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A workable $5.5bn scheme? Leave it out, Tony

AFR    |   19 August 2013

Laura Tingle says the Coalition’s paid parental leave scheme is policy so bad, so appalling – on both policy and political grounds – that in any reasonable contest, it should give Labor a fighting chance to get back in the election race.

Unfortunately for decent public policy, and for us as taxpayers, we cannot be confident, on the basis of Labor’s political form in the campaign so far, that it will be able to consign this piece of irresponsible, populist junk to the dustbin of history.

Let us test Tony Abbott’s $5.5 billion a year scheme against his own rhetoric, against his own political critique of Labor for the past three years, and against his own party’s general political philosophy.

The Coalition has argued until now that it could fund its scheme for 26 weeks’ parental leave at actual wage levels via a 1.5 per cent levy on companies’ taxable income over $5 million. Having finally undertaken a more serious costings exercise than it did in 2010, it emerges this levy will only finance slightly less than half the cost of the scheme.

The Coalition has been changing its position almost daily on when it would detail how it will fund its plans.

In the last week, it has finally admitted it will not release its full costings until the last week of the campaign. But shadow treasurer Joe Hockey has suggested it would indicate how much policies would cost, and how they would be funded, as policies were released.

This is despite the Coalition still not saying how it will fund a $5 billion a year company tax cut that it announced almost two weeks ago.

The four short sentences that outline the paid parental leave policy’s cost in the Coalition’s policy document misleadingly tell us the “net additional cost of the scheme is $6.1 billion over the forward estimates period (after allowing for savings from discontinuing Labor’s inadequate paid parental leave scheme)”.

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