Paid Parental Leave (PPL)

The Coalition has confirmed that commonwealth employees' existing provisions would be abolished, potentially saving millions by stopping federal and state public servants from "double dipping" on maternity leave, to offset the cost of its scheme.

At the moment, public servants can access an average of 14 weeks, and in some cases up to 18 weeks, of paid maternity leave.

They can also receive payments under the Labor government's existing maternity leave scheme which entitles them to another 18 weeks' pay at the minimum wage, providing an extra $11,200.

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drsmith said:

The Coalition has finally released the detail of its generous PPL scheme including the start up date of July 1 2015.

http://lpaweb-static.s3.amazonaws.com/The Coalition’s Policy for Paid Parental Leave.pdf

The costing detail (or more accurately, lack of it) is on page 9. As expected it will be funded by a 1.5% levy on corporate profits for businesses earning over $5m. This levy also coincides with a 1.5% cut to the corporate tax rate to 28.5%. The baby bonus will be axed (ABC radio) and double dipping with existing employer and Labor's scheme will also be removed.



http://www.theaustralian.com.au/nat...r-coalition-plan/story-fn9qr68y-1226699538231

One obvious group of losers initially at least will be shareholders that receive franked dividends. The franking rate will obviously reduce with the corporate rate, but corporate profit growth with the associated company tax cut will be largely offset by the new levy.

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sydboy007 said:

I look forward to seeing how they plan to afford the costs of this policy, along with the corporate tax cuts.

Lot so tax cuts, lots of new spending, so far not much to make me feel they can take on the rentier classes to cut back on spending that does little to help the economy.

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ROE said:

Get rid of negative gearing, that 20bn ...that can fund a lot of stuff
Why we give tax offset to people whose sole business is losing money

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ROE said:

Get rid of negative gearing, that 20bn ...that can fund a lot of stuff
Why we give tax offset to people whose sole business is losing money

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FxTrader said:

Totally abolishing tax offsets for negative gearing will just not happen and the cost last year was 13bn. It should be limited but it's to hard politically now. BTW, assets purchased to generate income (rental income or otherwise) are entitled to a tax deduction for interest expense including shares purchased using a margin loan facility. If the intent of any investment scheme is to lose money to generate tax offsets it's illegal.

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banco said:

If Rudd had rolled out a scheme as expensive as this I can imagine the howls of outrage on ASF.

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Let me explain how the funding plan works. First there are a series of offsets where the new plan replaces the old schemes and cuts out double dipping. These are genuine savings.

Then Abbott and Hockey impose a 1.5 per cent levy on taxable company incomes of $5 million or more, which will affect about 3200 companies who represent the bulk of company tax raised.

But the levy will be offset by a 1.5 per cent fall in company tax so profit-wise there is no effect on large corporations (and small companies win because they do not pay the levy).

But then comes Tony and Joe’s sleight of hand attack on retirees. Many big corporate taxpayers, like banks, pay around three quarters of their profits out in dividends and there is constant pressure from retirees for companies to payout more, especially now interest rates on bank deposits have been reduced. Most dividends (but not all) are fully franked because they come out of tax paid profits.

So a superannuation fund obtains a franking credit equal to the tax paid by the company. Those franking credits are currently calculated at a tax rate of 30 cents in the dollar. When the Abbott-Hockey plan is introduced the franking credits will be calculated on the basis of 28.5 cent in the dollar. They are worth less and so the retirees and those saving to pay for retirement cop the bill because Abbott and Hockey have simply swapped a tax for a levy aiming to lower the franking credit.

It is a clear attack on the older generation to benefit the up and coming generation.

Now most of you know my approximate age so you will realise that I am biased because I am one of those that the Coalition are attacking. And you can also argue that I should be happy to fund the next generation and to improve the overall productivity of the nation’s work force.

But those struggling retirees and those saving to retire will be horrified that not only are the older generation helping those with mortgages via lower interest rates but they are now seeing their franking credits reduced to help the younger generation.

Read more: http://www.businessspectator.com.au...-pay-paid-parental-leave-scheme#ixzz2cPdQqwWi

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banco said:

Baby boomers well past child rearing age aren't big fans? I'm shocked.

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banco said:

Baby boomers well past child rearing age aren't big fans? I'm shocked.

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sptrawler said:

So if Rudd rolled it out there would be outrage by ASF members.

However because ASF members are baby boomers, they don't care about it.

Yep pretty well sums up your take on the issue, thanks for the contribution.
Maybe you should put yourself up for pre selection, plenty of space for intellectuals like yourself, in Labor.

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banco said:

I don't think it's that complicated. If Rudd rolled it out the opposition would be a lot stronger on here and baby boomers are more likely to dislike the policy than the younger generations because they don't stand to personally benefit.

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tech/a said:

Well that's all well and good.
But you wont be able to find a rental property for love nor money.
You won't see an investor for miles.
Those that can afford to positively gear will be in the position
Of naming their price due to shortage of stock.

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The Australian understands the $5.5bn cost of the scheme will be covered by less than $2.5bn a year from the levy, roughly $2bn in savings from replacing Labor's current parental leave scheme and about $1bn in further savings.

The $1bn includes contributions from state governments as well as savings on family tax benefits and income tax revenue on the parental leave payments.

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drsmith said:

In the absence of sufficient costing detail from the Coalition, the media is left to try and work out the numbers themselves.



I suspect the state government contribution will revolve around the federal government recovering the cost of their present state public service schemes that the federal scheme is replacing. If that's the case, there would no net cost to state governments, but the negotiations could still be testy.

The problem with the above numbers is that there's still a $600m shortfall between the $5.5bn cost noted above and the Coalition's latest costing of $6.1bn in their formal announcement.

http://www.theaustralian.com.au/nat...t-libs-baby-bill/story-fn9qr68y-1226700207353

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sptrawler said:

I can't help but wonder if Abbott will dump it, saying that he is bowing to public pressure. This would then blow a hole in Labors argument and help Abbotts economic image.

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drsmith said:

He won't dump it, at least not this side of the election.

When in office and there's the usual discovery that the budget is in in a worse position than previously advised, that will be another matter. His direct action climate policies will hopefully also be dispensable in the same sense. It wouldn't surprise me if they keep the mining tax too.

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