Interview on Sky News First Edition with Kieran Gilbert
Topics: New child care package; Newspoll
Kieran Gilbert: Returning to one of our earlier stories, and the new child care reforms have come into force. Let’s bring in the Education Minister Simon Birmingham. Minister, thanks very much for your time. I know this has been pitched as about greater equity in the system but still 279,000 families are going to be worse off aren’t they, under this?
Simon Birmingham: Well, good morning, Kieran. This is about providing more support for more families in a better targeted way. So around one million Australian families are expected to benefit from these changes which ensure that the additional $2.5 billion of support the Turnbull Government’s putting into the child care system delivers the greatest number of subsidised hours of care to the families working the most hours, the greatest rate of subsidy in support to the families earning the lowest incomes. Yes, it does taper out for families earning more than $350,000 per annum. Now, that of course is something I think most of your viewers would think is a very fair and generous cap. And yes, there is an activity test but a very light touch one at around four hours per week on average of working, studying, volunteering, training, caring, et cetera, that people would undertake to meet that activity test.
Kieran Gilbert: Yeah, in terms of the cap, that’s right I think a lot of people- no one’s going to say if you’re earning $350,000 you’re struggling. But the question is, is it a welfare measure or a productivity measure? And people who are earning more also have greater capacity not to go back to work if it’s going to cost $40,000, $50,000 a year for their child care. So is it welfare or is it productivity, what’s the focus?
Simon Birmingham: Well Kieran, this is about both the national productivity and support for individual families. So, our estimations are that around 230,000 Australians will choose to increase their level of workplace participation as a result of these reforms. So, it clearly benefit very much the national economy by lifting that degree of workforce participation in which under the Turnbull Government is already at a record high and particularly notably female workforce participation stands at a record high in the Turnbull Government. But also then for individual families, the abolition of the $7500 cap on the child care rebate for all families earning less than around $187,000 per annum, well, that’s going to mean those families no longer run out of child care support part way through the year. We know that around 100,000 Australian families have spent the last few days, weeks or months basically going to work to pay the child care bills because they had run out of support on low and middle incomes. We’re abolishing that cap which means those families can choose now to work an extra few hours or an extra day without child care cost being a barrier to them.
Kieran Gilbert: Yeah, and you spoke about the numbers of extra hours for those receiving the subsidies, have you done any modelling on the reduced hours for those who will no longer receive the subsidy? And as I say, it’s not arguing a welfare measure, it’s more a productivity measure. If you want women to go back into the workforce and they’re not receiving that subsidy, well why would they? That’s the point.
Simon Birmingham: Well Kieran, the individuals who you quoted in the first question who fall into the category of not being part of the nearly one million Australian families who are better off, are individuals either in those very high income family brackets or individuals not meeting the four hours per week activity test. What we have not done, though, is model what you call second round effects, indeed how many people will choose to change their activity, that 230,000 I spoke of before, who might increase their workforce participation in terms of that impact on the reform. So, we would expect that even though, yes, there’s an analysis of people who if they don’t change their behaviour at all they might be worse off, many of those individuals will start to volunteer at their local school, will decide that actually because there’s more support for child care fees they’re able to go back and look for work or undertake more work than they have previously. So we actually anticipate that what we will see is a real benefit to the vast majority of families already in the system, around one million Australian families and they’re going to be better off on average to the tune of $1300 per child per annum according to analysis. That’s nothing to be sneezed at. That’s a lot of extra support for the family budget and a lot of extra capacity to be able to work that extra shift or that extra day.
Kieran Gilbert: Been suggestions recently of price increases that would gouge into the increased subsidies. Have you spoken to child care providers about this and urged them to keep things in check on that front in terms of price increases, because it’s already very very expensive as many of our viewers would agree with?
Simon Birmingham: Well, the first thing we’ve done is act on the recommendation of the Productivity Commission, which was to put in place a benchmark price against which the new child care subsidy is paid. And so the Productivity Commission identified this as a way of really trying to keep a lid on future fee increases and it’s the first time really that the child care subsidy system has put in place a mechanism to keep fee increases down into the future. But of course we will be monitoring this situation very, very carefully and I expect that child care providers ought to do the right thing, keep their fee increases to the same type of level that they may have done in previous years or lower, given some years we saw terrible spikes, and that they ought to pass on the maximum benefit of this additional investment under the new child care subsidy to working Australian families.
Kieran Gilbert: We’re now at the start of the long winter break, it’s a very much campaigning winter break ahead of the by-elections on 28 July. Are you positive about the numbers you’re seeing in today’s Newspoll?
Simon Birmingham: Kieran, it’s for the Turnbull Government, still very much a governing period of time. That’s why we’re implementing these new child care reforms today and of course we’ll continue to go about making sure Australians understand the things we’re doing to help them through tax relief, both for individual households as well as for Australian businesses to make sure they’re competitive. And what’s become very apparent if it wasn’t already over the last week is that Bill Shorten just wants to reach further into the pockets of hardworking Australian families, into the pockets of hardworking Australian small and medium-size businesses and that, of course, is just going to cripple our economy in future and devastate job growth in future.
Kieran Gilbert: But what Bill Shorten did do is recognise he’d made an error and fixed it last week in terms of his changing on the tax cuts already legislated. People welcome the fact that politicians can admit an error and fix it quickly, that’s what he’s done.
Simon Birmingham: Typically it was another tricky, shifty Bill Shorten fix, though. Taxes for small businesses will still be higher under a Shorten Labor government than they would be under a Turnbull Coalition government. So, the reality there is that if you are- if you are out there toiling away having put your house on the line investing to start a small family business, you will pay more tax under Bill Shorten than you will under Malcolm Turnbull, just as for many Australian income earners they will pay more tax, for many retirees they will pay more tax, for anybody who works and saves hard and buys a small rental property, they will pay more tax. Ultimately there’s a common theme and pattern here and last week’s backflip and back down doesn’t shy away from the fact or get away from the reality that Bill Shorten just has a vision for Australians to pay a whole lot more tax rather than any vision for how we grow our economy, create more jobs, create better paying jobs, that’s what the Turnbull Government’s reforms are delivering and will continue to deliver.
Kieran Gilbert: Well, there’s more support than many might have anticipated for the company tax cuts. The polling still shows that the Coalition would lose an election if it were held today. I guess that’s a sobering number that remains despite some improvements elsewhere.
Simon Birmingham: Look, I’ve been getting a pretty clear message across the electorate, since particularly the Budget, that Australians are increasingly understanding that the Turnbull Government’s plan, our plan for a stronger economy is coming together which is why we’re able to deliver tax relief to households, why we’re bringing the budget back into balance, forecast to be one year earlier than expected, while still being able to deliver the essential services investment in our schools, our hospitals, in an improved child care system. These are all important things for Australians. And I think they are seeing that Australia is increasingly on track under the Turnbull Government to be able to get the priorities right, whereas with Bill Shorten there really is a risk that Australia just cannot afford the high taxing, high spending mantra that Labor would bring back.
Kieran Gilbert: But the fact is on a two party basis, you’re still trailing despite the Prime Minister improving his popularity and enhancing his leader’s preferred PM. Why is there that disparity, how do you close that?
Simon Birmingham: Well, Kieran, you can commentate on the intricacies of the poll and one or two points here or there. For us, we’re going to keep working on governing between now and an election that’s due in the middle of next year. And of course, in that time we’re going to keep working to make sure that Australians get the maximum benefit from our investment in the new child care subsidy, that they also understand just how the tax relief we’re offering them is going to benefit them. And yes, we will keep championing the fact that Australia needs to be competitive internationally in terms of our business tax rates, that small or medium businesses, or even larger Australian businesses shouldn’t be paying the second highest tax levels in the OECD just after Portugal. They should be able to actually compete with others who are in the export market against Australian businesses seeking to steal export opportunities, steal Australian jobs. That’s why we must be competitive.
Kieran Gilbert: Minister, finally, Senator David Leyonhjelm made some appalling comments last week in the Senate. He repeated them yesterday in relation to Senator Sarah Hanson-Young, what are your thoughts on that intervention from Senator Leyonhjelm?
Simon Birmingham: It’s certainly not the way that I conduct my politics. I don’t believe that that type of commentary has any real place in decent fair public policy and ultimately, of course, I’ve seen your comments, Kieran, about Sky and the way the issues were presented or handled. But I would expect that apologies would be the appropriate order of the day and that frankly people ought to be a little bigger and better than that.
Kieran Gilbert: Minister, I appreciate your time. Thank you.
Simon Birmingham: Thank you.