Sources say Australian Conservatives senator has expressed objections about ‘a catch-22’ situation in childcare

This article is more than 3 years old

This article is more than 3 years old

The former Liberal senator Cory Bernardi has signalled he is unlikely to support the government’s childcare reforms as backroom wrangling intensifies over the $1.6bn package.

Government sources have told Guardian Australia that Bernardi has expressed objections about “a catch-22 situation” in childcare where more government funding has resulted in higher prices for families.

The Australian Conservatives senator first signalled his objections to the childcare system during a Senate estimates process at the beginning of March, when he raised concerns about the access guidelines for childcare centres.

Coalition childcare changes • A single means-tested childcare payment will replace the existing rebate and benefit

• The streamlined payment will cover up to 85% of the costs of childcare for some families, depending on household income • It will be determined by an 'activity test' that considers the amount of work, training or study parents do • The entry point will be four hours of activity a week • The government says it will stop childcare fees increasing 'incessantly' by capping the hourly rate, indexed to inflation • Some families who don’t meet the activity test can access a childcare safety net

The government had been counting on Bernardi’s support, so his potential opposition to the $1.6bn package has caught ministers on the hop.

The Turnbull government has cut deals with various crossbenchers in order to allow a revised savings proposal to be submitted to the Senate on Wednesday, which includes a freeze in the rate of family tax benefit for two years, to help offset the cost of the new childcare reforms.

The Nick Xenophon Team demanded as part of its negotiations that the government maintain $61.8m in existing childcare funding for Indigenous, remote and disadvantaged communities, and commit an additional $49m for services in remote communities or highly disadvantaged communities.

Crossbenchers Derryn Hinch and David Leyonhjelm sought agreement that the government would ban childcare subsidies for families earning more than $350,000. Leyonhjelm also wants a gradual cut off in subsidies once family incomes reach $200,000.

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Like Bernardi, Leyonhjelm has not given the government any guarantees that he will vote in favour of the package once it emerges from the process of amendments.

Campaign group The Parenthood has expressed concern about the Hinch and Leyonhjelm amendments on the basis that childcare should be funded in the same way as other tiers of education.

“Our childcare subsidy system is not welfare but an integral productivity measure. Early learning is a universal right that must be afforded to all Australian children,” said Nicole Lessio, principal campaign manager at The Parenthood.

“There is no limit on who is eligible to attend our public schools and our independent schools receive significant funding support from the government – early learning should not be any different.”

It is possible Labor and the Greens could vote for the package, with amendments, but neither party yet has a definitive position.

The wrangling over the childcare package is happening in parallel with negotiations over the new savings bill.

The government on Wednesday moved to extend the Senate sitting hours in an effort to push the childcare package and the recast savings bill through the parliament by week’s end.

In an effort to break the Senate deadlock, the government dumped its $4bn “omnibus” savings bill, bringing forward a $2.4bn package.

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The original $4bn package contained measures including cuts to family tax benefits and the paid parental leave scheme, scrapping the energy supplement for new recipients, requiring jobseekers under 25 to wait four weeks before accessing income support and cutting the pension to migrant pensioners who spend more than six weeks overseas.

To try and push the childcare package and some savings measures through this week, the government has, for now, shelved proposed changes to paid parental leave, the energy supplement abolition, the migrant pensioner cut and the proposed four-week wait for unemployment benefits.

A decision will be taken at the looming budget about whether these measures will be carried forward, or ditched.

The NXT has signalled it will support the savings proposal but discussions are continuing elsewhere.