Simon Birmingham:…will introduce legislation for a new child care subsidy. And a new child care subsidy of the Turnbull Government will be simpler, fairer and more affordable for Australian families. Our child care arrangements will ensure that those families who work the most hours will receive the most support for hours of subsidised child care and those families who earn the least whilst working will receive the greatest subsidy in their child care. This is about making sure that our child care system is easy for families to navigate, is affordable and accessible to all. Importantly today we’re announcing the details of the tapering rates in the child care subsidy that will be available for working families and additional support for grandparents. Firstly, in terms of families who are in the work force, they will receive dependent upon the number of hours they work, subsidies that range from 85 per cent for families earning less than $65,000 ranging through to 50 per cent for families on $170,000 and then declining from families on $250,000 down to 20 per cent at families on around $340,000 and then a floor of subsidy at 20 per cent from there on in.
These reforms have been informed by extensive consultations and the very detailed report of the Productivity Commission into child care. We are also announcing support to ensure that grandparents don’t miss out in these changes which will strip more than three different child care payments away into one neat child care subsidy. And for grandparents who are the primary carers of their grandchild, they can be confident they will still be able to access child care that can provide them with respite at a time of need as well as learning opportunities for their children. This is an important measure because we know that in those cases nearly 4,000 grandparents catering for more than 6,000 children are offering valuable care to children who they love immensely, but they are doing so often in their retirement years where they genuinely deserve some respite and support. Overall these measures involve more than $3 billion of additional expenditure taking total Commonwealth support for child care over the next four years to around $40 billion. This is a significant package and I hope and trust that the Labor Party and all parties will support this package and support the important savings measures that are required to pay for it so that we can have all aspects of our new child care system operational by the scheduled starting date in 2017.
Question: So families earning $250,000 or more won’t receive 50 per cent rebate? Is that correct?
Simon Birmingham: Families earning more than $250,000 will still be supported from a declining level of 50 per cent at $250,000 down to 20 per cent at about $340,000 and then a floor of 20 per cent after. This reflects broadly what the Productivity Commission recommended. It provides support for all working families in terms of their child care payment but ensures that that support is most generous to those families who need it most.
Question: So if it’s at that 20 per cent that means even families who are millionaires are still going to receive the 20 per cent.
Simon Birmingham: Well, families who are millionaires at present can receive the child care rebate that goes up to $7,500. What we’re recognising here is that there should always be some support, some incentive for participation in the work force and that we want all families to be encouraged to participate in the work force and we’re confident these child care reforms will lift work force participation. We are making the system fairer by providing less support to high income families, and more support to those working families who are on lower income, and making sure that they are having up to 85 per cent of their child care payment subsidised whilst they’re at work in many different jobs.
Question: Providing support to grandparents who are providing child care to these children is obviously a big part of this. Can you just go into a bit of detail about the specifics of the grandparent side of things for us?
Simon Birmingham: So grandparents who are the primary carer for their grandchildren will be able to access the child care subsidy and those who are on some type of income support arrangement, such as a pension, will have the full subsidy available to them, which is up to 120 per cent of the hourly rate. So for those grandparents who are pensioners looking after their grandchildren, they should expect to be able to access full time child care opportunities without being left out of pocket at all.
Question: How do you define a grandparent, does it have to be over a certain age, or do they have to be on an aged care pension, or can it be a grandparent of any age?
Simon Birmingham: So we’re talking here about grandparents who are the full time carers for their grandchildren and there are processes already that Centrelink have in place to support those grandparents. There’s no age limit on grandparents in this regard, it is simply a case that they must be the recognised full time carer for their grandchildren.
Question: And grandparents who perhaps are working 15 hours a week or something like that, how is this going to benefit them at all? Will it just be the same thing?
Simon Birmingham: Grandparents who are full time carers for their grandchildren will be exempt from the activity test. So the only impact there will be dependent upon the family income, the grandparent’s income, as to whether that might see the proportion of subsidy reduced. But grandparents will have full access to child care and we recognise its really important for grandparents who are showing enormous love and doing an enormous service to the community by looking after often vulnerable children at difficult times to get that support and to have that respite for at least a few hours a week.
Question: When will the full modelling be released? Labor says that lots of families don’t really know what’s happening.
Simon Birmingham: The legislation is being introduced into the parliament this week, that will provide clear detail to all Australians who will be able to see exactly how generous this package is. It’s providing more than $3 billion in additional support and steering it most directly to those families who are working hardest and who need it most. So if you’re a family earning between $65,000 and $170,000 you should on average be about $30 per week better off, that’s around $1,500 per annum better off as a result of the new child care subsidy arrangements.
Question: And why- what’s the reasoning behind this – some would say – back-flip?
Simon Birmingham: Well the changes that we’ve made to the package since the budget have been refinements that are driven by community feedback, stakeholder feedback and deeper analysis of the impact. So we want to make sure, and we’ve always been very clear that we would not leave grandparents out, and we’ve made sure now that we’ve designed the right model to support those grandparents who need it most. We’ve also always been clear that we’d respond to feedback and we received feedback that perhaps the original model was not as generous- sorry, that perhaps the original model was a little too generous in some instances. And so we recognised that, for those families who are on high incomes they should have every incentive to participate in the work force, but not necessarily the same level of child care subsidy available as families on low and middle incomes. And this is a very fair package. It’s a package that ensures greater support to those families who need it most, who are working hardest, but earning the least.
Question: Kate Ellis says that some families are still going to be worse off, and she wants to know, by how much. What’s your response to that?
Simon Birmingham: Well, any family who is working and earning a low or middle income should be no worse off, and in most instances will be better off because the arrangements we are putting in place are targeting support so that the greatest number of hours are available to the families who work the most number of hours, and the greatest level of child care subsidy is available to families who earn the least. This is an incredibly fair measure, ensuring that those on the lowest incomes get the most subsidies. Those working the most hours get the greatest number of hours.
Question: Thank you.
Senator Birmingham’s media contact: James Murphy 0447 644 957
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