LARRY EMDUR:
The federal budget will be handed down next week on May 11, but yesterday, Treasurer Josh Frydenberg delivered a package to the tune of $1.7 billion, announcing changes in subsidy increases for Australian families with kids in childcare.
JOSH FRYDENBERG
[from press conference]: The Morrison Government has already invested more than $10 billion a year into childcare. This is an additional investment. It is designed to give families choice and to make our economy stronger and to make childcare more affordable.
KYLIE GILLIES:
Designed to assist those with two or more children in care, low-to middle-income families will be the biggest winners - saving an average of $2,260 a year while encouraging more women to return to the workforce. And to tell us more, we welcome live from our Melbourne studio, Minister for Superannuation, Financial Services and the Digital Economy. She's also the newly appointed Minister for Women's Economic Security, Senator Jane Hume. Welcome to the Morning Show, Jane.
JANE HUME:
Great to be with you.
KYLIE GILLIES:
You have quite the title! Take us through how the $1.7 billion childcare investment will benefit Aussie families?
JANE HUME:
This is all about giving families more choice, particularly those families with two or more children. Because we know they disproportionally bear most of the burden of the cost of increasing childcare. So from now on, a family with a second child can actually claim a subsidy of around 95% of the cost of childcare and will also be removing the annual caps that apply to families on childcare as well. So for instance, a family earning around $110,000 a year combined income will properly save around $95 a week. If you had a family where, say the dad earned around $70,000 and mum earned $25,000 working part-time, she wanted to increase her shifts, the barriers to increasing those, extra days or extra hours is being removed and that family can save around $5,000 a year, just over $5,000 a year.
LARRY EMDUR:
Okay, so families with two or more kids under five in childcare are breathing a sigh of relief with the changes but what about parents with only one child in the system?
JANE HUME:
Well, things don't change for those. We know that for families that really are suffering under the weight of responsibility or those childcare costs tend to be the families have two or more children and the costs tend to be the families have two or more children and they are the ones that are struggling to find the opportunity to go back to work.
I that know I had three children under the age of five in childcare at one stage and it really is tough to deal with the costs and complications of doing that. So this should ease the squeeze on families in particular, most importantly it will families in particular, most importantly it will give women a chance to get back to work, increase the days, increase thier hours. We anticipate around 40,000 people will increase their work capacity by about one day, adding around $1.5 billion to GDP.
KYLIE GILLIES:
Okay, what about the changes, do they cover after-school care and out-of-school care?
JANE HUME:
No, only for people to have children in childcare that are aged five or under. They are the ones we know suffered the highest cost burden. Childcare is more expensive for those dealing with those that are in after-school care and they are the ones crying out for change. So this is a very targeted and proportionate response to a desperate need right now to help people get back into the workforce.
LARRY EMDUR:
So a quarter of a million families are said to benefit, but there are almost 1 million families who currently use early education and care. Will there be any relief for the 750,000 people who are missing out this time?
JANE HUME:
Well the Treasurer has said this not the first or last word in looking after children and in childcare. We want to make sure, though, that our response is targeted and proportionate. We already spend over $10 billion a year in childcare subsidies. Which is quite significant. And the vast majority of that, over the 75 per cent goes to people that are earning less than $125,000 a year. So it really is very targeted to the lower and middle-income earning families.
KYLIE GILLIES:
And as I say things are very tough at the moment, housing has never been less affordable, pandemic continues to generate uncertainty, Australians are desperate for relief now but these changes won't come into effect until July next year, July 2022? why wait?
JANE HUME:
We would like to see it sooner but there are technical requirements to changing the childcare subsidy scheme. If we can do it sooner, we would like to do it sooner. really, this is all about making sure Australian families and particularly Australian women have the choices and chances to increase their own financial security, to participate fully in the workforce.
LARRY EMDUR:
Now a recent survey showed that 59 per cent of Australians would actually support making childcare free and universal. given childcare in this country is like some of the most expensive in the world, is that something the government should work towards, longer-term?
JANE HUME:
We estimate the cost of making childcare universally free would be double the amount that it is already. Which is very significant. But more importantly, if you make childcare free, it does have a cost. Accessibility is much harder, people don't withdraw their kids from childcare if they don't need it if they don't pay for it. So it makes getting the place that bit tougher and it also potentially can bring down the quality of childcare service as well.
We think people who can afford to pay should pay, it shouldn't be free. For instance, the Labor Party has a policy that a family earning $500,000 would still get a subsidy of $50 a year, which is extraordinary. Our package is more targeted to low and middle-income workers that want to work an extra day.
KYLIE GILLIES:
Before we say goodbye, any more significant announcements from the Women's Task Force? Can you give it a share?
LARRY EMDUR:
We can keep it just between us!
JANE HUME:
Just between ourselves?
LARRY EMDUR:
Just the three of us.
JANE HUME:
We don't speculate on what may or may not be in the Budget but I can tell you the Women's Task Force has been working exceptionally well. Dealing with the issues particularly around women's safety and of course, women's economic security as well.
I am afraid you will have to wait for Tuesday, 1st of May to hear any more. But I can tell you that it has been a very effective task force and I really enjoyed working with my colleagues, Marise Payne, Anne Ruston, Michaelia Cash and Amanda Stoker, and of course the other women of the Cabinet. It has been a very effective task force.
LARRY EMDUR:
That was a very polite dodging of Kylie's question! It was wonderful. Lovely to talk to you, we know how busy you are.
JANE HUME:
Thanks, guys.