Abbott defies advice to protect PPL scheme from cuts

Assistant Education Minister Sussan Ley during House of Representatives question time at Parliament House Canberra, Tuesday, Nov. 19, 2013.
Assistant Education Minister Sussan Ley during House of Representatives question time at Parliament House Canberra, Tuesday, Nov. 19, 2013. AAP Image - Alan Porritt

PRIME Minister Tony Abbott's $5.5 billion paid parental leave scheme will likely be ring-fenced from future budget cuts, despite a key government advisory group calling for some of its funding to be redirected.

A draft report from the Productivity Commission released on Tuesday suggested the government move up to $1.5 billion from the PPL scheme to fund childcare for the wider benefit of the country.

Under current estimates, the PPL scheme, the merits of which are still disputed within the Coalition, would spend about $5.5 billion paying high income earners up to $50,000 for six months to stay at home and care for their newborn children.

Mr Abbott has consistently said the scheme would help women return to the workforce after having children, particularly women of "high quality".

But the Commission's draft report found it was unclear whether the PPL scheme would actually deliver more benefits to those needing childcare beyond those already available.

It also recommended replacing the current complex system of rebates with a single means-tested rebate, and recognising grandparents and other carers to allow the rebate to be extended to in-home care in some circumstances.

Despite the findings, Assistant Education Minister Sussan Ley, responsible for childcare, on Tuesday told the ABC she believed childcare and the PPL scheme were separate issues.

She said childcare was about once women went back to work, whereas the PPL scheme was about having children in the first place.

Her comments effectively rule out any further major changes to the PPL scheme, despite concerns in and outside the government about both its merits and cost.

Ms Ley said families needed "greater choice in child care", and the draft report from the commission would now lead to a second consultation phase, before final recommendations were received by the government.

Topics:  budget cuts paid parental leave scheme productivity commission tony abbott

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