Coalition revolts against Abbott’s stupid PPL

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ScreenHunter_03 Jun. 26 21.56

By Leith van Onselen

The Australian has revealed today that Coalition members continue to revolt against Tony Abbott’s paid parental leave (PPL) scheme, with five members resolving to cross the floor and vote against the measure:

[The members] are Barry O’Sullivan and Ian Macdonald from Queensland, Dean Smith from Western Australia, Cory Bernardi from South Australia, and John Williams from NSW…

Abbott’s backbenchers — like his publicly silent frontbenchers — have philosophical and practical objections. The money would be better spent elsewhere, on reducing the deficit or on childcare, or they baulk at increasing tax on companies — which one describes as a “wealth tax”. They resent the exclusion of “non-working women”, particularly in rural and regional Australia who keep the family farms going on no pay, and think it is fundamentally unfair that women giving birth receive different benefits.

They all say now is not the time. Not with a war to fund, other benefits being cut, the economy sputtering and the deficit growing…

Backbenchers are not convinced it will improve productivity or convince more women to participate, and in any case reckon improved childcare will achieve more on that front…

Abbott has made a mistake in letting the PPL fiasco drag on. The Government has already spent considerable political capital trying to sell the scheme, and in doing so has undermined its message of “ending the age of entitlement” and the need to cut expenditure to overcome the “Budget emergency”.

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Further, almost nobody – not economists, not the opposition parties, nor most Coalition members – genuinely believes that PPL is a good idea. Indeed, one of the key reasons why so many Coalition MPs have expressed dissent on the issue is that it has prevented them from being able to sell the Budget to a skeptical electorate.

Rather than showing a ringing tin ear, Abbott should have junked the policy altogether at the beginning of the year. There is no way his mentor, John Howard, would have clung so strongly to PPL. Howard 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, as it has done to Abbott.

The Prime Minister needs to recognise that his PPL scheme is dead and should kick his ego to the curb and abandon the scheme once and for all before it causes even more damage to the Coalition’s reputation and further derails its Budget agenda.

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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.