18 weeks' taxpayer-funded maternity leave, but not until January 2011, after the next election.
The budget will aim to encourage women to stay in the workforce by promising them paid maternity leave and sparing the child-care rebate from Wayne Swan's axe.
The Treasurer confirmed that 18 weeks' taxpayer-funded maternity leave would be introduced, but not until January 2011, after the next election.
The Government reduced the estimated annual cost of the scheme from $450 million to $260 million by scrapping recommendations for two extra weeks of paternity leave and absolving employers from making compulsory superannuation contributions during the maternity leave period.
A senior source scotched speculation that the 50 per cent child-care rebate would be targeted. "It's a very important productivity measure," said the source.
The rebate, capped at $7500 a year per child, is not means tested and is aimed at keeping women in the workforce, including highly paid professionals who contribute most to productivity.
The spectre of the budget having a Robin Hood theme is also dead, with confirmation that 1 million low- and middle-income earners would have their superannuation co-contributions cut. From July 1, the Government co-contribution of $1.50 for every dollar that workers earning less than $60,000 a year salary-sacrifice into their super, will be reduced to $1.
The maximum contribution of $1500 a year will be reduced to $1000, saving $1.4 billion over four years.
The maternity leave measure recognises Australia has one of the lowest rates of female participation in the workforce among countries in the Organisation for Economic Co-operation and Development.
From January 1, 2011, the primary carer of a newborn baby will receive $544 a week, the minimum wage, to stay home for 18 weeks. But the Government will means test the scheme, paying it only to mothers who earn less than $150,000 a year. Eligible parents will not be paid the $5000 baby bonus or family tax payments.
The Productivity Commission's recommendation for an 18-week scheme with no means test, continuing super contributions and two extra weeks for fathers would have cost $450 million a year.
Regardless, the Opposition was less than enthusiastic yesterday. The shadow treasurer, Joe Hockey, said it was taxpayers who would be slugged. The decision to delay the scheme until 2011 would increase that burden further because businesses contemplating introducing their own schemes would now reconsider.
"Now they know that the Rudd Government with taxpayers' money is going to step into the breach, they don't need to do anything," he said.
With an increasingly hostile Senate threatening to block budget measures, including means testing the 30 per cent private health insurance rebate, Mr Swan warned of consequences for pensions. The $30-a-week pension increase, forecast to cost $3.86 billion a year, will be the biggest new expense and Mr Swan hinted its fate would be tied to revenue measures.
"The Opposition can't pretend that it's for a pension increase and then turn around and block savings that are going to fund that pension increase," he said.
Mr Swan also confirmed that single parents would not be getting an increase in the budget. He said they had received "very substantial assistance in the last budget" and were not as needy as single aged pensioners.
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