Abbott dumps paid parental leave and reveals “small business and jobs” package

Prime Minister Tony Abbott is abandoning his signature paid parental leave scheme in favour of a funding package to support more families to access childcare. He is also expected to announce a small business and jobs package.

Amid growing concerns about the Prime Minister’s leadership following a shock election result in Queensland on the weekend, Abbott told the National Press Club today the government’s proposed “bigger, better PPL scheme is off the table”.

Instead, Abbott will unveil a “families package”, to be further developed in the lead-up to the May budget. The focus of the package will be “to reform and improve the current confusing system of multiple childcare support payments”.

“[This will] provide more money in parents’ pockets to help them with their childcare costs when they want to go back to work.” 

Abbott first announced his paid parental leave scheme while in opposition. In its first iteration, the policy promised to pay six months or 26 weeks parental leave based on the recipient’s full-time salary, with a cap of $150,000, plus superannuation. It was expected to cost $5.5 billion each year.

But growing unrest over the policy in the Coalition’s ranks led to Abbott scaling back the scheme in April 2014, cutting the threshold for the scheme to $100,000.

Abbott says his decision to scrap the plan is the result of listening to voters.

“We sought the advice of the Productivity Commission and I have listened to the feedback from my colleagues and from mums and dads around Australia and they have said that, with other current budget constraints, the better focus now is on childcare if we want higher participation and a stronger economy,” Abbott will say in his speech.

Social Services Minister Scott Morrison backed Abbott in an interview with Channel Seven this morning.

“I think this is the right decision for us going forward at the moment,” Morrison said.

“We have to make sure our priorities for reform are in touch and in sync with the communities’ priorities.”

“We must put our focus on the childcare part of the equation, not the PPL part of the equation, and that’s a decision the Prime Minister has taken with myself and others.”

Peter Strong, executive director of the Council of Small Business of Australia, welcomed the decision, telling SmartCompany “we need to move on” from the policy.

“It was hyper-generous and didn’t send the right message in times of austerity,” Strong says.

The Prime Minister also has good news for SMEs in today’s speech, revealing a “small business and jobs package”, although there is little detail at this stage as to what the package will involve.