Tony Abbott's baby redraws battlelines

THE Opposition Leader has gone out on a limb with his maternity leave plan.

TONY Abbott wants to do with paid parental leave what Richard Nixon did with China. Only Nixon with his anti-communist credentials could have engaged with China, as he did on a visit in 1972 when he met Mao Zedong. Only Abbott, the leader of the party of business and a social conservative to boot, could propose such a generous (and progressive) paid parental leave scheme, to be funded by the big end of town.

The proposal involves the top 3200 companies in Australia (the classification of which has not yet been clearly defined) paying a 1.7 per cent levy on top of the company tax rate estimated to raise about $2.7 billion annually.

All working parents would then be entitled to six months' fully paid leave, to be divided between couples as they see fit, commensurate to their salaries (capped at $150,000 a year).

Abbott's policy would give Australia one of the most generous paid maternity leave schemes anywhere in the world. (The most generous operates in Sweden, where 15 months' paid leave is funded by a combination of the employer and the government, for 12 months at a rate of 75 per cent of the leave taker's salary, before settling at a more modest flat rate for the final three months.) In comparison, the government's scheme of 18 weeks at the federal minimum wage of $544 a week looks positively stingy.

The grandeur of Abbott's proposed scheme, and the fact that he is the ideal political leader to make it happen, doesn't remove the fact that it will be a hotly contested policy move on a number of fronts.

For a start he will have to make the details of it clear to voters in the face of a scare campaign by the Labor Party, using words furnished by Abbott himself, that it will be nothing more than a "great big new tax" on business in the aftermath of one of the most serious economic crises in a generation. Abbott will have to repel the very rhetoric he has used to attack Kevin Rudd's emissions trading scheme legislation, which the

Coalition continues to block in the Senate.

It is uncertain whether Abbott's proposed levy will even be enough to fund his scheme.

Because company profits are variable according to economic conditions, in tough financial

times it is possible that the levy won't cover the number of people tapping into the scheme. If the levy can't cover the cost, taxpayers may find themselves having to do so in an already tight fiscal climate. That concern was raised by Business Council of Australia spokesman Scott Thompson.

And of course the natural advocates for such a policy, the union movement and women's rights groups, are hardly core Abbott (or Liberal Party) constituencies. They are more likely to find fault with the scheme than praise the boldness and merits of what it offers. Take for example the early commentary coming out of the union movement. ACTU President Sharan Burrow said: "After years of entrenched views antagonistic to the interests of women, Tony Abbott is now trying to con the electorate." Never mind that support for paid maternity leave has been union policy since time immemorial.

In addition, the early analysis from the press gallery has been nothing short of scathing, variously describing the scheme as policy on the run, reckless and inconsistent with Abbott's philosophical position on most issues.

The Federal Sex Discrimination Commissioner Elizabeth Broderick also poured scorn on the scheme with some uninformed rhetoric when she said: "I'd hate to see a scheme finally put in place that ended up meaning men were preferred candidates over women in positions."

Broderick, the nation's highest advocate for women's rights, might have looked more closely at the announcement before slamming it. One of the more clever aspects of Abbott's proposed system is that it gets around the tired argument against paid maternity leave, that it would act as a disincentive for businesses to hire women if they have to pay directly for such a scheme.

The compulsory levy on the top 3200 businesses requires them to fund the scheme no matter what gender decisions they or any other business make when hiring. In fact, if companies that already fund their own paid maternity schemes choose to wind them up, as they surely would, many could actually be economically better off under Abbott's proposal. Certainly companies outside the 3200 paying for the scheme would be.

The government has been keen to emphasise the threats posed to Australia's prosperity by the ageing of the population. It has been one of the ways Labor has advocated the need for health and taxation reform (although we still await the release of the Henry Review). One of the common mechanisms experts promote for mitigating the economic effects of ageing is to lift the national fertility rate, which is now at 1.9 children per woman, below the replacement level of 2.1. Another is improved productivity in the workplace, something Rudd started this year talking about.

A system of generous paid parental leave would almost certainly boost fertility rates and probably lift productivity as well, at the same time giving women real workplace flexibility when it comes to starting a family.

But Abbott will have to deal with the philosophical inconsistency of his advocacy for generous paid parental leave covered by big business. Is it the role of the business community to fund by mandate a socially valuable policy? How can a party built on market liberalism force the big end of town to stump up for a universal paid parental leave scheme? And has Abbott really changed his mind on this or is he simply being politically clever? These questions won't just be asked by journalists, the government and the wider public. They will be asked by Liberal MPs as well. At the moment this is Abbott's policy, not shadow cabinet's, not the Liberal or Coalition partyroom policy.

On the ABC's Lateline program on Monday night, Abbott said: "I have the standard liberal-conservative predilections for smaller government, lower taxes, greater freedom, a fair go for families and respect for institutions that have stood the test of time."

But Abbott's paid parental leave scheme makes for bigger government and higher taxes, and bucks the tradition of the stay-at-home mother by making the work-family balance more manageable.

This final point is indeed a worthy goal, but Abbott still needs to win over his own partyroom before he can be sure that what he announced two days ago becomes Coalition policy.

It was not that long ago that a Liberal leader, Malcolm Turnbull, tried to strong-arm his partyroom into supporting a position that went against the core beliefs of many Liberals. Turnbull's attempt to force his party to follow his line (and the government's) on the ETS is not all that dissimilar to Abbott's move on paid parental leave.

The difference, of course, is that the new Opposition Leader will rely on his improved polling numbers and the wider support for women's rights over environmental action to bring his party with him. That should be enough for him at least to get to the election with his announced policy intact.

How can Abbott's road-to-Damascus conversion on paid parental leave be explained?

In 2002 he said compulsory paid maternity leave would be introduced "over this government's dead body". While that statement has been proven correct, the strength of the rhetoric implied paid maternity leave was a policy position Abbott personally was never likely to support.

Yet last year when his policy manifesto book Battlelines was released, Abbott revealed a thawing on the subject, so much so that he became an advocate for paid maternity leave. Now he has put some flesh on the bones of how he would try to make it happen.

What does Abbott claim has changed his mind on this topic? A "deeper understanding of the practical difficulties of women who are trying to juggle families and careers, brought about by being more conscious of the burdens that friends and family members are carrying and of thinking more deeply about the sorts of choices that I would like to be available for my own daughters", he told Lateline on Monday night.

Privately the Opposition Leader has expressed to colleagues that with the stripping away of traditional family support mechanisms in our busy modern society, he now realises that there needs to be additional assistance for families. If parents take extra time off to care for their newborn child, families struggle financially. If parents return to work early, they are unable to forge the same bond with their child.

Abbott's policy has a traditional social-conservative value in that it is designed to help that relationship, but it is also progressive in that it encourages women to be able to manage work and family.

Even if all that is true, some Liberals wonder whether internal polling showing Abbott needs to lift support among women voters might also have had something to do with his change of heart. "Maybe he has seen the light," one senior Liberal says, "but more likely he has just seen the polling."

Either way, the evidence that senior Coalition strategists think the policy is a vote winner was on display yesterday when the opposition used question time to lambast the government for its far less generous paid parental leave scheme, due to start in January next year.

Separate from the politics of Abbott's scheme is the analysis of the policy itself. Australian businesses have been engaged for a number of decades in a battle to lower the company tax rate to make doing business in this country competitive with doing business overseas. With a company rate now down to 30 per cent (from 49 per cent in 1986) business groups were quick to come out and suggest Abbott's scheme could damage Australia's ongoing competitiveness in a globalised world.

While it is no surprise to hear vested interests raise concerns about a scheme that will see their members suffer the financial load, that doesn't necessarily diminish their point. The Australian Industry Group, The Business Council of Australia and the Chamber of Commerce all raised serious concerns with Abbott's scheme. It may be that the policy is the right thing to do for women in the workforce, as well as for social progress in this country, but the funding mechanism is problematic.

Still, if politics is about picking winners, Abbott wouldn't be too concerned about picking a fight with big business while at the same time siding with Labor's favourite people: working families.