Interview on 6PR Drive with Oliver Peterson
Topics: Delivering more affordable, flexible and accessible child care for Australian families; delivering fairer paid parental leave
Oliver Peterson: In a bid to save $4 billion, the new Omnibus Budget Savings legislation was introduced into Parliament today. Now, this is quite a complicated bill, but it will see the paid parental leave increase from 18 to 20 weeks, but some families will lose out in changes to Family Tax Benefits. To tell us more, the Education Minister is Simon Birmingham, and I’m pleased to say that the Minister joins us from Canberra this afternoon.
Simon Birmingham, welcome to Perth Live.
Simon Birmingham: G’day Ollie, great to speak with you.
Oliver Peterson: All right, explain to us this legislation. It is quite complicated, there’s lots of bits and pieces going on, but as I said there in the end paid parental leave will increase but some families will miss out here with the tax benefit changes.
Simon Birmingham: Well that’s right, Ollie. There are lots of different moving parts to this, and that’s in part because the Government last year had some significant success in putting through omnibus or packages of legislation, brought together that can allow members to find different parts of agreements within it, and that’s how we got $6 billion worth of savings through the Parliament shortly after the election last year.
In this case we’re looking at something that contributes to fixing the budget, to dealing with our deficit and providing billions of dollars’ worth of savings, but also approving and getting through the most comprehensive changes to our child care and early education system, to give far more effective and efficient support, particularly to low income and middle income hard working Australian families, as well as a more fair and effective means of providing for paid parental leave in the future.
So a lot of different parts here. But in the end it’s about better targeting of assistance, particularly to Australian families and hard working families to make sure that they can have the time off with young children after their babies are born, as well as be able to then choose to participate in the workforce and know that child care costs won’t cripple them doing do.
Oliver Peterson: Okay, so those people on lower incomes, they’ll have a boost of around $20 per week- per fortnight, I should say.
Simon Birmingham: In terms of the Family Tax Benefit changes, that’s right. There’ll be a phasing out of some of the end of year supplements, and instead a boost of $20 in fortnightly payments to them. But that of course comes on top of support that sees paid parental leave extended from 18 weeks minimum to 20 weeks minimum. So people who don’t have employer-funded paid parental leave, or only have a short amount of it, can be guaranteed getting at least 20 weeks of paid parental leave.
And changes in our child care arrangements that guarantee that no more will families, who are low or middle income families, face a cliff part way through the year where they run out of child care subsidy or support, but can be guaranteed of getting year-round assistance which is better means-tested, providing more help to hard working low and middle income families who meet an activity test, are in the workforce, or training, or studying, but who actually need more help to be able to pay the child care bills so that they can be in the workforce, get out, undertake a job, pay tax and do all of the right things we want people to do.
Oliver Peterson: Minister, some Family Tax Benefit recipients in the A category will lose reportedly a $700 a year supplement – that will be replaced with that other payment, though, there for $20 per fortnight. The Shadow Families Minister though, Jenny Macklin, says that this will affect 300,000 Australian families.
Simon Birmingham: Well you have to look at this in totality, and so Labor are conveniently ignoring the child care reforms here and focussing only on the bits that they want to focus on. If you look at it in totality there are significant benefits. Take a family, for example, earning about $80,000, two parents working with two children in long day care, in child care for three days a week. That family, when you take the net effect of our changes to Family Tax Benefit and our changes to Child Care Subsidy, will be close to $3500 better off- sorry, close to $3000 better off. So that’s a significant improvement for a family in those circumstances when you look at the whole package – so a family only earning $80,000, two people in the workforce.
There are a number of different similar examples I can give that show, especially in those early years, it will better empower people to make decisions about going back to work, working more hours if they choose to do so and knowing that they won’t be crippled by their child care costs.
Oliver Peterson: All right. There’s also some comments here from Christian Porter, the Social Services Minister, that 68,000 women will have their payments reduced in relation to the Paid Parental Leave scheme. Obviously this isn’t going to keep everybody happy.
Simon Birmingham: Well it won’t, but once again these are incredibly fair reforms. So around 100,000 Australian families will see their Paid Parental Leave scheme benefits improve going from 18 weeks to 20 weeks, and those are the families who either get no paid parental leave from their employer, or limited paid parental leave from their employer. The only families who might see a reduction in terms of government taxpayer-subsidised paid parental leave are people who are on generous employer-paid-for arrangements already.
So people who are getting full pay for 20-plus weeks, they don’t necessarily need to be seeing taxpayer support like somebody who doesn’t actually receive any employer paid parental leave arrangement, and that family will see an improvement. And that’s around 100,000 families who will see a net benefit in their paid parental leave arrangement.
Oliver Peterson: So it doesn’t look like Labor will support this move at the moment. Obviously you’ll be relying on the crossbench again in your chamber. Minister, how difficult will that be to sell the policy to the crossbenchers?
Simon Birmingham: Well I find it remarkable that the Labor Party are dismissing these changes out of hand, because these are the types of progressive policies in terms of family assistance and paid parental leave, targeted at the lowest income Australians, that you would usually expect the Labor Party to welcome and support. Instead, they’re standing up, they’re arguing that people earning big, big salaries should be getting more taxpayer dollars handed over to them in paid parental leave or in child care subsidies.
But look, we’ve certainly, in calibrating this package, in developing the reforms, we’ve done so mindful of discussions we’ve had with Senate crossbenchers, and we’re confident that we can manage to work with them over the coming weeks to try to see this package implemented, delivering savings overall to the budget to address the deficit, but also far, far better targeting support to help the most hard working, lowest income Australian families.
Oliver Peterson: And obviously very important, you’re expecting to save around $3.8 billion. That will put a bit of pressure there on Labor to try and address this major issue, as you say there Minister, of budget repair.
Simon Birmingham: That’s right. The real question for Bill Shorten and co is are they fair dinkum about supporting us to repair the deficit legacy that was left in place? And right now it appears they’re not, that they would rather basically see more money handed over – in many cases to people who frankly don’t necessarily need it – rather than seeing a better, fairer, targeted arrangement for child care payments or paid parental leave that, as I say, gives more support to people who are out in the workforce, working hard, doing the right thing but aren’t earning much. Versus, of course, their arrangements that would see more money handed over for people not working at all, or to people who are earning very good wages already, have very good employer-sponsored paid parental leave schemes, and shouldn’t be relying upon the taxpayer for additional support.
Oliver Peterson: All right, Minister Simon Birmingham, I appreciate your time on Perth Live this afternoon.
Simon Birmingham: Thanks so much Ollie, a pleasure.
Oliver Peterson: That is the Education Minister Simon Birmingham, joining us here on Perth Live.