Prime Minister Tony Abbott has watered down his paid parental leave scheme just 24 hours before the commission of audit is released.
Prime Minister Tony Abbott appears to be listening, even if it’s just to some of his disgruntled coalition MPs.
Despite going to two elections with his generous paid parental leave scheme and standing by it as late as Tuesday, Mr Abbott has agreed to scale it back.
The maximum payment for working mums will now be $50,000 rather than the $75,000 he promised.
At the same time, the government appears to be backing away from a debt and deficit levy on taxpayers earning $80,000 and above amid rumblings within coalition ranks.
Instead the government is leaning towards altering higher-end marginal tax rates: the 37 per cent rate that applies between $80,001 and $180,000 could increase to 38 per cent, and the 45 per cent rate for incomes over $180,001 would be hiked to 47 per cent.
At the lower end, that equates to $200 extra tax for someone earning $100,000. At the top, it means an extra $5500 for someone on a salary of $450,000.
The alternative plan may go some way to appeasing the concerns of government MPs who feared a political backlash from any decision to impose a temporary levy.
The levy plan is getting little support outside government with the Institute of Chartered Accountants describing it as a “band-aid” solution.
The institute’s Rob Ward told a pre-budget briefing of journalists in Canberra that any tax changes should be part of a promised review, which it wants sooner rather than later.
He hopes the budget will also include a timetable for the tax white paper, which must include consideration of the GST.
Grattan Institute CEO John Daley doesn’t think a levy is a “crazy idea”, but believes there are smarter ways to go, citing negative gearing and concessions on capital gains tax and superannuation.
“If you are going to break a promise on taxes then you might as well break it properly,” he told AAP.
Mr Abbott’s decision to alter his paid parental leave scheme came a day before the recommendations from the government’s national commission of audit are scheduled for release.
There have been reports the commission is far from impressed with the scheme.
Opposition Leader Bill Shorten was keen to portray the policy change as another broken promise.
“If the prime minister can’t even stick by his signature policy for 24 hours how can Australia trust him on anything?” he told reporters in Launceston.