The Prime Minister is about to announce a modification to this OTT and unjustified PPL, reducing the maximum payout point from $150,000 per year to $100,000 per year.
So what?, I say. There are about 2 per cent of women of child bearing age earning over $100,000 per year, so the impact on the financial cost of the scheme will be infinitesimal. And note that the scheme is expected to cost at least $5.5 billion per year.
I have really tried to make some sense out of the government’s rationales for this scheme.
- The idea that this is a workplace entitlement rather than a welfare scheme just doesn’t ring true – employers pay workplace entitlements, not taxpayers;
- The idea that it isn’t fair that new mothers are not recompensed at their pre-birth earnings? Apart from the obvious inequity with public sector schemes (which do not last for six months by the way) – the private sector can do what it likes – this idea of fairness just looks completely loopy when the taxpayer is picking up the tab;
- It will be good for smaller employers because now they can compete with large employers that currently offer generous PPL. Where is the evidence for this proposition? I have never seen anything to support this claim;
- It will be good for female labour force participation. Again there is no evidence for this and recall we are dealing with a delta here – the comparison with the souped up PPL and the current one. Indeed, there is no evidence that taxpayer PPLs actually increase labour force participation because they actually pay new mothers to stay out of the workforce;
- It will be good for productivity. Again no evidence and the PC report makes it clear that the reverse is quite possible because the most productive are the one most likely to return to work at the moment.
- Oh and what about the idea of ensuring that women actually return to work? Good luck with that one. Can you imagine the administrative hassles associated with that and the excuses, many legitimate, that can be made for not returning to work – all of which will have to be accepted.
Just ditch the idea, I say. (And modifications to the existing scheme should also be made to outlaw double dipping.) We can’t afford it and the political optics are bad if other forms of government payments are being restricted.
I’m hoping the Commission of Audit really slams the idea.