More middle class welfare/ buying votes

Give it up, I say, to the Turnbull government that wants to pour even more taxpayer funds into regulated childcare the fee subsidies of which are overwhelmingly snaffled by the middle and upper middle classes.  This must be a try-on.

(Don’t rely on the pathetic PC report for justification, by the way – the supply response was trivial, so forget the participation rationale.)

And all those examples of the low income earners, the single mothers – give me a break. Just take a look at their participation – even with the massive subsidies, low income earners can’t afford formal childcare.

And even if they were keen to use childcare and get a job, the EMTRs are so high, that they make taking this route crazy in a financial sense. (Greater than 90 per cent.)   Apart from trying to shift up the subsidies for low income earners, the government has changed nothing else that would deal with these poverty traps.

Also take a look at this pathetic effort by Birmingham talking about parents hitting the $7500 cap.  Who are these people?  They are spending more than $15000 per child per year on formal childcare, for which they receive $7500 back.

Do he really expect us to believe that these parents earn less than $50,000 per year?  Pull the other one.

The childcare package of the government is just a sop to the middle classes who are pissed off that they are not getting more from the taxpayer.  Frankly, I think it is good that more people are passing the cap because this might put pressure on the childcare centres to think about their fees.

The last thing the government should be doing is remove the cap for those families earning less than $185,700 per year or shifting it to $10,000 per year for those on higher incomes.  And paying the fee subsidies directly to the providers is just a highway to rorting.

The government should say that we have just maxed out the amount that the taxpayer will shell out for subsidising childcare fees (dismiss that stuff about the benefits for children from disadvantaged backgrounds, they don’t attend) and tell the sector that if it wants to reallocate that amount, put up some suggestions.  We simply cannot afford to increase the outlays in this area.

In due course, we should shift to a tax rebate/deduction mix – that would sort out the compliance costs of the activity test – and do away with most of the regulations.  Sorted.

 

New data shows that thousands of families have hit the child care assistance cap just weeks into the new year, forcing up their out of pocket child care costs.

Minister for Education and Training Simon Birmingham said just two weeks into the new year, more than 3,600 families had hit the $7,500 rebate cap for access to early childhood education and care services.

Minister Birmingham said it was vital for Australian families that Labor and the crossbench support the measures needed to pay for the Turnbull Government’s plan to take a passive welfare payment and instead empower families to choose a greater level of workforce participation without being constrained by child care costs.

“We won’t give up on delivering more support for hardworking families to pay their childcare bills and to provide more support to parents who don’t currently receive Paid Parental Leave but the reality remains that in times of budget deficits any additional expenditure must be paid for.”

“Thousands of families are starting the new year having already run out of assistance for meeting the cost of early childhood education and care and by the end of June we estimate around 94,000 families will hit the rebate cap,” Minister Birmingham said.

“Families have told me time and time again that the cliff they face in the middle of the financial year cripples household budgets, means one parent goes to work just to pay childcare bills, results in fewer hours worked or children being abruptly withdrawn from quality early learning opportunities.

“The reforms the Turnbull Government introduced to Parliament last week are designed to stop families falling off that financial cliff.

“Our fully funded reforms will give relief to around 129,000 families by abolishing the $7,500 rebate cap for the vast majority of families and increasing it to $10,000 for higher income families earning $185,000 or more each year.

“Many thousands of other families avoid hitting the current cap by working fewer hours or having one parent not return to work at all.

“We’ll give families relief from the out-of-pocket child care cost pressures they face, end the stress of reaching a funding cliff mid-year and empower parents to make decisions about when or how much to work that best suit their family circumstances.

“Unless Labor and the minor parties support the early childhood education and care reforms the Turnbull Government introduced to Parliament last week, the number of families set to hit the rebate cap will rise to around 129,000 each year.

“The situation will only get worse. More and more families will be cut off from support for early childhood education and care.”

2015-16
Actual
2016-17
Actual
2017-18
Estimate
2018-19
Estimate
Number of families reaching the
CCR annual limit 
76,000 94,000 112,000 129,000

Source: Department of Education and Training administrative data

Minister Birmingham said the new data showed more than one in 10 Australian families using early childhood education and care would lose access to rebates part-way through the year unless Parliament passed the Turnbull Government’s reforms.

“We want to make the early childhood education and care system more affordable, more accessible and flexible for families,” Minister Birmingham said.

“In addition to ending the financial cliff many families face, we are better targeting child care support to the hardest working, lowest income families.  Even when changes to Family Tax Benefit are taken into account hardworking families will often be better off to the tune of thousands of dollars a year.

“For example, a single parent earning $50,000 with two children in care for three days a week will benefit in net terms by around $2,500 a year, while a couple earning $80,000 with two children in care for three days a week will benefit in net terms by nearly $3,000 a year.

“Our changes to the rebate cap and rates of subsidy are complemented by a range of measures in our reforms that will help families and children. We’ll put downward pressure on incessant fee increases with an hourly fee cap, we’ll slash red tape so services can be more flexible in the hours they offer, and we’ll deliver stronger compliance powers to ensure taxpayer funds aren’t abused.

“I call on Labor, who have offered no alternative to address these problems, and my crossbench colleagues to work with us to pass these reforms and fix a broken system.”

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29 Responses to More middle class welfare/ buying votes

  1. john malpas

    There would be no need for state organized childcare if women were not coerced into having a ‘career’.
    If they just looked after their own children.
    If this was permitted there might be fewer abortions and less need for ‘migrants’.

  2. Tel

    The childcare package of the government is just a sop to the middle classes who are pissed off that they are not getting more from the taxpayer.

    That’s not true at all, prices are high because of government protection for the industry. Parents are merely the conduit that channels the money.

    Back when daycare mums were all over the place, anyone could afford childcare without subsidy. Well it’s not like anyone is getting more out of the current industry than they did before, it just costs more.

    And paying the fee subsidies directly to the providers is just a highway to rorting.

    It doesn’t make any difference whether the fees are paid directly or indirectly, the money still ends up at the same place.

    “Our changes to the rebate cap and rates of subsidy are complemented by a range of measures in our reforms that will help families and children. We’ll put downward pressure on incessant fee increases with an hourly fee cap, we’ll slash red tape so services can be more flexible in the hours they offer, and we’ll deliver stronger compliance powers to ensure taxpayer funds aren’t abused.

    Yes, price fixing has had excellent results in the past.

    The whole of the education industry is a sheltered workshop, with high prices and poor performance. It’s difficult to outsource and politically powerful because if you complain you must hate kids or something. Kids spend something like 12 years in the care of government institutions and every year we get an output that knows less than what we got the year before. Now they need “quality early learning” in the hope that even more effort spent on this process might make up for lack of efficiency.

    It’s way time for a major overhaul.

  3. Roger

    There would be no need for state organized childcare if women were not coerced into having a ‘career’.
    If they just looked after their own children.
    If this was permitted there might be fewer abortions and less need for ‘migrants’.

    That’s heresy, john.

    The family must be sacrificed on the altar of the Economy.

  4. teddy bear

    I go for a walk around the neighborhood and the number of homes I walk past with a small childcare sign out the front is amazing. They probably only look after a few kids and probably one of their own, yet you can bet they are charging close to the same if not the same as a normal centre and have also declared their home a home office and get subsidies on that as well.

    Get rid of the childcare rebate and watch childcare fees collapse and the sector scramble to lobby the government to unwind the regulations they and the union asked Gillard to impose on them.

    Of course you would need to have no possibility of the rebate ever coming back which isn’t going to happen, so they are just another rotten industry holding the taxpayer to ransom thanks to pathetic politicians and rampant cronyism.

  5. stackja

    In my Sydney neighborhood there is the great baby swap in mornings and afternoons as one mum cares for her and others babies. Probably ‘illegal’ so must not be too precise.

  6. Diogenes

    Teddy,
    They have a lot of the overheads of the “dedicated” childcare centres. Mrs D investigated becoming a “homecare” mum. By the time we had complied with all requirements, it would have cost 50-100k. These include extensive kitchen renovation to almost commercial kitchen standard, a new “child friendly” bathroom, a virtual rewire etc etc, that number includes the Cert 3 she would need, despite having successfully raised 2 sons, one of whom had a disability. Needless to say this idea died a quick death.

    The sector needs to be completely deregulated.

  7. Tim Neilson

    Tel
    #2298117, posted on February 16, 2017 at 9:37 am
    Exactly.
    A $X taxpayer funded subsidy for anything almost invariably means a $X increase in the price.
    The only way to make child care more “affordable” is to abolish all subsidies and use the savings to fund tax cuts.

  8. .

    By the time we had complied with all requirements, it would have cost 50-100k.

    Anyone who mocks the concept of “regulation gone mad” is a man/woman-child or is on the take.

  9. teddy bear

    Diogenes that may be the case, but there wouldn’t be that many doing it if they were not turning a healthy profit.

  10. H B Bear

    If the Left weren’t committed to the destruction of the family as an unstated policy position the simple answer is to tax the family as an economic unit, namely income splitting and tax deductible childcare (possibly capped).

    Any policy that can give rise to an ABC Learning is fundamentally flawed.

  11. Diogenes

    Diogenes that may be the case, but there wouldn’t be that many doing it if they were not turning a healthy profit.

    There would be the actual charges, plus the depreciation for the renovations.
    Even with all that the payback period for us would have been somewhere in the 5th year.

    As I said that is doing everything “by the book” I wonder how many or technically illegal, and not getting the subsidy on teh basis it is better to get 100% of $10 per hour than 5% of $30 per hour

  12. teddy bear

    Diogenes given that there have been many of these types already caught out getting the subsidy while caring for zero kids I would wager there is a very large number not doing it by the book. It is a setup that is perfect for rorting, so perfect one wonders whether that was the intention.

  13. RobK

    “A $X taxpayer funded subsidy for anything almost invariably means a $X increase in the price.
    Everytime. The government sanction also becomes the rationale and so increases demand. It’s a complete construct.

  14. NewChum

    Diogenes that may be the case, but there wouldn’t be that many doing it if they were not turning a healthy profit.

    You dramatically overestimate the ability for the average stay at home mum to do the sums on that.

    If people could calculate expected returns the same way Diogenes has the fly-by-night franchise business and multi-level marketing businesses would collapse in a heap. Who here doesn’t know someone that ploughed a heap of startup into ‘name your hopeless business here’ and wound it up in less than two years?

    Hmm, given me an idea. Note to self : look at a multi-level marketing sales plan to set mums up with home childcare. The kit will sell for $4000 and step them though the process of untold government-subsidised riches from looking after kids in their house. Sign up five friends and win a trip to Bali!

    Excuse me while I look through the Range Rover catalogue in antipication.

  15. RobK

    Why is it the federal government has anything to do with childcare, surely it’s a state matter.

  16. teddy bear

    NewChum I see these “childcare centres” everywhere throughout the suburbs, I never said it was just the stay at home mums that are doing it, I said they could do it.

    I also think you severely underestimate the ability of people to rort government systems especially certain groups that are used to dealing with government and have entire support groups dedicated to helping them get the most subsides and welfare out of government.

  17. Helen

    HECS style scheme would work very well, levied on joint incomes of both parents. This would get some return from highly paid two income families .These families are driving the property market both for their primary residences and investment properties.They have risen to senior levels thanks to childcare. Let them pay it back say when family income exceeds $200000. s

  18. Kneel

    “… means one parent goes to work just to pay childcare bills…”

    Then clearly, it is not a sound idea for both parents to be working.
    Sheesh.

    I am a single, white male > 50, with no dependents and I have never gotten any Centrelink or other Govt subsidy. I’ve been working since age 16 and pay my taxes every year. I have zero chance of being able to afford to buy a home, simply because such ridiculous subsidies distort the housing market (yes, 457 rorts don’t help either)

    Bring on the Oz version of The Donald – you’ll get MY vote!

  19. NewChum

    I have zero chance of being able to afford to buy a home, simply because such ridiculous subsidies distort the housing market (yes, 457 rorts don’t help either)

    Your inability to purchase a house is to do with regulations on land use and excessive taxation, not subsidies.

  20. duncanm

    Minister for Education and Training Simon Birmingham said just two weeks into the new year, more than 3,600 families had hit the $7,500 rebate cap for access to early childhood education and care services.

    WTF? They’ve spent $15000 in the first 6 months of the financial year ?!

    If that isn’t a sign that they need to be targeted for rorting or more likely child abuse (having their child in care so much), I don’t know what is.

  21. Squirrel

    Fear not, Aunty has the answer – http://www.abc.net.au/worldtoday/content/2016/s4620983.htm

    In the meantime, while a desperate nation waits for the au pair tsunami to sort things out, perhaps someone might join the dots and realise that spending ever-increasing billions a year on child care subsidies while we have shameful rates of (official) unemployment and underemployment is not such a good idea.

  22. Habib

    Had senate QT on in the background when whoever the health minister is started banging on about how much they’ve blown on health spending, and how evil Labor was in office by cutting a few items. Seriously, WTF. Their rather lame claim to be slightly less shit-awful than Labor is thinner than a boarding house bedsheet. This followed the microcephalic attorney general defending a sling to that obnoxious “moslem engineer” that’s more ubiquitous on the ABC than Stephen sodding Fry to tour assorted ME shitholes to flog her tome of ignorant imbecility.

  23. Why is it the federal government has anything to do with childcare,
    surely it’s a state parental matter.

    FIFY

  24. Snoopy

    Hey! Don’t diss our Moslem engineer. She’s an expert in waterless, pebble-based sewerage systems.

  25. Lem

    There would be no need for state organized childcare if women were not coerced into having a ‘career’.

    Even if they wanted a career, where to find one in this depressed economy? The reality is there are no jobs being created, regardless of the faux statistics that are presented. All those jobless law (and media, and psychology etc )graduates depending on retail have HECS bills to pay. Women are increasingly staying home because they cannot get employment, and the cost of unionised childcare forces them out of the economic equation, when women consider the pay of jobs on offer. This is concerning considering the precarious financial position of many households.

    So, yeah. In this depressed economic environment, for which both sides of the aisle can take credit, there will be less jobs for women, less need for childcare workers, and serious domestic debt issues. You may get what you wish for John Malpus, but women sitting at home might not represent the rosy picture you desire, and more a symptom of a very much deeper Australia wide economic malaise.

  26. .

    Can you “labour hire” – so you simply go to someone’s house and look after their kids? Is that childcare or not?

    If they’re well to do and have 3+ kids, it could be lucrative.

  27. Combine Dave

    Can you “labour hire” – so you simply go to someone’s house and look after their kids? Is that childcare or not?

    Not if you want to suckle the sweet nectar of taxpayers money.

  28. .

    I reckon there is a secondary market in this, only if I had the brains to build a “care sharing” app. Uber loco parentis!

  29. Lem

    Uber loco parentis will only work if there is a market for women who can get jobs. No jobs, no ULP.

    Childcare is a parasitic industry that only survives on the back of demand where the economics of women working stack up.

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