Tony Abbott’s paid parental leave proposal is a missile aimed directly at the Liberal party base.

As Glenn Dyer has shown today, the tax hike on Australia’s biggest companies will see dividends cut and share prices fall, and will directly hit superannuation returns, and particularly those of self-funded retirees and people nearing retirement looking to max up their super contributions.  Their investment returns will be directly hit by Abbott’s Great Big New Tax.

The rest of us, whose superannuation accounts and investments have time to recover from the hit, might get off more lightly given that Abbott, under fire, immediately insisted his proposal for a tax rise was “temporary”.  But for investors on the cusp of retirement and retirees, who are only just recovering from the red ink splashed about over the past 18 months, the cost of this attack on the blue-chips and big companies they’ve heavily invested in will be significant and visible.

The political logic of the Abbott proposal is that it trades off support from the big end of town — no one likes big business anyway — for support among swing-voting mums and dads.  But the proposal has been so poorly and quickly put together that Abbott’s team have failed to realise how companies will respond to the tax slug — and who will ultimately pay.

The answer is, partly, the Liberals’ core membership of middle- and high-income retirees and middle-aged workers who are going to watch their investment returns cop a serious hit.

But the rest of us will pay as well.  And no more directly than through the loss of returns for taxpayers from the Future Fund.  If David Murray was so happy to be an activist shareholder about the Telstra board, he ought to be on the phone to Abbott explaining just how much his proposal will cost taxpayers via his fund.  Peter Costello, who should relish a chance to point out yet again what an economic illiterate Abbott is, ought to do the same if he takes his job as a Future Fund board member seriously.

The unforeseen impact on public finances of Abbott’s half-baked effort demonstrate what can happen when a bloke who finds economics a bore fails to ask anyone with a clue, either in his own ranks or in business, what might happen if he bumps company tax up significantly.  But this proposal goes even further.  Abbott surely cannot have thought it was a good idea to launch a rocket at the retirement incomes of his party base.  That’s exactly what he wants to do.