Interview on 4BC Drive with Ben Davis

  • Minister for Education and Training

Topics: Delivering more affordable, flexible and accessible child care for Australian families; delivering fairer paid parental leave; Cory Bernardi; Salary of Australia Post executives

Ben Davis: Actually, look at this, I think we’ve got the senator back on the line now which is fantastic. I will get into this right now. I wonder if it’s going to be enough to stop haemorrhaging in the polls because today the Prime Minister has tried to woo families and your back pockets with it; announcing changes to child care rebates, paid parental leave, the Family Tax Benefit, claims that some of you could be $500 a year better off. But to help pay for it and to help repair the budget, those young people who want to apply for the dole, they’ll be forced to wait a month and made to complete a compulsory program before receiving it. Unemployed between the age of 22 and 24, they’d be shifted from Newstart to Youth Allowance, which would cost a single person living away from home around $90 a fortnight. And seniors living overseas would have their age pension cut off after six weeks which comes down from 26 weeks.

To unpack this, I do have the Child Care Minister, he’s also Minister for Education but child care is what we want to talk to him at this point. Senator Simon Birmingham, he’s got skin in the game. Senator, good afternoon.

Simon Birmingham: G’day Ben, good to speak with you. And apologies for the time shuffling and I’ll just hope the bells don’t ring again while we’re talking. 

Ben Davis: No, that’s okay. Can I ask you, well let’s get breaking news, what were you asked to vote on just then?

Simon Birmingham: Oh, the Senate has a process each day where all of the minor parties get to move a whole bunch of very random motions so I think we’ve had everything from some foreign policy matters to shipbuilding processes in SA and a whole bunch of others things that don’t relate to legislation, they’re just motions from the- largely from the crossbench and the minor parties.

Ben Davis: Alright then, let’s get into what we want to talk about. I’ve said to the Prime Minister and various ministers have wrapped this all up, rolled a few headaches into one nice little package. Let’s start with child care benefits. What’s set to change?

Simon Birmingham: Well, we’re proposing what is really the most fundamental overhaul of child care benefits in Australian history. We want to take what are currently a whole bunch of different payments – the Child Care Benefit, the Child Care Rebate – roll them into a single subsidy. More importantly, a single subsidy that has more effective means testing to it so that low and middle income families get more support to meet their child care costs; more effective activity testing so we make sure that it’s better targeted to those people who are working the longest hours, so they get the greatest support in terms of their child care services; abolish the Child Care Rebate cap, the $7500 cap that for low and middle income families in particular, many hit up against in February or March each financial year and then discover that they’ve got much bigger child care bills for the rest of the year, meaning they cut back on their work hours or take their children out of early education or the like. 

So, there’s a lot of different benefits to this proposal that will ensure especially those low and middle income families no longer fall off a cliff in terms of their support, get greater levels of subsidy for their care. That’s coming with some reforms, as I say, a tightening of an activity test to better tie support for those services to people who are working or studying [audio skip] …

Ben Davis: … test. I have a real big bugbear, and listeners to this program know this, that those parents who don’t work, have both parents working, that perhaps choose to put their kids in day care and child care but then don’t go to work, they just want to have free time, totally happy for that to happen but don’t ask the Government for any rebates. Is this what you’re looking at here?

Simon Birmingham: That’s the purpose of the activity testing …

Ben Davis: Hallelujah.

Simon Birmingham: … to make sure these people are genuinely working or studying.

Ben Davis: Excellent.

Simon Birmingham: There’s, of course, support we provide for guaranteed preschool access for all children so that they have that 15 hours a week of preschool before they go to school, making sure that also we have a safety net there for vulnerable children to be able to access early education and care opportunities, but otherwise …

Ben Davis: [Interrupts] Yeah. And see, that’s what it should be, it should be a safety net. It shouldn’t be one for parents to go, okay, I can offload my kids into day care, give me a bit of a break or whatever, but hello, that’s parenting. That forces child care prices up, that makes the supply and demand even tighter which has put the squeeze, I guess, on people trying to find places for their kids; those who genuinely need it.

Simon Birmingham: Well, exactly. And so that’s just making sure the system is geared to support really the hardest-working, lowest-income Australians. And if you’re working long hours but only as a single parent, perhaps earning $50,000 a year, there are significant benefits from these changes. That even with the changes to the Family Tax Benefit, the improvements we’re proposing in the child care subsidy, if that single parent earning $50,000 had two children in long day care for three days a week, they’d be around $2500 better off over the course of a year. So it really is better directing to somebody who’s working hard, doing the right thing by society out there, having a job, having a go, setting the right example for their children by being in the workforce, but of course needs to make sure those child care bills are met so that they can do so.

Ben Davis: Alright. That sounds good to me so far. Now linked into this is paid parental leave. More money for low-income families, less money for those better off, is that how it works?

Simon Birmingham: In very broad terms, what we’re proposing is to take what is currently and 18-week entitlement for paid parental leave from the taxpayer and translate that into a 20-week entitlement. But if somebody is receiving more than 20 weeks from their employer at their actual wage, then they won’t be getting that support. So, what we’re trying to guarantee is that everybody gets at least 20 weeks support to care for a newborn, to look after their family circumstance …

Ben Davis: [Interrupts] And that could be, say, ten weeks from the employer and then the Government would pick up the other ten weeks?

Simon Birmingham: That’s right. So the good news for …

Ben Davis: [Talks over] Or pick up the balance, yeah?

Simon Birmingham: … around 100,000 families each year is that they will benefit from an additional two weeks of support and those are families overwhelmingly who either get nothing from their employer or only a small amount of paid parental leave from their employer. But if somebody is on a generous scheme that pays them their full wage for 20 plus weeks, then of course they’re not in need of that level of government support.

Ben Davis: Senator Simon Birmingham, my guest this afternoon. He is the federal Child Care Minister, one of his portfolios, stepping through the changes that were put into the lower house today. What can you tell me about Family Tax Benefit? Because this is the confusing part, this is one that really does my head in; Part A, Part B, who’s getting what? It seems like you’re robbing Peter to pay for Paul, in some way.

Simon Birmingham: So, the Family Tax Benefit changes will see a phasing out of the end of year supplement which was sort of a lump sum payment that was introduced back in the Howard Government area when, firstly, the budget was flush with cash but secondly there were … processes families frequently faced, bills due to errors in estimates, and so on at the end of the year. Most of those processes have been ironed out of the system now, so that is a very rare occurrence. So we want to end … phase out that supplement payment but increase by $20 a week for many families the fortnightly payments they receive.

Ben Davis: So, that’s benefit A?

Simon Birmingham: That’s right.

Ben Davis: And okay, the numbers here, 1.2 million families will have an extra $20 a fortnight there but the end of year supplements from A and B will be scrapped. Now, I want to say- I want to put to you what the Opposition are saying here. They reckon Family Tax Benefit A people will be $200 worse off for each eligible child; Family Benefit B, $350 a year worse off as a family; pensioners would lose a $14 a fortnight energy supplement, while new parents, about 70,000 of them, would be affected by the parental leave changes.

Simon Birmingham: So, firstly the Opposition are of course conveniently forgetting about the extra investment we put into child care as a result of this package and the extra support for many families from that. So, they’ve just sort of put the good bits to one side and are only focusing on the … on what they would say are the negative elements.

Ben Davis: So, those negative elements …

Simon Birmingham: [Talks over] But, however, we …

Ben Davis: … are offset by the changes to child care? Is that …

Simon Birmingham: Well no, but we don’t shy away from the fact that in totality this package of reform will return funds to the budget. There is a saving attached to this, because of course we’re still deep in deficit as a nation, and some of these payment structures were put in place, as I say, some of them in the Howard era, some by other governments when the nation had far better financial circumstances, and now we have to try to make sure we repair the budget. 

We’ve made a number of compromises, though, in bringing this package to the parliament compared with some of the proposals that had existed over the last few years. So this is a much fairer package, and I’d say in many ways it is extremely progressive. As we talked about, the paid parental leave change, the child care change – these are changes that are supporting some of the lowest income families in Australia, but of course they’re also rewarding those who are the hardest working Australians as well. So- and they are really trying to better target assistance to those most in need, most worthy, and making sure that we actually get the right mix in terms of support for families so that they can effectively choose to contribute in the workforce, choose to work more hours, choose what suits their family circumstances best.

Ben Davis: And Senator, that’s what’s been put forward this morning. What we do know is these changes, when they were separate and I guess a little bit different – I know you’ve tweaked them now – but they were blocked by the Senate. How are you going getting these measures across? No doubt you would’ve been speaking to your fellow senators about this. How has the crossbench taken the new raft?

Simon Birmingham: We’re having continued discussions, and obviously a number of the changes to some of the social services, measured some of the savings, have been made in response to feedback not only from the community, but also from some of the Senate crossbenchers. 

Ben Davis: How’s Nick Xenophon, is he on side?

Simon Birmingham: Well look, we’re having really good constructive discussions with Nick and with other crossbenchers. I would hope that at some stage the Labor Party woke up and said we have a responsibility to make the welfare system fairer, the child care system fairer to actually better help hard-working Australians and to repair the budget, and that they might actually engage with us on this.

Ben Davis: Wishful thinking, I think, but if you get it through the crossbenchers- and actually now one of them is someone who was on your side: Cory Bernardi, your fellow South Australian.

Simon Birmingham: Well that’s right, and look, discussions have already been had there, and notwithstanding the disappointment that many of us feel, that Cory, who was elected as a Liberal, has chosen to defect from the party. Those discussions have been had amongst some of my colleagues and Cory, and we’re confident that we can make sure his support comes through – and we trust and hope the support of the majority of the Senate – so we can get these changes through, deliver more effective support to hardest working Australian families, and make some progress in repairing the budget at the same time. 

Ben Davis: You’ve had some choice words against Cory. Do you still stand by them?

Simon Birmingham: Well I described what Cory did as a dog act, and I think in terms of action, being elected just seven months ago by 345,000-plus South Australian voters and then breaking your bond, your word to them, is a dog act. But Cory is a Senator, we of course will continue to work with him, I will work with him. That was one act – and it was a pretty significant one – but that doesn’t betray the fact that we have to get on with the job at hand, as does he, and deal with the issues on a case by case basis. And he says he’s going to stick true to policies, principles, et cetera of the Liberal Party, so I trust that he will be supporting this package, as I gather he’s indicated to some of my colleagues.

Ben Davis: Senator, time is almost up. I did want to get into a few more Cory questions but I think we can let the listeners make up their mind for that. One thing though, and I guess because this is a government-owned enterprise, I want to ask you about Australia Post and the boss, Ahmed Fahour. It’s now been revealed – we know he was the, I think he was the $4 million man or $4.8 million man last time we looked – now he’s the $5.6 million man.

Simon Birmingham: Yup, and you know …

Ben Davis: [Talks over] Too much?

Simon Birmingham: … many people would shake their head in bewilderment, and the Prime Minister picked the phone up this morning after these revelations came through, which required a Senate committee to really force Australia Post to show its hand in this regard. The Prime Minister picked up the phone to the chair of Australia Post to express his displeasure. The legislation that Australia Post exists under gives it the authority to make these decisions independent of government, but the PM, Malcolm Turnbull, has certainly expressed his displeasure and we await a response from the Australia Post board as to what it is they will do in response to that.

Ben Davis: Many people might hear that and go, well, you’re washing your hands a bit. Is there anything you can do to influence the board, anything that Government can do?

Simon Birmingham: Well I think let’s firstly see whether this gets some progress and some action. Ultimately, board chairs of government business enterprises don’t much like receiving an early morning phone call from the Prime Minister not happy about what they’ve done. So hopefully that gets some action.

Ben Davis: What would be a good figure? Because 5.6, that’s 10 time what the Prime Minister earns.

Simon Birmingham: Yes, it is. Now, Australia Post is a big, complicated business. Ahmed Fahour used to run a bank before he went to Australia Post. Of course, he was recruited in a commercial way. It’s not for me to put a figure on it, but I think your listeners would obviously think that something much closer to what senior public servants tend to earn, rather than [inaudible] might accept, but taxpayers would question is probably the order of the day.

Ben Davis: Yeah, exactly. Senator, appreciate your time. Thank you for it this afternoon. Senator Simon Birmingham, federal Child Care Minister, along with Education. I know we did a few dances there, but I think it was important to ask those questions. 

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