The government agreed to crossbench compromises including banning childcare subsidies for families earning more than $350,000

The Turnbull government has secured its long awaited $1.6bn childcare package, reforms it says will benefit one million Australian families.



To secure the positive vote in the Senate on Thursday night, the government agreed to crossbench amendments, including banning childcare subsidies for families earning more than $350,000.

The Nick Xenophon Team also demanded 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.

The government was able to secure the package with crossbench support, which enabled it to reject amendments from Labor and the Greens which would have increased the base entitlement for children’s early education from 12 hours to 15 hours, and increased the household income threshold for the low-income entitlement from $65,000 to $100,000.



The package was passed in a late night vote on Thursday.

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Ahead of the vote, the childcare sector launched a last ditch effort to persuade the government to accept amendments ensuring that all children can access at least two days of early learning.

Childcare provider Goodstart Early Learning said without increasing the base entitlement from 12 to 15 hours, low-income families would be left worse off as a consequence of the Turnbull government’s long-awaited childcare changes.

In Thursday’s night’s Senate debate, Greens senator Sarah Hanson-Young said low-income families would be “thrown under the bus” unless the base entitlement was increased to 15 hours.

She said the existing care available to vulnerable children would be “slashed in half, overnight”.

Labor senator Katy Gallagher said the parliament had a “moral obligation” to ensure vulnerable children could access two days care, which was the standard recommended by experts.

But the government argued 12 hours would allow children to access two six hour days.

Education minister, Simon Birmingham, told the Senate the government was aware children from disadvantaged backgrounds benefited most from quality early childhood education and care, “and that’s why we’re providing additional support to those who need it most”.

He said the childcare safety net would support families earning $65,000 or less who do not meet the new activity test, by providing up to 24 hours per fortnight of subsidised care — equivalent to two weekly six-hour sessions — at the highest 85% rate of subsidy.

“This bill delivers on a core commitment of this government to deliver a more affordable, more flexible and more accessible child-care system,” Birmingham told the chamber.

The government carried the day with the support of the NXT, the One Nation senators, the Liberal Democratic party Senator David Leyonhjelm, and Derryn Hinch.

Earlier in the week, as a precursor to the positive childcare vote, the government secured a revised savings proposal worth $2.4bn which includes a freeze in the rate of family tax benefit for two years.

The savings bill imposes an indexation freeze in the base rate and maximum payment rates for family payments, saving the budget $2bn between now and 2020-21 – which offsets the costs of the childcare package.

The government opened the political year by wrapping together its childcare package and $4bn worth of saving measures in an “omnibus” bill – a presentation that was rebuffed by the Senate.

The earlier “omnibus” proposal contained cuts to family tax benefits and the paid parental leave scheme, scrapped the energy supplement for new recipients, required jobseekers under 25 to wait four weeks before accessing income support and cut the pension to migrant pensioners who spend more than six weeks overseas.

To push the childcare package through, 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 May budget about whether these measures will be carried forward, or ditched.