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Abbott cuts paid parental leave scheme

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Prime Minister Tony Abbott has confirmed the government will cut the threshold for his signature paid parental leave scheme to $100,000, from $150,000.

Abbott was responded to mounting speculation the coalition had amended the generous scheme, saying the expenditure review committee had made the decision earlier this week.

This means the maximum pay out for 26 weeks leave will now be capped at $50,000 when it is introduced.

Given the tough fiscal conditions, Abbott said this decision was “fair”.

“Obviously, I regret that we find ourselves in very difficult fiscal circumstances,” he told reporters in Geelong on Wednesday.

“But under the circumstances where everyone is going to have to share in bearing the burden of fixing this particular problem, I think it is reasonable.”

Women earning more than $100,000 would still be eligible for a payment, but at the lower cap.

Abbott said all sectors of the community must do their bit to solve the debt problem – including those on very high incomes.

“I don’t want any sectors of the community to feel they are getting special privileges – everyone has got to be in this together.”

Asked whether the decision amounted to a compromise with reports that coalition MPs had expressed their discontent with the scheme, Abbott said the government had inherited a debt problem.

“Inevitably you get into government you discover that things are every bit as grim, and then some,” he said.

The change means Abbott will have an easier time getting the policy through the Senate, with it more likely to gain Greens support.

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