Interview on ABC News Breakfast with Del Irani and Virginia Trioli
Senator Xenophon and South Australia;  Thousands of families hitting the child care rebate cap; Making child care more affordable, accessible and flexible; Supporting vulnerable families

Del Irani: Now, South Australian Independent Senator Nick Xenophon is under attack this morning for thwarting the Federal Government's proposed welfare cuts.

Virginia Trioli: Fellow South Australian Senator and Education Minister Simon Birmingham is in our Parliament House studio and joins us now.

Senator, good morning. Welcome to News Breakfast.

Simon Birmingham: Good morning, Virginia.

Virginia Trioli: First of all, I’ll just briefly get you to respond to the Daily Telegraph’s description of Adelaide as a backwater. 

Simon Birmingham: Well there’s not a lot that I agree with in that Daily Telegraph story. Look, South Australia has a number of challenges at present, I do agree with their highlighting of the energy problems in SA in particular and that’s certainly not helping investment and it’s not helping jobs growth in the state that has the highest unemployment in the nation. 

But South Australia is a state that I am incredibly proud of, it produces the nation's greatest wines, it does have strong exports, but of course, we need to do more. And the State Government there, in particular, needs to do more to guarantee energy supply to make investment more attractive to turn around the situation. 

Virginia Trioli: Okay. We’ll later on get to see if you agree with the description of Nick Xenophon as a self-absorbed politician, but that’s maybe for a bit later.

Look, something that’s concerning you today, is the data that you’re releasing that shows that thousands of family have already hit that child care assistance cap just a few weeks into the new year – the cap of $7500. But that cap, that policy, has been in place for quite some time now so it’s all very well in the context of this argument with the crossbench to suddenly point at that cap when it’s been a policy that your government’s been happy to stand by for quite some time. This is not the fault of the crossbench.

Simon Birmingham: Well that policy is part of, yes, a long-standing construct of the current child care model, but of course it’s …

Virginia Trioli: [Talks over] So you should have fixed it quite a while ago. 

Simon Birmingham: … but of course it’s a problem that is getting worse as each year goes by, Virginia. Now we’re indexing the cap for the first time in a number of years, it was frozen under the previous Labor government, so we’re going to index it to try to ease that pressure before the new child care model comes into place. 

But the Turnbull Government has a policy to fix this and we want the Australian Senate to help us implement that policy. And our policy is to abolish that cap that sees so many families – around 3600 already this financial year and tens of thousands more each month up to the end of June – falling off a financial cliff in terms of the financial support they get for their child care bills. And the result of that, for far too many families, is they choose to work fewer days or fewer hours or they end up going to work for the last couple of months for the financial year just to pay the child care bills. And we’ve got a solution to that and that is before the Parliament and we want to see it legislated.

Virginia Trioli: Senator, I get that, but I guess what I am asking you is really what the purpose of a conversation between you and me about this is? Because to whom are you speaking? As I mentioned the families across Australia who have had to deal with this $7500 cap have had to cope with that for years now and it runs out and it runs out really early. So are you directly addressing Nick Xenophon with this conversation with me this morning? Are you not trying to speak to him directly yourself?

Simon Birmingham: We are- I spoke to Nick again only last night. And we will …

Virginia Trioli: [Interrupts] And how did that go?

Simon Birmingham: Look … Promising conversations is the best I can say there. That I think we can …

Virginia Trioli: [Talks over] Can you give us an indication on whether he is going to negotiate with you about this?

Simon Birmingham: No, I am not going to put words in Nick Xenophon's mouth for him because that would not help negotiations on these discussions at all. But, Virginia, if we weren't out there selling our policies, if we weren’t explaining the problems we are trying to solve for Australian families, you and many other commentators would be the first to criticise us. So I am here explaining that there are real problems for the Australian families. Now the 96,000 who are going to hit the cap this year of course know those problems. 

Virginia Trioli: Yes.

Simon Birmingham: People like me who have young children in the child care system and are speaking with other parents all the time know those problems. But many of your viewers would not appreciate how the child care system works, would not know why it is that it’s so critical we make these changes so that’s why I’m here explaining them to your audience, hoping that we can build more support, because the more support there is, then yes, the more pressure there is. Not just on Nick Xenophon, but frankly on Bill Shorten and the Labor Party, who have got no solutions and no policies in this area to come to the table and actually help us fix what is a real problem, particularly for the hardest working and lowest earning Australian families.

Virginia Trioli: So I want to go to a report in The Australian today that shows the most vulnerable young children who stand to gain the most from early education would actually have their support cut back or axed entirely under the package that you want Parliament to pass. Why are you doing that?

Simon Birmingham: Well there are some elements of that report that aren’t entirely accurate. Firstly, in terms of children who are in state care, there are no changes to the way support applies there. They are of course the responsibility of state governments, there are safety nets such as the universal access to preschool that apply. But secondly, more generally, we have built into our child care reforms a safety net that applies for children in all low income families to be able to access two sessions of early education care a week, regardless of the activity of their parent. But beyond that, we do think it’s fair and reasonable with that safety net there, with the early access to preschool for all children, that beyond that child care subsidies should be for people who are working or studying or volunteering and that we actually target support, particularly more support, to families who are earning the least but are still out there working very hard.

Virginia Trioli: Well the article actually argues that it is manifestly unfair, as you concede there, that there is sort of a different outcome for those kids. The crossbench is actually then, some might argue, doing Australians a favour by not passing a manifestly unfair bill.

Simon Birmingham: Well it’s not a manifestly unfair bill. I stress again, children in low-income families, even if parents aren't going to work, aren’t studying, aren’t volunteering, will still get access to two sessions a week of care under our reforms.

Virginia Trioli: The minimum.

Simon Birmingham: And that’s an important minimum to ensure it there. That’s in addition to the early access to preschool, the 15 hours that’s guaranteed under the universal access to preschool arrangements. So these are all taxpayer funded supports that exist throughout the system for vulnerable children. And that ensures continuance there, whilst doing so in a way that minimises some of the waste. Because at present, we have far too many circumstances where sessions of care are billed for 10 or 11 or 12 hours, even though children are only there for five or six or seven. So we actually want to make sure we are better targeting the model to ensure taxpayers and parents are only paying for what is used, which is why working towards two sessions of care for children rather than a big entitlement that just gets gobbled up by child care providers is clearly not the right way to go.

Virginia Trioli: Minister, more generally, just how committed really is the Government to the full funding of the NDIS? Is that full funding for your government, in your view, is that a high priority?

Simon Birmingham: It is a high priority. It will be delivered. And in the end, the only ways that it can be delivered will be either through higher debt, redirection of spending from somewhere else or higher taxes. Now, we will pay for it one way or another through those different mechanisms. What the Government has said very clearly is that we would rather, as a government, prioritise our spending and ensure that we are paying for the National Disability Insurance System, that we are paying for a child care model by redirecting spending from elsewhere in government rather than see children face higher government debts that they'll have to deal with in future or rather than seeing higher taxes that hit the families today and hurt the nation’s competitiveness and jobs and investment. But ultimately, we will have to do whatever is necessary, but we will deliver the NDIS. There is no doubt about it.

Virginia Trioli: Okay, maybe we won’t discuss this morning whether Nick Xenophon is self-absorbed that might compromise negotiations.

Simon Birmingham: Well I said I disagreed with much of that story and that’s probably part that I disagree with too.

Virginia Trioli: Fair point. Good to talk to you, Minister. Thank you.

Simon Birmingham: Thank you.

Del Irani: It’s probably good he got that last line in, especially if negotiations are still continuing. [Laughs]

Virginia Trioli: I’d say that was a wise attempt at sort of, you know, trying to curry favour if you like.