Govt keeping options open on childcare
The future of the childcare system remains unclear with the Abbott government leaving the door open for means testing of rebates.
The government is expected to receive the Productivity Commission draft report into child care and early childhood learning this month, with the final report due in October.
The report will make recommendations on the economic and social benefits of child care as well as on trials of alternative models, such as subsidies for nannies.
It is also expected to canvass further means-testing, under which the wealthiest families will miss out on the childcare rebate.
The childcare benefit is now means tested, but the test does not apply to the childcare rebate, which applies for up to 50 per cent of out-of-pocket costs.
Prime Minister Tony Abbott has previously said that the rebate should be a “universal family benefit” and the coalition had no plans to means test it.
He told Macquarie Radio on Wednesday that the government had not received the commission’s report but was expecting it.
Asked whether means testing should be extended, Mr Abbott said: “I’m certainly not saying that everything’s got to be means tested by any means – I just think we need an affordable and accessible system.”
“A stronger child care sector, along with a fair dinkum paid parental leave scheme is a very important part not just of good family policy but of good economic policy.”
Labor child care spokeswoman Kate Ellis said means testing the rebate would make it harder for families to make ends meet.
“Tony Abbott has already announced more than $1 billion in cuts to child care support,” she said.
“By making such massive cuts before the Productivity Commission has even delivered its draft report, the government has seriously undermined the whole review, which was set up to make recommendations on access to affordable childcare.”
Assistant Education Minister Sussan Ley hit back, accusing Labor of scaremongering.
“Labor’s claims are false and a deliberate attempt to mislead working families,” she said.
Peak union body the ACTU argued in its submission to the inquiry that assistance should be means tested.
The financial benefits of the current system were “skewed towards high-income women and families”, the submission said, while the average annual total earnings for women was just over $43,000.
“The greatest impact of the cost of childcare on women’s labour market participation is around lower-income earners where it becomes economically unviable for women to return to work,” the submission said.
The Australian Industry Group said the rebate should be retained without means testing and its application extended to in-home nannies and other types of care.