Prime Minister Tony Abbott is reportedly set to lower the cut-off for his ''signature'' paid parental leave scheme as pressure mounts on the government following speculation it would introduce a ''debt tax'' in a bid to get the budget back to surplus as soon as possible.
News Corp is reporting that Mr Abbott told colleagues 10 days ago that he would lower the threshold from $150,000 of annual earnings to $100,000 to bring the scheme into line with his new welfare limit. The plan proposes to pay women their full wage for six months after giving birth and would reduce the upper limit of payment to $50,000 from $75,000, partly funded by a 1.5 per cent tax on large companies.
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PM defends parental leave policy
Prime Minister Tony Abbott says parental leave, like sick leave and holiday pay, should be paid at full wage. Nine News
The report says reducing the cut-off is unlikely to result in significant savings to the scheme with only 2 per cent of women earning more than $100,000 being of child-bearing age.
Mr Abbott continued to defend the plan on Tuesday, telling reporters in Melbourne that he knew that there were "mixed views" in the community about his PPL scheme, but argued that it should be a workplace entitlement, not a welfare payment.
He added that he was working with people in the community who had a "very traditional mind set" but was confident that their thinking could evolve, because his own had on the subject.
"There are one or two of my colleagues in Canberra who have already shifted a little on this and I am pleased about that," he said.
Fairfax Media reported on Tuesday that Coalition MPs had been urging Mr Abbott to follow his own advice by scaling down the $5.5 billion scheme in the interests of sharing the burden in the budget.
The call came as the government refused to hose down speculation of a special deficit levy and actively ramped up talk of big changes to reduce the welfare bill through cuts to the growth rates of a slew of pensions and the introduction of a harsher means test for family payments.
In an interview with Fairfax Media on Tuesday, NSW Nationals senator John Williams questioned whether such messages about belt tightening could sit alongside a generous paid parental leave scheme.
"I've made no secret about whether we can afford the paid parental leave scheme proposed by the Prime Minister. I have serious concerns about it," he said.
Liberal MPs contacted on Monday said the government was setting up "an unwinnable argument with voters" if it proceeded with a temporary deficit levy to help balance the budget, while also sticking to a paid parental leave scheme that would give mothers full pay for six months, capped at earnings of $150,000 per year.
"I think that's an argument we cannot win," one MP said.
Greens leader Christine Milne, whose party will be key to the Coalition passing the PPL in the Senate, reaffirmed that there were no negotiations between the Greens and the government on the issue.
"The Greens have had no contact whatsoever with Tony Abbott on paid parental leave. It makes you wonder whether he is serious about it and it is quite obvious now that he has a mutiny on his hands in his own party," she told reporters in Hobart.