Senators: Axe PPL if you want Budget support

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ScreenHunter_3079 Jul. 02 09.04

By Leith van Onselen

It seems Tony Abbott’s paid parental leave (PPL) scheme, which was devised on the fly by Abbott and Rupert Murdoch, has no friends left and faces imminent defeat in the Senate.

Following the Greens’ reversal last week, in which they announced that they would now oppose the scheme, key Senate cross-benchers have called-on the Coalition to axe PPL if they wish to secure support to repair the Budget. From The AFR:

Senators Nick Xenophon and Bob Day singled out the scheme ahead of separate meetings in Adelaide on Wednesday with Treasurer Joe Hockey…

Mr Hockey has hit the road to lobby Senate crossbenchers before Parliament resumes in late August…

Senator Xenophon called the parental leave policy “a dog” which highlighted the unfairness elsewhere in the budget…

But Senator Day said… “It’s inconsistent to keep the ­high-income paid parental leave but get rid of the low-income superannuation contribution”…

A spokesman for Senator Muir said… the paid parental leave scheme had “Buckley’s chance” of ever passing.

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The Senate’s opposition to PPL follows the Productivity Commission’s Draft Report into Childcare and Early Childhood Learning, released earlier this month, which explicitly criticised the merits of PPL and recommended that some of the $5.5 billion cost instead be spent on childcare.

Ultimately, the whole PPL fiasco has been one giant thorn in the side of the Abbott Government, which has spent considerable political capital trying to sell the scheme, and in doing so has undermined its message of “ending the age of entitlement” and needing to cut expenditure to overcome the “Budget emergency”. It has also tarnished Tony Abbott’s leadership, given that PPL was his brainchild. Time to let it go, Tony.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.