Subjects: The Turnbull Government’s child care reforms; Labor’s child care approach failing the ‘fairness test’; Family Tax Benefit changes; Paid Parental Leave.
EO&E………………………………………………………………………………………………………………………….
EMMA GRIFFITHS:
The Education Minister, Simon Birmingham, is responsible for child care. Minister, the ANU modelling that’s come out today shows that most families would be better off under Labor’s policy. Do you think you need to make some changes?
SIMON BIRMINGHAM:
Well good afternoon Emma and good afternoon to your listeners. Look, there are some positive findings in this report – I look at a quote that says, “where families meet the Coalition’s activity test we find that the Coalition’s new child care package is likely to be more generous for most low and middle-income families, particularly for where our child care price cameos are above $80 per day.” So what that shows is that the intent of our policy, which is to make sure that child care arrangements give the greatest support to those earning the least and working the longest hours, is actually being realised under our reforms.
So we’ve been very clear all along that we wanted to re-make the child care subsidy system to ensure that it provided greater support to families to work, to work longer hours, and to support their choices in terms of being in the workforce and I think we’ve managed to do that compared with a policy that the Labor Party has which is to put a couple of band-aids over the existing model which sees a lot of their extra money actually going to the highest income earners instead.
GRIFFITHS:
Minister, part of the issue or the problem with the Coalition’s policy that’s been identified to us this afternoon is the timing. That because it comes into effect in 2018, 18 months after Labor’s, that does have a huge impact on families. Would you consider bringing the changes forward?
BIRMINGHAM:
Emma, Malcolm Turnbull and I have both been clear during the election campaign if we can get the reforms implemented earlier then we will seek to do so. That will depend of course on how cooperative the new Senate is. These are significant changes where we’re getting rid of a multitude of existing payments, streamlining them into a new child care subsidy framework. We do need to ensure there’s proper time for families, child care providers and indeed, government agencies to make sure that the transition is effective but we’ll have a look at it straight after the election if we’re re-elected and if we can bring this forward and make sure that it’s successfully implemented, Malcolm Turnbull’s given the commitment that we will do so.
GRIFFITHS:
Now, the changes that the Coalition wants to bring into child care are funded by changes and cuts to Family Tax Benefits. Why should families who have children in school, and receiving Family Tax Benefits, why should they receive less so that families with kids in child care can receive more? Don’t we need everybody to work to build productivity in the nation?
BIRMINGHAM:
Well we absolutely want to have everybody work and families who have children at school but need support for out-of-school hours care will receive increased support [indistinct] if they are low or middle-income families under our child care plan, so…
GRIFFITHS:
[Interrupting]…But through Family Tax Benefits they receive less money.
BIRMINGHAM:
Well Family Tax Benefits aren’t related to child care in terms of the actual payment that’s being made…
GRIFFITHS:
[Interrupting]…But you’ve linked them though. What I’m getting at is…
BIRMINGHAM:
[Interrupting]…We have said as we say about all of our policies that they all have to be paid for…
GRIFFITHS:
[Interrupting]…So you have linked them by saying that families who receive Family Tax Benefit need to receive less. So that’s less money for them to pay for the cost of schooling, you know, whatever that may be whether they’re in state or private systems but it’s more money for people with younger children. Why does that change?
BIRMINGHAM:
Well we have outlined reforms to Family Tax Benefit arrangements so they do ultimately result in some Budget savings. They also see the end of end of year lump sum payments in favour for many families of increased fortnightly payments so we actually support families better throughout the course of the year. Every one of the 52 weeks of the year rather than reliant on some type of outdated end of system payment or end of year payment. So there are changes there to Family Tax Benefits, ultimately what this is is a case of the Government saying as we do in every single area of policy – we have to live within our means as a government, we want to prioritise giving more child care support for low income and middle income, hard-working Australian families. That’s going to cost money and we’re achieving that by re-structuring some of the Family Tax Benefit payments in ways that we think are fair and reasonable but give more regular support to people but do realise some savings in some circumstances.
GRIFFITHS:
Simon Birmingham, do you think perhaps that most families that are receiving Family Tax Benefits are sending their kids to state schools so they don’t need as much financial help?
BIRMINGHAM:
No, I don’t think that thought is something that – I’m not sure that there’s any analysis as to where families who are receiving Family Tax Benefit are particularly sending their children. We are providing record funding into Australian schools, which, contrary to scare campaigns that are out there, will grow each and every year into the future from around $16 billion of federal funding for schools this year in 2016 and if the Turnbull Government is re-elected that will grow each year to more than $20 billion by 2020. So that’s above inflation, above enrolment, it will ensure that every single good that happening in our schools today can continue to occur along with more good things in the future due to that increased funding.
GRIFFITHS:
We hear from some listeners who are concerned that the taxpayers helping families with the cost of kids at all, do you see that as a valid point?
BIRMINGHAM:
I understand some of those concerns but there are real workforce productivity benefits and economic benefits to the nation by supporting people who want to get back into the workforce to do so, know that five or more years out of the workforce can mean a skills loss and of course hurts people in terms of their retirement savings or elsewhere. Which is why in our restructuring of child care subsidies we’ve put in place an activity test, we’ve put in place the type of arrangements that ensure the greatest amount of child care support goes to those people who are in the workforce but are earning the least as a result of their efforts so that we actually reward them the most, take care of the greatest amount of their child care subsidies. The truth is, Labor’s policy as they’ve presented means that high income earners will still get more in terms of child care support under Labor than they will under the Coalition but low and middle-income earners in terms of child care support will receive more under a Turnbull Government if they’re going back into the workforce to support their choice to do so.
GRIFFITHS:
Can you remind us what the activity test is?
BIRMINGHAM:
Well the activity test is a very light touch activity test. It only requires activity of around four hours per week or eight hours over the fortnight for parents, and it’s working, studying, volunteering. So it’s light touch to qualify for the first threshold of support.
GRIFFITHS:
Minister, there’s been criticism of that that children from the most socially disadvantaged and vulnerable families will actually miss out on valuable early childhood, early learning experiences because of that test. What do you say to that?
BIRMINGHAM:
Well once again there’s a few safety nets we’ve put in place there. The first is that children in very low income families, families earning less than $65,000, will be exempt from that activity test for the first threshold level of getting access to child care support. So they will still be able to go into the child care system and access early learning opportunities. Further to that, around $1 billion in additional child care subsidy payments and other structures that are really targeted to make sure that particularly children at risk are captured and are given the opportunity to be able to be in the child care system and indeed again, receive those early learning benefits. So we’re making there’s multiple levels of safeguard there. We are also of course funding with the states a guaranteed 15 hours per week of pre-school services for all children in their year before school. So we absolutely recognise the benefits of early learning and the fabulous work done by many early learning educators there. We’re guaranteeing that for every single child in the year before school we’ve put in place multiple levels of safety nets to make sure that the most disadvantaged or those in really low income families are guaranteed of being given that support for early learning under this reform proposal.
GRIFFITHS:
Minister, a question around Paid Parental Leave. The Coalition policy is to get rid of what it’s described as ‘double dipping’. When will that come into effect?
BIRMINGHAM:
Well there’ve been some mild tweaks to that since it was first proposed and announced. Of course, all of these measures depend on ensuring that we have the support of the Parliament to put them in place. We have supported and will continue to support strong Paid Parental Leave for every person in Australia. The reforms you speak about touch particularly on people who receive paid parental leave already from government or employers versus those who might receive paid parental leave from purely the taxpayer out of the…
GRIFFITHS:
[Interrupting]…Yes, when will it come into effect?
BIRMINGHAM:
So the timeline for effect I think is for it to be legislated as quickly as possible after the election and to come into effect thereafter.
GRIFFITHS:
So if somebody is pregnant now, they should basically bank on not receiving both Paid Parental Leave schemes?
BIRMINGHAM:
Well if somebody is pregnant now and is entitled to employer paid parental leave, they will obviously still have that entitlement. If they’re only entitled to a taxpayer supported paid parental scheme they will still maintain that entitlement into the future.
GRIFFITHS:
But will there be some sort of timing put in place so that people who are pregnant now don’t have to, you know, deal with incredible uncertainty about how long they may be actually able to stay home with their baby?
BIRMINGHAM:
Well they’re things that will certainly be spelt out very clearly in the legislation and of course, we wouldn’t expect it to apply instantly overnight upon the election of the Government or the re-election. We’ll make sure there is certainty for people in terms of their individual planning.
GRIFFITHS:
I guess we look forward to clarity on a lot of things, Minister. Thanks very much for your time.
BIRMINGHAM:
Thank you Emma, cheers.
[ends]