Proposed ‘fair rebalancing’ deal would see some families receive extra two weeks of paid parental leave and a family tax benefit boost

This article is more than 3 years old

This article is more than 3 years old

Some families will receive two extra weeks of paid parental leave and increased fortnightly family tax benefit payments under a compromise proposed by the Turnbull government to pass other welfare cuts and childcare measures.

The government has rolled in changes to paid parental leave and family payments into an omnibus welfare bill that it will introduce on Wednesday.

At a press conference in Canberra the social services minister, Christian Porter, conceded the compromises “significantly reduce” savings but would fund improved childcare, a package previously blocked because it was linked to $3bn in family tax benefit cuts.

Nick Xenophon has given tentative support to changes to family tax benefits to pay for childcare improvements, but has signalled the compromise on paid parental leave has not gone far enough.

Labor said it would oppose the package, arguing it still inflicts a net cut to family benefits and will abolish the energy supplement which will impact pensioners.

Coalition releases childcare package compromise in bid to clear Senate – politics live Read more

Porter confirmed on ABC’s AM that, as Guardian Australia reported on Tuesday, the government will abolish the end-of-year supplements for family tax benefit B in stages but increase fortnightly payments for those on family tax benefit A by $20 a fortnight.

Porter conceded that hundreds of thousands of families would lose out from abolishing the end-of-year supplement, but said the savings would be reinvested to improve affordability of childcare.

On Wednesday Xenophon told ABC News Breakfast replacing the supplement with increased regular payments was “obviously a step in the right direction”. He acknowledged the government had improved the package, but stopped short of promising to pass it.

Porter announced that changes to paid parental leave, which would restrict the amount of taxpayer-funded leave parents with employer schemes can access, will only come into force nine months after a bill is passed, ensuring it won’t affect already pregnant mothers.

He said that 96,000 families with lower incomes who do not have generous employer schemes will get an extra two weeks of paid parental leave, worth an average of $1,300.

A further 68,000 families with employer schemes will no longer be able to access the current 18 weeks of taxpayer-funded paid parental leave. Instead, the government will only pay to top their employer schemes to a total of 20 weeks.

The Australian has reported those families will suffer an average loss of $5,600 and about 4,000 families will lose the entire $12,000 taxpayer-funded paid parental leave scheme.

Xenophon said he understood the paid parental leave changes would leave 60% of women better off and 40% worse off.

“We will still keep talking to the government about this, but at this stage we are not convinced but we will still keep talking,” he said.

Porter described the changes as a “fair rebalancing” between parents who are currently able to access the government scheme on top of employer schemes and those who only get the public scheme.

He confirmed that as a result of the paid parental leave changes, the government would save only $491m, down from the estimated $1.18bn between 2017 and 2020.

Labor shadow minister for social services, Jenny Macklin, said the omnibus welfare bill would cut paid parental leave, family tax benefits and the energy supplement, hurting millions of pensioners.

“If you’re a family on Family Tax Benefit Part A it will mean that you are around $200 a year per child worse off,” she said.

“If you’re receiving Family Tax Benefit Part B you’ll be around $350 a year worse off as a family.”

At a doorstop in Canberra, Pauline Hanson said the $700 a year per child supplement “needs to be reined back”.

“It is a lot of money to be handing out ... When I was rearing my children we got $8 a week,” she said. “There was no childcare, I as mother had to look after my kids.”

“I know circumstances have changed, but ... I believe in giving them a helping hand when you need a helping hand.”

The One Nation leader said Australia was about to hit $500bn in debt and had to rein in welfare payments which will hit $191bn by 2019-20 or the system would not be sustainable.

Asked why it had taken negotiation with the crossbench to achieve the changes, Porter insisted the government’s original position had been reasonable but it had to “deal with the landscape that exists”.

Porter said the omnibus bill was not sure to pass the Senate but the government had modified its proposal to “give it the best possible chance of success”.