Tony Abbott has announced that he will revise his unpopular “signature” Paid Parental Leave (PPL) scheme. The Prime Minister announced on Sunday that he would reduce the cost of his $5.5 billion scheme. The opposition, business groups and members of his party had deemed theoriginal scheme too generous.
The Prime Minister hasn’t released the nitty gritty of his new plan yet, but it is understood to include a new means test and a lower cap on the maximum payout to mothers.
It is expected to be introduced into cabinet in early 2015, in time for government to legislate it for a proposed July 2015 start date.
Here’s what you need to know
What the original plan meant
Prime Minister Abbott’s original PPL scheme was centred on paying new mothers six-months wage matched to their actual earnings, as well as superannuation payments. The payments were originally capped at $75,000 (for women earning $150, 000 per year) and were later reduced to try and gain support for the scheme to $50, 000 (for women earning $100,000). Last year Tony Abbott said that the scheme was aimed at rewarding career women who chose to have children, copping some flak for his choice of the word ‘calibre’
“If we want women of that calibre to have families, and we should, well we have to give them a fair dinkum chance to do so. That is what this scheme of paid parental leave is all about,” Mr Abbott told Fairfax Media in June 2013.
Funding for the plan was to come from a 1.5 per cent tax on 3000 of the biggest business in Australia and budget savings, including getting rid of the current existing maternity leave schemes (18 weeks at minimum wage).
Why it was unpopular
The PPL has detractors in the opposition, big business and within the Liberal party because it was considered by many to be extravagant and too focused on child birth rather than child care – an important issue for getting women back into the workforce. That it benefited high-income earners most was also questioned.
What happens next?
The Prime Minister has indicated that he will look into childcare options – including nannies – as a means of revising the PPL.
“We are going to better target it and we are going re-direct the savings into child care because it needs to be a holistic families package and people do want better child care, more available more affordable childcare as well as paid parental leave,” Abbott told reporters on the weekend.
The announcement comes at the end of a period that Tony Abbott has admitted has been “ragged” with policy defeats and backdowns some of the “barnacles” that he has been dealing with.
