Paid Parental Leave (PPL)

[drsmith]

Re: Paid parental leave

Our tax system is broken - those who earn a salary / wage and don't run a business probably have no idea what goes on, but the amount of legal tax reduction schemes open to those with business structures would be alarming to them if they did.

He might also have a trust structure within the family and be diverting taxable income to other family members.

 

[Ves]

Re: Paid parental leave

He might also have a trust structure within the family and be diverting taxable income to other family members.

Who also don't work in the business.

 

[sydboy007]

Re: Paid parental leave

I'm wondering when the first state Govt is going to renegotiate PPL with the unions should Abbott move into the Lodge.

Since Abbott expects the States to handover any money they currently payout on their schemes, seems ripe for them to shift the full cost onto the federal Govt.

I'm sure the unions wont mind helping to cause a cost blowout with little downside to themselves.

 

[McLovin]

Re: Paid parental leave

Our tax system is broken - those who earn a salary / wage and don't run a business probably have no idea what goes on, but the amount of legal tax reduction schemes open to those with business structures would be alarming to them if they did.

Yes, I agree. Our company tax rate is too high, but the ease with which income which is really just derived from the labour output of an individual can be corporatised or split across families is an area that is ripe for reform.

I mean realistically, should a plumber, builder, accountant, lawyer be able to distribute his taxable income through a trust to his wife and retired parents?

 

[Ves]

Re: Paid parental leave

I mean realistically, should a plumber, builder, accountant, lawyer be able to distribute his taxable income through a trust to his wife and retired parents?

Surely, it would not be too hard to make the personal services income (PSI) rules a lot stricter?

 

[Calliope]

Re: Paid parental leave

I'm wondering when the first state Govt is going to renegotiate PPL with the unions should Abbott move into the Lodge.

Since Abbott expects the States to handover any money they currently payout on their schemes, seems ripe for them to shift the full cost onto the federal Govt.

I'm sure the unions wont mind helping to cause a cost blowout with little downside to themselves.

You needn't worry Syd. If Abbott wind the election, the PPL will quietly go on the back burner. If Rudd wins, the PNG "solution" will wither away.

It's easier that way than breaking promises before the election.

 

[sydboy007]

Re: Paid parental leave

You needn't worry Syd. If Abbott wind the election, the PPL will quietly go on the back burner. If Rudd wins, the PNG "solution" will wither away.

It's easier that way than breaking promises before the election.

Maybe. His pigheadedness makes me fear he will find it too hard to back down.

But then that seems to kill off the Abbott is a value leaders rhetoric ASF members like to polish the Abbott halo with.

Seems you believe he's no more honest than any other politician that wants their butt on the treasury benches. Are you with Mr Burns on the ends justifies the means?

 

[Julia]

Re: Paid parental leave

Yes, I agree. Our company tax rate is too high, but the ease with which income which is really just derived from the labour output of an individual can be corporatised or split across families is an area that is ripe for reform.

I mean realistically, should a plumber, builder, accountant, lawyer be able to distribute his taxable income through a trust to his wife and retired parents?

No. Neither should anyone be able to make up a job that doesn't exist and charge the taxpayer and business for it for their own personal benefit.
If it's legally acceptable, then it's absolutely not, imo, morally acceptable.

But perhaps no surprise in a country which holds up an outlaw as a national hero.

 

[sydboy007]

Re: Paid parental leave

Surely, it would not be too hard to make the personal services income (PSI) rules a lot stricter?

Considering the MSM howls of death and despair over the changes to the car FBT, I dare say any tax changes post election will be nigh on impossible. Abbott has put a bulls-eye on himself for all rent seekers to use all tactics to kill off any form of meaningful tax reform. He'Combine that with him being against means testing of Govt benefits and I have no idea where he expects to save the money.

 

[drsmith]

Re: Paid parental leave

But then that seems to kill off the Abbott is a value leaders rhetoric ASF members like to polish the Abbott halo with.

That makeup artist yesterday must have baulked at Kev's request to polish his a***.

 

[Calliope]

Re: Paid parental leave

Seems you believe he's no more honest than any other politician that wants their butt on the treasury benches.

As I have said before "of two evils choose the lesser". I would have preferred to see Rudd turfed out by a Coalition led by Turnbull or Hockey, but I guess we will have to take what we get.

Are you with Mr Burns on the ends justifies the means?

Sometimes. Radical surgery is often necessary to excise a malignant cancer.

 

[johenmo]

Re: Paid parental leave

But perhaps no surprise in a country which holds up an outlaw as a national hero.

And we bowl better underarm...

 

[waza1960]

Re: Paid parental leave

IMO The PPS is worth it just to show that Abbott sticks to his guns and doesn't change policy because of the polls
The costs are exaggerated and the policy will probably be dropped or scaled back when the extent of Labors'
debt is exposed after the election

 

[Logique]

Re: Paid parental leave

Electoral gold, no question on that. Labor must be seething - outdone on their own turf, and a fair bit of hypocrisy exposed.

But the Coalition will raid imputation credits on shares to help pay for it.

 

[Calliope]

Re: Paid parental leave

Electoral gold, no question on that. Labor must be seething - outdone on their own turf, and a fair bit of hypocrisy exposed.

But the Coalition will raid imputation credits on shares to help pay for it.

Labor's negative ad says it all. A bitter old woman well past the breeding age complaining that the money should go to people like her...the politics of envy. Most of the opposition is just sour grapes.

I have been won over to this policy. It makes sense to encourage more high calibre women to have more high calibre children. If it reduces my dividends slightly...so be it.

But he highlighted the benefits for well educated women in top executive roles under his proposed payments.

Mr Abbott today said these women were "in the prime of life and they should be able not just to have kids, but to have careers".

"We do not educate women to higher degree level to deny them a career," he said.

"If we want women of that calibre to have families, and we should, well we have to give them a fair dinkum chance to do so. That is what this scheme of paid parental leave is all about."

 

[Logique]

Re: Paid parental leave

The Coalition are saying this morning they'll release costings to prove the Coalition scheme is overall cheaper than Labor's. So that makes me feel better about it.

 

[drsmith]

Re: Paid parental leave

The Coalition are saying this morning they'll release costings to prove the Coalition scheme is overall cheaper than Labor's. So that makes me feel better about it.

The Coalition has already leaked the costings,

The paid parental leave costings to be released by Mr Hockey today will show the gross cost of the scheme in the first two years will be $9.8bn. But this is reduced to $6.1bn by abolishing the existing scheme offering new mothers 18 weeks at the minimum wage, which Labor legislated in 2010.

The PBO calculates that a further $1.2bn will be saved by replacing the existing generous commonwealth and state PPL schemes. Another $1.6bn will be saved from reduced payments of family and other benefits and the income tax collected on PPL payments. The levy of 1.5 per cent on company taxable income above $5 million will raise $4.4bn in the first two years. The levy is not eligible for franking credits and cannot be claimed by business as a tax deduction. The Coalition sought to neutralise the business backlash against the levy by offering a matching 1.5 per cent company tax. This will cost more than $5bn in the first two years.

The costings over two years can be summarised as follows,

Gross cost: $9.8bn.
Net cost: $6.1bn (after abolishing Labor's existing scheme).

Savings:

$1.2bn from existing state and federal public sector schemes.
$1.6bn in tax transfer savings (increased income tax and reduced entitlement to other benefits).
$4.4bn from the 1.5% corporate levy on companies earning over $5m.

These savings amount to $7.2bn resulting in a net benefit to the budget of $1.1bn.

The corporate tax cut though is costed at greater than $5bn over two years. After taking that into account, the net cost of the PPL scheme and corporate tax cut combined is over $3.9bn.

What's not clear though in the article is whether the >$5bn cost of the 1.5% corporate tax cut is gross (before imputation credit flow through to shareholders) or net. If it's the former, the final cost to the budget will be less.

http://www.theaustralian.com.au/nat...by-boosts-budget/story-fn9qr68y-1226705344273

 

[sydboy007]

Re: Paid parental leave

Savings:

$1.2bn from existing state and federal public sector schemes.
$1.6bn in tax transfer savings (increased income tax and reduced entitlement to other benefits).
$4.4bn from the 1.5% corporate levy on companies earning over $5m.

I do wonder if any state Govt will do a deal with the unions to remove PPL from their benefits. I dare say a proposal along the lines of shifting the cost to Canberra in exchange for no job losses for a few years would be seen as a win win by both side.

I also wonder if they've budgeted for an increase in the birth rate as that seems to be one of the arguments for this policy. Certainly there could be some pull forward in peoples plans to have a child.

 

[sydboy007]

Re: Paid parental leave

Richard T. Green is the only economist I’ve seen actually properly frame the debate in terms of moral motivations, and the potential success of policies in addressing the moral arguments.

http://clubtroppo.com.au/2010/08/09/paid-parental-leave-motivations-and-policy/

1 The Rights Motivation - Having a baby is a universal right and if people cannot afford to take the time off work that is necessary to have a baby, the state should enable them to do so.

2 The Pro-Natalist Motivation - We need more babies.

3 The Equality Motivation - The time taken off will inevitably fall partially on women (since she has to give birth) and then almost always the period of extreme infancy through the choices of the parents (conditioned by culture and economics). It is unfair that a mother cannot earn money by selling her labour in this period whilst a father can, so the state should compensate her for the unfairness of biology and cultural norms.

While I don't agree with any of these as a reason to use tax payer funds, I can see 1 & 3 being the ones most widely accepted under the ideals of equality

 

[waza1960]

Re: Paid parental leave

Thanks for that Syd .Yes I think 1 & 3 are fair .
2 is ridiculous.