Tony Abbott's parental leave scheme is his first serious misstep. The plan allows for 6 months parental leave paid up to the equivalent of $150K per year, and it will be funded by a 1.7% tax on companies paying company tax of $5M and over per year http://bit.ly/abtVNd.

While it might put pressure on the government and please high-end professional women, as well as their much lower paid sisters, it will distort the tax base, penalise large companies for a populist policy and pay people for doing something that they ought to do for the love of it, thus undermining traditional liberal value of self-reliance.

You can see why Abbott is doing it - he has a problem with women, particularly middle-class ones - and this is one way of buying their approval. Yet it is so generous it may well backfire. It amounts to a $75K payment to a parent on the higher end, which is so ludicrously generous even the government might be able to lampoon it. It has also brought the business lobby out against it.

Even if it turns out to be smart politics, it represents a step on the road to South American populism that is unwise in any opposition that intends at some stage to be in government and is not in the best interests of the country.

Let's hope that Tony Abbott gets back to making the government accountable rather than providing distractions from their performance like this one.

Tony Abbott is no Mark Latham and until he stops shadow boxing as Latham did very successfully against John Howard, Tony will continue to run into challenges that while today may not be of concern the cumulative effect may be very damaging come election time.
A little less action and some real policy work may be the best thing for Tony Abbott. These new policies he is announcing were not in Turnbulls bottom draw, so one must suspetc Tony has rushed to the old desk in the study opened the policy draw and picked a few old policies dusted them off, a change here and there and we now have Tony's policy answers to everything.

This is aimed, at higher payed women, mostly in public service & academic jobs, I believe. Most of these are so rusted on labor, that no amount of bribery is likely to win their vote. Labor has already bought & paid for this vote, with their affirmative action policy.

The unfairness of the policy however, may cost him the vote of more than a few checkout chicks, & accounts clerks, & rightly so.

Tony's obviously in a bidding war with Kevin Rudd at the moment where he's got to fire his big guns to negate Kevin's.

I was thinking about Abbott's policy last night and thought that the $150k cutoff and 100% income compensation are too high.

A cutoff of $100k and a 75% income compensation would be better. That is, women who earn up to $100k would get 75% of their income for the period they are on maternity leave. I reckon this strikes a better balance as well as being more affordable. The deal can't be too low where women are dissuaded from having kids and it can't be too high where (some) women can bludge off the system and take it for granted.

I have to agree with Graham here. This is all about sly politics,
trying to buy enough votes to get him over the line, but its
bad economic policy and overall, not to the benefit of the
country.

The thing is, its not as if big companies will be the ones to
finally pay for it either. If big companies make less profit,
they pay less dividends. The major shareholders in big companies
are of course super funds, who hold that wealth on behalf of
super fund contributors. So if you have money in a super fund,
you'll be paying for it.

Tony is slyly taking money out of your back pocket and giving it
to those whose vote he might be able to purchase, to become
PM. Most likely, unless you think about it, you won't even notice.

In Russia before “perestrojka” paid maternity leave used to be for the period of one year. Mother would be getting full time wages to look after child. And up to three years right to return back to work to the same position she left before giving birth. Well, also paid [sick] leave for two months before child birth. Though no freedom to pass that all to father…
10% flat income tax

Firstly, I must correct GrahamY, as I think you will find it referrs to compnies 'with a taxable income' above 5 million per year. Not, 5 million in tax liabillities. Huge difference.

Now this is simply a 'no brainer' and TA would be better served simply allowing the Rudd government to continue 'sefl destructing' rather than give them a 'life line' as he has here. That's of cause if you are one of those who are hoping for a change of government.

So this means one earning 5 mill will have to find another $85,000 per year, out of thin air and that is simply not going to happen.

People/companies earning that sought of coin don't employ staff because the love them, they do it becaise they have to as staff are a bi-product of the success of a business.

Remember, these same companies also have to deal with 'pay roll tax' which to them is another 'no brainer' as it penalises one for being succesful.

Policies like these simply force large employers to seek alternatives, often resulting in 'out sourcing' rather than 'creating jobs' for locals.

Best you leave well enough alone TA, as Krudd and his crusaders are doing a mighty fine job of loosing ground, as they ruin pretty much everything they touch and, your supporters don't need you throwing this kind of life line to them.

Seems Abbott failed to discuss it with his colleagues, and the ABC readers don't like it and think it is a bribe: http://bit.ly/blzFEt.

Apart from that I've come up with some other strategic reasons why it was a bad idea. It takes the spotlight off Kevin Rudd's health policy and the remains of the home insulation scandal and puts it back on Abbott as the PM in waiting.

He made the announcement at an International Women's Day function, so it also looks like it was driven by the perceived need to come up with something for an externally determined date. Also a big mistake.

Oh, and it contradicts his promise of no new taxes at the same time as letting Nicola Roxon off the hook for her suggestion taxes might rise under the Rudd health scheme.

But it could be the making of Abbott. If he gets a big enough clip he'll be a bit more gun shy next time around.

Sorry Rehctub, you're right, it is apparently the profit figure, not the tax figure. Surprising that so few companies make that sort of profit. If I was a company on the cusp I'd be maybe converting some of my shares into converting prefs or something where the payment to shareholders gets out as a tax deductible payment rather than an after tax one. Or just increase my gearing a little, increase my borrowing costs and give them their return via capital growth caused by the additional leverage.

There's a maxim in company accounting that goes something along the lines of "Cashflow is fact and profit is fiction." And another "What would you like your profit to be?"

My first reaction is to say 'hear,hear'!

GrahamY says:



"[the proposed paid parental leave scheme] is
so ludicrously generous even the government
might be able to lampoon it."



Ya reckon, Graham? Well, at least we know Tatiana has read the link you posted, because she refers to the little 'sleeper' that may provide the basis for an immediate rort that would blow the opposition's costings right out of the water for this scheme. It is interesting to see this in the News report of the announcement:

"Every woman who is in the workforce before
the birth of her child should have the option
of six months' parental leave OR OF A SIMILAR
OPTION FOR HER PARTNER".

And also this:

"Rolling in the Baby Bonus, [the proposed levy] would be
enough to fund 26 weeks of paid parental leave at an
annual income up to $150,000 for every woman who is
in the workforce prior to having a baby."

I would suspect there would be many more men, already the partners of women of childbearing age, who would be on salaries in the vicinity of $150,000 per annum in the work force, than partnered women on such salary.

So, woman of child bearing age gets job, any job. Pay rate does not matter, say only $20,000 pa.

Woman gets pregnant. Her claimed partner, earning $150,000 pa. immediately applies for paid parental leave to which he would be entitled, to commence x months hence from application.

As soon as leave (worth $75,000) for claimed partner is confirmed approved, woman is free to leave job, either well before baby is due, or relatively shortly before delivery.

Scheme immediately starts to suffer a cost blow-out, and thats in circumstances where all the jobs, and the partnerships, involved are genuine. Heaven knows what the extent of the rip-off of taxpayers would be if, say, the migration racket industry joined forces with women otherwise identifiable to such racketeers as likely future claimants of supporting mother's benefit to fake parental leave claim situations on a wholesale basis.

The Australian Liberal Party leader, Tony Abbott has come to realise the importance of societies principle productive drivers, have on the economy and society in general. Its a pity the lemming like who wanted to be driven over the cliff encompassing the ETS, don't see, the most important benefits to the human families ability to drive productive choice.

Abbott is clutching at straws at this stage. This scheme would never work, but he knows he won't be voted in on election day any way.

Believe me, even this generous maternity leave payment will not be enough to sway many female voters to vote for a man who is so obviously following a very old-fashioned, outdated, religious-based way of looking at both life and politics.

Having said that, I wish someone had proposed this scheme when I was coming up to childbearing years. I wouldn't have said no!

I find it amazing that Tony Abbott failed to discuss this new policy initiative with the party room. It seems like more of a reactive gesture than a well thought out policy.
How are we supposed to deduce from such behaviour that there exists a unified sense of purpose in the higher echelons of the Liberal Party.
Tony Abbott has always demonstrated the ability to unleash statements without fully thinking them through - now his position allows him the luxury of doing the same thing with policy.
I predict he will only ever achieve the stature of night watchman for the Liberal Party until someone with a little more political acumen takes over.

In one swift move Tony Abbott was able to take the heat off the immigration debate.

Pity, it was warming up quite nicely to where all political parties would have been required to clarify their positions and enter into a debate on population and sustainability. None of the parties, greens included would relish consulting with electorates on that.

Meanwhile. Tony's suggestion about parental leave is easily dismissed as an off-the-cuff remark, over-enthusiastic maybe and the pesky advocates in the media for the women's movement are aware that in the future Tony Abbott is open to bribing to win a few votes.

No loss and wins all around, maintaining high immigration numbers is far more important to the backers of the Liberals+. Tony is intelligent, he has been in politics for years and he has experienced advisors both in and outside of politics.

It Will not be Tony's last blunder, at election time this and just about every word ever spoken by Joyce will be re hashed as propaganda.
No new tax? well yes and for those on incomes of up to $150.000 is cruel to those check out chicks

Next batter up, I would suggest, as TA has perhaps signed his own 'death warrent' amoung his party faithful and I would be surprised if his leadership is not challanged over this one.

Pitty, he was actually doing better than most expected.

The old saying of 'silence is golden' would have to be the best policy when you have a sitting government, continually taking one foot out of thier mouth and replacing it with the other..

Now as for paid parental leave, I have to say that the governments model, (although I don't know much about it as I am oppossed to it all together) would be a better, more fairly balanced scheme.

Why anyone on $150K is worth more than one on $20K, in this instance, is simply wrong.

Surely someone on $150K has the opportunity to put some cash away in readiness,whereas those on $20K don't.

Dear rehctub,

Couldn't agree with you more.
He is appealing to the higher income females.
And it is unfair.

It does seem a bit odd that for an experienced
pollie like Tony Abbott he's making all these
blunders.

I wonder if he'll last until the coming election,
or will he be replaced with someone like
Malcolm Turnbull?

No chance Foxy.

I know you labor people love him. No wonder, he's practically identical to your bloke, just not as cunning.

Even a floundering liberal party could not be so dumb again.

rechtub you can bank on it, no one would for second even think about challenging him on this issue.
Close look will find this is not his first foot in mouth statement.
His boots and all never mind about the truth is bringing his mob back.
However Rudd has 56% saying he is preferred PM , not a bad figure after some Labor foot swallowing.
I have a question, can any leader think that earner of $150.000 deserves our tax money?
If so, if we need kids that bad why not set up baby farms and pay mums full time to have money thrown at them, sorry kids., gee come to think of it we are doing that now

Dear Hasbeen,

Then who do you suggest?

The only reason I suggested Malcolm is -
who else is there to replace Abbott that
would be in with a chance at least?

Belly>>>I have a question, can any leader think that earner of $150.000 deserves our tax money?

Firstly, it is not 'our tax money', it is a special levy propossed by TA.

To the question, Yes, all mothers should be eligible for maternity leave if it is available, but at exactly the same rate, whether they are a checkout chick, sandwich maker, office clerk or the chief magistrate.

Foxy;
Perhaps Costelo! Sorry, just dreaming.

*he's practically identical to your bloke, just not as cunning.*

Hmm, on this occasion I am not so sure and will watch to see what
happens. I have seen too many elections swung by voters voting
through their wallets. Remember, it only takes a small swing, to
win an election.

By what I've read in terms of reader comments in the press, there
are already quite a few out there licking their lips at the
thought of 6 months off, on full pay, for them or their partner.

As the money is coming from big companies and they have few votes,
those licking their lips could well be enough to buy their votes
and swing an election.

As Keating said, "in the game of life, always back self interest"

He has a point. So we'll have to stay tuned, to see how it pans out.

Yes I was wrong rechtub.
However in the end it will be us who pay.
I am struck by the thought it is said we ALP voters are Socialists bent on throwing money away.
Howard however made baby bonuses pay for wide screen TV and we continue to pay for children left by parents who never wanted them.
Yes mothers should get some thing but this extreme act is truly wasteful.
As Labor moves into liberal country their are unsure if they want both extreme right and left in their paddock.
Yes hip pocket drives some but Abbott can only fool some of the people and only some of the time.
Election result remains ALP win slightly increased majority, Abbott leaves the Parliament before the following election.

Belly observes:



"Howard however made baby bonuses pay for wide
screen TV and we continue to pay for children
left by parents who never wanted them."



It should be noted from the reference I gave in my previous post, that in proposing this seemingly ill-conceived policy, Abbott has proposed the "roll back" of the baby bonus scheme introduced under Howard and as continued under the present government. My purpose in highlighting this is to draw attention to the fact that the offerring of financial incentives to persons other than such as might qualify for supporting mother's benefit (or whatever it might otherwise be called these days), has been a policy pursued by both previous Coalition governments and the present ALP government.

From this fact I conclude that there has been a belief in both major parties that there is a need for population growth by way of natural increase, as distinct from by way of immigration, in Australia. This belief may have come about by its being fostered by interests outside of the elective political structure that have an interest in such growth, or because both major parties see the prospect of gaining significant electoral support that they do not presently enjoy, from the proposal of such schemes.

Perhaps the latter prospect is now bi-partisanly seen as being not worth pursuing.

My first question is: Does this obviously lampoonable proposal constitute the first step in a retreat from the policy of offerring 'baby bonus' style incentives by the Opposition? And if so, how soon can we expect to see the present government also abandon or seriously modify existing policies?

Another question is: Has the apparently bi-partisan support for incentives for natural increase to date been a tacit recognition that the bi-partisan agreement not to discuss Australia's hitherto acknowledgedly 'elitist' migration policy is ultimately an unsustainable position in the face of increasing public opposition or uncertainty?

Which advisers promoted this proposal? Could Cornflower be correct? Is it part of a covert bi-partisan diversionary action designed to keep the population debate off the public agenda?

Foxy, in my opinion, both the libs, & Australia in general, will be much better off, if they stay where they are, if their only chance of winning is with Turnbull as leader.

It is hard for me to imagine many people I would see as worse than Rudd as our prime Minister, & I'm sure Abbott is not one of them. However Turnbull is most definitely one of them. Another of them is a bottle red head, unfortunately.

At least Rudd is unlikely to do anything, except spend money. There are a whole range of stupid things Turnbull would probably try to do.

Even though he's my local member,he does disappoint.Why not let couples with children income split with one partner working thus paying less tax.Larger businesses could also contribute in the first 6 mnths with 30% salary.

Tony is trying to win back the female vote due to the losses because of his views on abortion.He is turning out to be just another opportunistic polly,having an each way bet on AGW and compromising his own economic wisdom.

I invite comment from conservatives on Costello's view.
It is amusing me the twists and turns in this matter.
To see Liberals and Barnaby Joyce even Iron bar Tucky insulting Costello has got me grinning.
Fact is dislike him as I do he is far better placed to comment than all of them.
Yes rough sailing for Rudd, but not as rough as some think, I saw Abbott plan as something the very left in my party would put up, and that if they did it would damage us, but to come from conservatives.
Gordian knot comes to mind.
Yesterdays hero regarded as a fool for being more a conservative than Abbott?