Labor’s stop-gap approach to child care is history repeating itself – faster fee increases for families, stop gap policy and $3 billion more on Bill Shorten’s unfunded spend-o-meter.
Minister for Education and Training Simon Birmingham said just like the last time Labor tinkered with child care policy, today’s announcement puts no downward pressure on child care fee increases, is no more than a short term band-aid and, if anything, will accelerate costs for families.
Minister Birmingham said Julia Gillard and Kate Ellis presided over a 53 per cent child care fee increase in fees for families between 2007 and 2013 – or a $73 increase per week for average families.
“Child care costs are a challenge for many Australian families but over the past three years we have seen a halving of the cost increases faced by Australian families,” Minister Birmingham said.
“Under the Turnbull Government the rate of fee increases have reduced to around 3.6 per cent per year compared to an average of 7.8 per cent per year during Labor’s time in government, which spiked at 12.5 per cent in 2009 after their last effort at Child Care Rebate changes.”
Average early education and care fee increase (June quarterly data)
Source: Department of Education and Training, June 2015 quarter Early Childhood and Child Care in Summary
“Labor may be upping the subsidies available but they are abandoning our caps on the subsidies child care providers are paid, meaning their changes are far more likely to lead to price rises and taxpayer dollars going into provider profits rather than helping hardworking families.
Minister Birmingham said by abolishing the activity test, Labor are also spending more to pay for child care for people who are not working, studying or volunteering – making it even harder for families who need to find a place so they can work.
“The Coalition’s national economic plan includes the most comprehensive set of reforms to child care in a generation, to make child care more affordable, flexible and accessible for families and children.
“Our $3 billion in additional child care investment is targeted towards those working the longest hours but earning the least, yet Labor wants to spend more money for parents that don’t require child care in order to go to work.
“We’re focused on helping families, particularly the 230,000 families who are expected to join the workforce, or work more hours, with the support of our fully funded child care package.
“Our reforms include abolishing the $7,500 cap to ensure parents on family incomes of $185,710 or less aren’t limited by a cap on the amount of child care fee relief they can access.
“The abolition of the cap for four in five families, including all low and middle income families, is a permanent solution to an ongoing problem in the child care system. Labor's increase of it to $10,000 is just a band-aid. What will they do in two or three years’ time when more families are again hitting the cap given they have no real measures to constrain fee increases?
Minister Birmingham said ‘to add insult to incompetence’, Labor had failed to identify the savings needed to pay for their stop-gap measures and that they are an unfunded magic pudding.
“We’ve identified a clear plan to pay for our child care policy but Labor seem to think you can just put it on the national credit card,” Minister Birmingham said.
“With no identified savings, you can add $3 billion in child care to billion-dollar Bill’s spend-o-meter that will certainly end up only hurting families’ hip pockets.
“Today’s announcement is another example of Labor trying to walk both sides of the street on child care as it did with the school kids’ bonus, pension asset test and the company tax cut, and we know Australian families will suffer.
“By continuing the status quo and simply increasing the cap and rebate, the question for Bill Shorten is how does his plan put long-term downward pressure on costs for Australian families?”