Labor counters Coalition childcare policy with $3b plan of its own
Jun 06, 2016 | News | by The Learning Press staff
Just days after Kate Ellis tipped The Learning Press to “stay tuned” on childcare, Labor has unveiled a $3bn package to increase pre-school accessibility.
The shadow education secretary told us: “I absolutely believe that we need to reform Australia’s childcare system, but I do have serious concerns about the package that the Government announced.”
This weekend, Labor revealed its alternative to the Coalition’s comprehensive Jobs for Families package.
It promises a 15% increase in the Child Care Benefit from 2017 and a rise in the benefit cap from $7,500 to $10,000, with Labor claiming every family earning under $150,000 will be better off.
While the Coalition has also promised an extra $3 billion for childcare, its package ties the number of subsidised hours to parental work, study or volunteer hours.
Rebate rises linked to the Coalition’s package have been shelved until 2018 following senate objections to a lack of detail around ‘safety net’ provisions for low-income families and proposed reductions in family tax benefit to fund the changes.
The opposition has seized on that delay for political advantage, Shadow finance minister Tony Burke saying: “Any child who was born when the government first announced they were going to do something about childcare will be in school by the time their policy comes in.
“We’re not willing to wait, so we’d bring it all forward to 1 January.
“For the people who are reliant on the childcare benefit, that increases by 15%. That means, for low to middle income earners, up to $30-a-week improvement for them.”
The childcare benefit is currently means-tested, with families earning under $43,727 per year receiving the full rate of up to $208.50 per week.
Working families are then eligible for an additional childcare rebate, which covers 50% of parents’ out-of-pocket childcare expenses to a current maximum of $7500 annually.
Labor says its new package will be funded within the existing budget through a range of savings measures, including social security changes, the scrapping of the baby bonus, axing proposed company tax cuts and cuts to negative gearing subsidies.
Its policy statement reads: “Every one of the 813,000 families that rely on the Child Care Benefit will be better off - an increase up to $31 per child per week, or up to $1,627 per year, will provide much needed relief for the family budget.”
The four-year package includes new accountability standards for childcare centres, $50 million for improvements to family day care facilities, improved services for indigenous children and those living in remote areas, and $150 million to help develop and train a better early education workforce.
Under the Coalition's more comprehensive reform plan, the childcare rebate and childcare benefit would be replaced by a single means-tested subsidy, with families earning up to $65,700 qualifying for a subsidy for 85 per cent of fee costs, tapering down to 20 per cent as the family income rises over $250,000.
The plan’s contentious activity test would require parents to work, volunteer or study for at least eight hours a fortnight to be eligible for 36 hours of subsided childcare, and for more than 16 hours to be eligible for 72 hours of subsidised care.
Kate Ellis told The Learning Press that under the Coalition’s scheme “Australian children would be punished for the decisions of their parents or for the workforce participation of their parents, particularly in areas of disadvantage.
“Those are the same children that we know can benefit most from access to early education, so there are some serious flaws there.”
But education minister Simon Birmingham described Labor’s plan as a band-aid solution which put no downward pressure on child care fee increases.
"Labor may be upping the subsidies available, but they are abandoning our caps on the subsidies child care providers are paid, meaning their changes are far more likely to lead to price rises and taxpayer dollars going into provider profits rather than helping hardworking families,” he said.
"The Coalition's national economic plan includes the most comprehensive set of reforms to child care in a generation, to make child care more affordable, flexible and accessible for families and children.
"Our child care investment is targeted towards those working the longest hours but earning the least, yet Labor wants to spend more money for parents that don't require child care in order to go to work.”