Interview on ABC News 24 with Julie Doyle
Topics: New child care package




Kathryn Robinson:       Time is running out for families to switch over to the Government’s new system for child care payments. Around 300,000 families risk losing their government subsidies from 2 July if they don’t update their details. The change is part of the Government’s move to introduce a single means-tested subsidy for child care. The Education Minister Simon Birmingham says he is pleased with the progress so far but is encouraging parents to act now.


He spoke to political reporter, Julie Doyle.


Simon Birmingham:     We’re really pleased with progress that’s seen more than 800,000 families register for the new Child Care Subsidy and update their details. There’s still around three weeks to go of course for families to do so and we’re confident that many thousands more will do so in that time. Some of those that we’re counting as wanting to transition may indeed no longer be in the child care system. We’ve gone back to records that go back into last year to ensure we’re targeting as broad a group of people as possible. So some will choose never to transition. So we don’t expect to get to a 100 per cent rate in that sense, but we’ll get vast numbers already, more to come, and there’s a three month grace period that comes afterwards.


Julie Doyle:      Just on that though, the grace period, so if you don’t switch over, 2 July the new system starts: will payments stop?


Simon Birmingham:     Payments do stop from 2 July if you haven’t registered for the new Child Care Subsidy because this is a single new subsidy to replace the current mix of different payment arrangements, then payments will cease. However, they will be back paid if people then realise and of course we’re giving service providers – child care services – details of their families who have failed to register, so that they’re able to ideally tap people on the shoulder ahead of time and encourage them to do so and I want to give a big thank you to the many services that are doing just that and have even set up iPads or laptops in the front reception area to be able to step families through it there and then.


Julie Doyle:      That would be a bit of a shock for people if they haven’t, and for some various reason it slipped through the cracks and then all of a sudden, the payments just – the rebates that they rely on – just stop.


Simon Birmingham:     That’s why we’re going to great efforts to get the message out there. We’ve run an extensive communications campaign, written to families, emailed families, sent text messages. It’s been according to some families, quite a barrage of communications reminding them that they need to do this. And we’re confident that overwhelmingly, clearly, we’re already at more than 70 per cent. There’s still three weeks to go. We anticipate that families do recognise and indeed our own research shows that families understand that they need to do it by 2 July but some are holding out because they want a better picture of what their estimated family income will be next year. But a key message as well, is that it’s worth the 10 minutes that of those who’ve transitioned to date, they are around $1300 per child, per annum, better off, under these reforms and that’s well and truly worth 10 minutes updating your details at education.gov.au/childcare.


Julie Doyle:      Let’s have a little chat now about some of the details of the changes. The big one is that you’re simplifying the system, making it one means tested subsidy for families but it also includes the activity test and that’s where there’s been some concern about families that will miss out on subsidies because they don’t meet that test. Once the new system is up and running is there any option of tweaking that?


Simon Birmingham:     Well the activity test is a light touch activity test. Now, we’ve put it in place because we do believe as a government that the greatest hours of subsidised child care should be available to those who are working the longest hours or studying or volunteering. We’ve made sure the activity test is quite encompassing but also we make no apologies for investing an extra $2.5 billion in child care support but then re-prioritising where that support goes to ensure it’s targeted to those families working the longest hours and also the greatest rate of subsidy going to those families on the lowest incomes. And all up, our anticipation is that this is going to benefit around one million Australian families, help around 230,000 people increase their rate of workforce participation because for the vast bulk of families no longer will they face that cliff mid-year where they run out of child care support, because we’re abolishing the cap on the child care rebate for all families earning less than around $187,000.


Julie Doyle:      On the test though, because that seems to be the area where there is concern from the Opposition and some of those in the sector – the activity test – is it a difference of opinion really, whether child care should be to encourage workforce participation – which seems to be what the Government is saying. The Opposition is arguing there’s also the early education benefit and that children receive a lot of benefit from getting into the child care system. Are you focusing too heavily on the workforce participation aspect?


Simon Birmingham:     We strongly support the early educational opportunities that pre-school and early childhood education services provide to young children. We’ve also put into the child care system very strong safety nets, ensuring that families on very low incomes do have a safety net access for two sessions a week in terms of early childhood education available to them, regardless of the activity test, as well as further safety net measures in relation to children who are at risk or in vulnerable circumstances.


Julie Doyle:      Well that’s for the low income under 65,000, but what about the other families that don’t meet the activity test?


Simon Birmingham:     It does come back to that point that it is a light touch activity test. It’s easy to meet at just four hours a week on average, of not only working or studying but also volunteering. Volunteering can include reading to children at your elder child’s school or working in different charity groups in the local community. We are trying to encourage engagement of course in society more generally through this. Part of that is the workforce participation angle and we’re unashamed in being very proud as a government of the fact that female workforce participation in Australia is at the highest levels ever under the Turnbull Government and these reforms are going to empower more people to try to choose to work the hours or days that suit them and likely drive female workforce participation even higher as a result.


Julie Doyle:      All right, Minister, we’ll have to leave it there. Thank you very much.


Simon Birmingham:     Thank you, Julie.