Childcare rebate: Malcolm Turnbull to announce unified bill in attempt to pass long-delayed reform

Latest News | Feb 01, 2017


Prime Minister Malcolm Turnbull will use an address at the National Press Club today to unveil a new strategy to get his Government’s childcare changes through Parliament.

The Government wants to streamline multiple childcare subsidies into one means-tested payment, with the highest amount going to the lowest income families.

It also wants to remove the annual cap on the amount of childcare rebate paid to most families.

But the Government has consistently argued the package cannot go ahead without cuts to family tax benefits to pay for it.

When Parliament resumes this month the Government will introduce a new childcare bill, combining these two elements into one piece of legislation.

The Government wants the legislation passed early this year so the childcare package can come into effect on the scheduled start date of July next year.

The changes to child care have been on the table since 2013 and families and childcare providers are becoming increasingly frustrated by the delays.

They argue the current subsidies are woefully inadequate, particularly the childcare rebate which covers families for half their costs.

But it is capped at around $7,500 per child for each financial year.

Canberra mother Jacqueline Cooke hit the annual cap in December, which means her childcare fees have now doubled until the end of June.

“We had a few glorious months of having some disposable income and then straight back into over two-thirds of my wages going on child care,” Mrs Cooke said.

“I had an awful moment when I was at the supermarket and thought I had heaps of money in my account because I just got paid. But oh no, I didn’t realise the rebate had run out so all of my pay had gone.”

Doubling child care cost ‘pinch’ for a lot of families

Childcare provider Goodstart Early Learning estimates 114,000 families will hit the rebate cap this financial year.

Advocacy manager John Cherry said in 2008 the rebate lasted almost the entire year for a family using a typical service full-time.

Now he says it lasts only 30 weeks, leaving many families short-changed.

“We know that for a lot of families it really is a pinch to see their childcare costs double for the rest of the financial year,” Mr Cherry said.

“We know that for some families, they actually pull back on their workforce participation or others have to pull back on other costs.

“But the worst thing is that for a lot of families, they know they’re going to hit the top of the rebate so they decide that one of us can’t work full-time.

“We did a survey last year of over 2,000 families that found 55 per cent of families said if they weren’t hitting the rebate cap they would be considering increasing their workforce participation.

“So, there’s a massive economic cost to Australia, to employers, to the economy.”

Hoping child care won’t get ‘stuck in politics’

Samantha Page from Early Childhood Australia said families had been waiting too long for extra government support.

“They’re being very anxious about the cost of child care and how they’re going to manage that in the future and having to make really difficult decisions as a family about how they can best juggle childcare responsibilities and going back to work,” she said.

Ms Page supports the general direction the Government is taking with its proposed changes but wants the package to guarantee 15 hours a week of subsidised child care for all children.

She is also critical of the decision to link the childcare package to cuts to other family payments.

“The childcare package pays for itself, it pays for itself just in terms of improvements in workforce participation,” she said.

“The real economic benefits are in children’s development outcomes over the long term and particularly where we can increase the participation of disadvantaged children.

“We can see major economic benefits from that over the long term.”

Mr Cherry also argues the Government has other options to pay for its childcare boost.

“We’re certainly hoping child care doesn’t get stuck in the politics. I mean, this is a no-brainer for Government, it’s fundamental part of jobs and growth,” he said.

“It’s a win-win for families, it’s a win for employers, it’s a win-win for the economy and it’s a win-win for workers and children.

“We’re really hoping that after waiting four years for this package to come through, that hopefully this time it will be delivered.”


Originally published in the ABC.