There’s a chorus of economic opinion against Tony Abbott on paid parental leave. Even Judith Sloan, the economist who long since gave up her independent economist reputation in cheering for a Tony Abbott victory at The Australian, reckons the Coalition’s scheme is “too generous, too expensive and wasteful of precious taxpayer funds”:

“For all the bragging, there is not much evidence that female workforce participation will rise much or that productivity will improve, particularly as there is already a scheme in place.

“There will be no requirement that mothers return to work, just as with the current scheme. And for those women who fail the work test before giving birth, there is now virtually no assistance from the taxpayer. It’s one rule for working mums, another for non-working ones.

“The compliance costs will be considerable. What evidence will be required to establish replacement earnings? How will the self-employed be treated? What about workers on commission? Or with multiple jobs? The scope for rorting is obvious and preventing it will cost money.

“For new mothers, the early months fly by. The real challenge for mothers re-entering the workforce is the availability and cost of child care. The Coalition should direct its efforts at these issues and leave paid parental leave alone.”

Well said. When Sloan is against you, alarm bells should be ringing at Coalition HQ.

It won’t matter, of course — at least on current polling. But unsustainable economic policy, however the numbers are massaged before the election, is the millstone Abbott would wear in a first term. And the biggest test for Joe Hockey, Andrew Robb and the rest of the harder economic heads around the party room would be to talk their leader off the edge.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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