Parental Leave in Australia

The Herald reports:

Abbott has come up with a plan to tax big business – those earning more than A$5 million ($6.25 million) a year – to pay for a surprisingly generous compulsory leave scheme.

Under his proposal primary carers would be paid at their full rate of take-home pay up to a maximum income of A$150,000 a year ($187.5 million) for 26 weeks. Abbott estimates the scheme will cost about A$2.7 billion a year.

A rather desperate election bribe. First of all, taxing large businesses to pay for the entire costs is blatantly unfair. If it is deemed desirable to have paid maternity leave, then it should be funded by all taxpayers.

Secondly it is massive welfare for the rich. If you were on $40,000 you will get $20,000 maternity leave. If you were on $150,000 you will get $75,000.

Rudd’s scheme, due to be launched next January, pales by comparison. This scheme will pay the minimum wage of about A$544 a week to the primary carer for a maximum 18 weeks’ leave after the birth of a child.

It will cost an estimated A$260 million a year, paid out of consolidated revenue.

Rudd’s scheme seems far more sensible to me.

Not a good sign for Australia, if both parties are getting into a bidding war of spending money they don’t have.