Parental Leave in Australia
March 11th, 2010 at 10:14 am by David FarrarThe Herald reports:
Abbott has come up with a plan to tax big business – those earning more than A$5 million ($6.25 million) a year – to pay for a surprisingly generous compulsory leave scheme.
Under his proposal primary carers would be paid at their full rate of take-home pay up to a maximum income of A$150,000 a year ($187.5 million) for 26 weeks. Abbott estimates the scheme will cost about A$2.7 billion a year.
A rather desperate election bribe. First of all, taxing large businesses to pay for the entire costs is blatantly unfair. If it is deemed desirable to have paid maternity leave, then it should be funded by all taxpayers.
Secondly it is massive welfare for the rich. If you were on $40,000 you will get $20,000 maternity leave. If you were on $150,000 you will get $75,000.
Rudd’s scheme, due to be launched next January, pales by comparison. This scheme will pay the minimum wage of about A$544 a week to the primary carer for a maximum 18 weeks’ leave after the birth of a child.
It will cost an estimated A$260 million a year, paid out of consolidated revenue.
Rudd’s scheme seems far more sensible to me.
Not a good sign for Australia, if both parties are getting into a bidding war of spending money they don’t have.
Related posts:
- Paid Parental Leave
- How would Labour pay for paid parental leave?
- Paid Parental Leave Pains
- Australian youth rates
March 11th, 2010 at 10:27 am
DPF said…
First of all, taxing large businesses to pay for the entire costs is blatantly unfair.
It’s got nothing to do with being fair or unfair. This is a direct assault on private properties of business owners. It is legalized theft.
Vote:March 11th, 2010 at 10:34 am
Not quite that simple DPF. Abbott wrote at length about maternity provisions in his book, and there is no surprise here that he has come out with a policy on it – it is something that he is passionate about, rather than being (as presented by some segments of the Australian media) a desperate election bribe. It is true that he rushed the announcement so as to take the wind out of Rudd’s sails on Health, and that it was a bit of a blunder to do that.
In terms of what he’s funding, he’s been very clear for some time that means testing creates substantial marginal tax rates in the middle income brackets, and that he’s more concerned about that than he is about the provision of welfare to those earning above the median income. That is an arguable point, but he has been pretty clear about it.
There is more to come from Abbott yet – he has been clear that he thinks it important to support mothers and families, and he identified three groups:
– mothers who take time off work to have children. There is current support in Australia, but that support consists of 3 months paid maternity leave (at your normal pay), then the newly proposed 3 months at minimum wage. He thinks this should be 6 months at normal pay, else there is a substantial impost on their families
– mothers who return to work, and therefore shoulder child care costs. He believes there needs to be a better subsidy regime than that currently in place
– stay-at-home mothers (not previously working), who aren’t eligible at present for any payments, he argues their families are incurring additional costs and deserve support.
My view is that having children is a personal choice, and should be a personal cost. If you can’t afford it, you shouldn’t have children, it isn’t like we have a shortage of people in the world. Abbott seems to be more of the view that we need ongoing growth, and that therefore children should be supported by the whole community through the tax system – almost as a public good. That aligns with his catholic faith. Although I disagree with the principle, I think it is probably good politics – those with children, those wanting children, those recently having had children, and grandparents of those children, are a pretty significant voting bloc.
Vote:March 11th, 2010 at 10:49 am
The left wing media govern Australia, as they govern NZ. That means that any politician who choses to stand for election must work within the framework set up by the myriad of left wing “journalists ” (and their academic cohorts) who shape public opinion. They’ve got their knives out for Mr. Abbot due to his Christian background, and they’re salivating away, waiting for a chance to cut him down and feed on his corpse.
I had expectations that Mr. Abbot might be able to fight back, at least a little, but he’s obviously decided that discretion should take precedence over valour. Its not easy for him as leader to do much anyway when most of his party are thieving socialists as well who would ditch him in a nanosecond if he ever showed any signs of straying to the rational economic and social right.
Australia is held as fast in the death grip of the Progressives/ socialists as most Western countries.
Vote:March 11th, 2010 at 10:53 am
“Not a good sign for Australia, if both parties are getting into a bidding war of spending money they don’t have.”
That has always been the nature of Australian politics – it is far worse than here.
Vote:March 11th, 2010 at 10:54 am
Another Lib leader im-fcking-plodes just in time to become unelectable in the next election.
Vote:March 11th, 2010 at 11:22 am
Abbott seems to be more of the view that we need ongoing growth,
The last Liberal government encouraged Australians to have “one for mum, one for dad and one for the country” with a ~$3000 payment for every registered birth in 2004, I think it was. Not just Abbott in isolation in this case, perhaps it’s a strand of though in Australian politics.
Vote:March 11th, 2010 at 11:27 am
If this sort of thing is welcomed in Oz it will be the start of the end. Blatant middle class welfare instilling a culture of entitlement. This sort of thing is what lays Europe low.
Vote:March 11th, 2010 at 11:28 am
DPF: Not a good sign for Australia, if both parties are getting into a bidding war of spending money they don’t have.
Glad I live in NZ where we don’t spend $240 million a week we don’t have.
Vote:March 11th, 2010 at 11:30 am
stephen: correct.
My personal view, there is no reason to keep growing the population (through immigration or birth rate). I agree that letting the population shrink creates a big demographic and pensions funding problem. But unless we think we’re going to grow population indefinitely, continuing to grow now just saves up problems for the future. Better to deal with it now.
Vote:March 11th, 2010 at 11:39 am
Good news for here, means effecitvely we have a tax advantage of 1.5% on the company rate over the Aussies. It will also put to rest the argument over whether large companies moved head offices from NZ to Aus based on tax rates, as I suspect it will show they moved to Aus because its where the majority of their business is.
May incentive rejigging transfer pricing however
Vote:March 11th, 2010 at 11:41 am
Well, maybe now we can stop the charade of “catching up to” Australia. Much cheaper to just let them drag themselves down to our level.
Vote:March 11th, 2010 at 4:52 pm
Redbaiter is quite right: “Australia is held as fast in the death grip of the Progressives/ socialists as most Western countries”.
I lived and ran a reasonably large business there for two and a bit years and was glad to leave. The propensity of both major parties to meddle for the worse in the private sector and the fact that Australians by and large seem to think “give us a fair go mate” means someone else should pay for their lifestyle choices means I would never return.
Vote:March 11th, 2010 at 11:43 pm
Speaking as a person who hired and occasionally “released for further career development” something as draconian as this would not only be “unfair” to the people employing stay at home parents but it would mean – whether you admit it or not – you would think thrice before employing women of a certain age as their potential cost to the biz would be horrific. The reality is that skilled women would be unemployed and heading to NZ … oh yeah … maybe we should let them rot and fall to our lowly status
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