From the AFR:
Prime Minister Tony Abbott’s signature paid parental leave policy and Labor’s National Disability Insurance Scheme could be scaled back, potentially saving billions but leaving the government open to political attack.
The Coalition and the Greens have held discussions about the structure of the parental leave scheme, which is forecast to cost $5.5 billion a year. The Greens want lower payments than the generous rates preferred by Mr Abbott.
The government is also considering modifying the $22 billion disability scheme, following trials in NSW, Victoria, South Australia and Tasmania that have cost 30 per cent more than forecast. The scheme provides personalised support for the disabled, such as physiotherapy.
“It’s a pilot program and at the moment, contrary to what the previous government claimed, the pilot program has blown out massively,” Treasurer Joe Hockey said. “We want to deliver the scheme in full, but we want to do it in an affordable manner, otherwise it won’t be sustainable.”
The likely welfare cuts would be part of deep savings across the entire budget, which is forecast to be in deficit this financial year by $47.6 billion.
Cuts to the parental leave scheme will be politically welcome. But cuts to the NDIS will not.
The Government is making a big blunder here. It is couching the cuts within the old framework of needing to return the Budget to surplus. That’s fine but it is not a strong enough narrative to rally the polity behind painful cuts to vulnerable parts of the community, nor to contain the blow back that will come from every affected interest group.
The Government has plenty of tactical slogans: “budget repair”, “open for business”, “no handouts”, but it has no strategic economic narrative.
Even if it does the right thing, therefore, it will pay a big price in the polls because there is no sense of shared responsibility and sacrifice. On the contrary, the Government is rapidly lengthening the list of disenfranchised and pissed off people that will get full voice in the media and there is no compass to point to and offer understanding that this is a shared national transition. This failure will also, in the end, kill the policy process.
My guess is that the Libs think their being politically clever by couching their various policy shifts as slogans that implicitly blame Labor. It is ironic that by being so narrowly political that they’re going to lose the politics of their agenda.
The framework the Government should be using is the nation’s failing competitiveness which must be repaired if we are to sustain our standard of living. It is essential that considerations of equity be a part of that shared effort. The PM is already seen as a bovver boy and is hemorrhaging women voters as his recent performance has reinforced that perception.
The Prime Minister or the Treasurer needs to launch a sustained public relations blitz about why these various measures are needed for the country, not for the Budget and not for business.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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