Less than half of Tony Abbott's generous paid parental leave scheme will be funded through a levy on big business, leaving the coalition with no option but to cut deeper into the Federal Budget should it win government.
Shadow treasurer Joe Hockey yesterday revealed the coalition's PPL scheme will cost $5.5 billion a year but Parliamentary Budget Office costings obtained by The West Australian reveal that the 1.5 per cent levy will raise $2.3 billion in its first year.
About 3000 companies with a taxable income of more than $5 million face paying the levy indefinitely after the Opposition Leader yesterday failed to give a timetable for its abolition.
Business groups yesterday indicated they would maintain pressure on the coalition to drop or significantly amend its PPL beyond the election, with the Business Council of Australia saying a lower tax burden was critical to investments and jobs.
The coalition's PPL would start on July 1, 2015, coinciding with a plan to cut the company tax rate to 28.5 per cent.
Mr Abbott described his pitch for the family vote as a "signature policy" and said every working woman would be better off financially.
Acknowledging that some coalition MPs were unhappy about the scheme's generosity, Mr Abbott said he had a "convert's zeal" on paid baby leave after opposing it during the Howard government's years. "The greatest vote of confidence in the future is to have a child," he said.
Under his plan, new mums would get 26 weeks of paid leave at their actual wage plus superannuation contributions, capped at a maximum six-month payment of $75,000.
Companies that already offer paid parental leave, such as Coles and Woolworths, would be able to scrap their schemes and State government and council employees who already get up to 18 weeks paid leave will be able to transfer to the scheme.
Mr Abbott said a woman earning about the average full-time salary of $65,000 a year would get $32,500 - $21,000 more than under Labor's current scheme, which pays all new mothers earning less than $150,000 18 weeks at minimum wage, or $622 a week.
The PBO costed the Opposition's policy at $6.1 billion in its first two years of operation, once "savings" are allowed from scrapping the Government's scheme.
PBO costings commissioned by the Greens for a slightly less generous scheme showed the 1.5 per cent levy would raise $2.3 billion in 2015-16 and $2.6 billion in 2016-17.
ACTU president Ged Kearney said she was suspicious Mr Abbott had delayed the scheme for two years given hostility to it in coalition ranks and questioned what would be cut to fund it.