This year’s Federal budget is in turmoil again as the Gillard government breaks its promise to 1.5-million families.

Today’s decision to scrap “Family Increase Tax Part A” will cost families hundreds of dollars each year.

It comes as more Liberal MPs urge Opposition Leader Tony Abbott to dump his Paid Parental Leave scheme.

Lizzie Mulherin reports.


Treasurer Wayne Swan pledged more money to families in last year’s budget.

Wayne Swan, Treasurer: “These new measures are good for low and middle-income families because they help make ends meet.”

The scheme was supposed to be funded by the mining tax. But the projected two billion dollar revenue has plunged by over half.

The Finance Minister confirmed this morning that the Government can no longer afford the one-point-eight-billion dollar payout to families.

Penny Wong, Finance Minister: “The government has to make responsible economic decisions. They’re not easy decisions and this is a decision that is responsible.”

However, the schoolkids bonus and supplementary payments to low income earners will remain.

Tony Abbott, Opposition Leader: “What was then a rock solid committment, and a stick with which to beat the opposition mercilessly has now been dropped.”

But Abbott is facing his own struggles with the budget, as pressures mount from high profile Liberals to dump the Opposition’s parental leave plans.

Jeff Kennett, Former Victorian Premier: “I would say at the moment let’s not have the parental leave the scheme as part of the offering”

Peter Reith, Former Liberal Minister: “The problem with this policy is that you can’t explain it.”

But the Opposition Leader stands by it.

Tony Abbott, Opposition Leader: “We will do it in a way which is consistent with budgetary responsibility, we will certainly do it in a way which is consistent with budgetary responsibiliity but it will happen.”

Lizzie Mulherin, QUT News.