I’m planning on having a baby next year (I went off ‘The Pill’ this month) and I’m really confused about the whole Kevin Rudd/Tony Abbott debate and who is offering what in terms of paid maternity leave and family tax benefit and so on. Can you help me out? If I have a baby next year will I be financially better off by voting Liberal or Labor?
Two things firstly – you probably need to think beyond your immediate hip pocket when deciding who to vote for, and Kevin and Tony may both change the offer on the table between now and election day!
However – in purely parent-related money terms right here and right now, I’ve asked Bruce Brammall for some advice. Bruce is the author of Debt Man Walking. He is also a financial planner, columnist and parent. This is his take on it:
“I can understand why the money thing is top of mind when you’re planning your first bub and expecting to take an extended break to spend early critical time with your child,” he says.
“When it comes to politics, paid paternity leave is an unusual one, I’ve got to say. The Coalition, surprisingly, seems to have out-Labored Labor. The following two policies almost seem to be attached the wrong party. But the following is not a misprint. I repeat, NOT a misprint:
The baby bonus has been dumped. In its place, Labor has just introduced to parliament its paid parental leave scheme. This will be 18 weeks of pay at the federal award minimum. Therefore, if it becomes law (and given the recent track record of Rudd Government policies, it might not), Australians will be eligible for about 18 weeks worth of pay at approximately $570 a week. In total, that’s approximately $10,260. The scheme will be totally funded by the taxpayer.
Tony Abbott’s parental leave is far more generous if you’re looking just at the dollars. You will earn 26 weeks at your normal rate of pay (with a cap at a salary of $150,000). So the maximum here is obviously $75,000. Just a little bit more generous than Labor’s $10,260. But wait, there’s more. They’ll also kick in a further 9% of your what you receive to your super fund. This scheme, however, is going to be funded by a “great big new tax” on Australia’s largest 3200 businesses.
Rudd’s policy is now making its way through the parliament, with the possibility it could be in force by January 1. Even if Abbott wins the election, he might not be able to get the policy started immediately. If it’s just a dollar figure you’re after, then the answer would appear to be the Coalition, so long as you’re earning more than about $20,500 a year.
What do you think of the government and opposition's family policies? Comment on Justine's blog.