5.5 billion.
The temporary tax would reportedly start at 1 per cent on pre-tax incomes over $80,000, rising to 2 per cent for incomes over $180,000. Mr Abbott warned every Australian would have to play their part in fixing the budget.
“When you have $123 billion of approaching deficits, when you have $667 billion of projected debt you have got to act.”
The Greens, who have previously indicated they could deliver nine crucial balance-of-power votes in the current senate for Mr Abbott’s leave scheme if it was scaled back to $100,000, warned they were not convinced by the policy and demanded further details.
Mr Abbott’s backdown on his “signature” paid parental leave scheme would have seen women paid their actual wage for 26 weeks, capped at a payment of $75,000 for women earning more than $150,000. The shift to a maximum payment of $50,000 for women earning $100,000 or more will save only about $50 million annually, with just 1.7 per cent of women earning more than $100,000 aged under 50. The scheme is to be partly funded by a 1.5 per cent tax on large companies.
Mr Abbott said the powerful expenditure review committee had decided some days ago to scale back the threshold of the scheme.
“I’ve been thinking for some time about how we can best adjust all of these things to fit the circumstances of the budget emergency we inherited,” he said.
“I would have preferred to stick with the original policy.”
Mr Abbott said “under all the circumstances” he believed the change was “fair” and “reasonable”.
But Greens deputy leader Adam Bandt said Mr Abbott could not necessarily count on his party’s support in the Senate.
According to costings prepared for the Greens by the Parliamentary Budgetary Office, even with a $100,000 cap – and the 1.5 per cent levy on businesses with a taxable income of more than $5 million – about $2.2 billion would need to come from general revenue to pay for the scheme.
“We don’t want to take money from other areas,” he said.
“It’s up to the Prime Minister to put a fully costed, detailed proposal for a PPL for everyone to see. At the moment all we have to go on is selective reporting about parts of the scheme.”
He suggested a higher levy on business, or an upper limit on the scheme of $80,000 should be on the table – while the Greens would also need to be assured the Prime Minister could carry the votes of his own dissenting senators who have privately flagged they could cross the floor.
Labor leader Bill Shorten continued to slam the Coalition’s paid parental leave plans, describing it as a scheme to give “multimillionaires tens of thousands of dollars they don’t need”.
He also seized on Mr Abbott’s change of heart on the policy, arguing he was “not a man of conviction”.
“If Prime Minister Abbott can’t even stick by his signature policy for 24 hours, how can Australians trust him on anything?”
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This story Administrator ready to work first appeared on Nanjing Night Net.