Budget 2023: Women put ‘front and centre’

Labor will scrap the ParentsNext welfare program and remove mutual obligations for the 100,000 people receiving payments until the middle of next year.

‘Our work on investing in addressing gender equality is not finished in one budget,’ says Minister for Women Katy Gallagher. Picture: NCA NewsWire / Martin Ollman

Labor will scrap the ParentsNext welfare program and remove mutual obligations for the 100,000 people receiving payments until the middle of next year, as the government responds to key findings of its Women’s Economic Equality Taskforce.

Minister for Women Katy Gallagher declared Labor’s budget on Tuesday would do more for women than budgets “going back decades” and had put women “front and centre” in its decision-making.

However, Senator Gallagher signalled that many recommendations made by the taskforce – including an interim increase to childcare workers’ wages and paying superannuation to primary carers on paid parental leave – would not be forthcoming in Tuesday’s budget.

“We can’t do everything at once,” she told The Australian. “Our work on investing in ­addressing gender equality is not finished in one budget.”

The taskforce made six recommendations in total and called for the single parenting payment to be reinstated for women with children older than eight, the childcare subsidy activity test to be abolished and ParentsNext to be scrapped in favour of a new, more flexible program.

Senator Gallagher confirmed on Thursday that the government would put an immediate end to ParentsNext in the budget and replace it by mid-2024 with a new welfare program for eligible parents that demanded less onerous mutual obligations.

“The view was … to abolish it essentially because of the punitive nature of that program,” she said. “We know that about a fifth of people on it were in breach and lost income.”

“We’ve taken the decision to abolish it from when the contract ends on July 1, 2024, but as an interim step we would waive mutual obligations in the meantime.”

ParentsNext was designed as a pre-employment program for people on parenting payments who had not completed their final year of school, had not worked in the past six months and had children aged from nine months to six years old.

As of April, the single parent payment rate was $922.10 a fortnight, while the partnered rate was $631.

A parliamentary committee noted in its report to government earlier this year that the program had been conceived in an effort “to help young teenage parents and highly disadvantaged single mums with positive net outcomes” – chiefly to find work.

“ParentsNext, however, is now locked into a punitive frame and does too much harm for the good it also does,” the committee found.

Senator Gallagher said strict compliance – including the need for parents to attend frequent appointments and prove they were undertaking parent-related tasks such as attending playgroups – was damaging to the vulnerable cohort relying on the payment.

“You might have a nine-month-old baby. You’ve missed your appointments and all of a sudden you don’t get income for a month. I think we can get a better outcome for people without taking their money away,” she said.

The abolition of the $487m program will not produce a net saving for the budget, given the money will simply be rolled into whatever replaces ParentsNext.

“Some said to return it to budget, but I think the idea that you just abolish it and leave this group hanging is not ideal,” Senator Gallagher said.

She said to “stayed tuned” when asked what the cut-off age for the single parenting payment would be changed to, but she indicated there would be no decision on scrapping the childcare subsidy activity test until after a Productivity Commission review at the end of the year.

She rebuffed calls for childcare workers to be given an interim pay rise, despite this measure being recommended by the Women’s Economic Equality Taskforce.

“I don’t know that governments give interim rises to employees that aren’t employees of ours. The way we got to where we did with the aged care (pay rise) was because there had been a wage case before a commission and it had a finding and we are funding that finding,” she said.

“I’m not sure that we’re in a position to just say ‘We’ll give you (an interim wage rise) in the absence of the process that has been gone through in aged care’.”

Jim Chalmers also dismissed calls for an immediate wage rise for early childhood educators and pointed to enterprise bargaining reforms passed last year as having improved conditions for the cohort.