By Julie Doyle.
Prime Minister Malcolm Turnbull will use an address at the National Press Club today to unveil a new strategy to get his Government’s child care changes through Parliament.
The Government wants to streamline multiple child care 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 Child Care 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 child care bill, combining these two elements into one piece of legislation.
The Government wants the legislation passed early this year so the child care 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 child care providers are becoming increasingly frustrated by the delays.
They argue the current subsidies are woefully inadequate, particularly the Child Care 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 child care 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 child care 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.”