Bill Shorten spends it up in budget reply as the Coalition's paid parental leave plan hangs in tatters

The Labor leader didn’t even try to offset the significant cost of new measures and before he even started speaking, one of the government’s flagship policies was unravelling

Lenore Taylor Political editor

Thursday 14 May 2015 20.45 AEST Last modified on Thursday 14 May 2015 21.08 AEST

Who’d have thought Tony Abbott would be under fire for the stinginess of his paid parental leave scheme when for so long he was attacked for its profligacy, and that this attack would be the big threat to his plan to use a giveaway budget to reset the political debate.

The Coalition wanted to use its softer 2015 budget to get traction for the “Labor are wreckers with no savings alternatives” line, which tanked last year because most of the savings in question were also rejected by the voters and the crossbench in the Senate.

The finance minister, Matthias Cormann, tried to revive this attack ahead of Bill Shorten’s budget speech in reply, demanding the Labor leader explain how he would cut $52bn in spending – the Coalition’s calculation of the cost of the savings Labor has blocked and the policies it has promised to reinstate.

Shorten, unsurprisingly, did not oblige. More surprisingly, he did not even try – announcing significant new spending without any new offsetting savings, other than restating Labor’s commitment to a multinational tax avoidance crackdown and a modest cut to superannuation tax concessions.

His message was pitched in a similar fashion to the government’s budget – all about having a plan to create the jobs of the future that would replace the mining boom – but the policy details were scant. Its main aim was rhetorical – to remind everyone watching the televised speech about last year’s unfairness and insisting that its “meanness of spirit” lives on.

But that rhetoric had been bolstered by Labor’s attack on the paid parental leave cuts, which pried back open the “unfairness” theme. As the hours ticked down to Shorten’s speech, the government’s policy started to quite spectacularly unravel.

Ministers had referred to the idea of employees receiving both an employer-funded scheme and a government-funded scheme as “double-dipping” and described it as a “rort” and a “fraud”, but then the assistant treasurer, Josh Frydenberg, said he and his wife had “double-dipped” themselves, and the finance minister, Mathias Cormann, appeared to have done the same.

The prime minister tried to change tack and say the saving was justified because its major beneficiaries were (apparently undeserving) public servants, but then had to backpedal when asked about the generous scheme offered by the Australian federal police (also public servants). And then the social services minister, Scott Morrison, tried to say it was targeting only a “Labor/union deal” but appeared lost for words when asked why the Coalition had voted for it five years ago and not mentioned any concerns in the interim.

The government still has almost $10bn dollars in small business and childcare funding to flick the switch to economic and political optimism and achieve the political breathing space it is seeking, not to mention lots of other smaller goodies to give away.

But Labor’s attack on paid parental leave shows how quickly the debate can be diverted back to last year’s devastatingly damaging themes.

http://www.theguardian.com/australia-news/commentisfree/2015/may/14/bill-shorten-spends-it-up-in-budget-reply-as-the-coalitions-paid-parental-leave-plan-hangs-in-tatters

Budget 2015: The Coalition's reprise of Kevin Rudd Keynesianism

by The Australian Financial Review

Call it have-a-go government. The Coalition is too badly damaged to wait for prudent management of the national finances to encourage business to spend, so it is jumping in and kick-starting things for itself.

Joe Hockey is splurging $5.5 billion on small-business tax cuts, and instant tax deductibility on small-business spending of up to $20,000 for the next two years. Like Kevin Rudd's failed Pink Batts and school halls, it is a pseudo-Keynesian attempt to create demand out of nothing, a sugar hit from a Coalition government that was elected because it was supposed to know better. If nothing else, the tax break will create a new $19,999 retail price point for boxes of tools or kitchenware, though most economists doubt they will create many other measurable effects in the economy.

The government is also offering a $4.5 billion childcare scheme, also billed as a productivity-lifting boost to numbers of working women.The subsidy would clearly have merit for many individual families, though the last serious study of the subject by the Productivity Commission found that the extra workforce participation created by such spending was minuscule.

But they are political gold. The two schemes take the money that would have been going to an unpopular cause – the $10 billion that Tony Abbott's paid parental leave scheme would eventually have cost – and give it to much more popular ones. They provide the political ammunition that Coalition backbenchers have been starved of for a year. And in the heartlands, which they are desperate to reach, it was on target. Budget coverage in the big city tabloids saluted the optimism and imagination of the policies, and of using hardworking Australian tradies to haul the economy out of trouble. Indeed, Treasurer Joe Hockey's overall fiscal game plan now is to hope that GDP growth, underpinned by benign interest costs, petrol and power prices, will shrink the relative size of the deficit by itself – with the tax break as a final nudge for small businesses to begin that spending and growth.



Causes problems later

But the scheme is pulling forward future demand to be spent now, in the hope that it takes on its own momentum and just keeps going. That frequently either does not happen, or causes problems later. And it seems even more optimistic when through an entire rate cutting cycle since 2010, business confidence and investment has stayed stubbornly low and the formation of small businesses has been slow for a decade.

Rather than trying to steer growth like this, the government would have been better off improving business conditions overall by cutting taxes further and deregulating more. But that would get less political credit than a flashy intervention like cash for tradies, and increasingly it is the political winnings have become the game in budget policies.

While many are arguing that this budget at least does no harm, that's not really true. It is harking back to the discredited fiscal activism of the Rudd years. The lesson of modern economics is that fiscal policy should focus on a medium-term goal of generating budget balance, or a modest surplus, over the course of the economic cycle. It is the Reserve Bank's setting of rates and the floating dollar that are supposed to manage the economy's ups and downs, not runaway spending by Canberra.

Now the government has taken its eye off that medium-term fiscal framework. The claimed path back to surplus relies on growth simply continuing as it has despite the rising number of problems. It also ironically relies heavily on bracket creep producing stealthy tax increases on the middle-income earners that the small business tax breaks are also aimed at.

But right now it is political believability rather than economic credibility that the government is searching for, and these policies have so far given them a rare win. The bill will come later.

http://www.afr.com/opinion/editorials/budget-2015-the-coalitions-reprise-of-kevin-rudd-keynesianism-20150514-gh1ovf

Missed the joke sorry.

Might have been too meta for some.

-PB

He talked shit. I love how Labour always talk up what they're going to do without any means of paying for it. How are they going to pay for 100,000 engineering/IT women to go through uni? Who's going to get screwed to pay for it?

They have to put out whitepapers and other documentation on how they would fund that stuff in the comings weeks surely?

I want to know where these jobs are going to come from :lol:

-PB

:idea: The 100,000 engineering and IT women and their employers :idea:

...or everybody

Shorten said that the government would pay for. The companies themselves aren't going to fund degrees.

1) The vast majority of engineering firms are holding/reducing professional staff levels.
2) Most (us included) firms have had to scale back undergraduate programmes because it's not cost effective to pay kids form minimal return these days.
3) Most engineering firms (us included) have scaled back graduate programmes because the work simply isn't there for them.

Yes you're right, the government is going to pay for it because the exact reason you said. Look forward to the moaning when we can't build and develop infrastructure because people like you (who I'm sure is on the young end of the age scale) are all no longer capable of working.

All you've talked about are symptoms of the problem of a stagnating economy.

With positions reducing following mining slowdowns I don't see the need to 'boost' positions at all. University offerings should be in line with demand (where practical). Producing engineering graduates is expensive, especially when we're producing more graduates than there are positions. Boosting female positions is a stupid way of trying to prove that the opposition is all for equality. There's nothing wrong with females in engineering. There is a problem of wasting money trying to prove a point.

If the government wants to do this, they need to put the squeeze on male positions gaining entry to university courses, to prevent graduate engineers working in either part time jobs or in other fields.

I had something like 120 engineers in my cohort. About 3 in 4 had jobs out of uni in the middle of the mining boom. We had an undergrad who left us who said less than half his cohort had jobs. Why on earth would you boost funding to a sector that's over saturated?

Was in reference to Joyce and Johnny Depp's dogs.

-PB

I know what you're saying and I work in IT where it's the same thing. There's definitely an aspect of creating a point of difference to the fact that the Liberals have been crushing the science and innovation sectors ever since they got into office.

I have an applied mathematics degree and the university offers a scholarship for women to do the course. It's not a full fee paying scholarship but it did work to attract some. What they're suggesting is essentially a full fee paying scholarship to attract even more. There's a limit to placements so as long as it attracts the best and brightest into the field I don't see much of an issue with it.

If that's the case then I have no issue with it. What I would have an issue with is these ladies going in on top of the existing cohorts. The fact is we simply don't have the jobs to keep pumping out engineers and I'm sure your field is the same.

There's also the social issues of women in engineering. I have no problem with it. However tradies and the like don't always respect them or they objectify them. People can say how it doesn't happen in this day and age but they're ignorant and wrong. People can bitch about the 'cultural' problem all they want but realistically it's not going to change any time soon. It is how it is. You can't change people.

Alright, can someone please provide me with a no-BS, lazymans terms description of this paid parental leave thing?

How much? How long for? When starting/stopping? Who is for&against what?

Under Labor, Tony's first go at it, and now what they are planning this time around?

Labor PPL (also current policy since the Tone Gold scheme wasn't ever bought into law):
* Not available if you earn more than 150k. Must have worked 330 hours, out of 10 months in past 13. Minimum wage. 18 weeks to primary carer. Paid by employer, funded through general Govt spending. Partner gets 2 weeks. Payable in addition to existing entitlements in workers contract.

Tone's "Gold" PPL (not put through):
Same restrictions as above. Replacement of wage for 26 weeks, up to a maximum of 150,000. Funded by tax on business. Partner gets 2 weeks.

The proposed scheme from the current Government isn't really a new policy, as much as it changes the existing situation to mean that if the law passes, you can only get the government leave, or your employers leave. It will save $1 billion over 4 years. It will impact on any working families who have additional parental leave via their employer.

Despite the original law being intended to work with any workplace leave policy, it was described as a 'rort' (despite at least two of the current Government taking advantage of this 'rort'). Up to 80,000 parents will lose payments in part or full.

It is effectively a giant backflip from their PPL election policy.

Edited by macktheknife: 15/5/2015 06:34:35 PM

85 broken promises in 88 weeks. The worst in modern history anywhere in the world.

Kick this mob out.

https://independentaustralia.net/politics/politics-display/abbotts-budget-backflips-bring-broken-promises-tally-to-85,7722

Edited by fourfiveone: 18/5/2015 12:39:14 PM

So we can have Labour throwing more money around to keep the plebs happy?

No thank you.

6 half dozen of the other etc etc.

Bring back the democrats maybe? Something more "centrist".

-PB

the ideology isnt the issue

the issue is they're all crooks serving the interests of their mates in big business and couldnt care less about the electorate other than to get re-elected
this goes for Coalition, ALP and Greens alike.

Because the ALP has thoroughly made Australia weaker :roll:

:lol: They're f*cking idiots.

Tony was in Townsville today and went up Castle Hill, the one day I don't go up.

Gah.

-PB

Go on.

There was no budget emergency and overspending is worse under the current lot.

Oh and it would be nice if they did something for the 'plebs' (the people they are elected to serve) for once in their miserable political careers.

Howard and Costello were very good at doing that at the end of election cycles.

LOL @ true believers

Thee fact that any critism of the libs is still met with this "but labor" bullshit really makes me wonder.

Anyone who thinks that any political party is here to serve the people is deluded.

What do the people want? Everything at no expense to themselves.

Who should pay for it? Rich people and big businesses.

All political commentary these days is a dig at the opposition. We literally have parties opposing new ideas because they didn't come up with it.