The Abbott Government appears to finally be giving ground on controversial Budget measures, flagging that it might accept compromise packages that water down the proposed $7 GP co-payment and Tony Abbott’s paid parental leave (PPL) scheme.
Regarding the GP co-payment, the Government is reportedly looking “seriously” at exempting vulnerable groups, such as pensioners and the disadvantaged, from the scheme in order to counter concerns about equity:
The AMA’s counter policy would void the fee for the elderly and disadvantaged as well as indigenous Australians…
We’re having discussions with the AMA and they’ve put forward an alternate model. They still believe and support a co-payment model and we’re having a look”…
“If there are further changes we can make that people believe can make it fairer, I’m happy to listen to that,” he said.
“I believe we can negotiate this,” Mr Dutton said.
This is a substantial improvement to the policy in my view; although the Coalition should perhaps follow Peter Costello’s advice, abandon the scheme altogether and save its political capital for more important issues, such as superannuation reform, applying tighter assets/means testing to the Aged Pension, and broad-based tax reform? Concrete action in these areas offer far bigger budgetary pay-offs and/or could significantly improve the economy’s productivity.
On PPL, the government has flagged that it might seek to amend the scheme so that it offers less generous benefits to higher income earners, while kicking in additional funding for childcare. From The Australian:
The Australian has been told of discussions within the government on substantial amendments to the policy that could cut the cost and counter accusations that the “gold-plated” scheme is too generous to the wealthy.
…ministers repeatedly attempting to persuade the Prime Minister to abandon or delay the huge spending because it undermines the wider message on saving taxpayer funds…
One option being canvassed is to scale back payments to wealthier new parents but develop new programs to help with childcare towards the end of the year.
“The wisest thing would be to drop it very quickly,” said a senior Liberal…
No cabinet ministers are enthusiastic supporters of the policy and many see a wider childcare package as a more successful policy but they accept that the decision is up to Mr Abbott…
“There’s no way now we’ll get the PPL scheme through the Senate, whereas we’d get a good childcare package through.”
Unfortunately, Tony Abbott continues to back the PPL scheme in its current reform, reportedly rebuffing “private pleas to adjust the policy beyond his decision in April to lower the income threshold for the payments from $150,000 to $100,000”.
As argued earlier this month, the best thing that the Government could do is abandon PPL altogether. The scheme has been nothing but a giant thorn in the side of the Coalition, which has spent considerable political capital trying to sell PPL, and in doing so has undermined its message of “ending the age of entitlement” and needing to cut expenditure to overcome the “Budget emergency”. Further, one of the reasons why Coalition MPs have expressed dissent on PPL is that it has stopped them from being able to sell the budget to a skeptical electorate.
While it appears that the Abbott Government may finally be learning the art of compromise, it needs to do a lot more to stop the rot. In particular, it needs to begin crafting a consistent message and, more importantly, take the necessary care in formulating policy, including consulting with key stakeholders and ensuring proposals are based primarily on evidence rather than ideology.
