It’s all coming undone for Abbott

Can't we forgive and forget? Prime Minister Tony Abbott hopes voters will give him another go. Source: News Corp Australia

ONE by one, Tony Abbott has sought to neutralise the unpopular Budget barnacles that have clung to his government's ship this year and caused it to run aground.

Mr Abbott began his repentance last Monday, announcing that the government would drop plans to cut $17 million in Australian Defence Force allowances.

In a marathon press conference, following a disastrous election result for the Liberal party in Victoria, Mr Abbott also acknowledged that cuts to the ABC were "at odds with what I said immediately prior to the election". The Prime Minister had been faced with ridicule over his insistence that the cuts were not a broken election promise and was reportedly told to stop using "verbal gymnastics" by his own Liberal colleague, MP Craig Laundy.

The penance continued on Sunday with a further announcement from Mr Abbott promising to rein in his signature paid parental leave policy over the summer.

Meanwhile, his government's unpopular Budget measures continued to be tweaked with the news yesterday that the unpopular $7 GP fee would be changed to an "optional" $5 co-payment on everyone except pensioners and children.

And in yet another backdown, Australia bowed to international pressure today and pledged $200 million to the United Nations-backed Green Climate Fund to mitigate the impact of global warming on poor countries.

RELATED: Australia's backflip on Green Climate Fund

The government had previously indicated it was not interested in the fund, but Mr Abbott said at a press conference: "We've seen things develop over the last few months.

"I think it's now fair and reasonable for the government to make a modest, prudent and proportionate commitment to this climate mitigation fund. I think that is something that a sensible government does."

The government was also unable to get its university reforms through the parliament and last week the Education Minister Christopher Pyne said it would be prepared to make further changes to its renamed bill, which the Senate rejected the first time round and which was reintroduced to the lower house last week.

It has also moved to fix the troubled $8.5 billion Air Warfare Destroyer project, also announced yesterday, after Defence Minister David Johnston was criticised for his "unhelpful" comment that he wouldn't trust the government-owned shipbuilder ASC to build a canoe.

The turnaround comes as two opinion polls this month found support for Mr Abbott had dropped, the first-term Liberal government in Victoria was booted out and there was a voter backlash in a South Australian byelection against the party.

Why don't people like our Budget? Treasurer Joe Hockey (right) with Tony Abbott during Question Time in the House of Representatives. Source: News Corp Australia

The latest Newspoll showed Mr Abbott's approval rating had hit its lowest point in five months, down to 33 per cent. Labor was also ahead on a two-party-preferred basis, leading 54 to 45 per cent. A Fairfax Ipsos showed Mr Abbott's personal approval rating was down to 38 per cent from the last survey five weeks ago, while Labor opposition leader Bill Shorten had jumped to 46 per cent. They were previously level-pegging. On a two-party basis, Labor holds 52 per cent of the vote to the conservative coalition's 48 per cent.

Abbott has blamed his government's poor polling on the unpopular work of reducing the budget deficit. The government's plan to return the budget to surplus in four years has been undermined by falling iron ore and coal prices that have wiped billions of dollars off forecast tax revenues.

But Mr Abbott said it had been a "year of achievement" for the government with the mining and carbon taxes axed.

"This government is absolutely ... determined to restore the budget to surplus as quickly as we reasonably can," he said.

Treasurer Joe Hockey, who will next week release the mid-year economic review, said earlier this month that the government had reduced projected debt by $300 billion and was rolling out the nation's biggest infrastructure program.

Economic growth would be up from 2.5 per cent to three per cent and exports up seven per cent.

The repeal of the carbon tax had delivered the largest-ever fall in electricity prices, and red tape cuts would save business $2 billion a year.

As a result of cutting industry entitlements, the government had achieved three free trade agreements that were the country's "passport to the future", he said.

Environmental approvals had been issued for 300 major projects worth $1 trillion.

MEDICARE CO-PAYMENT

Yesterday the government ditched plans for the unpopular $7 Medicare co-payment. Instead an optional co-payment will be introduced at the same time the Medicare rebate to doctors is reduced by $5.

Most Australians face the prospect of paying more to visit their doctor, but it will be up to doctors to decide whether to impose an optional $5 co-payment on their bulk-billed patients to make up for a reduction in the rebate they receive from Medicare.

Patients who are not bulk-billed will have their rebate reduced by $5 as well.

Pensioners and other concession card holders, children under 16 and those living in aged-care facilities will be exempt from the reductions.

RELATED: PM announces changes to $7 co-payment

Labor MP Tanya Plibersek speaks at the Save Medicare protest in Randwick. Picture: John Appleyard Source: News Corp Australia

Consultations of less than 10 minutes will attract a Medicare rebate of $11.95 only, and a rebate of $32.05 will apply for standard consultations between 10 and 20 minutes.

The rebate changes do not need parliamentary approval, but they could be disallowed by the Senate if Labor and the Greens get sufficient support from the crossbench.

Labor has accused the government of introducing a co-payment by stealth.

UNIVERSITY DEREGULATION

After the Senate rejected legislation to deregulate university fees, the government has moved to plan B. A new bill before parliament contains concessions promised to the Senate crossbench. The biggest will limit the interest rate on student loans to the consumer price index.

It will establish government-funded scholarships specifically for poorer and rural students, a support package for regional universities, freeze interest on debts for new parents and explicitly rule that domestic fees can't exceed what international students are charged.

A student protest against university reforms. Picture supplied Sarah GarnhamNUS Education Officer Source: Supplied

Last week the Education Minister Christopher Pyne said he was prepared to make further changes when the bill returned to the upper house in 2015, but warned the Senate if it failed to pass the second bill, it would be responsible for continued instability and uncertainty in the sector.

RELATED: Defeated Pyne vows new university legislation

The government had hoped to save $1.1 billion over three years from 2016 under the plan that included reducing government restrictions on how much universities could charge Australian students. The most popular universities welcomed fee deregulation, but the opposition and key independent senators warned that the children of ordinary Australian families would be priced out of tertiary education.

DEFENCE PAY

Last week, Mr Abbott announced the government would drop plans to cut $17 million in Australian Defence Force personnel Christmas allowances. But a 1.5-per-cent-a-year pay hike, which critics say represents a cut in real wages because it is below inflation, is unchanged.

RELATED: PM backs down over ADF allowances

PAID PARENTAL LEAVE

On Sunday Mr Abbott said he would restructure his signature paid parental leave policy over the summer in a bid to win Senate support.

The revamped scheme is speculated to include a new means test that would exclude women on salaries of more than $150,000 per year, but Mr Abbott has refused to confirm any details.

He won't reveal what the new scheme might look like, saying only that paid leave will still be determined by women's wages, and savings will be directed into childcare.

RELATED: Means test for paid parental leave scheme

DESTROYER PROJECT

Yesterday the government moved to fix the troubled $8.5 billion Air Warfare Destroyer project, which is running more than two years late and as much as $600 million over budget. Last week Defence Minister David Johnston underlined the government's concern when he declared he wouldn't trust government-owned shipbuilder ASC — lead partner in the AWD alliance — to build a canoe.

Under a remediation plan unveiled on Tuesday, Melbourne shipbuilder BAE Systems and local subsidiaries of overseas defence contractors Navantia SA and Raytheon Australia will take on increased roles in the program.

RELATED: Defence team given 7 months to save destroyer program

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