Child Care Cuts

"What Labor have said is that we are absolutely committed to the Gonski reforms. We did not go through the biggest review of Australian schooling to see it simply tossed aside."



KARVELAS: Families earning a combined income of more than $230 000 a year will pay more for child care and face new cuts to the 50 per cent rebate under a revamped child care policy the Turnbull Government is proposing. The policy being finalised will target low and middle income families even more. Now child care was the centrepiece of the last Budget delivered by the Hockey/Abbott Governments but it's still yet to be legislated. My guest tonight is Labor's Shadow Minister, Kate Ellis. Happy Melbourne Cup Day, Kate.

ELLIS: Happy Melbourne Cup Day, Patricia. I understand you picked a winner.

KARVELAS: Oh look I picked the winner. I told everyone to go for the winner and then forgot to put money on the winner. So, I'm poor but happy. I'm just happy. Now let's get into this. What do you think of the policy to reduce child care payments to better off families. Is it something at least in principal you support?

ELLIS: Well we have no idea of any of the detail of the Government’s latest position on child care and what we asking is 21 months after this review was first conducted, whether we could perhaps see the detail of the Government’s policy so we can debate it, form a position and make sure that we are improving the affordability and accessibility of Australian child care for families and I think the wait has gone on for far too long.

KARVELAS: There is a policy being devised though and there are different areas where the Government is looking at moving around the money. Now on principle, do you think that families earning more than $300 000 a year should face a reduced child care rebate to 30 per cent rather than the current 50 per cent. I mean that's fair isn't it, as a concept?

ELLIS: Well certainly our concern has been around low and middle income families. Our concern has been changes particularly changes to the activity test which the Government has indicated will form part of a package if ever we see it. It will have an impact on lower income families as well and that is where our priority focus has been. But there has been, and you know over the years there have been many debates about means testing of Government payments and means testing of  child care payments. What I think we need to be clear of is any implications for workforce participation, because the way that child care subsidies work is that obviously it would be the second income earner who would then make decisions about whether or not they return to the workforce, and in Australia today that second income earner is still predominately female. So I'd like to see the detail of the proposal. As I've said, my focus will be on making sure that lower and middle income families receive some relief in this package but I also wouldn't want to see any negative impacts on women's workforce participation as a result of poorly thought out policy by a new Minister who's replaced two existing Ministers.

KARVELAS: Sure Kate Ellis, but ultimately there's not a limitless amount of money that the Government can throw at anything so choices have to be made. Given that you've said that you're worried ultimately about means testing because it could adversely affect women as the secondary earners. So at what rate would means testing be acceptable to you? $230,000 has been floated for a reduction at this stage and then families over $300,000 getting an even bigger reduction. Do you think that that is too low? Would you like means testing to kick in at a higher rate then?

ELLIS: Look I think that we need to look at the package as a whole. We need to see if there are higher income families that are going to be targeted in this package, is the return for that that we see significant increased support for all low and middle income families who are struggling to pay their child care fees? From what we've seen at the moment that is not the case. From what we've seen at the moment there will be a significant number of low and middle income families who are also worse off in this package. So I think the package as a whole needs to be judged on whether the Government can offer some simple guarantees. For example to this point they haven’t been able to guarantee that vulnerable children will not be worse off. They haven’t been able to guarantee that low income families, and the children in low income families, will not be disadvantaged as a result of this package. My first point is saying, can we please see the detail of the Government’s response and see some sort of action from the Government in this space when all we have seen is fees continue to increase under their watch.

KARVELAS: I'm interested in this apprehension you have around means testing given Labor means tested Paid Parental Leave. You imposed a means test on that. Why is child care any different?

ELLIS: Well I think that when we have a look at means testing of Government payments, Labor has traditionally supported and will always support ensuring that taxpayer funds are directed towards the families that need it most. That needs to be the starting point regardless of what sort of payment it is. But I think that particularly when the Government has said that one of the goals of their package is to increase women's workforce participation then we need to study what the impacts of these measures will be on women's workforce participation. And certainly the way that it works with child care for example is, you might have a father on a higher income, you might have a part-time nurse who is also a member of that family but because the combined family income is above a means tested rate, it may mean that that woman decides that she's better off leaving the work force. Now if as a result of this Government’s package we were going to see tens of thousands of women leave the workforce I think that that would be a significant concern. But the problem at the moment, Patricia, is that I would love to be able to give you specifics on where we would draw the line, on what the impact will be, but we simply do not have the detail of the Governments package in order to be able to do that and I think it is the responsible position of the Opposition to say that we will wait until we see the detail, we will work through it and then we will see if there's a way that we can work constructively with the Government to ensure that we get the outcome that Australian families are hoping for.

KARVELAS: Just want to move to Gonski before I let you go. The NSW Education Minister wrote a piece challenging you on Gonski, he says you were asked in front of 500 NSW primary school principals whether Labor would fund those important years 5 & 6 of the agreement if you win the next election, and you couldn't give that commitment instead you challenged principals to lobby you. Will you fund it? Why were you reluctant to make that promise?

ELLIS: Well, one; that's simply not true, that I challenged them to lobby me. That is not the case at all and if the NSW Minister had wanted to actually speak up at the forum other than quietly sit there in the audience then give misleading accounts of what happened we could have a more accurate discussion about it. What I would say is that I think any Australian taxpayer would expect that when governments or oppositions were making funding commitments that they could identify where that funding was coming from and why it was the priority. What Labor have said is that we are absolutely committed to the Gonski reforms. We did not go through the biggest review of Australian schooling to see it simply tossed aside. Where we are at, at the moment is that the Government have not just backed away from years five and six of the Gonski reforms, but on top of that they have now locked into the Federal Budget a $30 billion cut to school funding by changing school indexation rates. So we are going through the process now of seeing how we can best address reversing the damage that this Government have committed to Australian schools and we will be releasing fully costed policies in place to show how we would fix the situation. I think that's the responsible thing to do but what I would say is perhaps the NSW Minister might want to spend more time lobbying his own party, that being the Federal National Party, who are silently sitting and supporting these cuts to country schools, rather than giving misleading accounts of what I said when I was fronting up and answering questions.

KARVELAS: Kate Ellis, thank you so much for joining me on RN Drive.

ELLIS: Great to be with you Patricia.

KARVELAS: And that's Labor's education and child care spokeswoman, Kate Ellis joining us there.