Election 2013 — parental leave and promises


Election 2013 — parental leave and promises

The major talking point of the election campaign this week was of course the Coalition’s paid parental leave policy. Both Labor and the Coalition made announcements aimed at small businesses and a host of other promises impacting on workplaces.


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The major talking point of the election campaign this week was of course the Coalition’s paid parental leave policy. Both Labor and the Coalition made announcements aimed at small businesses and a host of other promises impacting on workplaces.

The policy promises for this week are listed below.

Parental leave

The Coalition released its paid parental leave scheme and immediately unleashed a storm of controversy over its affordability and costings, as previously reported.

The policy promises all women in the workforce will have access to 26 weeks of paid parental leave at their wage, plus superannuation. The Coalition promised that the policy would be funded by 1.5 per cent levy on large companies with taxable incomes over $5 million per annum.

Fathers will be eligible for two weeks out of the 26 weeks for dedicated parental leave at their actual wage or the national minimum wage (whichever is greater), plus superannuation.

The scheme will be administered through the Family Assistance Office.

Where is the money coming from?

Questions that have swirled around all week as the funding of the promised scheme include:
  • The Policy says scheme will cost the Budget around $6.1 billion. What percentage of this will come from the levy on large companies is the main question. Labor claims it has costings by the Parliamentary Budget Office that show the net revenue impact of a 1.5 per cent levy is $4.7 billion over three years. The Coalition is promising a company tax cut of 1.5 per cent, with most commentators stating that this will cancel out any income that will be received by the levy.
  • The Coalition’s own policy states that the remainder will come from ‘associated reductions in other outlays’. Labor is campaigning strongly on where and how much the Coalition will be cutting in order to meet the scheme’s funding needs.
  • Yesterday, Merrill Lynch Chief Economist Saul Eslake said he was skeptical about the economic basis of the scheme. He said: ‘On our estimates, (the Coalition) will need to find another $30bn or thereabouts over the four years to 2016–17 in order credibly to claim that it will produce a “bottom line” no worse than that most recently forecast by the Government.’
  • Shadow Treasure Mathias Cormann repudiated Mr Eslake’s findings today, saying that he did not have all the figures and had made a number of errors. The debate over where the money is coming from will no doubt continue until Election Day.
 Public servants
The Coalition says that public servants who already have paid parental leave schemes in place will be able to elect to join their (more generous) scheme; however, it would be asking the state governments to send it the money, which they would otherwise have paid to their own public servants. The Western Australia Premier has said he will not be sending any money, but the Queensland Premier has said that Queensland would cooperate with the Commonwealth on the scheme.
Franking credits
As the week went on, Labor seized on the fine print of the parental leave policy that large companies liable for the 1.5 per cent levy will not be entitled to a ‘franking credit’ (that is, investors will not receive credit on their dividends on tax that has already been paid by the company). On Wednesday, the Greens announced that they would amend the Coalition’s paid parental leave scheme to protect investors and ensure that the levy creates franking credits.
The Greens announced that if they held the balance of power they would seek to amend the Coalition’s paid parental leave scheme to introduce it earlier, in 2014, but cap full wage replacement for parents earning up to $100,000 a year. (See: Better Paid Parental Leave)

More from the Coalition
The Coalition announced the following additional policies:
Small Business: The Coalition has made a number of promises to small businesses including a two-year delay in having to pay the superannuation guarantee increase as well as immunity from fines for breaches of employment entitlements, as long as they are not deliberate and the employer had previously sought advice from the Ombudsman. A number of other promises have also been made: see previous article
GenerationOne employment model for Indigenous Australians: the Coalition announced that it will provide up to $45 million to support the GenerationOne employment model to prepare indigenous Australians for employment. The Coalition says this will create job opportunities for up to 5000 indigenous Australians.

The Coalition will also commission a review of Indigenous employment programs by the Department of Prime Minister and Cabinet to begin within one-month of the election, with Andrew Forrest chairing the review.

Manufacturing: The Coalition promised it would boost manufacturing industries through its macro-economic policies, as well as these further measures announced on Wednesday: the appointment of a Minister for Trade and Investment to attract trade and increase inwards investment into Australia; an initial $50 million in Export Market Development Grants; $50 million to the Manufacturing Transition Fund, providing assistance to communities and industries as they transition to new areas of manufacturing growth; and implementing industry specific Strategic Growth Action Agendas that bring industry and government together.

Labor announced the following workplace-related promises this week:

Public service: The Australian Financial Review reported on 17 August that Workplace Relations Minister Bill Shorten had promised CPSU (Community and Public Sector Union) members in a speech the previous day that Labor would reduce budgeted cuts to the public sector from 5000 to 2000 jobs over three years.

However, the Coalition pointed out that Mr Shorten’s promise was that Labor would work with the CPSU ‘… to help identify targeted saving strategies’, which essentially means the promise is unfunded.

Small business: as reported previously Labor has promised small businesses help with administration of both paid parental leave (PPL) and superannuation guarantee payments, if it is re-elected.

Child care: Labor is promising a total $720,000 in grants to fund projects to investigate new and better ways to build a more flexible child care system for Australian families.
New car plan for the 2020s: Labor announced it would give a further $500 million to the car industry, equating to $300 million a year on an ongoing basis. The funding will be reviewed every five years. However, the promise will not be required to be funded until 2018.
457-visas: on Monday, the CFMEU launched a national election campaign targeting what it says are the Opposition’s plans to expand 457 visas. The Union is targeting key marginal seats in five states and the Northern Territory.
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