Mark Kenny Chief political correspondent
April 26, 2013
Putting tax offsets on the table: Tony Abbott. Photo: James Brickwood
Major companies face higher costs under a future Coalition government after Tony Abbott signalled introducing his $3.3 billion paid parental leave scheme without fully offsetting company tax cuts.
In the first sign that business might get the downside cost but be forced to wait longer for tax relief as the opposition considers the fiscal situation, Mr Abbott has hinted at uncoupling the two promises.
That could see the top 3200 companies hit with a 1.5 per cent parental levy from say, July 1, 2015, but denied an offsetting business tax cut until a later time.
''Well, my hope - and we can't finalise the fiscal position, we can't finalise the timings of these initiatives until we've seen the pre-election fiscal outlook and I fear that that will be much worse than the government is currently letting on,'' he said in an interview on the ABC's 7.30 program. ''My hope is that we are able to introduce paid parental leave at the same time as we have an offsetting company tax cut.''
However, it is expected that even if a cut is proposed, it would be less than the 1.5 per cent reduction promised in 2010 when the parental scheme was first proposed.
His office on Thursday said that nothing had changed and that Mr Abbott remained firmly committed to the parental initiative, albeit with an as-yet unspecified start-up date.
In 2010, it was planned to commence, subject to legislative passage, by July 1 last year.
The latest comments raise the likelihood of the big end of town paying more tax under the Coalition if it finds as expected, that the federal budget is deeper into the red than is stated.
''I know that there are some people who are unhappy about that element of our policy,'' Mr Abbott said of his generous parental leave scheme, which would pay a mother's full salary over a six-month period post-birth, capped at an income of $150,000 a year.
He said it remained an aspiration to deliver modest relief to business but stopped short of guaranteeing it would start at the same time as the parental scheme kicked in.
''What we want to do is have a modest reduction in company tax that will mean that for big businesses, there is no net increase in tax, despite the paid parental leave levy,'' he said.
The equivocation will send shockwaves through the big end of town where the reluctant acceptance of the leave policy had been secured only through the promise of lower company taxes across the board, leaving top corporations at least no worse off.
Mr Abbott argued that assuming the two things were eventually introduced, small business would get ''a company tax cut and a paid parental leave without having to pay the levy''.
Key Nationals MPs and free-market-oriented Liberals have privately criticised the leave policy as a project of Mr Abbott in search of more support from women.
Business groups have slammed the proposal as an impost they cannot afford at a time of a soaring Australian dollar and a softening domestic economy.
The Business Council of Australia has gone on the record saying the policy ''defies commonsense''.
It has also dismissed Mr Abbott's claim that big businesses may find the levy cheaper, because they can scrap their in-house parental leave arrangements.
