If Greens are your policy saviours, think again

TONY Abbott’s parental leave scheme muddles budget pitch.

ENDING the age of entitlement, to paraphrase one former Liberal prime minister, was never meant to be easy. But Tony Abbott and Joe Hockey didn’t need to make it this hard for themselves. Laudable as their aims are and brave as some of their budget measures have been, the practicalities of campaigning against rampant entitlements while claiming credit for introducing a historic new entitlement were always going to rankle. The opposition seized on the paradox in question time yesterday, juxtaposing every budget measure it considered miserly against its “$50,000 for having a baby” summation of the Coalition’s expanded paid parental leave proposal.

So while the Prime Minister’s overall message continues to be redolent of Malcolm Fraser’s lament about life not being easy, he also finds himself standing at the dispatch box spruiking his “workplace entitlement, not a welfare entitlement”. In this age of prolific information noise, messages still are best kept simple and consistent in order to cut through to voters. Yet the Coalition is arguing that it will end the age of entitlements it doesn’t like while extending the reach and value of entitlements it considers to be in a different category. Mr Abbott says a new levy to support a taxpayer-funded, wage-based, 26-week, paid parental leave scheme, capped at an annual wage of $100,000, is a “watershed” economic and social reform. “We took it to the 2010 election,” he told parliament yesterday, “we took it to the 2013 election, and we will deliver it.”

This is an income-support payment that uniquely pays the most to those with the highest incomes; and a workplace entitlement that uniquely is not paid by the employer but the taxpayer. For these reasons, we know many MPs within government are disdainful of the policy and some have openly criticised it. Mr Abbott must be embarrassed rather than comforted by its strongest enclave of political support — the Greens. In a parliament already rich with irony — Labor blocking the repeal of a carbon tax it won’t recommit to and opposing budgetary savings it once said were necessary — it is only fitting that a leader who was highly critical of Labor getting into bed with the Greens might look to the Greens to save a key policy.

Mr Abbott does, however, make the salient point that public service workers already receive PPL at their wage, uncapped. This inequity is difficult for Labor to defend but public sector workers receive 14 weeks’ PPL, not 26. And this is perhaps an argument, at the least, for compromise. The Coalition’s own audit commission recommended capping the scheme at average weekly earnings, which would almost halve the maximum payment from $50,000 to about $28,500. The arguments against the Coalition scheme are not so much the rejection of any improvement but that now is not the time.

Labor is inconsistent too, vowing to block sensible budget measures to curb spending on Family Tax Benefit B. Just a decade ago Labor wanted to abolish this “middle-class welfare”, saying it paid “married women to stay home”. And current deputy leader Tanya Plibersek mocked the Howard government’s focus on choice: “The choice seems to be stay a single-income family or spend all of your second income on childcare.” Yet Labor could well block the planned FTB-B indexation pause and related savings. This will worsen the budget bottom line that Labor has spent five years telling us must be improved.

As we embark on a period that will be dominated by budget horse-trading in the Senate, the government has a compelling case to make. Its hyperbole about a budget “emergency” aside, the fiscal challenge remains urgent lest the national economy confront its next global shock in a situation of structural weakness. Labor and the Greens should not be standing in the way of efforts to repeal the carbon or mining taxes, or block reforms to trim welfare expenditure and restore the budget to order. Yet the government’s case would be all the more compelling without its plans for a new tax on business and a significant increase in taxpayer-funded workplace entitlement. A concession by the Prime Minister to delay his $4 billion “signature” policy until his primary fiscal task is on track would be a welcome signal of economic common sense and political pragmatism.