Scott Morrison’s ‘family friendly’ budget lashed by new analysis

New analysis shows that the vast majority of Australian families would be worse off under the Coalition’s key family budget policy.

EXCLUSIVE

Scott Morrison’s claim he’s handed down a family-friendly budget has been smashed by a new analysis claiming the vast majority of parents will be better off under Labor’s childcare changes.

The Prime Minister has unveiled a $1.7 billion childcare change in the federal budget designed to help larger families with the cost of daycare.

But because the changes are tightly targeted at a small group of families with more than one child aged under six who have two kids in daycare at the same time, the benefits are limited.

Both Labor’s plan and the Morrison government’s own policy also don’t start until 2022.

According to new analysis based on Parliamentary Budget Office figures, the Labor policy will deliver higher rebates to every parent with one child compared to the Liberals’ offering.

Based on those figures, Labor’s analysis suggests only a small group of parents with larger families – around 8 per cent – will be better off under the Prime Minister’s changes.

The analysis finds 92 per cent of parents are the same or better off under Labor and of those families 86 per cent are better off.

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Scott Morrison with the 2021 federal budget. Picture: Sam Mooy/Getty Images

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The single biggest group that are better off under the Liberals are high-income parents in the $175,000 to $250,000 income bracket with more than one child in daycare.

There are around 43,000 families that will be better off under the Liberal’s policy according to the figures.

By comparison, there are 730,000 families with one child that will be better off under Labor because the ALP policy does not limit the more generous rebates to families with two kids in daycare.

There are a further 180,000 families with two kids that are the same or better off under ALP policy changes.

The PBO figures suggest the real benefits of the Coalition’s policy compared to Labor’s offer of higher rebates for more families only really kicks in when you have three children, including two in daycare.

This table from Labor shows how many families fall into each category and which ones would be better off under Labor (in yellow) and better under the Coalition (in red).

The vast majority of parents with three kids in daycare are better off under the Liberals but this involves a small group of parents – just 2 per cent of families.

Parents with a combined income of more than $250,000 with two kids in daycare are also better off but again this is small cohort of parents.

“This completely demolishes the Morrison government’s spin that they’re better for families than Labor,” Labor’s childcare spokeswoman Amanda Rishworth said.

“The Morrison government’s claim that Labor is not supporting low and middle income earners, or families with two children in child care, is blatantly false. In contrast, under Labor many more families are better off, and for longer.”

One of the big criticisms of the ALP’s policy is that it is much more generous to wealthy families.

The new analysis based on PBO figures does confirm that Labor’s policy would see a small group of parents with a combined income over $530,000 who are also better off.

According to the figures there are 3000 families better off in this income bracket under Labor and 1000 with the same income that are also better off under the Liberals’ changes, which abolish the $10,000 rebate cap.

Labor says the Morrison government’s claims are ‘blatantly false’.

Labor’s policy would also see more high-income earners with combined incomes over $350,000 better off compared to the Liberal Party.

But it’s larger families with three children – including at least two in daycare – that are better off under the Coalition’s changes. There are around 18,000 families better off in this category compared to Labor.

For low-income families earning under $69,000 there is also a small group of parents with three kids that are better off under the Liberal changes. However, the group that are better off is modest – around 1000 families.

The other big criticism of the Morrison government’s changes is they don’t start until July 2022.

However, the PM has offered some hope this morning that timetable could be fast-tracked.

“Now if that can be done sooner, then we will certainly, we will certainly move on that,” the Prime Minister told Sunrise.

“The systems changes that are required are quite complex, so we’re not going to overpromise and underdeliver here.”

He added, “If it’s possible to do these things earlier then we will certainly look at that. But right now what I can tell you is we can start it on that day, that is the date when our department says that we can get those changes in place. If we could do it sooner, we would.”

Education Minister Alan Tudge said the child care package is targeted, measured and provides support to families that need it most.

“Labor, on the other hand, wants to give families earning $500,000 a year a $50,000 taxpayer-funded gift,’’ he said.

“Families are already benefiting from our 2018 changes to the child care system – average out-of-pocket costs are less than $4 an hour and a quarter of families pay less than $2 per hour.”