Kylea Tink (North Sydney, Independent) Share this | Link to this | Hansard source

My question is for the Treasurer. At a recent deliberative democracy forum on affordability and access to early childhood education and care in my electorate of North Sydney, the participants unanimously agreed that the child care subsidy activity test should be abolished. This has also been recommended by the Productivity Commission and a number of other expert bodies. With the Mid-Year Economic and Fiscal Outlook around the corner and a budget next March, will the government abolish the activity test, and, if not, why not?

Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Thanks to the member for North Sydney for her characteristically thoughtful question about the activity test. Whether it's this Prime Minister, Minister Aly, Minister Clare, the whole cabinet or the whole government, we are big believers in the social and economic value of early childhood education and care. We see it as a game changer for families and for the economy more broadly as well. As you know, because colleagues have made it clear, we are considering a whole range of possible reforms as part of our commitment to try and get the system as close as we can to something which is a bit more universal.

Because of the work that was provided to us by the Productivity Commission and because of suggestions that we get from stakeholders, including the sorts of groups that you meet with as part of your job in North Sydney, we are looking at all of those sorts of options. As it turns out, I met with the head of the Productivity Commission this morning. We welcome the important work that they've provided us.

I think, to be fair, early childhood education and care has been at the very core of our agenda, really, since we came to office. The biggest new investment in our first budget, all the way back in October 2022, was our investment in cheaper child care. That meant that we lifted the subsidy to 90 per cent for families earning up to $80,000, benefiting 1.2 million families. We're very proud of that. As part of that reform package, the honourable member would recall that we made some modest changes to the activity test as well. We're also delivering a 15 per cent pay rise for our early childhood educators. That's because we value the work that they do and we know that to do that important work requires from us decent pay and decent conditions. We're very proud to be providing substantial funding for that as well. I think up to 200,000 educators will benefit from that investment. We're very proud of that, as I said.

More broadly, we're coming at the cost-of-living challenge from every conceivable, every responsible angle. Working parents were a big motivation for the tax cuts that the Prime Minister and I announced and which came in in the middle of the year. We wanted to make sure that working families got a bigger tax cut, particularly mums and particularly Australian women. Ninety per cent of women taxpayers are now getting a bigger tax cut than they would have under those opposite. Ninety-seven per cent of early childhood educators are getting a bigger tax cut as well.

So this is all about making it easier for people to earn more and keep more of what they earn, work more if they want to and have more kids if they want to. These are really central priorities of this Prime Minister and this government. We know that the member for North Sydney shares our objectives here. We look forward to discussing these really important issues in more detail in time.