This article is more than 4 years old

This article is more than 4 years old

Labor has unveiled its biggest promise to date in a $3bn childcare package which would provide greater rebates to families with incomes under $150,000.

The centrepiece is a 15% increase in the Child Care Benefit (CCB) as well as a rise in the childcare benefit cap from $7,500 to $10,000. Labor has said every family earning under $150,000 will benefit from the change.



Labor’s finance spokesman, Tony Burke, said the policy was a stark contrast to the Coalition, which has delayed rebate rises until 2018.

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“Any child who was born when the government first announced they were going to do something about childcare will be in school by the time their policy comes in,” Burke said.

“We’re not willing to wait. So we’d bring it all forward to 1 January. For the people who are reliant on the childcare benefit, that increases by 15%. That means for low to middle income earners up to $30-a-week improvement for them.”

The CCB is means-tested, with families earning under $43,727 per year receiving the full rate. The maximum rate of the CCB is $208.50 per week currently. In addition to the Child Care Benefit, working families are also eligible for the Child Care Rebate. The Child Care Rebate covers 50% of parents’ out-of-pocket childcare expenses, up to at $7500 annually.

The Labor policy would cost $3bn over four years and Labor claimed it would be funded within the existing budget, via cuts to social services and the baby bonus payment, worth $1.2bn over the next 10 years.



Labor has said there is no new money for the policy given it has supported $9bn in social services and childcare savings.

This includes some elements of the Coalition’s cuts to family tax benefit part B for couples with children 13 and over. Labor also supports a crackdown on family day care where carers were being paid while substituting their own children within paid places.



Labor’s childcare package includes an extra $50m for family day care to provide both flexibility and “investigation and compliance”.



Labor has also promised a 15% increase in “budget base funded services”, which covers 300 childcare, early learning and school aged care services in regional and remote areas “where the market would otherwise fail”. Many of the children accessing the places are Indigenous.



Labor said it would crack down on “unjustified price increases” through new transparency and accountability standards. Under the changes, every centre would have to report their fee structure to government.



The Department of Education and Training, which oversees the sector, would be given extra powers and Labor said it would work with more closely with the Australian Competition and Consumer Commission on compliance.

Labor pledged to put $150m towards a new early years’ workforce strategy and a national educator professional development program. Labor has committed to advocate in the Fair Work Commission to support of professional wages for early childhood educators.

The Coalition’s childcare package has been delayed until 2018 – after it was held up by the Senate’s refusal to pass cuts to the family tax benefit from the Tony Abbott’s unpopular first budget in 2014.



The family tax benefit cuts were to pay for the changes which would means test childcare assistance measures announced in the 2015 budget, with families on a combined income of $165,000 or less getting the greatest benefit.



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The Coalition would also impose tighter work tests to qualify for childcare benefits and would streamline multiple subsidies into one means-tested payment.

Labor would not support the government’s plan to tighten the work tests.

The education minister, Simon Birmingham, described Labor’s policy as a “bandaid” and said the Coalition’s delay would result in long-term reforms. He said previous childcare benefit increases by Labor went into the pockets of childcare providers.

“We want to make sure our system is implemented and we have a fully funded costed reform proposal on the table unlike this thought bubble from Mr Shorten which simply costs $3bn to the budget bottom line without any idea of how it will be paid,” Birmingham said.

Birmingham said Labor’s had decided to “junk” the activity test. “That means Mr Shorten is proposing to pay more taxpayer dollars for childcare for families who aren’t working studying or volunteering.

“We want to ensure assistance is targeted to those in the workforce, or studying or volunteering who are doing things to help their families to help society and make a contribution.

“That is essential to ensure our childcare system is fair, it’s essential you target support to those people so they can more easily find a place and you target the financial assistance so they more easily make ends meet.”

Asked whether the government could bring forward the childcare assistance, Birmingham said if the savings could be found, the changes could be brought forward from July 2018.

Labor has honed in on the childcare delay, saying its policy will deliver childcare assistance which is “fairer” and “faster”.



“Right now, too many Australian women have their pay packet eaten up by the costs of childcare,” the policy says. “Better childcare is essential to a growing economy. It’s central to Labor’s plan for fairer growth, real jobs and greater opportunities.”

Jo Briskey, executive director of advocacy group the Parenthood, said any increase in childcare benefits would take the pressure off families.

“What we know is, in particular for mums, a number of families are only working three days a week because three days of childcare is all they can afford before reaching the cap,” Briskey said.

She said while the Coalition was trying to reform the whole system, the policy measures were still two years away.

“The reality is for families they need cost relief now, not two years down the track and we’re hoping that today by the Labor will put a bit more pressure on the Coalition to perhaps come out with more detail about how they can not delay help for mums and dads on the cost of childcare.”







