Julie Bishop: "Child care support is not a welfare payment".

On Budget Day 2015, Foreign Minister Julie Bishop explains the Coalition’s new child care package in her fortnightly column for Mamamia.

For too long, parents across the country have been denied important childcare choices due to a complex, inflexible and unaffordable system.

The Productivity Commission’s Inquiry into Childcare and Early Childhood Learning found that the previous government’s system for delivering support was unnecessarily complex, arguably inflationary and failed to target support where it would have the greatest impact.

Childcare fees were continually rising, including a jump of 50 per cent between 2007 and 2013, which was unsustainable.

Travelling across Australia, talking to families in community forums, shopping centres and schools I have listened to the concerns of parents wanting to return to the workforce. Many are faced with the same problem – there has been little incentive to do so, while caring for a family.

These conversations are a constant reminder that the current system is failing many people. When families, and women in particular, are faced with the prospect that returning to work will cause financial disadvantage it is clear that something needs to be done.

That’s why the Coalition Government has put families at the heart of the 2015-16 Budget.

Our new child care package Jobs for Families will provide greater choice for more than 1.2 million families, by delivering a simpler, more affordable, flexible and accessible child care system.

Child care is not, and should not be considered, a welfare payment. This is a key difference between our reforms and the system we inherited from the former government. The package is designed to encourage people to return to work and to stay in work because that provides greater financial independence.

Additional benefits to reforming the childcare system and making it simpler and easier for women to re-enter the workforce include increasing female workforce participation, career progression and leadership opportunities.

Addressing the systemic problems in our childcare system also results in a potential increase in the size of our economy. For example, if Australia lifted its female participation rate to be equal to the rate of say Canada, we could potentially see a $25 billion increase in the size of our economy.

The Government will establish a new and simpler child care subsidy from 1 July 2017. Families using childcare in 2017, on incomes between $65,000 and $170,000 will be around $30 per week better off. Families on higher incomes, on average, will continue to receive the same level of support.

Importantly, families on incomes of less than $65,000 per year will receive ongoing access to early childhood learning, and can be eligible for additional financial support through the Child Care Safety Net.

It is estimated that these new Jobs for Families package measures will encourage more than 240,000 families to increase their involvement in paid employment, including almost 38,000 jobless families.

We have already announced:

– A two year In Home Care (Nannies) Pilot to support 10,000 children in families who find it difficult to access mainstream child care services such as shift workers, nurses, police and families in remote and rural areas at a cost of $246 million.

– A new Child Care Safety Net to support families who are vulnerable and disadvantaged, with $237 million in additional funding supporting up to 95,000 children and up to 18,000 individual services and centres.

– $843 million over two years for pre-school programmes across Australia ensuring Australian families can continue to access 15 hours a week of pre-school education a year in 2016 and 2017.

This child care package is about jobs, choice and opportunities.

This is not only the right thing to do for our families, it is the smart thing to do for our entire economy.

Previous columns from Julie Bishop:

“We are defying the dark forces that threaten our freedoms.”
Julie Bishop on why Fashion Week is about more than just clothes.
Julie Bishop on why young Australian women are becoming radicalised.