Federal Budget 2020: Labor to promise free childcare for low income earners

Labor leader Anthony Albanese will make a pitch to millions of Australians who were ignored by the Coalition in its Budget cash splash.

Labor leader Anthony Albanese is set to promise free childcare for low income earners and cheaper care for thousands of families in Thursday’s Budget-in-reply speech.

In one of the biggest policy announcements since he secured the leadership after the 2019 election loss, Mr Albanese will reheat a plan to slash the cost of childcare.

Outlining his alternative vision for the 2020 Budget, Mr Albanese will accuse the Prime Minister of doing nothing to address the cost of childcare for families.

News.com.au has confirmed the plan will include free childcare for some workers, just as the original election policy offered free childcare to workers earning under $69,000-a-year.

But he’s set to dump a controversial element of Labor’s original policy – a wage subsidy for childcare workers that Scott Morrison previously slammed as “highly irregular”.

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The wage subsidy, which was pushed by unions and designed by Bill Shorten, was slammed as akin to “communism” by the Morrison Government during the election.

It will not form part of Labor’s policy prescription going forward.

Speaking this morning on Sunrise, host David Koch asked Mr Morrison why “free childcare” wasn’t part of the mix if he wanted to get women back to work.

“Nine billion dollars a year is what we spend on supporting child care, and those on low and middle incomes, they can get up to 85 per cent of their childcare rebated,’’ Mr Morrison replied.

“I mean, free childcare is not something we’re proposing. What that does is basically give massive subsidies to those on much higher incomes.”

But Labor’s policy has never proposed free childcare for high income earners, with the benefit limited to those earning less than $70,000 a year.

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Treasurer Josh Frydenberg delivered a Budget unlike anything Australia has seen. Picture: Getty Images

Labor’s treasury spokesman Jim Chalmers hinted childcare was part of the mix today when he claimed the Budget dudded female voters.

“There’s hardly anything for women, nothing for childcare, nothing substantial for public housing, nothing substantial for cleaner and cheaper energy, and nothing substantial for aged care,’’ Dr Chalmers told ABC Radio.

“It really beggars belief that you can spend that much money and rack up a trillion dollars in debt and still not address some of the obvious challenges in our economy now and into the future.”

Asked what Labor will be offering women in the Budget-in-reply speech today, Labor frontbencher Jason Clare also confirmed childcare was in the mix.

“Albo will have more to say about that in the Budget-in-Reply, but particularly in those service sectors like teaching, childcare, aged care, areas that are very female dominated, there’s a hell of a lot of work that needs to be done,’’ Mr Clare said.

Labor isn’t happy with much of the Budget, particularly the absence of any childcare perks. Picture: Getty Images

In the dying days of the 2019 election, then-leader Mr Shorten promised $4 billion for cheaper childcare promising 887,000 families could expect to see fee reductions of up to $2100 per child off their yearly childcare bill.

The original policy pledged to offer cheaper childcare for all Australian families earning less than $174,000.

It also warned Labor would consider price controls if operators fail to pass savings on to families.

For nearly 400,000 families, the policy change would deliver free childcare but only if they are working.

Labor also proposed asking the Australian Competition and Consumer Commission to investigate excessive fee hikes.

“So in other words, before operators can increase fees, they’ve got to get the approval of the government,” Mr Shorten said at the time.

“So we want to make sure that the money gets to the pockets of the families.

“Labor will increase the subsidy families receive, we will kickstart the process to limit out-of-control childcare price increases, and we will review the impact of the system on vulnerable and very low-income families.”

It’s expected Labor’s new policy will also refer the childcare issue to the Productivity Commission or the ACCC for further investigation.