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Childcare subsidies: Coalition cautious on mean-testing recommendations Childcare subsidies: Coalition cautious on mean-testing recommendations
(about 2 hours later)
The Abbott government has reacted cautiously to the Productivity Commission’s call for complicated childcare subsidies to be replaced by a single means-tested payment, with the responsible minister arguing that “affordability is an issue for families on any income”.The Abbott government has reacted cautiously to the Productivity Commission’s call for complicated childcare subsidies to be replaced by a single means-tested payment, with the responsible minister arguing that “affordability is an issue for families on any income”.
The assistant education minister, Sussan Ley, also played down the draft report’s suggestion that total funding for early childhood education and care should increase by about $1bn, or that some of the money earmarked for Tony Abbott’s signature paid parental leave policy be diverted.The assistant education minister, Sussan Ley, also played down the draft report’s suggestion that total funding for early childhood education and care should increase by about $1bn, or that some of the money earmarked for Tony Abbott’s signature paid parental leave policy be diverted.
The childcare union and stakeholder groups welcomed elements of the Productivity Commission’s interim findings but sounded concern over others, such as the extension of funding to nannies.The childcare union and stakeholder groups welcomed elements of the Productivity Commission’s interim findings but sounded concern over others, such as the extension of funding to nannies.
The government launched an inquiry into the nation’s childcare and early childhood learning after vowing to look for ways to improve affordability and flexibility.The government launched an inquiry into the nation’s childcare and early childhood learning after vowing to look for ways to improve affordability and flexibility.
The draft report, published on Tuesday, said people often struggled to understand their entitlements under the “complex” existing system which includes two main subsidies: the Child Care Benefit and the Child Care Rebate.The draft report, published on Tuesday, said people often struggled to understand their entitlements under the “complex” existing system which includes two main subsidies: the Child Care Benefit and the Child Care Rebate.
Its central recommendation was to replace these with a single means-tested payment made directly to the parents’ choice of provider.Its central recommendation was to replace these with a single means-tested payment made directly to the parents’ choice of provider.
The government would meet 90% of the deemed cost for families with incomes under $60,000, and this support would decrease in a linear way to 30% for those earning $300,000.The government would meet 90% of the deemed cost for families with incomes under $60,000, and this support would decrease in a linear way to 30% for those earning $300,000.
Modelling in the report indicated that any family with gross income under $160,000 was likely to find mainstream services more affordable under the new scheme, but costs could rise for families above this income level.Modelling in the report indicated that any family with gross income under $160,000 was likely to find mainstream services more affordable under the new scheme, but costs could rise for families above this income level.
Asked on Tuesday about means testing, Ley said: “I just don't want to rule anything in or out. But affordability is an issue for families on any income.”Asked on Tuesday about means testing, Ley said: “I just don't want to rule anything in or out. But affordability is an issue for families on any income.”
Ley emphasised that it was a draft report, containing “interesting” proposals, and the government would make decisions after the final report. She said the system the government inherited from Labor was “pretty much broken”.Ley emphasised that it was a draft report, containing “interesting” proposals, and the government would make decisions after the final report. She said the system the government inherited from Labor was “pretty much broken”.
“I talk to parents across the country who say we feel as if we're designing our work life around our childcare, when what we should be doing is designing our childcare around our working life,” Ley said.“I talk to parents across the country who say we feel as if we're designing our work life around our childcare, when what we should be doing is designing our childcare around our working life,” Ley said.
The peak body, Early Childhood Australia, said it looked forward to discussions over the structure of the proposed new subsidy. Its chief executive, Samantha Page, said the existing system was “complicated, defective and failing to address the rising cost of early childhood education and care”.The peak body, Early Childhood Australia, said it looked forward to discussions over the structure of the proposed new subsidy. Its chief executive, Samantha Page, said the existing system was “complicated, defective and failing to address the rising cost of early childhood education and care”.
The union representing childcare workers said early childhood education and care was “chronically underfunded” and employees were leaving because of inadequate wages.The union representing childcare workers said early childhood education and care was “chronically underfunded” and employees were leaving because of inadequate wages.
David O’Byrne, the acting national secretary of United Voice, welcomed the simplification of the funding model but was worried about the easing of some requirements under the national quality framework.David O’Byrne, the acting national secretary of United Voice, welcomed the simplification of the funding model but was worried about the easing of some requirements under the national quality framework.
O’Byrne said the commission was “clearly hamstrung” by the government's terms of reference, which asked for proposals within the existing funding envelope, but the report had nonetheless recommended increasing spending on this area from about $7bn to $8bn per year. “That is a clear statement from the Productivity Commission that more funding is needed,” O’Byrne said.O’Byrne said the commission was “clearly hamstrung” by the government's terms of reference, which asked for proposals within the existing funding envelope, but the report had nonetheless recommended increasing spending on this area from about $7bn to $8bn per year. “That is a clear statement from the Productivity Commission that more funding is needed,” O’Byrne said.
Ley indicated the government was not likely to increase funding.Ley indicated the government was not likely to increase funding.
“What we've said is we'll look at this within the existing framework, so we have budgeted $28.5bn over the next four years,” she said.“What we've said is we'll look at this within the existing framework, so we have budgeted $28.5bn over the next four years,” she said.
“That's a strong financial position from the commonwealth so I believe there is plenty of scope within that funding envelope to build a better system and what I learned from Labor's attempts was that just adding dollars doesn't necessarily get it right. When it comes to flexibility there are many things we can do that aren't necessarily attached to dollars, so I'm confident and optimistic that we can do better and we will.”“That's a strong financial position from the commonwealth so I believe there is plenty of scope within that funding envelope to build a better system and what I learned from Labor's attempts was that just adding dollars doesn't necessarily get it right. When it comes to flexibility there are many things we can do that aren't necessarily attached to dollars, so I'm confident and optimistic that we can do better and we will.”
Labor seized on the commission’s criticism of the Coalition’s $5.5bn-a-year paid parental leave (PPL) scheme.Labor seized on the commission’s criticism of the Coalition’s $5.5bn-a-year paid parental leave (PPL) scheme.
The commission said the Coalition government’s planned changes – including moving from a minimum-wage to a full-replacement-wage model – would make the scheme “more generous to many mothers” but it was “unclear that this would generate additional significant maternal and child health benefits”.The commission said the Coalition government’s planned changes – including moving from a minimum-wage to a full-replacement-wage model – would make the scheme “more generous to many mothers” but it was “unclear that this would generate additional significant maternal and child health benefits”.
The commission said a number of submissions and the government’s national commission of audit had suggested that some of the funding be diverted to funding childcare on the basis that “childcare is a greater barrier to returning to work for mothers than the availability of PPL”.The commission said a number of submissions and the government’s national commission of audit had suggested that some of the funding be diverted to funding childcare on the basis that “childcare is a greater barrier to returning to work for mothers than the availability of PPL”.
Labor's families and payments spokeswoman, Jenny Macklin, said the report undermined Abbott's claims that his "hugely expensive scheme" would improve female workforce participation.Labor's families and payments spokeswoman, Jenny Macklin, said the report undermined Abbott's claims that his "hugely expensive scheme" would improve female workforce participation.
"It also confirms what Labor, the business community and almost all of Tony Abbott’s own colleagues have been saying for years: Tony Abbott’s signature scheme is a dud," Macklin said."It also confirms what Labor, the business community and almost all of Tony Abbott’s own colleagues have been saying for years: Tony Abbott’s signature scheme is a dud," Macklin said.
"Today, the Productivity Commission, which Tony Abbott once described as 'our most respected policy making body', has confirmed this money would be better spent elsewhere. Tony Abbott should heed the mountain of evidence and scrap his unfair and unaffordable scheme.""Today, the Productivity Commission, which Tony Abbott once described as 'our most respected policy making body', has confirmed this money would be better spent elsewhere. Tony Abbott should heed the mountain of evidence and scrap his unfair and unaffordable scheme."
Ley said paid parental leave and childcare were “separate” policies and indicated the government would not consider changes to the signature scheme.Ley said paid parental leave and childcare were “separate” policies and indicated the government would not consider changes to the signature scheme.
“I know that the [Productivity Commission] has made some comments and that's a reasonable thing for it to do; this is a draft report [and] it's entitled to have a view, as do many other people who've put submissions in, but these are two separate policies,” she said.“I know that the [Productivity Commission] has made some comments and that's a reasonable thing for it to do; this is a draft report [and] it's entitled to have a view, as do many other people who've put submissions in, but these are two separate policies,” she said.
“I see it as a separate policy from childcare policy and I always feel frustrated on behalf of families who say we can’t afford to step away from the workforce to have a child because we can’t meet our mortgage payments, we can’t meet our household bills, we just might put it off for two or three more years. That’s not a good thing.“I see it as a separate policy from childcare policy and I always feel frustrated on behalf of families who say we can’t afford to step away from the workforce to have a child because we can’t meet our mortgage payments, we can’t meet our household bills, we just might put it off for two or three more years. That’s not a good thing.
“It’s also not a good thing if parents feel, as they sometimes do, that they need to rush back to work in order to pick up the household bills and get the finances back on track, when they really could be spending those vital six to 12 months with their baby, bonding with their baby, in those vital months of life – completely separate policy.”“It’s also not a good thing if parents feel, as they sometimes do, that they need to rush back to work in order to pick up the household bills and get the finances back on track, when they really could be spending those vital six to 12 months with their baby, bonding with their baby, in those vital months of life – completely separate policy.”
Ley said the commission’s suggestion for funding nannies – as long as they were appropriately qualified and regulated – was “about parental choice”.Ley said the commission’s suggestion for funding nannies – as long as they were appropriately qualified and regulated – was “about parental choice”.
"We've heard long and loud from families who cannot get childcare outside the long day care setting, so we do need to be flexible, but what I'd say about nannies is there would not be funding for nannies or in-home care outside of our existing formal regulated system,” she said."We've heard long and loud from families who cannot get childcare outside the long day care setting, so we do need to be flexible, but what I'd say about nannies is there would not be funding for nannies or in-home care outside of our existing formal regulated system,” she said.
Louise Dunham, managing director of the agency Placement Solutions, welcomed the proposal, saying it would “open up new opportunities for women wanting to return to work or develop their careers, rather than seeing their colleagues being promoted above them”.Louise Dunham, managing director of the agency Placement Solutions, welcomed the proposal, saying it would “open up new opportunities for women wanting to return to work or develop their careers, rather than seeing their colleagues being promoted above them”.
“Nannies aren’t suitable for everyone’s situation but for many parents where both caregivers work full time, the convenience and peace of mind of having the childcarer in the home is the preferred, or sometimes the only, viable option,” Dunham said.“Nannies aren’t suitable for everyone’s situation but for many parents where both caregivers work full time, the convenience and peace of mind of having the childcarer in the home is the preferred, or sometimes the only, viable option,” Dunham said.
Labor's education and early childhood spokeswoman, Kate Ellis, questioned the nanny plan in the light of the government's decision not to increase overall funding.
"Any new programs for families, such as subsidies for nannies, can only be funded through cuts to the existing childcare services that families rely on every day, and I know many would be deeply concerned about this," she said.