ABC Radio Adelaide Mornings – Labor’s Working Family Child Care Boost

Friday, 09 October 2020

DAVID BEVAN, HOST: Amanda Rishworth can you explain just very briefly, what is your plan?

AMANDA RISHWORTH, SHADOW MINISTER FOR EARLY CHILDHOOD EDUCATION AND DEVELOPMENT: What we plan to do is remove the disincentive for the second income earner, predominantly women, to take extra hours of work. So we plan to scrap the cap on the Child Care Subsidy that kicks in for families often when two people go back to work full time. We’re going to increase the subsidy for all levels up to $530,000 of combined income. A lot of parents when they look at going to work, they actually have to pay to go to work on the fourth or fifth day. So we’re going to remove those things which are the cause of that disincentive.

BEVAN: Can you explain to our listeners why a household which is bringing in more than half a million dollars a year gross needs any support from the taxpayer for child care?

RISHWORTH: Well what the evidence shows it that particularly the second income earner, if they don’t go back to work at the hours they want then it is a drag on our economy. This is actually about women’s workforce participation.

BEVAN: But that household is pulling in more than half a million dollars? Why should our listeners if they’re on welfare, why should they forgo a payment so something can be done to subsidise a wealthy household, or if they are paying tax, why should they pay tax to subsidise a wealthy household?

RISHWORTH: The evidence is very clear that this helps grow our economy which benefits everyone. We don’t means test the NDIS because we see that as an important measure to provide support those who need it. Families going back to work after they’ve had a child delivers to our economy. The government might criticise this but they always had a plan not to even have a top cap on their system, but they had to do a deal with Derryn Hinch and David Leyonhjelm to bring that in. So there’s no rhyme or reason about why the government now cuts off their support at $356,000 combined income. So the government is really using weasel words if they try and make that the issue.

But what we know is families are doing it tough, our system still gives 90 per cent of the subsidy, the greatest amount, to those on the lowest income. That’s still a feature of our design. But what we want to do is take away the disincentive for those families that say it’s not worth my while to go back those extra days. And this does not just benefit families – business has been calling for this, whether it’s the BCA, Chief Executive Women. Because if you have an employee that is really productive and they say I’d love to work full time but I can’t because I’ve got to pay to come to work, I lose money when I come to work, then that’s not good for the business and it’s not good for families.

BEVAN: How much would that household on half a million dollars get?

RISHWORTH: It would really depend on the composition, on average the benefit is a lower amount, a couple thousand dollars. Whereas the potential for someone –

BEVAN: Oh the phone line just cut out, I’m not sure what happened there, can we try and get Amanda Rishworth back? Oh you’re back with us sorry if we could start again.

RISHWORTH: It depends on the two income earners and how the tax system interacts, but on average it is around a couple thousand dollars. If you look at what potentially a family on a lower income could get, that could be around $28,000. So it is still a progressive system that we are proposing, but it is looking at removing the disincentive to go those extra days by removing the cap and –

BEVAN: I’m sorry to sound pedantic but it’s really important we get these figures. That was a family on a combined income of half a million dollars could expect between two thousand and how much?

RISHWORTH: No it’s around a couple of thousand dollars but it depends on a whole range of things, depending on how many hours a week you work, how many days of child care. It’s on average but a lower income family if they were both working full time and needing full time child care, could benefit around $28,000.

BEVAN: Oh sorry that was the $28,000, okay.

RISHWORTH: That is the benefit and that’s on average, and it does vary depending on your family circumstances.

BEVAN: Why don’t you just make it universal and everyone gets a certain amount of child care hours totally free and that’s it?

RISHWORTH: We have flagged we want to move to a 90 per cent subsidy universal system, we see this as critically important. You don’t means test Medicare, you don’t means test your contribution to higher education because it has public benefit. That’s what we would like to move towards, but we would like the Productivity Commission to outline how we would move to that, that is certainly what Anthony Albanese flagged last night is that after our three year child care boost we would look to move to a 90 per cent subsidy for all Australian families.

Caller

RISHWORTH: Well the family does qualify for the money but the money goes to the centres. So it’s a bit like with Medicare which you qualify for if you’re an Australian citizen and if you’re not on the pension you do have to pay a co-payment, but the Medicare rebate does go directly to the doctor. That is similar to what happens in the child care sector at the moment, you qualify for a certain amount, the portion that the government is paying goes directly to the child care sector and then parents have to pay the gap.

But in terms of why it’s good for the whole economy and why particularly our proposal is good for the whole economy – the government’s announced a trillion dollars of different measures, it varies in how much return you get for the economy, but they haven’t been able to demonstrate that any of their proposals deliver as much return as this would. This proposal could deliver between $4 and $7 billion to our GDP, that is economic growth and I challenge the government to point to any of the measures that make up a trillion dollars that would deliver that type of economic benefit.

BEVAN: Amanda Rishworth you’re more than welcome to stick around but I think you do have a press conference to get to.

RISHWORTH: I do, thank you so much.

BEVAN: We’ll let you go thank you very much for your time Amanda Rishworth.

ENDS

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