Nick Xenophon Team to vote against Malcolm Turnbull’s childcare and family payments reform

UPDATE : A war of words has erupted between Senator Nick Xenophon and Defence Industries Minister Christopher Pyne over suggestions the Government could fund welfare reforms by cutting its defence spend.

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A WAR of words has erupted between Senator Nick Xenophon and Defence Industries Minister Christopher Pyne over suggestions the Government could fund welfare reforms by cutting its defence spend.

The row comes after The Advertiser revealed Malcolm Turnbull’s childcare and family payments overhaul was in tatters because the three Nick Xenophon Team senators would vote against the Government’s entire suite of social service reforms.

Mr Pyne, one of the state’s most senior MPs, took to Twitter to declare: “Xenophon now wants to cut defence spending in favour of welfare. In 2016 he wanted 12 subs, 9 Frigates & 12 OPVs (offshore patrol vessels). Now he wants to cut them.”

“This would be diabolical for SA,” he tweeted further.

But it didn’t take long for Senator Xenophon to hit back, tweeting: “What a disgusting lie from @cpyne (Mr Pyne). He is a disgrace. It’s about cutting waste while maximising defence outcomes, local content & jobs.”

Senator Xenophon later described Mr Pyne’s characterisation of his comments as an “absolute lie”.

“All I was saying was we need to make sure we maximise local content, maximise local jobs and make sure we’re not wasting local money,” he said.

He said that the Government’s decision to build some offshore patrol vessels in Adelaide and then move the build to WA was one example where you had to question if that was the best use of taxpayer money.

Prime Minister Malcolm Turnbull’s childcare and family payments overhaul is in tatters because Senator Xenophon has declared that he and his fellow NXT senators will vote against the Government’s entire suite of social service reforms.

In a huge blow to Mr Turnbull’s attempts to prove he can work with the fractious crossbench, Senator Xenophon told The Advertiser on Monday that the Government’s latest negotiating tactic was “as subtle as a sledgehammer”.

Minister for Defence Industry Christopher Pyne has hit back at Nick Xenophon’s suggestions savings could come from Defence. Picture: AAP Image/Mick Tsikas

Senator Xenophon said that while his team was supportive of the “important” increases in child care subsidies, the reforms could not hinge on cuts to other Australians in need.

The Government last week announced it would combine a series of reforms into a single omnibus Bill, which included a massive increase in child care subsidies, changes to family tax benefits which cut end-of-year supplements but increased fortnightly payments, and preventing “double dipping” of paid parental leave.

Senator Derryn Hinch and Senator Nick Xenophon during Question Time last week. Picture: AAP

Treasurer Scott Morrison yesterday announced that an extra $3 billion would be committed to the National Disability Insurance Scheme, funded by using savings from the social service reforms.

He warned crossbenchers that any cuts within the social services reforms that were not passed “means that the NDIS special account will be poorer for it”.

“It will have to be made up from other sources going forward. These are the choices that are before the Parliament. There are no easy decisions here,” Mr Morrison said.

In the absence of support from the Opposition and Greens, the Government cannot pass the Bill without support from the Nick Xenophon Team.

Labor and the Greens have now each formally agreed to the oppose the Bill.

Senator Xenophon said he informed the Government of NXT’s decision not to support the Bill on Monday night.

“They were obviously disappointed,” he said.

“We will continue talking but at this stage we think they need to go back to the drawing board.”

Senator Xenophon said no amendment would make the Bill passable because it was “fundamentally flawed”.

“Pitting battling Australians against Australians needing disability support services is dumb policy and even dumber politics. As a negotiating tactic, this is as subtle as a sledgehammer,” he said.

Treasurer Scott Morrison during Question Time on Monday. Picture: AAP

Social Services Minister Christian Porter said there was about $5.5 billion of savings within the Government’s package. About $1.6 billion was proposed to fund the “biggest reforms to childcare in a generation” across the forward estimates.

“The single biggest myth that the Labor Party has sought to perpetuate from its years in office was that it fully funded the NDIS,” he said.

“It is simply untrue. The starting funding gap that Labor left this government in 2020 to fund the NDIS is, at this stage, estimated to be $4.1 billion and that grows to over $6 billion very rapidly.”

Mr Porter said the Government wanted to find “appropriate savings to fill that funding gap” rather than “resort to further borrowings or higher taxes”.

This morning Mr Porter said he and Treasurer Scott Morrison would speak to Senator Xenophon today to identify which of the 16 measures contained within the Bill he could support.

Mr Porter told ABC Radio the main issue was to find a way to fund the $1.6 billion child care subsidy, ruling out borrowing more money to support the scheme.

“We’ll see what measures Nick thinks he can agree with and see how close we can get to the $1.6 billion figure,” he said.

But Mr Porter conceded it was clear NXT’s had “fundamental” problems with the Bill.

He said while the savings were committed to the NDIS, the Government would not walk away

Senator Xenophon said he believed a small increase in the Medicare levy would be a “more equitable” method of funding the NDIS.

Senator Xenophon said NXT would be willing to consider some of the measures, if presented separately.

“The Team considers the child care reform measures contained in the Bill to be important for families and the sector, but it believes that these reforms should not come at a cost to families by way of the scrapping of Family Tax Benefit supplements and cuts to paid parental leave.

“The Treasurer’s announcement that any savings from the Bill will be tipped into the NDIS Savings Fund are considered by the Team to be ‘robbing Peter to pay Paul’ and viewed in the same way as holding child care reforms hostage to FTB cuts.”

Senator Xenophon said while the Government’s modelling of the changes to family benefits combined with increases to the child care subsidy would help some families, it was “only within specific narrow parameters on which the modelling has been done”.

He said NXT had previously ruled out and continued to oppose a four-week wait for the dole and paid parental leave cuts, which would no longer provide Government paid leave on top of that provided by employers.

Instead, the changes — which would save the Government about $490 million between 2016-17 and 2019-20 — mean the Government would only top up employer paid leave to ensure a new mother had a total of 20 weeks leave.

Issuing a warning on other Government reform plans, Senator Xenophon said: “NXT firmly believes that before considering cuts to everyday Australian families, the Government needs to pause future company tax cuts, crack down on multinational tax avoidance and ... urgently free up funds in the Automotive Transformation Scheme to stem the flow of jobs.”

Australian Greens Senator Rachel Siewert also warned the Government to “stop robbing Peter to pay Paul”.

“The Treasurer is trying to pressure the Senate to support their cuts — this is a cheap trick,” Senator Siewert said.

“You don’t build a strong society by pitting families against families. Both childcare and the NDIS could be funded if the Government dropped its fanatical approach to laying waste to our social safety net.”

Opposition social services spokeswoman Jenny Macklin described the Government’s plans as

“holding the NDIS hostage”.

“This is a disgraceful political game of brinkmanship,” she said.

Opposition education spokeswoman Tanya Plibersek said Labor would “never support the sort of cuts this Government is proposing”.

“We do support improvements to the childcare system, but we have concerns about the childcare policy that the Government’s put forward,” she said.

“We know that the most disadvantaged children will lose hours in childcare, and we know that small centres in remote communities, indigenous communities, country areas, will probably close down on the proposal that the Government’s got.

“A third of families will be worse off under this childcare package. So when the Government talks about childcare reform we’re up for it, but not a reform that leaves a third of families worse off, shuts down country childcare centres and leaves the most disadvantaged kids missing out.”

State Disabilities Minister Leesa Vlahos called on the Federal Government to stop using the NDIS as a “political plaything”.

Tasmanian Senator Jacqui Lambie said on ABC’s Q and A program last night that she would vote against the Government’s plan.

“I can tell what they can do with it ... and it’s stick it. They’re never going to get it through,” she said.

Unaware of The Advertiser’s report, Senator Lambie said the fate of the Bill would come down to NXT.

“I have spoken to Nick and explained it. I have come through that system. I was on welfare, on a disability support pension for 10 years trying to support for two kids,” she said.

Also on Q and A, Senator Xenophon questioned the Government’s plans to take away $900 million in concessions that were designed to compensate households for the carbon tax.

“We are now having price rises in our electricity that go far beyond the carbon tax because of dysfunction in the electricity market and the failure of the government and the Opposition to agree with bipartisan policy to stabilise to reduce prices and ensure security of energy supply,” he said.

No change: What it means to you

■ WORKING mothers will still be able to “double dip” on paid parental leave, giving them full access to their employer’s paid maternity leave scheme and 18 weeks paid leave from the Government.

■ FAMILIES with a combined income up to about $65,000 will continue to receive 15 hours of subsidised childcare even if both parents don’t work. It would have been reduced to 12 hours.

■ SINGLE-INCOME families will continue to receive Family Tax Benefit B at current levels. It was going to be axed for single parent families (unless the parent is aged over 60), and two-parent families when the youngest child turned 17.

■ YOUNG people aged under 25 receiving Government benefits who would have been affected by a number of changes to the way they were paid.

■ PENSIONERS living overseas who would have had their pension reduced after six weeks under the changes will continue to have access to it for 26 weeks.

■ FAMILIES with a combined income of up to $250,000 will miss out on increased child subsidies which increased the current 50 per cent rate and $7500 claim cap to up to 85 per cent with unlimited claims. The Government said its child care reforms would have increased workforce involvement for 230,000 families.

■ STAY-AT-HOME mums and those without access to an employer-paid scheme will only get access to 18 weeks Government paid leave instead of the 20 weeks the Government proposed.