PRIME MINISTER:
It is great to be here at Crace and what a wonderful centre. Isn't it fantastic talking to the kids and to their parents and to hear the mothers say how our child care reforms will make it easier for them to get back to work, get more child care, they'll be able to have full-time work rather than part-time work. These are reforms that back hard-working Australian families. They allow mums and dads to ensure that their kids are being looked after, getting all this fantastic early learning here. You can see the difference that is going to make, setting those kids up for the future, but ensuring that their parents are able to stay in the workforce and keep producing, demonstrating that commitment.
We need to grow our economy. Now, this is a very big social reform. What we're proposing, and we're seeking the support of the Senate, are reforms that will make child care more affordable and more available, especially for families on lower incomes. It will remove the $7,500 cap. You can see how well received that news is from the mothers in the early learning room where we were a moment ago. That is going to make an enormous difference.
So more affordable, more available, backing hard-working Australian families and ensuring that these parents who we've met today, and thousands more like them, will be able to stay in the workforce, stay engaged and their children will have the benefit of this great early learning.
I'll ask Birmo, the Education Minister, to say a bit more about the reforms.
MINISTER FOR EDUCATION:
Thanks very much, PM. These are exciting reforms because they are the most comprehensive reforms to the way in which Australian families are supported to access early learning and child care that the nation has ever seen.
We are abolishing the existing child care rebate, child care benefit, complicated mix of different payments and replacing them with one new child care subsidy that is better targeted to provide the greatest assistance to the most hard-working, lowest-income families in Australia. To make sure, that it is a support payment that supports people to participate in the workforce as it suits them and their families.
That's what we've heard today from the families here at this wonderful early learning centre. Those families have told us that these changes will enable them to make easier decisions to go back to work, to work more hours, to work the hours that suit them.
Our reforms will benefit around one million Australian families. They will do so by better targeting payments to low and middle-income families, which will see the lowest-income Australian families able to access child care at about $15 a day. For those families, their rate of subsidy will go up from about 76 per cent to 85 per cent support of the cost of accessing high-quality early learning.
Importantly, as the Prime Minister said, we're abolishing the $7,500 cap that many families face. It's a cap that means around March or April each year, for many families at present, they run out of support in relation to child care payments. That's a horror for budgeting. It's a horror for choosing to return to work or knowing how many days you can afford to work. So for those families in abolishing that, around 90,000 Australian families will no longer face a cliff that they fall off presently in relation to their child care support, and a further 40,000 higher-income families will see that $7,500 cap lifted to $10,000.
Importantly, all of these reforms provide tangible, practical benefits, not only for those families, but to ensure access for our most vulnerable children to high-quality early learning. This package involves a $1 billion safety net, which guarantees those children who most need it can get the access to the early learning they need and of course it's coupled with important reforms to better support parents straight after the birth of their children to give that support to their children, which Christian will say a few words about.
MINISTER FOR SOCIAL SERVICES:
Thank you, again. It's very pleasing to be here. This is my fourth visit to a child care centre in 10 days. The three last week were dropping off my own little boy and the benefits of child care are absolutely enormous.
So having a simple, fair, accessible and affordable system that Simon has spoken about is an absolute critical thing for parents and a key reform that this Government wants to drive.
That reform will be introduced into Parliament this morning in a Bill. That Bill will do three things. It will reform child care in the way that Simon Birmingham has just described, to give all parents a chance at accessible, affordable child care. The second thing it will do is produce the budget savings that can pay for that child care reform as well as help this nation move back to surplus. There are also changes that will benefit families in that Bill.
With respect to paid parental leave, the bill will provide that 96,000 Australian families will get two extra weeks of paid parental leave, which represents $1,300 extra during that key period after the birth of a child for those 96,000 families, and they represent the families with the lowest incomes, accessing paid parental leave.
The Bill will also ensure that families with Family Tax Benefit A will have $20 extra a fortnight to help them with that rolling fortnightly cycle of bills and all of the things that normal families have to cope with in terms of the cost of living.
We are introducing a Bill that fundamentally reforms child care. That helps return the nation to surplus. That gives more money to low income families in terms of their paid parental leave and an extra two weeks. And gives more money to families on the fortnightly cycle.
So we’re achieving a very big trifecta. We're very much hoping for the support of the crossbench and I suspect even Labor might have a look at this bill because it does all of the things that Australian families are crying out to have.
JOURNALIST:
Minister, you’ve just said that this Bill will – the cuts in the Bill will help pay for the child care reforms as well help return the budget to surplus but the child care reforms which haven’t changed, it’s slated to cost an extra $3 billion a year. The cuts that were proposed previously didn’t cover all of that cost and now you have reduced those cuts even further so how does this both pay for the child care reforms and help repair the budget?
MINISTER FOR SOCIAL SERVICES:
We have to remember, of course, that we were successful in some of the Family Tax Benefit savings already in the first Omnibus Bill - when the Labor Party agreed to end the end of year supplements for families earning over $80,000. Now it is the case that we’ve had to cut our cloth and the savings are less than we would’ve hoped for in the original configuration of this policy but we have always said from the outset that if you’re going to have wide ranging, critical reform to child care, it has to be paid for. The source of funding is through reasonable changes to Family Tax Benefit. And what we’ve essentially said is that for hardworking Australian families who need reform to child care, isn’t it better to have better, more accessible, less inflationary child care and have $20 extra a fortnight that helps you with that rolling cycle of fortnightly bills. But that comes from savings by drawing down and ending end of year supplements and we just think that that is a fairer system and focuses those payments on hardworking Australian families in terms of child care.
JOURNALIST:
In terms of the minimum hours of child care provided by this, on average, it is 12 hours. The industry says the bare minimum is 15 hours. Are you listening to the industry? Why not make it 15?
MINISTER FOR EDUCATION:
We’re absolutely speaking with the industry and the child care sector and early learning experts and indeed colleagues in the Senate crossbench to make sure that the final construction when it is passed by the Senate delivers what is necessary for Australian children.
Now we believe that two days a week and access to high-quality early learning is appropriate and our belief is that in terms of families who don’t meet the activity test of working, studying or volunteering – 12 hours can provide for two effective six hour sessions. And there are discussions of course with the industry about whether that’s viable to deliver.
But what we don’t want to see is a situation where taxpayers are being asked to pay for hours of care and support that aren’t frankly being used or accessed. There is no point the taxpayer subsidising and families having to subsidise care that isn’t actually being utilised and which with a poorly constructed safety net could be the case. So we have a significant safety net, those discussions are absolutely ongoing with both the crossbench and early learning experts.
JOURNALIST:
So it could be increased to 15 hours, in line with what the industry wants? Are you saying you are open to that?
MINISTER FOR EDUCATION:
We’re having discussions to make sure that children can access two days a week of quality early learning in two appropriately hour timed sessions of care.
JOURNALIST:
You said that the savings will cover the child care reforms plus will help return the budget to surplus. What would be those extra savings exactly?
MINISTER FOR SOCIAL SERVICES:
Well the savings come from two basic areas. There are 16 measures in the Omnibus Bill that we’ll bring forward. The two ones I think that people are most interested in are Family Tax Benefits. Back in the years of John Howard when there was a massive surplus, they invented a thing which was an end of year supplement and over three years we will close down that end of year supplement. That represents a very significant saving.
The other saving is rebalancing paid parental leave so that we ensure that this situation doesn’t persist, which we have at the moment, where one mum can get $44,000 in paid parental leave for an 18-week period, another mum only gets $12,000. Where one mum gets more in parental leave than another mum might earn in an entire year. So what we are going to do is reduce those inequities and rebalance paid parental leave so that more goes to the people in the greatest need. There is a savings in that and that also helps us return to surplus.
JOURNALIST:
How much will you save once you’ve paid for the child care reforms?
MINISTER FOR SOCIAL SERVICES:
That will be revealed this morning when the bill goes into Parliament. But we have had to cut our cloth. Now, the savings with respect to paid parental leave are significantly reduced from where they were in the first configuration of this policy. The savings with respect to the Family Tax Benefit are significantly reduced because we are offering families an extra $20 a fortnight. But we are doing this in a way that still contributes to a return to surplus and leaves enough left over to pay for wide ranging reforms in child care.
JOURNALIST:
Prime Minister, the Australia Post boss earns ten times more than you. Do you think that that is excessive?
PRIME MINISTER:
Well, firstly, Australia Post’s board is independent. It makes its own commercial decision. So this is not a decision of the Government. However, as the shareholder, the Prime Minister, the Government is the shareholder and as a taxpayer, I have spoken to the Chairman today – I think that salary, that remuneration is too high. Now, that is a matter for the board. I think it is too high. I know it is a big job, it is a big company. The company has been able to improve its position but in my view - I say this as someone who has spent most of his life in the business world before I came into politics - I think that is a very big salary for that job, very big package of remuneration for that job. That is my view. But it is a decision, I want to stress this, of the board of Australia Post. But I am entitled to my opinion just like every other Australian is and I think many would agree with me.
JOURNALIST:
Prime Minister, on Cory Bernardi, obviously yesterday as it played out, he said on television this morning he only had one real conversation with you about leaving the party and that was in the telephone call when he spoke to you to announce that he was leaving the party. Why didn’t you spend a little more time trying to keep him inside the tent? Perhaps, are you not sad that he has left?
PRIME MINISTER:
Cory Bernardi should resign from the Senate. He has talked about the importance of keeping faith with the electorate. The Liberal Party of South Australia and the people of South Australia only seven months ago elected him to the Senate for a six-year term as a Liberal Senator, so the honourable thing for Cory to do is to resign from the Senate and then run again at the next election as an independent or under his new party. Now he has chosen not to do that, that’s his decision, he has to explain it. Obviously we will work with him as we will with every other Senator to secure the passage of the Government’s legislation.
JOURNALIST:
Why didn’t you try and cajole him a little bit and try and keep him within?
PRIME MINISTER:
I have spoken to Cory Bernardi on a number of occasions but if a person wishes to leave a political party, then normal practice and courtesy would suggest that they would talk to the leader about it.
JOURNALIST:
The fact that nearly 70,000 people will be worse off under these new paid parental leave changes – how is that fair?
MINISTER FOR SOCIAL SERVICES:
The sort of families that you’re talking about have, in a comparative sense, much higher family incomes. What I would put to you is that the situation that exists at the moment, where one person can have paid parental leave, about $45,000, compared to a low income mother who gets $12,000 – that one person can have paid parental leave more than another mother earns in an entire year is a system that is fundamentally unfair. So there is a rebalancing here that we think it is a fair rebalancing. And what this allows us to do is return the budget to surplus, pay for child care and offer 96,000 mums who represent the lower income people inside the paid parental leave system. $1,300 extra and two weeks extra with their child. Now that ticks every box of fairness, of appropriate return to surplus and the ability to fund other more important things.
[ENDS]