Put the PPL dog down, Tony

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ScreenHunter_3580 Aug. 04 08.06

By Leith van Onselen

It was revealed over the weekend that the Government has shelved Tony Abbott’s signature paid parental leave (PPL) scheme for fear that several Coalition backbenchers would cross-the-floor and vote against the scheme, causing embarrassment for Tony Abbott. From The Canberra Times:

Several… sources said a message had been discreetly sent to Mr Abbott that his pet policy could face an embarrassing defeat in the Senate.

Coalition senator Ian Macdonald had been an outspoken critic of the policy and welcomed the delay.

“I’m pleased that Mr Abbott has listened to the overwhelming majority of Australians in deferring the scheme until the country can afford it,” he said…

One source said the idea was friendless within cabinet, the exception being Mr Abbott.

Meanwhile, independent senators and business groups have welcomed the shelving of PPL, claiming it as a victory for commonsense:

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Independent senators contacted by Fairfax Media on Sunday said the decision was a good one and that the scheme ought to be scrapped altogether. Government sources said Treasurer Joe Hockey had realised after speaking with independent senators last week just how strong opposition to the policy was – both within the Coalition Party room and outside – and that it had become an oversized stumbling block to important negotiations on key budget measures…

Big business groups have also welcomed the news… [claiming] it was too expensive for the economic times. ”It shouldn’t happen until the budget can manage it,” said Australian Chamber of Commerce and Industry chief executive Kate Carnell.

As argued last week, PPL 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”. Indeed, one of the reasons why Coalition MPs have expressed dissent on the issue is that it has stopped them from being able to sell the budget to a sceptical electorate, as noted today in The AFR:

“The dogged insistence on a PPL has been the most significant roadblock in convincing the electorate of our budget crisis,” [Liberal] Senator [Dean] Smith told The Australian Financial Review. “Electors have found it hard to reconcile the importance of our budget measures when also asked to support what seems to them a generous PPL scheme.”

Senator Smith said he was a strong supporter of the government’s budget and the need for its tough measures, but that he had become frustrated with trying to explain the government’s inconsistency…

Senator Smith joins lower house backbench MP Alex Hawke and Queensland Liberal National Party senator Ian Macdonald in openly criticising the scheme from within Mr Abbott’s own party ranks.

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While most seem to be opposed to PPL, several Coalition Cabinet members, including Barnaby Joyce and Scott Morrison, continue to support Tony Abbott’s staunch refusal to back down on PPL, and claim that the Government plans to press on with the scheme.

And therein lies the key difference between Tony Abbott and his mentor, John Howard. There is no way that Howard would have clung so strongly to PPL. He would have gauged early on that there was dissent within the electorate, in the party room, and in the Senate and would have staged a dignified reversal before the issue wrought significant political damage.

Abbott needs to kick his ego to the curb, doff his hat to John Howard, and put the rabid PPL dog out of its misery once and for all before it damages the Government’s brand any further.

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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.