The most fascinating policy to come out of the Budget this week was on child care and paid parental leave. The back flip produced by Tony Abbott on parental leave is one of the largest in recent political history, and demonstrates the lengths he had to go to quieten his back bench.
Back flips are always dangerous for Prime Ministers, especially on core issues. Kevin Rudd came a very big gutser when he ditched the carbon pollution reduction scheme given that he had called climate change the “great moral, environmental and economic challenge of our age”.
The key policy Tony Abbott made his own was paid parental leave. His journey was from one who, while Employment Minister in the Howard Government, was dead against the idea of PPL to one who as leader suddenly announced to voters that “he got it”.
Rather than just support the ALP government’s PPL scheme, which allows for 18 weeks paid leave at the minimum wage, Abbott wanted the government to provide full replacement wage for 26 weeks up to an income of $150,000.
He told parliament when debating the government’s PPL legislation in May 2010 that “the government’s measure is a small step in the right direction. I believe we should go much further”.
It was his own policy – a “captain’s call” – and few others in the Liberal Party, who generally view government funding for social issues as an anathema to good government, wished to defend it.
But for Abbott it was no one day wonder thought bubble. He took the policy to the 2010 election, and in the run up to the 2013 election he kept at it. Writing on the website Mamamia in November 2012, he said of his policy that “on every measure, the Coalition’s paid parental leave scheme is better for mothers, families, our community and our economy than Labor’s welfare scheme”.
Last year Abbott had to admit that he could not get his scheme passed the Senate and so he tried to do so by reducing the income threshold from $150,000 to $100,000.
That in itself was not a back flip – just a negotiation within the realities of the politics of the day.
Then earlier this year, when Abbott’s political fortunes were so low that many within his party sought to have him dumped as leader, he went further and dropped the entire scheme. Doing so helped appease the back bench of his party, most of whom hated not just that he had made a captain’s call on the policy, but hated the idea of the policy itself.
Now that was a big come down for any leader. In April last year he had told parliament that his original policy (which he was not going to abandon) was “an historic change ... a mighty social and economic advance for the women of Australia”.
His PPL, Abbott told the media and voters, was his “signature policy” and would “be one of the defining marks of (his) leadership of the coalition”.
The problem for Tony Abbott was that while he argued for his “fair dinkum” PPL scheme, critics (including myself) suggested the money would be better spent on child care.
The Productivity Commission’s report into child care noted this and so too did the Abbott Government’s own Commission of Audit, which recommended that the government keep in place the 1.5% tax on big business that was to pay for Abbott’s PPL scheme but instead redirect it to “offset the cost of expanded child care assistance.”
The child care policy introduced in the Budget this week is very generous – much more generous than even the most expensive of the different recommendations put forward by the Productivity Commission.
The Commission recommended a policy whereby subsidy for child care would go from 85% for low income families to 50% for those earning $130,000, and then progressively fall to around 30% for those earning over $200,000.
The government’s proposed scheme will go from a subsidy of 85% for low income earners to between 40% and 50% for those on $300,000.
To pay for this, the government has proposed using the savings from to cuts to Family Tax Benefit that were in last year’s budget – but which are still to be passed by the Senate – and by removing the ability for women to access both the government’s parental leave and their employer leave scheme.
No longer is Abbott just dumping his own PPL scheme, he is now cutting the current parental leave for 47% of mothers who would have accessed both the government’s and their own employer’s parental leave.
Tony Abbott has thus gone from arguing that the current scheme was too cheap to now arguing that it was too expensive.
The argument by the government is that the current system whereby women can use their employer paid parental leave and then access the government’s PPL was in effect “a rort”, or as Joe Hockey agreed with Laurie Oakes, “basically fraud”.
But it is an odd rort and fraud because it was the basis for the current PPL scheme as recommended by the Productivity Commission.
When the legislation was introduced, the Minister responsible, Jenny Macklin in her second reading speech, specially noted that the government funded PPL “can be taken before, after, or at the same time as other leave entitlements such as annual leave or employer funded maternity leave to best suit a family’s circumstances”.
This was based on recommendations in the Productivity Commission’s review of parental leave that not only should mothers be allowed to access both leaves but that mothers should also be allowed to access both schemes at the same time in order to improve the overall efficiency and outcomes of the scheme.
When the Commission of Audit looked at paid parental leave, nowhere did this body, which took an almost allergic view towards any government expenditure, suggest removing the ability for women to access both employer and government schemes. Nowhere was it suggested this was a waste or a rort.
It recommended increasing the payment in the current scheme from the minimum wage to the average weekly wage and for this to be indexed according to inflation.
When the paid parental leave scheme was introduced in 2010, Liberal Party MPs actually argued the ability to access both schemes showed how miserly was the ALP’s scheme.
Then shadow minister for families, housing and human services, Kevin Andrews, said that while he acknowledged the Productivity Commission had recommend mothers be able to access both types of leave, it was “problematic” – not because it was a rort, but because not all women would get it and thus not all women would be able to access (in his words) the “ideal leave period of a full six months.”
Now even fewer women will.
For a man who said he had a “convert’s zeal” to parental leave, it looks like it was all just a show, and Abbott’s zeal is more about placating his back bench and keeping his own position safe.
Given Abbott himself called it his signature policy, voters could be forgiven for wondering if his signature is worth anything at all.
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