David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Education and Training, Senator Birmingham. Will the minister update the Senate on the cost pressures faced by families with small children in child care?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I thank Senator Bushby for his question. I know Senator Bushby and, indeed, all members opposite and over here are well aware that many Australian families face real pressures in their childcare costs. On this side of the chamber we also have answers to how we are going to address those childcare costs, unlike those opposite. On this side of the chamber we recognise that already this year thousands of Australian families have hit a financial cliff in relation to their childcare rebate. The $7½ thousand rebate they received has simply run out and between now and the end of the financial year they face a very difficult choice. They choose either to work fewer hours and fewer days or to pay the full cost of their child care, often meaning they go to work for no particular real or meaningful benefit. We appreciate that, which is why the coalition is determined to abolish the childcare rebate cap that exists for all families earning less than $185,000. Ours is a meaningful change that will make a real difference to low- and middle-income Australian families, allowing them to choose the hours they work and the days they work without the fear of falling off the childcare cliff. We recognise this will support the 94,000 families who are estimated this year to face this childcare cliff, but it will also support tens of thousands more families who will be empowered to make a choice that better suits their financial circumstances.

Modelling suggests that around 230,000 Australian families will choose to work or to work more as a result of our childcare reforms—reforms that will allow them to do what suits their families, to pursue their careers, to make the choice to earn more money and to grow their own personal prosperity. All of this is supported, because we will eliminate this cap and better direct subsidies to support those on the lowest incomes so that they get more support for their childcare bills than ever before. These will be real reforms that will make a real difference for hard-working families. (Time expired)

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Bushby, your supplementary question.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Could the minister further update the Senate on how the Turnbull government is acting to address this important issue for families?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

Thank you, Senator Bushby. Our reforms are going to make a real difference to families. Let me give the Senate a couple of examples. One example is of a hard-working family with two parents going to work and earning about $80,000 a year. It is a family with two children attending long day care service for three days a week. Under our reforms that family will, in net terms, be around $3,000 better off a year. For that $80,000 family, $3,000 a year is a lot of money. That example is in net terms, taking into account family tax benefit changes as well as the benefit of the new childcare subsidy. Similarly, a single parent family earning around $50,000 with one child in child care for three days a week will be around $2½ thousand a year better off thanks to our changes. They will be better off because they will not hit that childcare cliff that families are currently falling off. They will be better off because they will be getting a higher rate of childcare subsidy. They will be better off because they will be able to choose to work more hours and the hours that suit them best.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Bushby, your final supplementary question.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Can the minister apprise the Senate of what is standing in the way of the Turnbull government's plans to address childcare affordability for families?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

Those opposite, sadly, are standing in the way of helping Australian families to better meet their childcare costs and in the way of empowering Australian families to better choose the hours they work, the days they work and the conditions they work in. Those opposite went to the last election with but one childcare policy—a policy that was to increase the childcare rebate cap from $7½ thousand to $10,000. Do you know what their policy would have done? It would have seen a fee escalation, as occurred before, and it would have put $176 million per year in the pockets of families earning more than $250,000. They would have been helping the wealthiest Australians, whereas our reforms aim to help those who are the hardest working and those who are earning the least. We are shifting the balance of the childcare rebate to help those who are earning the least, to give them the chance to choose to work more, and to help those who need that help the most.