The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

1 July 2008

Joint Doorstop Interview
with
Maxine McKew

Sydney

1 July 2008

SUBJECT: Childcare; Education Tax Refund; Emissions Trading Scheme; RBA Decision and Inflation; Computers in Schools; Newspoll

TREASURER:

Good morning everyone. It's great to be here with Maxine McKew, who has got particular responsibilities in the Rudd Government for childcare, and to talk today about our very positive measures to increase assistance to families, particularly when it comes to their childcare expenses, but also additional tax cuts which start from today and, of course, also the Education Tax Refund. All of these measures recognise that families are under tremendous financial pressure.

Global petrol prices, of course, and domestic inflation the highest in 16 years that we inherited, have put families and those on low and fixed incomes under tremendous financial pressure, and that's why we worked very hard in the recent Budget to put new measures in place which will provide additional assistance to families and also those on low and fixed incomes, and they are all kicking in as we speak.

Most particularly, the additional assistance for out of pocket childcare expenses – the increase in the rebate from 30 per cent to 50 per cent and the payment of those monies to families on a quarterly basis. These are very substantial increases of assistance to families who have very substantial out of pocket childcare expenses, and they kick in from today.

So, if you take a typical family who will receive additional tax cuts, childcare relief and also the Education Rebate, they could be up to $52 a week better off as a result of these measures. So, these measures recognise the financial pressure that families are under. I'll throw to Maxine just to talk a little more about childcare before we take your questions.

MCKEW:

Okay, thanks very much Treasurer. It's a delight to have the Treasurer here at Somerville Park, which is one of the great quality centres in the entire country, but particularly in my electorate of Bennelong. And importantly they recognise that affordability is a key issue for parents. I mean, this is a growth area of north-west Sydney and the need for childcare is very great. But the other clear message we've been getting from parents all along is, of course, the importance of affordability.

So, it's tremendous that from today parents will have significantly more money in their pockets for their childcare expenses. Importantly, the rebate is not just going up from 30 to 50 per cent, as the Treasurer's made clear, it will be paid in quarterly instalments so that, in fact, parents will receive the money closer to the time that costs are incurred. The other very important point to make is that the rebate is not income-tested, so all parents who have children in approved care will be better off as a result of these changes.

JOURNALIST:

There are, though, complaints today from some single mothers that they will be worse off. How can you assure them that?

MCKEW:

Well, certainly if you look at all of the figures, nearly all of those income groups, there is a small change to the CCB at the top end, but when you put the CCB and the rebate, importantly, the rebate together, people are considerably better off.

TREASURER:

I think you are mixing up some changes in child support which were legislated by the previous government and are also starting on 1 July this year. So, those measures are entirely separate from this additional assistance which was put in place for all of those families out there who require childcare. Everybody knows that mixing work and family is a difficult thing to do and having some capacity to access quality childcare such as we see here today, and to do it in an affordable way, is absolutely critical, not just to those families but to the economy.

Helping families better balance their work and family life is absolutely critical. So, increasing the rebate from 30 per cent of out of pocket expenses to 50 per cent of out of pocket expenses, and now paying it quarterly, is a very substantial increase in assistance to very many families out there. And as Maxine said, the out of pocket rebate is not means tested. I think it is very important that families understand that as well. So, there is substantial additional assistance out there for families with their out of pocket childcare costs, and that's a very good thing. It's long overdue. It was a commitment we gave during the election campaign and it is one that we are delivering for working families.

JOURNALIST:

Treasurer, we've heard today that the Iraqi Government is planning to sue the Australian Wheat Board over the Oil for Food scandal. Have you heard that, and what is your response?

TREASURER:

Well I'll leave the government response to our Foreign Minister, Stephen Smith. I haven't been briefed on the detail of this and I understand that he will be having some comment to make about it and I'll leave it to him.

JOURNALIST:

With the childcare rebate, are you confident that it won't be swallowed up by increased fees by private providers?

TREASURER:

Well certainly the childcare rebate will deliver very substantial additional assistance. The very first thing you have to understand is that the cap, in terms of assistance provided, has gone up substantially. The maximum amount that can now be claimed is $7,500 per child, per year. So, there is very substantial additional assistance.

JOURNALIST:

Can you stop providers increasing their fees, though?

TREASURER:

We don't have control over the fees charged by childcare providers. We would certainly be urging those providers to keep their increases to a minimum. We do understand that there are pressures out there, and childcare providers need to be very mindful of the financial pressure that families are under. But this is one of the reasons why we have moved so quickly to substantially increase the amount of assistance available. We recognise the price pressures in the system.

MCKEW:

One other further point. I mean, I talk to parents all the time because I'm in and out of a lot of centres and I try and get here early in the morning so you can talk to parents who are dropping off children. They've all done their sums and they know that, come October, they'll be substantially better off. So, people are pretty canny about having looked at the figures and done their sums.

JOURNALIST:

Can you tell us a little bit more about the A to E rating system that's being talked about?

MCKEW:

Yes, we're as concerned and we campaigned on this. We are as concerned about a quality environment for children as we are about affordability. Now, you're here at a centre today which is really outstanding because it has the kind of integrated care and education, with a special emphasis as well on the needs, the special needs of children, speech pathologist. It's the kind of, if you like, integrated centre that we want to encourage with the roll-out of our 260 centres. So, it's a credit to Hornsby Council that they've already seen that investment in the early years of children, in children's development, is something worthwhile doing, and it's what we have a national emphasis on. As you can see, we've had tragic stories in the press in the last couple of weeks. As much as anything else, we need to be getting children into quality centres. We also need to be getting their parents into centres so that we can help them with parenting skills. I'm not suggesting that's the whole answer, but boy, quality childcare is a big, big part of the solution.

JOURNALIST:

(inaudible)

TREASURER:

Well, what we've said is that we will produce a Green Paper on the Emissions Trading Scheme. That will be produced by around the middle of next month and it will canvas all of the various approaches that we will take to the scheme. We understand there are energy intensive industries which will come under pressure from an emissions trading scheme. We will take all that into account in our design. We will publish that in the Green Paper and then we will have a community debate about this. We will hear the views of households. We will hear the views of those industries. An emissions trading scheme will, of course, raise some revenue and every cent of that revenue will be going back in the system to assist households who may be affected but also to assist some industries who may be affected. So, we'll take all of that into account.

The most important thing to understand about tackling climate change is that the cost of inaction is far greater than the cost of action and if the previous government had acted on climate change four or five years ago the task wouldn't be as significant as it now is for the Government. We are determined to tackle this for the long term. The federal Liberal Opposition is just economically reckless in their approach to an emissions trading scheme. They favoured one when they were in government, now they apparently don't favour one. What this has done is shred any remaining element of economic credibility that the Liberal Party ever had. If we want prosperity in this country, if we want to hand something better to our children, then we have to tackle dangerous climate change and we have to put in place the hard policy options for the future. We put our hand up to tackle those hard questions. The Liberal Opposition, I think, now has no economic credibility left whatsoever.

JOURNALIST:

(inaudible)

TREASURER:

Well, that paper will canvas the details of an emissions trading scheme. When it's out there, the detail will be out there and we can have a community discussion about all aspects of the scheme and how it will work.

JOURNALIST:

(inaudible)

TREASURER:

No.

JOURNALIST:

Just on petrol prices, has the Government got any plans in future on ways to cut the price of fuel?

TREASURER:

Well, we've said that we will be constructing an emissions trading scheme. But the first thing everybody has to understand is the price of petrol is global. We are in the middle of a global oil shock – the worst in 30 years. These global factors have increased the price of fuel by about 30 cents a litre. These global factors have pushed it up by about 30 cents a litre since the beginning of the year. What we have to do is to get the policy settings for Australia right in the long term. That not only means an emissions trading scheme to deal with dangerous climate change, but it also means an energy security policy as well, and the Government will be responding to all of those things in a timely way. But at the end of the day, the price of petrol is caused by global factors. You have to take action globally and you have to take action nationally.

JOURNALIST:

So, are you saying there's nothing you can do to help the truckies? The truckies have been protesting today on the F3. Is there anything you can do to help them?

TREASURER:

What I've said is that the price of petrol is determined globally. There are a variety of issues involved here from energy security, supply – most of those are international as well. What we have to do is to get all the policy settings right for the long term to prepare our country for a time where the economy will be more carbon constrained, and we're going to do that and that will involve over time, some tough and hard decisions, but we're going to put our hand up for them, we're going to tackle them. We're not going to put them in the too-hard basket like the previous government did for 12 years.

JOURNALIST:

Can you speculate on what the Reserve Bank might decide later on this afternoon?

TREASURER:

No, I don't speculate on what the Reserve Bank decides. But what I can say is this: we brought down a tough Budget back in May and we did that to take pressure off the Reserve Bank. That's why we built a $22 billion surplus, a surplus which the Liberals are now recklessly trying to erode through some very, very obstructive action in the Senate, once again, eroding any semblance of economic credibility by them. But by building a strong surplus, as we did in the May Budget, we've taken pressure off the Reserve Bank because the previous government was putting pressure on the Reserve Bank by its reckless spending.

JOURNALIST:

(inaudible)

TREASURER:

The information that got out had absolutely no status. It wasn't an official document. It wasn't a document that had been contemplated or looked at in any way by the Government. It was simply a staff note which had no status whatsoever and it has not influenced my thinking or anyone else's thinking in the Government at all.

JOURNALIST:

You don't think it's damaging at all?

TREASURER:

No, I don't. No, this sort of argy bargy goes on before COAG meetings all of the time.

JOURNALIST:

(inaudible)

TREASURER:

You'll have to go and ask the television station where it was left.

JOURNALIST:

Newspoll results. If you were Brendan Nelson, how would you be feeling today?

TREASURER:

Well, I'm not too worried about Newspoll results because what I'm focussed on is not the next opinion poll or even the next by-election. I'm focussed, and the Government is absolutely focussed on getting the policy settings right for the long term, not short term opinion polls. Long term prosperity is what this Government focuses on.

JOURNALIST:

What's your reaction to Bob Carr's push for nuclear?

TREASURER:

We're not supporting that.

JOURNALIST:

Are you worried that you're losing touch with the public if the polls aren't going your way?

TREASURER:

Cost of living pressures, out there, as I said before, are significant and they are impacting on Australians. They are impacting on people on low and fixed incomes. What we've done in our Budget is to provide additional assistance recognising that pressure, and we will continue to recognise that pressure and do everything we possibly can to assist households and those on low and fixed incomes cope with the impact of these global factors. Thanks very much.