Abbott plays a decisive card

THIS is the week that Tony Abbott positioned himself with Greens leader Bob Brown, the trade unions and radical feminists by embracing a big new tax to finance an excessive parental leave scheme.

The Leader of the Opposition has stolen an icon of the Left. This is a brazen populism that has shocked everybody: the Rudd government is enraged at being outbid, the feminists are agog and incredulous that Abbott has joined their cause, and business is shrill with its denunciations of his economic irresponsibility. Brown caught the mood with his exclamation: "Go, Tony."

It is a naked bribe with truckloads of money designed to shift female perceptions of Abbott.

He must pray the ploy delivers in the polls and among women voters under 45, because the long-run damage for Abbott will be substantial. Abbott has changed his mind on parental leave and changed his pledge on no new taxes. It is one reversal too many. It invests Rudd Labor with its election theme: don't trust Tony with your economic future.

With this move Abbott reinforces his personal stamp on the Liberal Party. It is becoming the Abbott party. He said it was "a leader's call" and this has a precise meaning. Abbott felt the shadow cabinet would not have endorsed this idea so he never gave them a chance. This is Abbott's personal effort to reach out to mothers in the outer metropolitan seats and convince them the legend that he hates working mothers is dead wrong. It is a gamble and a decisive moment in his leadership.

Abbott's scheme runs for 26 weeks. It is based on salaries up to $150,000 a year. And it is funded by a hefty 1.7 per cent tax levy on the top 3200 businesses. It defies the recommendations of the Productivity Commission, whose report is the basis for the Rudd government's scheme, which is due to start next year.

The scale of Abbott's outbid is staggering. Rudd's scheme is set at the minimum wage, runs for 18 weeks and costs $260 million a year. By contrast, Abbott's levy raises $2.7 billion, a multiple of more than 10 times. This betrays a leader psychologically incapable of being a small target whose instinctual political aggression runs across the border of recklessness.

It is a populist leap and another test of Abbott's insight into public opinion. He will campaign ruthlessly to election day that he is doing more than Labor for working mothers. And there is more to come: Abbott also plans to unveil a taxpayer funded scheme to help stay-at-home mothers.

This week's decision is deeply revealing of Abbott's character and style. It shows a penchant for risk taking in order to beat Rudd, an obsession to fix his political problems, a confessional bent to abandon former policies when necessary, a suspicion of big business unusual in a Liberal leader, the dominance of his pro-family social conservatism, the weakness of his economic rationalism and fiscal discipline, and, ultimately, his instinctual ties to the philosophy of B. A. Santamaria at some departure from the assumed Liberal Party mainstream.

Forget the nonsense that Abbott wasn't worried about the female vote. This signals an urgent quest to gather support from women. Foreshadowed in his book Battlelines, published last year, Abbott's rethink on parental leave symbolises his philosophical adjustment to the demands of contemporary work-family issues.

He knows that 62 per cent of women who have a baby are in work.

This suggests a retail politics contest between Rudd and Abbott with serious risks to sound Australian policy. With much of the developed world still struggling in the aftermath of the global financial crisis, Australia is trapped in its own conundrum of rising election bribes.

This week Abbott was in repentance mode, breaking from past sins and apologising for exercising the leader's prerogative.

The departure from the Howard era is dramatic. In my book The March of Patriots I describe the Howard government's rejection of sex discrimination commissioner Pru Goward's push for paid maternity leave. Goward said: "When I informed Tony Abbott's office the report was coming, their reply suggested it would be dead within the day. When the report was released I was heartbroken. There was a campaign run against me. Abbott said, `Not over my dead body.' I did not have a supporter within the cabinet."

Abbott now confesses Howard's cabinet got it wrong. He rationalises his conversion by reference to his commitment to families and belief that slugging business is the fairest option.

It is through Santamaria that Abbott has found his way to a leftist stance. This sounds fantastic but only to those ignorant of Santamaria's hostility to pro-market economics and his support for pro-left state intervention in the cause of "little" people, families and a growing population.

This move shows Abbott's emotional preference for Santamaria over Howard. The downside for Abbott will be significant. In many ways he has given the Rudd government a political gift. He has prejudiced his brand consistency. The leader who brilliantly exploited Rudd's emissions trading scheme as a big new tax and who wants to exploit the Henry review's tax recommendations has shot himself by introducing his own big new tax on businesses with a taxable income of more than $5m a year.

This breaks Abbott's earlier pledge that: "We won't increase taxes. There will be no new taxes." It opens a credibility problem that Rudd and his senior ministers will mercilessly prosecute.

While probably popular, Abbott's business tax as a method of financing social policy runs against the Australian tradition and best policy practice.

It lifts corporate taxes when the Henry review will say they are too high in international terms. The effect will be to damage investment, jobs and competitiveness. Business will have a financial incentive to engage in silent discrimination against younger women.

This scarcely enhances the Liberal Party as the free enterprise party. Indeed, the suspicion business harbours for Abbott will only intensify. At the same time, anti-big business sentiment within the Liberal Party and the Nationals has only intensified. It is significant that the Australian Chamber of Commerce and Industry, with a strong small business constituency, was utterly dismissive of Abbott's policy.

Beyond this lie a series of judgments about Abbott. He needs this decision to reap electoral dividends, otherwise his authority is weakened. The gap between the opposition's tighter fiscal policy promise and its list of specific spending commitments will only provoke more scrutiny and criticism. And the tactic of diverting attention from Rudd's hospital plan to Abbott's parental scheme was a one-week wonder that betrays an obsession with retail politics at the cost of long-run political reputation.

A deeper question is: will women conclude that Abbott is sincere or will they see him as a political trickster? Will Abbott's reputation as an authentic who stands up for his beliefs actually be damaged?

By Thursday, Abbott had retreated from threats about blocking Rudd's far more modest scheme in the Senate. "I am not in the business of frustrating even small steps forward for Australian women and Australian families," he said. Obviously, halting Rudd's scheme would be high folly.

As the week advanced, Abbott kept delivering assurances about his core principles: lower taxes, greater freedom, smaller government. But political brands are built on consistency, an unpalatable reality for retail politics. Abbott knows that Labor is measuring him for a Mark Latham type campaign and he risks giving Rudd fresh material suggesting he is too raw, erratic and unpredictable to be trusted with running Australia's economy.

However, Abbott may have made another calculation: that Rudd lacks the policy fortitude and courage to make credible such an attack on him. Abbott thinks Rudd is a phony tough.

His gameplan is to out-muscle the Prime Minister.