Bill Shorten will block Budget savings plan to end parental leave scheme ‘double dipping’
BILL Shorten has vowed to support the Government’s $5.5 billion small business package, but will block a bid to end paid parental leave double-dipping.
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BILL Shorten has vowed to support the Government’s $5.5 billion small business package paving the way for tax cuts and instant asset write offs for more than 2 million businesses.
But Labor will still block a bid by the government to end the double-dipping paid parental leave scheme Labor created, along with a raft of other key savings measures.
The Labor loophole allows a new mother to claim maternity payments from her employer and the government, meaning a woman on $130,000 could pocket $35,000 from their company and $11,593 from taxpayers. Closing the loophole would save taxpayers $1 billion over four years.
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Opposition to the end of the double dipping and other measures has left the government considering scaling back its proposed $7 billion in cuts to win support in the Senate.
“For the government to attempt to take this away, to take the blanket away from underneath the arrangements already in place, is absolutely outrageous and we are going to oppose,’’ Opposition Treasury spokesman Chris Bowen said.
Mr Shorten this morning said the Opposition would support measures designed to kickstart the economy in Tuesday’s Budget.
The government looks likely to get support from the crossbench and the Greens for its small business package as well.
Labor will stand in the way of a fuel excise increase, announced in last year’s Budget, which would cost motorists 50c a week and pour more than $500 million into government coffers.
Changes to the Pharmaceutical Benefits Scheme, which are worth $1.2 billion and would raise the price of medicines by up to $5 — 80c for pensioners — will also be blocked by the Opposition.
But Labor is likely to vote for changes to the pension asset test which will leave tens of thousands better off but hit wealthier seniors.
The government will consider paring back cuts to family tax payments proposed in last year’s Budget in a final bid to get them passed in the Senate and partly pay for its new $10 billion jobs, small business and childcare package.
Senior government sources confirmed the savings were up for negotiation with Senate crossbenchers, with signs they could be passed now they have been linked to the $4.4 billion families package.
Finance Minister Mathias Cormann challenged Mr Shorten to explain what his alternative was and how it would be paid for when he delivered his Budget reply speech tonight.
“Bill Shorten will have to explain where all the money is supposed to come from that he wants to spend or which he doesn’t want to save,” Mr Cormann said. “He has to show that he has what it takes to make the difficult decisions in the national interest.”
Opposition Leader Bill Shorten takes on Prime Minister Tony Abbott in Question Time. Picture: Kym Smith
The measures to reduce the small business tax rate by 1.5 per cent, tax discounts of five per cent for sole traders and instant asset write-offs for goods worth under $20,000, as well as FBT exemptions for electronic devices such as mobile phones, will require legislation.
The families and childcare package will not be presented to the parliament until the government can get agreement to get its $7 billion in family tax payment cuts through the Senate.
The view of the crossbench was that pension, childcare and small business changes would get through the Senate, albeit with some tweaking.
Greens leader Richard Di Natale said he supported the small business plan to allow operators to immediately write off purchases up to $20,000.
Independent Senator Nick Xenophon said he supported the key changes for small business and childcare, but would not support changes to the family tax benefit.
Labor fakes outrage over PPL scheme that it invented
SIMON BENSON — COMMENT
LABOR’S mock outrage over the government’s changes to double dipping on paid parental leave is understandable — politically.
Treasurer Joe Hockey opened the door to this attack when he stuffed up the announcement. The explanation should have been easy and, if explained properly, would have exposed Labor’s own trickery — which looks suspiciously like a sneaky backdoor pay-off to the public sector unions, which few people picked up on at the time.
The facts are pretty straightforward. But people can decide for themselves whether they think the government is being fair in shutting down a loophole which has allowed people — the majority of them public servants — to claim payments from two separate paid parental leave schemes.
When Labor introduced its PPL, with a cap of $11,500, it was on the assumption of a national taxpayer scheme to help women in a country where very few employers actually had PPLs for their employees.
It turns out that the one employer who did have a generous PPL was the public service. Under union negotiated enterprise agreements, public servants became entitled to 14 weeks of leave — which for someone on $130k provided $35,000.
This public servant could then claim the government PPL, topping up their total payments to almost $50k.
It is hard to imagine that Labor didn’t do this without design considering its union vested interests, knowing that the majority of people who would benefit would be their own.
Of course, private sector workers would be able to do the same. But there are far fewer who have the luxury of working for a company that actually has a PPL. Hence the number of people to be cut off from this double dipping are primarily public sector workers — they are more than 60 per cent of the 80,000 estimated to be affected.
The spirit of Labor’s PPL should have been to use the government scheme to help people who may have received a lesser private-funded scheme or none at all, not add to an already generous public sector scheme.
Is the system that Labor is now trying to protect fair? Most people, or at least those who can’t take advantage of it, would say no.
What would have been fairer was a bipartisan support for Tony Abbott’s original PPL which offered all women six months leave with their newborns.
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