Federal Budget 2015: Government unveils Jobs for Families package

THE government chose to reveal one of its big Budget plans on Mother’s Day, with a crackdown on people who are ‘double dipping’.

THE PRIME Minister has used Mother’s Day to reveal key changes to childcare payments that will be included in Tuesday’s Federal Budget.

Mr Abbott said he hopes the $3.5 billion Jobs for Families package will make Australia’s childcare system more accessible, affordable and simpler.

Savings earmarked under last year’s budget, which tightened access to the family tax benefit, will be used to help fund the package which is expected to impact about 1.2 million households.

The changes mean families could be better off by $1500 a year on average under the reforms which are designed to encourage mothers back to work, although some will lose out.

The package comes into full effect in 2017 and will put $30 a week back into the pockets of families earning up to $165,000 a year.

It will also deliver a streamlined, single childcare payment paid directly to childcare centres to reduce parents’ upfront costs.

But stay-at-home parents with a family income over $65,000 will no longer secure childcare subsidies.

The government estimates 240,000 families will get into work or work more as a result of the package.

“It is a very important economic reform, as well as a very important social reform,” Mr Abbott told reporters. He said many families come to the conclusion working to pay for child care can be “hardly worth it”.

“We are changing the economics of going back to work.”

Earlier, Treasurer Joe Hockey said the government will also close a loophole which allows parents to ‘double dip’ by gaining access to maternity payments from their employer and the government.

“At the moment people ... are effectively double dipping — we are going to stop that,” Mr Hockey said of the measure which is expected to save $1 billion over four years.

“You cannot double dip, you cannot get parental leave paid from your employer and taxpayers.”

Social Services Minister Scott Morrison said the changes would give families more choice, citing previous announcements on a nannies pilot and a safety net to support disadvantaged students.

The mid-2017 start date had been decided following months of consultation with families and the sector, he said.

Children of families with an income of $65,000 or under will continue to be subsidised for 12 hours of child care a week. But those over that threshold, with a parent not working, will miss out.

“The something-for-nothing bus for those above $65,000 on child care, where there’s no activity test, that will stop running on the first of July 2017,” Mr Morrison said.

HURDLES IN THE SENATE

But the government’s proposed childcare package won’t go ahead unless the Senate passes cuts to family tax benefits, Mr Abbott said, as they are tied to legislation still stuck before parliament.

“Unless we offset this new spending it cannot go ahead,” Mr Abbott said as he used Mother’s Day to unveil the key reform package.

Mr Abbott said the government will discuss the package with Labor, but the opposition has already said it will not support cuts to the family tax benefit in last year’s budget to help pay for the reforms.

“Children don’t get cheaper when they turn six. We didn’t support it then, we won’t be supporting it now, we won’t be supporting these cuts in the future,” shadow treasurer Chris Bowen told the ABC.

The Prime Minister Tony Abbott and Social Services Minister Scott Morrison unveiled the reform on Mother’s Day at a press conference in Sydney.

Labor is concerned some children will miss out on early education because of the changes.

“We don’t want to see children locked out of high-quality early childhood education,” opposition families spokeswoman Jenny Macklin said of proposals to cut subsidies for stay-at-home mums with family incomes over $65,000.

Ms Macklin also said Labor would not support the Abbott government’s move to tie the childcare reforms to changes to the family tax benefit.

Finance Minister Mathias Cormann insists that any new funding for child care must be offset by savings elsewhere in the budget.

“It really is for the Labor Party to think about whether or not they support better access to more affordable child care or whether they want to continue to stand on the sidelines,” he told Sky News on Sunday.

Greens Senator Sarah Hanson-Young said while the childcare package was “interesting”, she wanted to see the details and was concerned the availability of childcare places wasn’t addressed. She was also worried the changes to the activity test could make it difficult for mothers to find work without guaranteed child care.

Originally published as Federal Budget 2015: Government unveils Jobs for Families package