Interview on Radio 4MW with Anthony Geagea
Topics: Child care subsidy changes

Journalist: Joining us this afternoon on Radio 4MW, I’d like to give a warm welcome to Senator the Honourable Simon Birmingham, Minister for Education and Training, and he joins us to talk about the new child care package.

Good afternoon, Minister Birmingham, and welcome.

Simon Birmingham: Good afternoon, it’s great to be with you.

Journalist: Now, when will the new child care package be introduced?

Simon Birmingham: The new child care subsidy comes into effect from 2 July this year. So, in a little under six months’ time now, Australians will see a replacement of the current complex mix of different rebates and benefits that are paid, in place a streamlined new child care subsidy regime.

Journalist: What will the Child Care Rebate and Child Care Benefit be replaced by?

Simon Birmingham: So, we’ll see a new Child Care Subsidy that is better targeted to give greater levels of support to low income families, and to ensure that the most hours of support is available to those people working the longest hours or studying or volunteering, in terms of different areas of engagement. So we’ve really tried to retarget to give more support to those who need it most, deserve it most, and to make sure that the new Child Care Subsidy is really aiming dollars at those who really require it.

Journalist: Minister Birmingham, can you tell us about the safety net?

Simon Birmingham: So, coupled with the new Child Care Subsidy is around a $1.2 billion Child Care Safety Net. Central to that is an additional Child Care Subsidy that ensures, for families in particular circumstances of disadvantage, that they will have all of their child care fees, their reasonable fees paid; that there is access for families earning less than $65,000 per annum, regardless of the activity test. So these sorts of measures under the safety net are about making sure that we have a fair system where the early education benefits of child care are also available and realised for many people.

Journalist: Minister Birmingham, should parents and other carers plan ahead?

Simon Birmingham: I do really encourage people to look ahead, in terms of their child care activities. That’s one of the reasons why we’ve put a lot of information out there already, including publishing an estimator that’s online for people to access where they can enter their details, the number of hours a week that they work or study or volunteer in their community, the amount of family income that’s earned, and the child care estimator will tell them then how much child care subsidy they will be entitled to receive.

Journalist: Minister Birmingham, who will receive a higher subsidy?

Simon Birmingham: Higher subsidies will particularly go to low and middle income families. What we see is that for low income Australian families, their rate of subsidy will go from presently about 72 per cent or 72 cents in the dollar, and increase up to around 85 per cent. So, a significant growth there. That’s going to leave many families who might have a child accessing child care for three or four days per week, some thousands of dollars potentially better off over the course of a year. It will also see abolition of the $7500 cap that applies to the Child Care Rebate at present. So for many families right now, they would be just over halfway through the financial year, and they might be running out of their Child Care Rebate that they’re entitled to. Under the new system, families earning less than $185,000 per annum face no cap at all, and families earning more than that have a $10,000 cap.

Journalist: Minister Birmingham, can you tell us about the activity test and what are some recognised activities?

Simon Birmingham: So the activity test is quite a light touch. Of course, work counts, but so too does studying or training; so does volunteering, and that can include volunteering in your child’s school, preschool, early education or child care centre; looking for work also counts; mutual obligation activities or receipt of different benefits would count as well. So in that sense, it’s a very sweeping arrangement there, and you only have to be engaging in any of those activities for four hours a week to be able to meet the activity test. But it’s about sending a signal there that to be accessing benefits for child care, people ought to be volunteering in their community, looking for work, working or studying or training to better themselves.

Journalist: Will the new Child Care Subsidy be paid directly to child care providers?

Simon Birmingham: So, of course, this is a subsidy against people’s fees, but indeed, it can and will be paid direct to providers so that families don’t face significant fees that they then have to be rebated for. The Government, once applications are made, can make those payments straight through to child care providers and families need only pay the gap where that’s applicable.

Journalist: Are there any exemptions?

Simon Birmingham: In terms of exemptions for the activity test, as I said, the main exemption is for families earning less than $65,000 per annum, who will have still some access guaranteed outside of the activity test, but there are also then a range of other safety net elements for children who may be at risk or people in families in particularly difficult circumstances to make sure that they get the support they need too.

Journalist: For further information, which website can parents visit?

Simon Birmingham: The simplest thing is to visit education.gov.au, and families can follow the links from there to get more information about the child care subsidy, the changes, and indeed, they can find a link to the child care estimator that can tell them exactly how they’ll benefit.

Journalist: You’re listening to the Senator Honourable Simon Birmingham, Minister for Education and Training. I’d like to thank you for sharing your time with us today. Is there anything further you’d like to add before we finish our talk?

Simon Birmingham: No, look, just thank you very much for the chance to explain how the new system works. We know that around Australia there are some 32,000, 33,000 Indigenous, Aboriginal and Torres Strait Islander children accessing and child care, and we’re determined to make sure that the system continues to provide a valuable service to those children and those families.

Thank you, my pleasure.