Interview on ABC Radio WA Drive with Barry Nicholls
Topics: New child care system

Barry Nicholls: Now, working parents would be very familiar with the child care benefit and that rebate that they can access. However, are you aware that the new rebate comes into effect in six weeks? Now, if you’re currently receiving child care benefits, you actually have to reapply to ensure that you continue to receive them once these changes take effect as of 2 July.

Now, I spoke with the Education Minister – federally – Simon Birmingham a little bit earlier about this.

Simon Birmingham: Well, it’s very important because there are a number of changes in the way in which the new childcare subsidy will be assessed. We’re investing an extra $2.5 billion to provide more support to those families who work the longest hours but earn just low or medium incomes, and we want to make sure that they get every cent they’re entitled to. So, people who might currently receive the old child care benefit or child care rebate should go through to education.gov.au/childcare, follow the links to update their details around how many hours they’re working, what it is their family’s earning, so that when the new child care subsidy comes into effect on 2 July, they do receive every cent they’re entitled to, which is designed to help them work the hours that best suit their family.

Barry Nicholls: Won’t you lose some in the process, though, if you are asking people to reapply?

Simon Birmingham: People aren’t reapplying per se, but they do need to update their details to receive the information. It is a pretty straightforward process. My kids are aged five and seven and occasionally still do after school or holiday school care, and so I’ve gone through the process myself – I sat on the couch at home Saturday night a couple of weeks ago with the iPad on my lap and ticked it all over in about 10 minutes. So, it is fairly quick and simple and straightforward, and I’d urge people to simply get on, get the job done. And for the vast majority of Australian families – around one million families across Australia and I think more than 70,000 in Western Australia – they will receive real financial benefits out of these changes.

Barry Nicholls: This child care cap has been lifted from $7500 per child to $10,000 a year. How did you come to that figure and will it be enough to pay for someone while working fulltime?

Simon Birmingham: Well, what we’re actually doing with the cap on child care support is for families who earn less than around $186,000, is we’re abolishing it entirely, and then for higher income families, it’s being lifted from, as you say, $7500 to $10,000. So, we’re putting big extra support there, because right now there would be many families across Perth and around Australia who are in a circumstance where the level of child care support they receive during the financial year has already run out and so they’re having to pay full [indistinct] on their child care fees, and for some of those families, that means they’re now working fewer hours or their budgets are under much greater strain as they pay those bills.

So, we’ve abolished that cap completely for low and middle income earning families – all those under $186,000 – raised it substantially for others to make sure that they are no longer constrained when they decide how many days to work or how many hours to work in the future.

Barry Nicholls: My guest this afternoon is the federal Education Minister Simon Birmingham. We’re looking at some of the changes to child care rebates that’ll come into effect in six weeks – you might have an experience with childcare in regional Western Australia. If you do – 1300 545 222 or 0448922604 – how will these changes affect you?

Minister, we often talk about trying to get people into regional Western Australia and try and bolster up the workforce. This would be welcome, I’m sure, for people who are wanting to access child care, but there’d be a lot of regional centres across the state where there just aren’t the child care facilities. How do you plan to get more child care workers into regional WA and regional Australia?

Simon Birmingham: Sure. And a huge part of this is to absolutely back in the record levels of workforce participation that we’ve got in Australia at present, particularly female workforce participation is at its highest ever level, and that’s on the back of the Turnbull Government’s significant jobs growth-

Barry Nicholls: Not in regional WA, though.

Simon Birmingham: Yeah, and so how do we make sure that in regional WA or regional areas generally that’s achieved? By a couple of things. We’ve put around $1.2 billion into an additional child care fund, a safety net as such, which is targeted in a number of ways, including to provide additional support for community child care services in areas where they might not otherwise be financially viable, so regional services are getting a significant amount of that funding for community child care support. As well as trying to ensure that in family day care, where services can operate with an educator who cares for just a small number of children in their home, rather than a full, large service long day care centre, that again there’s support there for people to open up and provide more services across regional Australia.

Barry Nicholls: I mean, a lot of people don’t go into child care work because of the pay rate. What can be done, do you think, on that front?

Simon Birmingham: Look, pay rates are very much, at the minimum wage level, a matter for the Fair Work Commission. But in many cases, employers such as Goodstart, one of the nation’s largest child care providers, do pay a lot of their staff above those minimum award wages, and we encourage services to give as much reward and recognition to their staff as they can. But the Government doesn’t ultimately run child care services or employ child care workers or early childhood educators. We, however, do support Australian families to be able to meet the costs and the bills of child care, and these reforms are about helping those Australian families better meet those costs. And for many families, they will be $2000, $3000, $4000 a year better off as a result of these changes because we’re better targeting the support to those who need it most.

Barry Nicholls: What’s the general rationale behind this? Is it to try and ensure we are getting more people into the workforce?

Simon Birmingham: There’s a couple of objectives here. One is to recognise that many families are doing it tough – that child care fees are a big household cost and that where people run out of that support midway through the financial year, they can be a very prohibitive household cost in terms of continuing to stay in the workforce. So, our modelling suggests that around 230,000 Australian families or people will choose to work more or re-enter the workforce as a result of these changes, so it really is expected to dramatically help workforce participation. But more importantly, that helps families by empowering them to earn as much as they can, work the hours that suit them. Of course, everybody wants to spend time with their kids as well, but this is about helping people with choice, choice that ensures child care costs are not a prevention on going to work and earning a quid.

Barry Nicholls: Okay. Simon Birmingham, thank you. Appreciate you coming on this afternoon.

Simon Birmingham: My pleasure, thank you.