$900m saving on childcare reforms but bill faces hurdles

Labor’s childcare reforms are facing significant hurdles, with the Greens and the Coalition raising concerns with the $4.5bn package.

Education Minister Jason Clare. Picture: Bronwyn Farr

Labor’s childcare reforms are facing significant hurdles, with the Greens and the Coalition raising concerns with the $4.5bn package and urging the government to first set out its workforce plan for the early childhood sector.

Education Minister Jason Clare revealed on Tuesday a massive $900m saving to the government’s plan to make childcare cheaper, which Labor had originally costed at $5.4bn going into the election.

The saving was the result of ­updated modelling and a raft of “integrity measures”, which the government said would root out fraudulent activity and prevent dodgy operators from rorting money from the childcare subsidy system. The changes will include banning cash-in-hand payments for metropolitan centres.

“What the fraud is, is that a parent might sign up to a centre and the centre registers them as being there three days and they only have the child there for two,” Mr Clare told the ABC.

“The commonwealth pays for all three days through the childcare subsidy. The commonwealth is being defrauded for that third day. By and large, we want to go to the electronic model because it will stamp out this fraud.”

Despite the saving and the commitment to ensure no family is “worse off” under the package, the Coalition slammed the legislation. Opposition spokeswoman for Early Education Angie Bell said the plan did nothing to address workforce shortages.

“Centres are capping enrolments and educators are already overworked and stressed. The government’s legislation will only put further pressure on the early childhood education sector,” she said.

Greens education spokeswoman Mehreen Faruqi said the bill didn’t go “anywhere near far enough” and universal free childcare was the solution to issues related to cost of living and women’s participation in the workforce.

“The bill does not tackle the workforce crisis in early education. Educators must receive better pay and conditions that reflect the skill and responsibility of the work they do every day,” she told The Australian.

“At the very least, the bill should scrap the activity test that restricts access to subsidised childcare and the new subsidy rates should be brought forward to commence at the start of next year rather than wait until July.”

Labor’s reform package would slash childcare fees for 96 per cent – 1.2 million – of families and lift the maximum childcare subsidy rate to 90 per cent for families for the first child in care.

For a family with a combined income of about $120,000 a year with one child in care, that would lead to a saving of $1780 a year.

Goodstart Early Learning advocacy manager John Cherry said he was “disappointed” the reforms couldn’t be brought forward, but understood the technical difficulties in reconfiguring the Services Australia systems.

It follows a push for the package to be expedited by other advocates including former South Australian Labor premier Jay Weatherill, who is now the head of Thrive by Five.

“When it comes to childcare reform, there is no time to waste,” he said on Tuesday.

Goodstart chief executive Julia Davison urged the government to put the $900m saving into a staff wage subsidy. “An interim wages subsidy will help ensure we have the early learning workforce we need,” she said.