Paid Maternity Leave: "How can we afford it, Mr Abbott?" I'll tell you.

The reason Abbott's plan for Paid Maternity Leave is a good one is all about population growth. I mentioned in my first post that by 2050, we'll only have 2.5 working Australians for every person aged over 65, so we have two options if we want the country to grow; breed or import.

As the population grows, so too does the economy. Population growth has been responsible for roughly half the economic growth we've seen over the past 20 years. Without consistent, predictable, positive population growth, the economy will suffer. 

It's a well known fact that richer families have fewer kids than poorer ones. While people with less money wouldn't make worse parents, they will be far more restricted in what they can offer their children, and are more likely to require more assistance from the government.

Having looked at what benefits are available, a 'low income' parent may get the (to be removed) $5,000 baby bonus, plus up to $4,000 a year until the child turns 19 in Family Tax Benefits - this can potentially total $63,000 over the course of the child's life. The way I see it - we want rich people to have kids. Once they have their potential $75,000, they probably wouldn't be eligible for another government hand out in their life.

What Abbott has proposed is that anyone earning up to $150,000 will get 6 months salary when they go on maternity leave. To the little old lady that's asking 'How can we afford this, Mr Abbott?', let me explain:

• The theoretical parent earning $150,000 would be eligible for a taxable $75,000 under this scheme. When tax is taken out, this is reduced to around $52,150 that the Government is actually paying (on 2014 tax rates).
• Based on the $43,000 this parent is already spending on tax each year, this will take about 15 months for the Government to earn this money back from the individual.
• If the child earned $70,000 for 40 years of their life, they would have paid $570,000 in tax using today's rates (if we're looking purely at the Government payback - admittedly not including any expenses), plus contributing to the larger economy. 

Now let me turn to the little old lady on a pension earning $19,000 p.a.. 

• This year, you cost the taxpayer $19,000.
• Next year, you cost the taxpayer $19,000.

Now, how can we afford that?

Australian Car Manufacturing: Take it seriously, or get out.

Every few years the government throws more money at car manufacturers to keep them local. There's no strategy around Australia being a long term car manufacturer, just the hope that if you throw a few dollars at it now, the issues the industry face can be thrown over the fence for the next government to handle.

Australians are finally starting to realise that if we don't support locally made products, even though they're more expensive, the rest of the world won't provide enough demand for the majority of Australian products to survive.

While car manufacturers are no different in needing Australian support to survive, they lack anywhere near the support of consumers that other products have. In a recent survey, 87% of people said they were more likely to purchase Australian made food, where only 55% said they were more likely to buy Australian made cars. Given that about 10% of new car sales last year were actually for locally produced cars, even that is an overstatement.

So if no Australians are buying Australian cars, is there at least an export market for them? No, the number of cars we've exported has halved since the GFC. Our cars are simply too expensive, with our exchange rate still at historical highs why would someone elsewhere buy an Australian car over a higher quality German one or cheaper Asian one?

Both Liberal and Labor governments have had a chance to sort out the industry issues so this statement does not come with any political bias - the government should have, and could have, done a lot more for the industry. The actions made by Australians show they don't care about the industry, so the ball is in the governments court to save the industry. Not by throwing money at General Motors or Toyota, but by implementing policies specifically designed to increase demand for locally made cars.

I'm talking about subsidies for buying Australian made cars - how about removing stamp duty and taxes on locally made cars, how about instead of handing out tax cuts to businesses, allocate that money to tax breaks for businesses that purchase Australian made cars. How about the government invests in R&D, in giving Australian made cars a competitive advantage against foreign competitors. How about we force Australians to take one for the team, and pay for this with increased taxes on cars not made in Australia?

I'm not saying I even agree with what I propose - but if we're not willing to take the problem seriously, how about we stop throwing money at foreign companies to keep them here and focus on reskilling the workers who have faced non-existent job security for years?