The government must scrap the levy on businesses that would have paid for the now defunct paid parental leave (PPL) scheme, industry groups have said.
Tony Abbott announced on Monday that he would ditch his election promise to provide paid leave for new parents, focusing instead on making childcare more affordable.
But the finance minister, Mathias Cormann, would not be drawn on whether that meant the government would also scrap the 1.5% levy imposed on big business to pay for PPL.
“The detail of all of that will come over the coming months,” Cormann told Sky News. “The principle that we’re working off is that big business will be no worse off, and small to medium companies will be significantly better off.”
Business groups welcomed the move away from PPL, but wanted a commitment to end the levy.
The head of the Australian Industry Group, Innes Willox, said: “The focus on childcare is a positive but the hopefully reduced tax burden on business at this time to make them more competitive is also exceptionally welcome.
“Business shouldn’t be asked to pay for specific programs,” Willox said. “We would hope that what has been flagged today means the end of the 1.5% levy.”
The opposition spokeswoman for families, Jenny Macklin, said the proposed levy on “3,000 of Australia’s biggest businesses … would mean that every time every family goes to the supermarket they will pay more”.
Labor’s deputy leader, Tanya Plibersek, said the scheme was “flawed from the beginning”.
“We’ve been saying for years that this is a dog of a scheme. What kind of government designs a scheme that gives the biggest benefit to the families that already have the most money?” Plibersek said.
Crossbench senator Nick Xenophon called the PPL scheme “an extravagant indulgence”.
“If you want to boost the participation of women in the workforce … you need to revamp the childcare system in this country.”
The union that represents childcare workers, United Voice, said it was disappointed at the lack of detail on childcare proposals in Abbott’s speech.
Its national secretary, David O’Byrne, said the prime minister’s announcement was “a plan to have a plan to have a plan”.
“We were expecting to have detail… unfortunately what we got was basically an announcement of what we already knew.”
The Greens have called for the government to release details of the policy, but did not directly call for a cut to the 1.5% levy.
“The Greens have always supported tax cuts for small business but certainly not for big business,” Greens leader Christine Milne said.
