Thursday, August 22, 2013
The Coalition’s parental leave scheme is “fully funded - by abolishing the existing scheme, and importantly by imposing the 1.5 per cent levy on the largest businesses"
Joe Hockey, Q&A ABC television, Monday August 19 2013
There’s little debate about how much the Coalition's paid parental leave scheme would cost. The Parliamentary Budget Office says $5.5 billion per year.
What is in dispute is how it would be paid for. Joe Hockey told Q&A on Monday the scheme would be “fully funded by abolishing the existing scheme, and importantly by imposing the 1.5 per cent levy on the largest businesses.”
Would just those two measures do the trick?
Finance minister Penny Wong says they wouldn’t. The Coalition would need “deeper cuts to families, education, health and jobs”.
The Coalition says it has supporting evidence, but it’s keeping it to itself.
It says Parliamentary Budget Office agrees with it, and (on the record) leaves it at that.
On so-called “background” it spells out what it says the PBO has told it, but it won’t release the actual PBO costing as the Greens have done for their maternity policy.
The Coalition finds $2 billion per year by abolishing Labor’s scheme. It finds another $2 billion to $2.5 billion by its tax levy on big firms. That leaves $1.25 billion to $1.5 billion to be found.
And here’s where it gets complicated.
An extra $1 billion or more would come from higher tax collections. Some would come from the mothers getting the payments, the rest would come from investors.
Right now shareholders can claim their share of whatever tax their company pays as a so-called franking credit which they can use to cut their own tax.
They would be unable to do that with the Coalition’s 1.5 per cent levy. Abbott said Wednesday: “Levies just don’t attract franking credits, that’s just a standard rule”. Because the Coalition both plans to cut the company tax rate (in a separate policy) and lift it for big firms, the firms themselves would notice little difference but their shareholders would be worse off.
The Coalition would also save $100 million on Family Tax Benefits as some parents were pushed into higher brackets, another $100 million from no longer separately paying public service maternity benefits, and $200 to $300 million from the states.
It adds up to the required $5.5 billion if the PBO costing says what the Hockey says it does.
Without seeing the costing Politifact can only rate Hockey’s claim “half true”.
It will review the finding when it sees the costing.
In Politifact and The Sydney Morning Herald
. Mostly false. An average female earner $21,000 better off
. Paid parental leave. Swan, Rudd and Tanner are their own worst enemies