SUBJECTS: Child care crisis, cuts to the FTB, Cory Bernardi, Government disunity

DAVID SPEERS: I want to turn now to an issue which is going to be watched closely by so many families in Australia – what’s going to happen with child care benefits, what’s going to happen to family benefits as well? Because the Government is rolling all these changes into one omnibus bill, one piece of legislation that it’s going to be introducing this week, the first week of Parliament. The changes for child care are meant to be good news for those on lower incomes, after years of talk about high paid parental leave and so on, instead go for better child care support – one single means-tested payment that will see lower income families better off for child care. But to pay for that, cuts to family tax benefits. Here are those cuts: the end of year supplement for those on the lower incomes, Family Tax Benefit Part A, it is worth up to $726 per child per year, that end of year supplement that would go. For those on Family Tax Benefit Part B, it’s per family - $354, so it wants to get rid of those to pay for the child care improvements. We spoke a little earlier to Nick Xenophon, whose votes are going to be crucial to this going through. Here’s what he had to say.

NICK XENOPHON: Look it depends how you structure it, and that’s something that we will talk to all stakeholders, including people like ACOSS, about their concerns. I also understand the imperative that the Government has, that they’re concerned about the triple A credit rating, what that means if we lose that rating, there are a whole range of issues here. And of course, if the Government doesn’t get certain savings then it will be looking at increasing taxes. But I have no hesitation in increasing taxes for companies like Facebook and Google, that seem to be doing very well in the Australian environment.

SPEERS: Clearly the Government doesn’t want to be increasing taxes to pay for this. What does Labor think about where this is going? With me now is the Shadow Minister for Child Care, Kate Ellis. Thanks very much for joining me.


SPEERS So the Government is putting together this omnibus bill, it’s apparently talking to the crossbenchers about it. Have you seen or have you been approached about the legislation?

ELLIS: We haven’t seen the bill yet and we haven’t heard the detail of it. I heard Sky News reporting earlier that there were due to be some surprises in store. We certainly hope that those surprises might include the fact that the Government has addressed some of the flaws in their child care reforms, which have been pointed out.

SPEERS: What are they, just briefly?

ELLIS: There are some particular flaws when it comes to the activity test – that is, how many hours of subsidised care, particularly disadvantaged children, get. The proposal at the moment, some of the most disadvantaged children in Australia would have their access to early education cut back, and we know that they’re the children who have the most to gain from it. There’s also a really big flaw in that they’re cutting funding for Indigenous services and for remote and regional services, and that’s something we’re arguing should be fixed. I know a lot of the crossbench, and Cathy McGowan, have been speaking up about this. So we hope to see those addressed in the legislation.

SPEERS: If they can fix those though, do you agree in principle with what they’re trying to do to boost the payment, make it one payment, and boost it for lower income families?

ELLIS: Certainly we’ve said that if they address those issues, then we don’t want to stand in the way of these improvements to the child care system. I don’t say that they are the solution overall, they’re no silver bullet. But certainly we’d all argue that Australian families need assistance with the child care system and we would support that package. What we obviously cannot support, and have made very clear, is that we don’t think that other low and middle income Australian families should have to pay for this. We don’t think that the family tax benefit cuts should be linked as a way of holding the Parliament to ransom – if you don’t support these cuts, you go another whole term without any improvements to child care.

SPEERS: You would vote against this? Even if it gives you the sort of changes you want?

ELLIS: We have previously voted against these family tax benefits cuts, the Parliament has voted gains these family tax benefit cuts. We need to be really clear, what the Government are saying is that unless families on incomes of less than $80,000 foot the bill, then there is to be no child care reform. Frankly, that’s not good.

SPEERS: One of the other measures the Government has been trying to get through is the end of double dipping of paid parental leave. We know you have a concern about that as well, is that likely to end up in this omnibus bill too?

ELLIS: I’m not sure about where that legislation is placed, whether that’s likely to end up in this bill or be dealt with separately. But again, why is it families that are in the firing line constantly? Why is it that when it comes to the Government’s priorities, we heard in Question Time again today, the Prime Minister was outlining their priority to introduce $50 billion in corporate tax cuts. They don’t need to find the matching savings and rip that off big business at the same time. Why is it the families are the ones that have to -

SPEERS: - OK, but if it is about using the same pool of money but saying, take some from families with older kids and target it more importantly at those with younger kids so that they can get back into work, they can be more productive in the economy, is that a principle you’d agree with?

ELLIS: I’ll tell you the principle I don’t agree with. I don’t agree that working single parent families should be the ones to have their payments cut by this Government.

SPEERS: OK, so how would you pay for the extra child care that you support?

ELLIS: For example, we’ve put forward a whole range of areas where we would reduce Government expenditure. We’re still calling on the Government to adopt our negative gearing policies. We have put forward, when it comes to capital gains tax exemptions – there are a range of areas that we put forward our priorities -                       

SPEERS: - But as you know, this is a recipe for higher taxes and higher spending, ever higher spending on child care, now without reining in spending in the family space anywhere else.

ELLIS: The Government’s talking about – as we said – they’re talking about spending $50 billion on corporate tax cuts, billions of dollars of that going towards the big banks. You could more than pay for helping Australia’s child care system right there. It’s also really important to remember, David, that we’ve backed the Government on a whole range of savings measures, and we’re back the Government with a whole range even of family payments, which we did when the last omnibus bill went through. We’ve supported a range of savings measures within child care itself. And by the Government’s own arguments, by increasing workforce participation, these changes would apparently pay for themselves over time. So why is it that this is being held ransom to these FTB cuts? The answer to that question the Government themselves have answered, when Arthur Sinodinos himself stated that it was for ‘political purposes’ that they were linking them.  

SPEERS: Just getting back to child care, last time we spoke last year, you were looking at embarking on a process of looking at what to do about child care – whether there is a better way to address what can be a confusing system, with the shortage of places, ever increasing fees, churn of staff and so on. Have you settled on any ideas here about what the approach should be?

ELLIS: We are continuing to do that groundwork. There is no one easy answer. I think the reality is that we can continue to tinker around the edges, as the Government is seeking to do, which we hope to support – we hope that there’s a package we can support. We’ve supported to changes to the way that payments are made, we’ve supported changes. Ultimately, when it comes down to it, the Government and this Parliament is going to have to realise that we can only tinker with this system for so long, and it actually requires fundamental change.

SPEERS: And what’s that going to look like?

ELLIS: This is the discussion that you and I were having at the end of last year, where we outlined that in the lead up to the next election we want to be able to advance a pathway towards that reform. I’m not suggesting that there is one element that can simply  be overturned, we’re talking about a really big and fundamental longer-term change. But what Labor’s said is that we’re up to the job: this is serious policy reform that needs serious thinking, serious consultation. And we’re out there talking with experts, talking with parents, with academics, and look forward to putting something forward to really advance the situation of working parents in this country, but also really importantly, the best interests of Australian children.

SPEERS: It is a big issue for so many families we know, so I look forward to checking in with how that’s going. Final one – and I don’t want to give you too much of a free hit here, but South Australian Cory Bernardi’s departure is the big political story today. What do you think it’s going to mean in South Australian politics?

ELLIS: Everyone’s talking about the national impact and the disunity, and Malcolm Turnbull is having a very bad week. But from a South Australian perspective, we’ve already seen how poorly South Australia has fared from our Liberal representatives – when it comes to the River Murray, when it came to Holden, when it came to having to drag them kicking and screaming to honouring the submarines promise, South Australia has been let down by the federal Liberal Party. Today we see that there is even less South Australian influence within the federal Liberal Party, which -

SPEERS: So Cory Bernardi should’ve been made a cabinet minister? It would have been good for South Australia?

ELLIS: (laughs) I’m saying that I wish somebody from South Australia was sitting at the cabinet and fighting for South Australia. We have Christopher Pyne -

SPEERS: Birmingham, Christopher Pyne -                  

ELLIS: - who is pretty preoccupied playing politics, and with self-promotion -  

SPEERS: - he got the submarines for South Australia.

ELLIS: The submarines came because the South Australian community, joined by Labor, absolutely fought back. It’s very easy to rewrite history, you’ll remember the comments about building canoes -

SPEERS: It wasn’t Christopher Pyne -

ELLIS: No but it was the Liberal Government –

SPEERS: I don’t think you’re going to give him any credit for that one, but anyway. Kate Ellis, thanks very much for joining us this afternoon.

ELLIS: Thanks David.