The federal government is abandoning children’s rights to subsidised non-parental care. Apart from 15 hours preschool for four and five-year-olds, the newly announced childcare package focuses on pushing mothers into paid work or more paid work as a condition of subsidy – unless the child is in need of remedial programs, which may stigmatise many users. This contrasts both with overseas evidence that universal access is better for remedying disadvantage and the UK government election promise that all children aged three and older will receive 30 hours of free preschool care, up from 15, because it’s good for all children!
The idea that universal children’s services are an essential part of a network of community services is gone, together with other aspects of good social policies.
Another bad move is proposed cuts to paid parental leave, which will restrict most parents to 18 weeks. The budget plan is to refuse to pay the government benefit if employers fund top-ups. This abandons the recommended minimum standard of 26 weeks, which Prime Minister Tony Abbott touted only a few months ago!
Why the package is unfair and impractical
There are other serious flaws in the childcare proposals, which fail political, fairness and practical tests. To name a few:
The proposed subsidy changes (A$30 per week on average) may marginally increase affordability for current users but won’t necessarily increase “workforce participation rates” greatly. This is because the policy fails to address non-fee-related reasons for gaps in the supply of services including few services for unprofitable age groups (the under-threes); fewer places in high-cost areas/locations; lack of flexible hours; and local centre waiting lists.
The policy fails to recognise the problem of the lack of jobs, particularly those with the flexibility needed by parents who wish to enter the workforce. There is an imbalance of 150,000 vacancies versus 770,000 job seekers.
The government cuts to paid parental leave will mean higher demand for baby care, unless parents get a nanny.
We are now well below most OECD countries in funded parental leave, and many big employers may decide to stop picking up what should be government-funded (as the Australian Chamber of Commerce and Industry has already predicted).
Are the changes likely to happen? The government has set up barriers that suggest it isn’t seriously committed to the package. Its condition for implementing the childcare changes is the unlikely Senate passing of last year’s Family Tax Benefit Part B changes. These are particularly nasty, as they remove payments to sole parents and sole-earner couples once their youngest child turns six.
This is the last policy recognition of more traditional families. Such cuts to single-earner couples will not be popular with the Nationals and remaining conservatives in the Liberals. Despite changes over the past decade or more, which normalised paid work for almost all parents, these last changes are likely to re-open old differences between women. Those in paid jobs support the paid worker push and those not in paid work object to their children’s exclusion from subsidies.
Already, there is talk from the Nationals about income splitting for single-income couples to recognise they have only one tax threshold. These current policies also ignore the job pressures and contribution of time that most mothers and a few fathers make to meet children’s needs. Most parents also contribute considerable volunteer time – in schools, junior sport and elsewhere – which is not recognised in the package.
The earlier announcement of the unnecessary trial nanny program – an existing program is already operating and could be expanded – suggests the newer version will have fewer supervision and skill requirements. The risks of exploitation of workers and poorer quality of care have not been addressed.
The two-year delay in the introduction of the child-care package also raises questions. This leaves lots of time for further undermining of the community aspects of care and cost-cutting. The starting date will be after the next election, so it may not proceed in any recognisable form.
Savings to fund package open to negotiation
The prime minister’s responses on Monday to questions following the announcement of the package were revealing.
Q: What would you say to the 80,000 mothers and fathers who are told that they won’t be able to access the full paid parental leave scheme that they previously were able to access under the budget? And how can you justify the fact that you’re now cutting access to paid parental leave when you went to two elections with your signature policy of a rolled gold paid parental leave system?
Abbott: As you know, the policy that we took to the last election is off the table, and I guess there are all sorts of circumstances that have changed since the last election – certainly circumstances that have changed since the election before – and intelligent governments respond appropriately to circumstances as they evolve.
Under further questioning, Abbott also indicated that the government was open to alternative savings to fund the package:
This is a good package, a fair package, a package that will be good for families and good for the economy, so it’s socially desirable and economically desirable, but if we’re going to do it we do have to have offsetting savings, and let’s talk about where those offsetting savings must be, but savings there must be if this package is to go forward.
Q: Some of those families who won’t be better off, for example those who would lose Family Tax Benefit B once their youngest child turns six, what do you say to them? They’ll lose in the budget?
Abbott: That’s actually a measure from last year’s budget. It’s not a new measure.
Q: That needs to be passed to pay for what you’re talking about today?
Abbott: It’s one of the measures stalled in the Senate and the point we make is that we can’t go ahead with the child-care initiatives with the “Jobs for Families” package unless we get offsetting savings. We’re prepared to talk to the Labor Party and the crossbench about where these savings will be found but savings must be found for this to go ahead.