The reality is that for years now, hardworking Australian families have battled with a broken child care system – a system with considerable uncertainty, where families have struggled with exorbitant child care costs that dictate how much and for how long parents work.
On top of this, families are required to navigate through the current labyrinthine system of benefits and rebates which, quite frankly, is confusing and haphazard. As a parent who has been part of this system, I understand like many other families, just how important and needed real change is.
Australians need a child care system that better supports them – not one that punishes them for working or studying. We want a child care system that helps us get back into the workforce, not one that acts as an impediment.
The Turnbull Government’s overhaul of child care and early learning subsidies includes an extra $2.5 billion investment that will target support towards families earning the least and families working the most. It will also introduce hourly rate caps to put downward pressure on fee increases and abolish the annual rebate cap for most families.
The greatest level of financial support will also be given to families who earn the least.
Under our New Child Care Package, the old benefits and rebates have been replaced by a single, simplified Child Care Subsidy. And, most importantly, the former annual subsidy cap has been removed for families earning $186,958 or less. We recognised that too many families are hitting the annual child care subsidy cap in mere months. Under the new arrangements, these parents no longer have to stress about hitting a limit on their support. For families earning more than $186,958 up to $351,248 the cap has been raised to $10,190 per year, per child.
The new Package works in three ways. First, the level of subsidy a family is eligible for will be determined by their income, with most low and middle-income families receiving a higher subsidy than they do now.
Second, the number of subsidised hours per fortnight a family can claim will be directly proportional to the number of hours they work. This includes paid employment, training, studying or volunteering. The more families work, the more hours of subsidised care they will receive.
Finally, the type of child care services a family uses will determine the hourly rate at which the subsidy will be calculated, with an appropriate maximum rate to match different provider types. This will provide families with more transparency on the fees they’re being charged.
Under our new arrangements, we will provide the greatest hours of child care support to families who work the most hours. The greatest level of financial support will also be given to families who earn the least. I make no apologies for this.
Almost one million families throughout Australia will benefit from the new system when it comes into effect on 2 July. However, for families to take advantage of the changes we do need them to make the switch ahead of 2 July. To do this, they need to complete a Child Care Subsidy assessment through myGov or at www.education.gov.au/childcare.
This is about supporting families financially, and also giving parents the support they need to get back into work or study on their own terms. Hardworking Australian families have been let down by the current system and I’m confident the Turnbull Government’s New Child Care Package will deliver the child care and early learning support they need and deserve.
Simon Birmingham is the Minister for Education and Training