Premiers baulk at Libs' baby bill.
by: David Crowe and Sarah Martin
From: The Australian
August 20, 2013
WA Premier Colin Barnett with Tony Abbott. Mr Barnett has labelled the Coalition parental leave scheme too generous.
TONY Abbott has come under fire from premiers from both sides of politics for assuming they will contribute to his $5.5 billion parental leave scheme amid a wider fight about whether the costings for his policy add up.
West Australian Liberal Premier Colin Barnett said the scheme was too generous and, although his state would co-operate, it wouldn't contribute any money.
South Australian Premier Jay Weatherill rebuked the Opposition Leader for announcing a plan that needed state funds to work, and declared he would not make any commitment to help pay for the federal scheme.
And Tasmanian Premier Lara Giddings slammed the "ill thought out" Coalition scheme and said her state could not countenance returning any "savings" on parental leave to Canberra.
The Premier's comments came as Jeff Kennett declared that Mr Abbott's paid parental leave scheme was an "extraordinary extravagance" and must be means tested. The former Victorian premier predicted it would be manipulated by families who had a baby for the benefit of full pay without working rather than because they wanted one.
Opposition Treasury spokesman Joe Hockey insisted the costs of the scheme were "totally covered" but could not say how much of the total would be raised by a 1.5 per cent levy on big companies.
"Well it would have to be 50 or 60 or 70 per cent - I am not going to speculate," he told Melbourne radio host Neil Mitchell.
"I haven't got the numbers in front of me."
The Australian understands the $5.5bn cost of the scheme will be covered by less than $2.5bn a year from the levy, roughly $2bn in savings from replacing Labor's current parental leave scheme and about $1bn in further savings.
The $1bn includes contributions from state governments as well as savings on family tax benefits and income tax revenue on the parental leave payments.
The Australian has asked for the full costing of the policy by the Parliamentary Budget Office but the Coalition has declined to provide it, saying the details will be released before the election.
The net cost of the Coalition's scheme will be more than 10 times higher than the government's.
Although the Coalition has quoted a cost for Labor's scheme of $2bn a year, the latest figures from the department show its gross cost was $1.4bn in 2011-12. Australian National University professor Peter Whiteford said this cost was reduced to a net figure of only $270 million because people claiming the paid parental leave no longer obtained the Baby Bonus and received reduced family benefits while paying more tax.
The Coalition has claimed a net cost for its scheme of $6.1bn in the first two years.
Mr Barnett said he supported paid parental leave but added: "I think in many respects it probably is too generous. If Tony Abbott becomes prime minister and that scheme is introduced, we will co-operate in terms of the administration, but we will not be contributing money to the scheme ... as has been suggested."
Mr Weatherill said he would not enter an agreement with the Coalition that might require spending cuts elsewhere. "(Mr Abbott) owes us the courtesy of actually communicating with us about his plans ... and he hasn't yet taken up that basic courtesy," Mr Weatherill said.
Ms Giddings said Tasmania would lose revenue if an Abbott government took power, and could not countenance any discussion about contributing to the scheme. "It is evidence of how ill thought out Tony Abbott's paid parental scene has been that states have not been consulted," she said.
Mr Abbott said there were 18 months to negotiate the details if the Coalition won the election.
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