Interview on ABC AM with Kim Landers
Topics: New child care package; Newspoll
Kim Landers: There’s a big change to the child care system that comes into effect from today. A new single Child Care Subsidy replaces the Child Care Benefit and the Child Care Rebate for hundreds of thousands of families. The Federal Government says it will offer more support to low and middle income families and a big part of that is the removal of the annual subsidy cap for families earning less than $187,000 a year. The Minister for Education and Training, Simon Birmingham, joins me now.
Minister, good morning.
Simon Birmingham: Good morning, Kim.
Kim Landers: Families have to sign up to this new system through the myGov website. How many still haven’t switched over?
Simon Birmingham: Well, more than 1 million Australian families have switched over. In terms of those who have not, for those who have been active in some way in the child care system since 1 April, around 51,000 have not done so to date. Now, not all of those individuals or families will still require child care support. As I say, this is about trying to assess those who we might have invited to switch over, encouraged to switch over, but ultimately for many for them, their lives may have moved on beyond the child care system.
Kim Landers: But if you haven’t switched over, are you going to miss out on the payments?
Simon Birmingham: There’s a three-month window for families. So, anybody who still registers will be able to be back paid essentially in terms of the new Child Care Subsidy, which is going to be very beneficial. It’s certainly well worth the 10 minutes it’s taken most people online to provide their updated levels of work or study or training hours, their updated income levels, because on average families are expected to be around $1300 per child per annum better off.
Kim Landers: You talk about those work and study levels. The amount of subsidy you get depends on how many hours parents are either working, or studying, looking for work or volunteering. You’ve got to do at least eight hours a fortnight to be eligible. Now, you’ve said that this new system could encourage the primary caregiver, which is often women, to take up more work. Do you have any figures on how many more hours you think women might actually start working?
Simon Birmingham: Based on analysis, we expect around 230,000 Australians to increase their level of workforce participation. Now, for some that will be deciding that actually the new Child Care Subsidy makes it viable to return to work for the first time. For others, it will be that they feel they can pick up an extra shift or an extra day here or there. You mentioned in your intro, many families, around 100,000, have already in the last financial year, they ran out of the $7500 Child Care Rebate subsidy, which meant that they were going to work for the last few weeks or months of the financial year often just to pay the child care bills. Well, now for low and middle income families, they can have confidence that the support won’t run out midway through the financial year. It will be there for every extra day they need for every extra shift they work.
Kim Landers: Some families are going to be worse off though. If there’s a stay-at-home parent not working or studying, quite frankly they’ve got their hands full looking after little kids. They may be caring for a parent, for example. Won’t they be penalised because they’re not going to get any access to any subsidy for child care?
Simon Birmingham: So importantly, Kim, it is a light touch activity test. It includes people who are on parental leave. So, if you already have one child in the child care system and another one comes along and you take 12 months of unpaid parental leave, for example, well that will be assessed as against the activity test. But it’s only four hours on average per week. It can be averaged over a three-month period. So, if people work variable hours, we’ve accounted for that. It can include volunteering, such as reading or doing volunteer activity at your older child’s school. It really is about trying, though, to make sure that we are targeting the support so that the greatest number of hours of subsidised child care go to families working the longest hours, but have that incentive or support there for people who might be studying, or training, or caring, or volunteering as well.
Kim Landers: Now, there are plenty of reports of centres hiking up their fees just before this new system came in. What is the Government going to do to monitor those price rises and if necessary step in?
Simon Birmingham: The first thing we’ve done is acted on the Productivity Commission recommendation that there should be a benchmark price that we’ve put into legislation now. That’s what the Child Care Subsidy can be paid against – this new benchmark price. And the PC recommendation viewed that as a means of keeping a lid on future fee increases. But of course, we’ve delivered this extra support and we expect it to flow through to Australian families. We will be monitoring the behaviour of child care centres very, very closely.
In the past, when the Labor Party just increased the old Child Care Rebate…
Kim Landers: But what will you do though? What will you do if they’re hiking up fees?
Simon Birmingham: Well Kim, we accounted in our budget for the fact there would be the usual fee increases at the start of a new financial year, and many of the reports to date are within that range. But if we see extraordinary fee increases, we won’t be ashamed in terms of going out and naming and shaming providers and making sure that they are held to account, because this extra support we’re providing is intended to help families with their cost of living pressures, with paying for their child care fees.
Kim Landers: A final question on another matter. There’s a glimmer of good news for the Government in the latest polling out today, showing the Coalition is trailing Labor just by two points on a two-party preferred basis. Does that put a spring in your step leading up to the Super Sunday by-elections?
Simon Birmingham: Well, I’m excited today about the fact we’re able to give more support to Australian families, and we can do that because the Turnbull’s plan for a stronger economy is working through. That we’re able now to bring the budget back to balance a little earlier than expected. We’re able to give tax relief to Australian families, invest in the services that are essential, such as child care support or our schools and hospitals. That’s all because of strong economic management in contrast to Bill Shorten, where people just see he’s about higher taxes and slugging workers, small businesses, family businesses et cetera.
Kim Landers: Okay, minister, we’re out of time. Thank you very much for joining AM this morning.
Simon Birmingham: Thank you, Kim.
Kim Landers: That is the Minister for Education and Training, Simon Birmingham.