ALAN TUDGE:
Good morning everybody. Okay, well, I might kick off then and just say that it’s great to join you remotely, and obviously with my colleague Jane Hume who’ll say a few words after me. But today we’ve got an important announcement in relation to the child care system and the bringing forward of additional subsidies for families. You might recall back at the Budget earlier this year, we announced a new package of additional subsidies or increased subsidies specifically targeting families with two or more children in child care. Why do we focus on them? Because that’s when the costs really start to add up and that’s where the workforce disincentives are the greatest.
You’ll recall that at the time I announced this, that we said that it would begin in July of next year. But I always said that if we could bring it forward, then we would, and I’m pleased to announce today, with Jane, that we are able to bring the start date forward to the seventh of March, of next year. We’re able to do that because we were able to get the legislation through quite quickly, and we’ve also been working very hard across government to streamline as many processes as possible, so that the difficult technical build can be done in time for the seventh of March.
Now, what does this mean for families? It means that the average family, with two or more kids in child care, will be $700 better off this financial year, and they’re going to be $2,200 better off next financial year and the subsequent financial years. So that’s great for families, and it’s also going to really help the economy as well, by reducing some of those workforce disincentives.
Importantly, we’ve also removed the annual cap, and that will apply, for the entire financial year. So, from now, families can have that confidence that this financial year they won’t hit that cap, and they’re not going to ever hit that cap again, so that they don’t have to ration any child care, which I know that some parents do.
So this is a good announcement. It’s great for families and will really help our economy roar back post the lockdowns. I might just ask Jane to say a few words, and then we can obviously take some questions.
JANE HUME:
Thanks, Tudgey. I’m really excited by this announcement, because we know that the most effective way to improve women’s economic security is by increasing participation in the workforce. And today, with participation rates just hovering under 62 per cent, more Australian women are participating in the workforce than ever before, but about a third of the women who do work, work part‑time. According to the Business Council of Australia, around 90,000 people last year identified the cost of child care as the reason why they weren’t in the workforce. Reducing the cost of child care and removing those disincentives to increasing the number of days or hours that you work, removes one of the major barriers to women’s workforce participation.
From personal experience too, at one stage of my life having three children under the age of five at the same time, I can attest that child care certainly does become much more costly and much more complicated with more than one child. But importantly, it’s not just women with young children that benefit from more affordable and accessible child care. Almost half of working women with a child under two, rely on informal care from a grandparent, and about a quarter rely on grandparents solely, as their main source of child care. So, making child care more affordable and accessible can also remove a barrier to older women’s workforce participation.
Decreasing the cost of child care gives Australian women more choices and chances to increase their lifetime earnings and secure their economic future. But, it also makes the most of Australia’s human capital: our highly educated and capable female workforce, who are going to be so vital to our post‑COVID economic recovery.
I’ll leave it there, Tudgey, and we can take some questions.
ALAN TUDGE:
Well let’s take any questions on this issue to start with. I can’t see who’s there, so you might just jump in.
QUESTION:
Minister Tudge, is it fair to say that the majority of families in the system will not receive any extra from this announcement? And why are those with just one child being left out?
ALAN TUDGE:
Well, because this is targeting those families that really need it the most, and that is those families with two or more kids, because that’s when your costs really start to add up. But it’s also, when we’ve done the analysis, that’s where the workforce disincentives were the greatest. Where in some cases you’re more or less working those extra days for no financial benefit at all, once you net out your child care costs and maybe some loss of your family tax benefits. So this’ll make a difference to that, and encourage what Treasury estimates to be 40,000 more people doing further work than they presently are doing.
QUESTION:
Why now? Why bring it forward to March? What’s the significance? Is it because we’re coming out of the pandemic? Is it because you’re going into an election? What is it?
ALAN TUDGE:
I always said when we announced this that we would try to bring it forward if we could. We only announced this at the Budget. The advice at the time was that because of the nature and the complexity of the technical build, that it would take until July. I said if we could bring it forward we absolutely would. Now, we got the legislation through more quickly than we had anticipated, and then we’ve been working across the government departments to streamline the process, working with the third party software providers, and we now have great confidence that it all can be built by the seventh of March. Had we been able to build it and do it by now, then we would have done that. We’ve now got the advice that says the seventh of March is the fastest date that we can get this up and running, and of course we want to get those benefits out to families as quickly as possible.
QUESTION:
The question is why. Why bring it forward?
ALAN TUDGE:
Because these are benefits which will help families with their cost of living and will help the economy. So we wanted to do them as quickly as possible. Previously the advice was that the beginning of July was the first possible date that we could do it. But now, because of the work that we have done, we’re confident that we can do it from March of next year.
QUESTION:
You’ll probably pick up a few extra votes there, at the election. Was the government threatened at all by Labor’s child care policy? They’ll probably be spruiking that quite hard in the lead‑up.
ALAN TUDGE:
Well, Labor’s child care policy costs $20 billion, and the biggest beneficiaries are those earning $500,000 or more. Every single person is going to be paying for a child care policy, under Labor, where the single biggest beneficiaries are going to be those high‑income earners. You wonder why the Labor Party gets in such turmoil, when they’re supposed to be the party of the workers, but the biggest beneficiaries are those earning $500,000 or more. Under our policy a family earning $500,000 or more doesn’t get any child care subsidy. Under the Labor policy, if they had two kids in full‑time care, they’d be getting $50,000 in child care subsidy. So, Labor’s policy is a $20 billion cash splash, who mainly benefits millionaires.
QUESTION:
How much of this is about trying to address the perception that the government has an issue with women?
ALAN TUDGE:
This is about addressing specifically workforce disincentives. As you know, we’ve got skills shortages across the board, in part because the borders have been closed and we haven’t been able to bring in the normal number of migrants into the country. And so we’re doing everything that we possibly can in order to create incentives for people to upskill and go into the workforce to address those shortages. This is very consistent with that, and as Treasury has estimated, 40,000 more people will go into the workforce for at least an extra day as a result of this package.
QUESTION:
The opposition says its child care plan will help around one million families, by comparison yours helps around 250,000. Why not go further?
ALAN TUDGE:
Our plan here is measured. It’s targeted, and it’s fair to those who use the child care system, and it’s equally fair to the 50 per cent of families who don’t use the child care system. Labor’s policy is $20 billion where the biggest beneficiaries are millionaires.
QUESTION:
Tomorrow a lot of children are going to return to child care in Sydney. Do you have any idea of the number of child care workers who are vaccinated in that state or broadly in Australia?
ALAN TUDGE:
I don’t have those particular figures but obviously we can make some estimates based on the age of those workers. And obviously, in New South Wales ninety per cent of all people above the age of sixteen have been vaccinated, seventy per cent with the double vaccination. I’d be very confident that amongst child care workers those figures would be similar.
QUESTION:
Question for Jane, if I can on climate change. So BCA yesterday announced they'd support an interim target of up to 50 per cent emissions reduction by the end of the decade. Are you confident that the Prime Minister can land a deal with the Nationals on net zero, potentially a bolstered interim target ahead of these UN climate talks?
JANE HUME:
Well, I think those conversations will occur this week. It was terrific to see that the BCA come out saying that industry will want to work alongside government to find a pathway to reach net zero by 2050. This is not something that any one government can do on their own, whether they be state or federal. We need all of the community to be able to get on board to those targets to make sure that the transition to a cleaner, greener future is something that doesn't necessarily disrupt, particularly our work in the regions or our economic opportunities. And that's what the BCA presented yesterday, which is great news.
QUESTION:
Keane also said today that you could just have an average of the state and territory targets that are already out there, and you could bolster the federal emissions target. Is that something that you'd be willing to countenance, giving you are saying you want to work with the states?
JANE HUME:
Well, that's something that the Prime Minister can discuss in the Cabinet this week. But as I said, there is no way that we could get to net zero emissions by 2050 without everybody working together at all levels of government, state and federal, as well as the private sector. No one agency or government can do this on their own.
QUESTION:
Minister Tudge, if I could stick to another part of your portfolio. You talked about wanting to diversify foreign students coming to Australia. What are you proposing or looking at in terms of trying to shift away from the majority of Chinese and Indian students? Are you looking at subsidising foreign students from other countries?
ALAN TUDGE:
I'll be making further announcements about this later in the year. The central point that I've been making for some time is that we have a very high concentration of international students from a small number of countries. And that presents some risk, because if one of those countries, for example, makes decisions or something occurs that they're unable to send as many students here, then obviously you can get hit versus having a more diverse international student population. But also it impacts on the student experience. The student experience for Australian students and indeed for international students is enhanced when you have a diverse classroom. There's two benefits that you can get by having greater diversity amongst your international student body. That should be an objective of ours where we're more concentrated than our competitor countries. Our competitor countries, the United States, the UK, Canada in particular, do have greater diversity and we should aspire to have that as well for the benefit of Australian and international students, but also from a financial risk management perspective that you don't necessarily want to be so reliant upon one country.
I'll just finish with this point. There's one university that has almost forty per cent of all of its students are international students. Eighty per cent of those are from one source country. Now again, that presents some financial risk if that country decides to take actions like they've taken actions against some other industries.
QUESTION:
Sorry, just back on child care. I think the biggest concern about this policy was that by the time the second child qualifies for this, they’re already in primary school, so some families don't actually get that reduction. Are you looking to perhaps change this policy, add to it? Or is this it? This is what you're taking to the election?
ALAN TUDGE:
This is the policy which we announced in the Budget, and it is targeted at those families with two or more kids in child care for the reasons which I've articulated already. It's going to make a big difference to 250,000 families and it'll make that difference from the seventh of March of next year. And the average family in that situation will now be $700 better off this financial year and $2,200 better off next financial year and subsequent financial years. This is a very significant increase to the child care subsidies. Targeted, measured, fair to those who are in the child care system and using it, but equally fair to families who don't use it.
QUESTION:
But that's it? A done deal? No upgrades, no tweaking of it?
ALAN TUDGE:
Do you want me to announce some election policy now?
QUESTION:
Sure, sounds really great.
ALAN TUDGE:
Sure, sure. That would be a first.
QUESTION:
Minister Hume, just while I’ve got you. Can I just clarify the 40,000 parents who would be able to work an extra day per week because of the subsidy? Is that because of the subsidy in general or from this extra four months in particular?
JANE HUME:
The Treasury have modelled that the change in the subsidy and the change to the cap will allow an additional 40,000 days worked by the parents that have two children in child care. And this is really important because we know that higher female participation – and it is largely women that are the secondary income earners that are used in child care system – and higher female participation in workforce participation could substantially boost Australia's economy and living standards. And it would also significantly boost women's economic security. An increase in paid hours among women is the single biggest change that would help close that lifetime earnings gap between men and women.
ALAN TUDGE:
Alrighty. Thanks very much, everybody. Thanks, Jane.