Monday, 27 February 2017
Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017; Second Reading
What a contrast we see in this parliament today. During the motion to suspend standing orders, just before this bill was brought on for debate, we saw the Prime Minister prepared to support a cut to the wages of some of the lowest-income workers in this country. It is a government not prepared to support the Leader of the Opposition moving to make sure that penalty rates are protected in our nation.
Of course, the legislation in front of us today, the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017, is all about cuts for families, cuts for pensioners, cuts for young people and cuts for new parents—at the same time that this government is pursuing enormous benefits for some of the biggest companies in this country.
Labor cannot and will not support this bill today. It is fundamentally unfair. It is unfair because it rips money from the household budgets of some of the poorest Australians. It is unfair because it takes $2.7 billion out of the pockets of families. It is unfair because it rips $1 billion from the energy supplement, a payment that is designed to help pensioners, people with disabilities, carers and Newstart recipients with the costs of energy. This bill is unfair because it cuts paid parental leave to 70,000 new mums each and every year. This bill is unfair because it cuts support to young Australians seeking work, forcing them to live on absolutely nothing for five weeks.
This bill cannot be debated without referring to its origins—the 2014 budget. Many of the measures that have been put forward by the Liberals and Nationals in this bill have their origins in the 2014 budget—a budget so reviled by the Australian people that it has become synonymous with unfairness. Nearly three years ago, I said of those budget cuts that they:
… seek to destroy the fundamental pillars of the Australian way of life. They seek to savagely cut support for ordinary working Australian families and will push hundreds of thousands of vulnerable people into poverty.
Nearly three years later, my opinion has not changed—even if the Prime Minister has. This Liberal government just do not get it. They do not understand fairness, and they do not understand just how hard it is for ordinary Australians to manage. They do not understand what social investment means. They do not understand the need for inclusive growth that actually enables all Australians to reach their potential in life. If they did, the Liberals would not propose the measures contained in this bill.
The truth is that the Liberal Party's vision for Australia's future is about ripping up the basic social contract in this country. There is nothing visionary or reformist about forcing some of the most vulnerable Australians to accept cuts to their standard of living. The cuts in this bill are an attack on the Australian fair go. They are an attack on egalitarian Australia, an Australia that values fairness and opportunity for all. The Australia that I know says, 'If you fall on hard times, we are going to help you back on your feet.' The Australia that Labor knows says, 'If you are sick, disabled or old, we will not abandon you and leave you to fend for yourself.' Australia is not the United States of America. We look after one another. We take care of the most vulnerable. We invest in people. We do not abandon them. We are not a nation of 'lifters' and 'leaners', no matter what Joe Hockey says. We are a generous and compassionate country that deeply values fairness.
I have people say to me, 'There isn't much of a difference any more between Labor and the Liberals.' Well, I say to those people: 'Have a look at this legislation. Remember the 2014 budget. Remember the $8½ billion in cuts to family tax benefits that every single member opposite in the Liberal and National parties voted for. Remember the $23 billion in cuts to the pension as a result of changes to indexation that, once again, every single member of the Liberal and National parties voted for. And remember the GP tax. That is what the Liberal Party stands for. That is what the National Party stands for. Don't tell me there is no difference in the values of the two major parties.' The Liberal government still want to rip up Australia's social contract; they just have not been able to because Labor and the community have stood up. We have opposed these cuts and we have stopped them getting through the parliament.
It is important to say that all of this is happening, as I said at the beginning of my remarks, at the same time as this government is supporting a cut to penalty rates. Of course, Labor will continue to defend the lowest paid workers in this country, many of whom will be affected by the proposed cuts to family tax benefits contained in this bill that we are debating right now. With inequality at a 75-year high in this country, wages growth at record lows and underemployment at record highs, there could not be a worse time to either cut penalty rates or cut family tax benefits.
This bill also contains cuts to paid parental leave, it contains cuts to support for young jobseekers and it will see the abolition of the energy supplement. Marie Coleman from the National Foundation for Australian Women said that the decision to slash penalty rates was:
… a fair smash at younger women and female-headed families".
… … …
"Women are … more likely to receive minimum award wages and more likely to rely on penalty rates to meet household payments.
"When you've got that allied with the Omnibus savings bill … it's disastrous."
She said that just the other day.
The Liberals like to say that they are committed to representing family values in this place. But, for all their talk about wanting to help families with the cost-of-living pressures, the reality is plain to see in this legislation. Their talk about supporting families was probably best exemplified by the member for Warringah back in 2013 when he put forward his rolled gold paid parental leave scheme. He said then that that was his 'Nixon goes to China' moment. Then, of course, he scrapped it. On Mother's Day 2015 the Liberals decided to crack down on what they called 'double dipping'. What an insult. They said at the time that it was better to focus on child care. That was back in 2015.
Here we are in 2017 and they still have done absolutely nothing to support those families struggling with the cost of child care, and they have certainly failed to deliver for families. The reason for that is that they keep trying to link any improvements to the costs of child care to cruel cuts to family tax benefits. Of course, they are doing that again in this legislation. Put simply, the Liberals and the Nationals just want to rob Peter to pay Paul. With the introduction of this legislation, the government are not just holding families to ransom for child care; now they are including pensioners, young Australians and new mothers. They are holding all of them to ransom before they are prepared to do anything to help with the costs of child care.
Most recently, we have seen the Treasurer and the Minister for Social Services attempt to blackmail the Senate crossbench into passing the harsh cuts contained in this legislation, trying to hold the National Disability Insurance Scheme hostage against these unfair cuts.
It is shameful. It will hurt the most disadvantaged in our society. I just want to quote a young mother who really, I think, understands this issue. This is Tanya Humphrey, whose five-year-old son Lachlan was diagnosed with autism last year. She said, 'It feels like they're holding the NDIS to ransom—that unless you are willing to take a budget cut we won't help fund therapy.' That is exactly what this government is doing. Jo Briskey from The Parenthood said, 'I hope that the Turnbull government sees that they have made a mistake here, they have made a misjudgement, and that the NDIS should be above party politics.' I certainly hope the Minister for Social Services starts listening to the views of these mothers, who really understand exactly what this government is on about. I hope that the Minister for Social Services actually takes some action to reassure people with disability that the future of the NDIS is secure and that the NDIS has nothing to do with the cuts in this bill.
I want now to go through each of the individual measures. Labor, of course, will stand up for low- and middle-income Australians, as we have done ever since this government began its attacks on them in a cruel 2014 budget. This bill attempts to cut the end-of-year supplement of $726 per child from all families receiving family tax benefit part A with incomes below $80,000. Although the bill introduces a $20-a-fortnight increase to family tax benefit part A, all of these families—and this is the critical thing—will be $200 a year per child worse off. So that is what all the Liberals and Nationals will be doing. They will be saying to all the lowest-income families in the county, 'You'll be worse off.'
The bill also cuts the end-of-year supplement of $354 from families receiving family tax benefit part B. So that will be the end of that supplement, as well, for those families if this legislation gets through the parliament. The bill abolishes family tax benefit part B completely for single parents whose youngest child is 17 years old and still at school. It will leave those families more than $3,000 worse off. The government actually admits that their family payment cuts will leave 1½ million Australian families worse off. As I said, families losing their family tax benefit A supplements will be worse off by $200 for each child each year. Families receiving family tax benefit part B will lose $350 each year. And, of course, these cuts add up. They add up for families who are already struggling to make ends meet. For example, a typical family with two children and a single income of $60,000 will lose around $750 a year. A couple with one child on $75,000 will lose over $1,000 a year. As I have already indicated, those single parents who have a 17 year old finishing school will be the worst off of all, losing over $3,000 a year.
Over recent weeks I have received many emails from distressed families pleading for these cuts in family payments to be stopped. I will just quote from one email from a mother called Kelly. She has four children. She is living in Melbourne. She has just completed six months of chemotherapy. She will be around $1,000 a year worse off because of this Prime Minister's cuts to family tax benefits. Kelly says that the cuts will make it very hard for her to, for example, pay for the rego on her car, which, of course, she needs to get to and from her medical appointments. There are so many families just like Kelly's. So Labor will not be supporting these unfair cuts to family payments. On the measures relating to child care that are contained in the bill, I will leave it for my colleague, the member for Adelaide, to articulate Labor's position.
The next issue that I want to go to is paid parental leave. This bill reintroduces the government's cuts to paid parental leave by placing a cap on the total number of weeks a new mother can claim if she has access to employer-funded leave. Under the previous legislation, this cap was 18 weeks. In this legislation, it is being increased to 20 weeks. Currently, primary carers of a newborn who meet the work and income tests can access up to 18 weeks of leave paid at the minimum wage—that is, $672 a week—regardless of the leave they have access to from their employer. This bill will mean that women who have access to leave from their employer will only be able to top up this leave to a maximum of 20 weeks. Labor, of course, will continue to stand up for new mothers. By contrast, this government has called these new mothers scammers and fraudsters—working women who have bargained for paid parental, often sacrificing wage increases.
Labor will protect Australia's paid parental leave scheme. We introduced this support for new parents, which deliberately allows them to combine leave from their employer with the government scheme. It was designed to make sure that as many mothers as possible can get access to 26 weeks of leave at home with their babies, which is what is recommended by the World Health Organisation—time to allow them to bond with their baby, to breastfeed and to recover from the birth of the baby. This government wants new mothers to have less time at home with their babies, capping the scheme at 20 weeks. Nurses, teachers, police officers and retail workers would all have to return to work after 20 weeks. They are taking apart the incentive for employers to provide leave to their employees and making mothers choose between returning to work early and cutting their living standards. A new mother who had access to 10 weeks of employer leave could currently also access 18 weeks of paid parental leave paid at $12,000, bringing her to a total of 28 weeks leave. If these changes are implemented, she could only access 10 weeks of paid parental leave through the government's scheme, bringing her to a total of 20 weeks. That is eight weeks less at home with her new baby, and she would be $5,400 worse off. So the examples go on. 70,000 mothers will be worse off as a result of this change.
This bill also contains cuts to payments to young people. These are the most of draconian cuts of all in this legislation. The Turnbull government wants young job seekers under the age of 25 to live on absolutely nothing for five weeks. They have to wait five weeks before they can get Newstart if they cannot find a job. This measure, of course, had its origins in the 2014 budget, when the government wanted to make young people under 30 wait six months before they could access any income support. Labor opposed this then and we oppose this latest version now. It is unacceptable to abandon young people in this way. This is not about creating incentives for young people to find work. It is not about adopting the New Zealand approach, as the government sometimes likes to assert. It is just a cruel cut to support for young people, which will push young people into hardship and poverty. How on earth can these young people pay their rent or buy food if they have absolutely nothing to live on?
Labor will also oppose the government's attempts to rip $48 a week out of the budgets of young Australians by shifting 22- to 24-year-old job seekers from Newstart onto the lower youth allowance. This bill would also freeze for three years the income-free areas for all working age and student payments. This would mean that for three years the income tests applying to payments for single parents, job seekers and students would not keep pace with cost of living. Labor will stand up for young Australians and oppose all of these cruel cuts.
The Turnbull government also wants to abolish the energy supplement. That is also in this legislation. That is a cut of $1 billion that will come out of the pockets of pensioners, people with disability, carers and Newstart recipients. This cut was first announced in the 2016 budget, so the Prime Minister cannot actually blame the member for Warringah for this one. If the Prime Minister gets his way, single pensioners will be $14.10 a fortnight worse off as a result of these cuts to the energy supplement. That is around $365 a year worse off. Couple pensioners will be $21.20 a fortnight worse off—that is around $550 a year worse off. This supplement was designed to help pensioners and other social security recipients with the cost of electricity and gas. Now the Turnbull government wants to scrap it.
It is quite extraordinary—the hypocrisy of a Prime Minister who is desperately trying to convince people that he actually cares about helping Australians with the cost of energy and at the same time has brought legislation into this parliament, which is in front of us right now, where he wants to scrap the energy supplement—take $1 billion out of the pockets of pensioners. That is what this legislation will do. If is Prime Minister really believed in helping Australians with energy costs, he would immediately take this cut out of the parliament and out of the budget.
Let us be clear: this cut will have a big impact on the most vulnerable members of our community—Australians on Newstart. Labor believes that Newstart is already too low. The Newstart payment for a single person is equivalent to just 28 per cent of the average wage. If the energy supplement is abolished, someone on Newstart will be $4.40 a week or $220 a year worse off. ANU's David Plunkett estimates that new recipients of Newstart will be around $3.60 a week worse off than had the energy supplement not been introduced in the first place. To put it another way, the Turnbull government is actually proposing a cut in real terms to Newstart. That is what everyone over there is going to be voting for. If you vote this, you are cutting Newstart in real terms. That is what this legislation means.
So I say to everyone in the Liberal and National parties, think very carefully about what this cut will mean to the most vulnerable Australians, who are finding it very difficult right now. Labor opposes the scrapping of the energy supplement. We do not accept that pensioners, carers, people with disability and people on Newstart should be forced to accept these cuts. This is especially so at the time when this government wants to deliver a $50 billion cut to taxes on big business.
The Turnbull government also wants to cut the pension to around 190,000 migrant pensioners by limiting the amount of time that they can spend overseas and still get their full pension. Currently pensioners can stay overseas for 26 weeks and receive their full pension. Following that time the pension is reduced to a rate that depends on the number of years they have resided in Australia. But the Liberals and One Nation want to change that, with a cut to the time that pensioners can spend overseas. The government's proposed cuts in this bill will mean that after just six weeks overseas pensioners who have lived in Australia for less than 35 years of their working life will have their rate of pension reduced. Labor understands that these pensioners have worked very, very hard all their lives and deserve dignity in their retirement. The last thing they need is to be treated like a burden by this Prime Minister and the Liberal Party.
The Prime Minister also wants to remove the pensioner education supplement and the education entry payment. These cuts are also in this legislation. These are small payments that go some way to supporting people on income support who start studying. The Prime Minister also wants to completely take away the pension supplement that pensioners receive; he wants to take it away from those pensioners who go overseas for more than six weeks. Labor will oppose these cuts to pensioners.
What this bill says is that the Liberals and the Nationals would rather take money from the pockets of families, pensioners, people with disability, carers, new mothers and young people than make multinationals pay their fair share of tax. They want to take food off the tables of Australian households so as to give big business a $50 billion tax cut. Labor will not stand by and let this happen. We will fight these cuts once again. We will oppose this bill.
The Liberals seem to think that the 2014 budget was a failure because it was poorly sold. They think that the member for Warringah and the former Treasurer somehow stuffed up the PR on the 2014 budget. And somehow they think that now they have got a new salesman they can get some of these 2014 budget measures through the parliament. They just do not get the fact that the 2014 budget failed because it was unfair. It failed because it went to the heart of who we are as Australians, not because it was poorly sold. The 2014 budget was overwhelmingly rejected by the Australian people. And now, nearly three years later, this miserable excuse for a government comes back into this place and serves up the same unfair and unacceptable policies to the Australian people. Well the Australian Labor Party says no. We will not stand for this. Accordingly, I move the following amendment to the bill:
That all the words after "That" be omitted with a view to substituting the following words:
(1) declines to give the bill a second reading because it will hurt pensioners, families, new mums and young Australians while holding child care assistance and the National Disability Insurance Scheme to ransom; and
(2) calls on the Government to:
(a) drop their unfair cuts to pensioners, families, new mums and young Australians; and
(b) fix their child care changes so that vulnerable and disadvantaged children are not worse off and Indigenous and country services do not face closure.
The original question was that this bill be now read a second time. To this the honourable member for Jagajaga has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.
I rise today to speak on the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill and not in favour of the amendment. This bill is fair, reasonable and responsible and provides better targeted support to Australian families. This bill will improve the sustainability of government payments and will trigger the right levers to get more people participating in employment or onto better pathways.
This bill reintroduces the Jobs for Families Child Care Package and a range of new and previously introduced social services measures. Total savings delivered by the measures included in this bill amount to almost $5.5 billion in net savings. These savings are critical to ensure we can provide support where it is needed most and, more importantly, to ensure we do not place our children and grandchildren into even more debt.
Close to my heart, and a topic of much debate, is paid parental leave. It is likely that many of those in this House fortunate enough to be parents, like me, were not afforded paid parental leave at the time. Many Australians with older children possibly spent less time with their newborns and did their very best to provide a stable future. Parents are now fortunate to live in a time where the government will support them during this important postnatal period and beyond. The coalition government considers that all working parents should receive paid leave to spend time bonding with their newborn or newly adopted child in those early months, and the coalition's policy and this bill will provide an important safety net for families who do not have access to employer schemes or only have access to a few weeks.
This government proposes to increase paid parental leave to 20 weeks. Our changes mean that all mothers have the opportunity to spend equal time—that is, 20 weeks—with their newborn or newly adopted child. This change means that 53 per cent of eligible mothers who do not have access to employer provided parental leave will now be able to spend an extra two weeks with their new child. We need to ensure fairness in this system so that taxpayer funded paid parental leave is sustainable and available to eligible families. Our package is aimed at providing support to those who need it most. For this reason, mothers who are entitled to employer funded parental leave will be able to access a maximum 20 weeks combined parental leave from their employers and the government. Only a very small percentage of mothers—two per cent, or 4,000 people—will not receive parental leave pay from the government because of their generous employer provided leave. That means they receive more than 20 weeks from their employers at above the national minimum wage.
I have spoken before about the unfairness in previous iterations of the parental leave scheme that results in some mothers, particularly those mothers who work in dangerous occupations or who work casually, not able to access any parental leave. This is significant. In 2011, there were 1.23 million women in casual employment. There were 109,705 women working in construction and 30,798 women in mining. I am pleased to say that this bill will ensure those mothers have better access to parental leave by reducing the work test requirements. The current work test requires mothers to work 10 of the 13 months before the birth of their child, with a maximum break of eight weeks between work days during this time. Under the changes, eligible mothers will be able to have a 12-week break between work days in the 13 months before birth or adoption. Mothers in dangerous jobs will be able to use the hours from before they had to stop working to meet the work test.
In the past, I have received complaints from constituents about the difficulties in submitting their parental leave forms on time. The amendments in this bill relax the backdating provisions so that parents have more time to make their claim. And, importantly, we are reducing red tape for businesses. The Department of Human Services will now administer the parental leave pay and this is expected to reduce compliance costs on businesses by around $44 million per year.
There are many young, hardworking families in my electorate of Ryan who contact my office with their concerns about the cost of child care. They are concerned because the nature of the current childcare rebate scheme prohibits them from placing their son or daughter into child care while they work or study. The childcare reforms we are introducing are the most significant reforms to the early education and care system in four decades and respond to recommendations of the Productivity Commission inquiry into child care and early childhood learning, an inquiry instigated by the coalition. The reforms are also the product of in-depth and ongoing consultation with the sector. The Jobs for Families Child Care Package demonstrates the coalition's commitment to supporting new families and new parents. Approximately one million Australian families will be better off from the coalition's reforms to make child care more affordable, more flexible and more accessible. The childcare measures create a better environment for Australian parents who want to work or who want to work more to provide a stable future for their young families. We are committed to helping families who want to get ahead by providing accessible and affordable child care so parents can go to work.
Families, particularly those on lower incomes, will feel relief from out-of-pocket childcare cost pressures. We are introducing a new childcare subsidy, which is better targeted than the current childcare benefit and childcare rebate. The subsidy will provide low-income families with 85 per cent of their childcare fees up to an hourly cap, which decreases down to 20 per cent for families with very high incomes. This subsidy is subject to a three-step activity test, which aligns the hours of subsidised care more closely with the hours of work, training or study the parents may do. The more hours parents work, train or study, the more hours of subsidised child care they will be able to access. However, we recognise that children from disadvantaged backgrounds benefit most from quality early childhood education and care. So families with an income of less than $65,000 who do not make the activity test will still be eligible for the highest rate of subsidy. The childcare reforms will ensure the most vulnerable children get the best start in life. No child in Australia should be disadvantaged due to their family's financial situation. There will be an hourly rate cap to place downward pressure on fees and to set a benchmark, making child care more affordable for families.
Amendments in this bill will target those who work the most and earn the least. Take, for example, a hardworking family with young children living in Keppera, a suburb in my electorate. Just like many other families, they have a mortgage or pay rent, they have a car—all of the usual expenses—and of course they care for children. This family might make $65,000 a year and, as a result of the changes contained in this package, they will now pay approximately $15 per day for child care. This is positive relief where it hits hardest, the back pocket. We estimate that the measures in this bill will increase choice and access to child care that will result in more than 230,000 families increasing their workforce participation. I would also like to take the opportunity to note the red tape reduction for childcare providers. The new system will be much easier for providers to navigate and will give them more time to focus on providing care for our children.
This package will improve the lives of many families, but we need to pay for it. We must find savings in the budget to fund these measures. As a fiscally responsible government, this is what we do—unlike those opposite, who continue to drive this country, our children and our grandchildren further into debt. In recognition of the increasing cost pressures facing families, this government is increasing family tax benefit part A by $20.02 per fortnight for each child in a family up to 19 years of age. This means higher payments for 1.2 million lower income families or for 2.2 million children.
We will also provide an extra $19.37 a fortnight for people under 18 who are on youth allowance and living at home. This aligns the payment to the FTB part A payment for a child aged 13 to 19. This change is designed to encourage high school students to stay at school. It also helps simplify our payment system. As children get older, when they study and start entering the workplace themselves, we need to support parents back to work. We are making changes so that single parent families will continue to receive FTB part A for eligible children; however, they will only receive be able to receive FTB part B until the end of the calendar year their youngest child turns 16. Single parents over 60 years of age will be exempt from this measure.
In recognition of the improvements in service delivery and technology, we are phasing out the FTB part A and FTB part B end-of-year supplements. These supplements were introduced to help families with their end-of-year reconciliation of debts. However, they are no longer needed because we now have the technology to update and verify their incomes in real time. This is another red tape reduction measure.
We are also making changes so that young people are given incentives to stay in education or work. From 1 July 2017, young jobseekers aged 22 to 24 years of age who become unemployed will receive youth allowance until they turn 25 rather than being placed onto Newstart. This means that all people under 25 will be on the same payment arrangement regardless of whether they are unemployed or studying. Youth allowance also provides young people with more flexibility to earn an income. Anyone under the age of 25 and already on Newstart or sickness allowance will be exempt from this change.
This bill also introduces other measures designed to streamline and target our welfare system. We are going to implement a trial of seasonal work incentives for jobseekers. This measure provides a social security income test incentive to increase the number of jobseekers who work in specified seasonal horticultural activities—fruit-picking et cetera. This measure responds to concerns raised by the Australian horticultural industry about attracting the right number of seasonal workers. The incentives will commence as a two-year trial from 1 July this year.
A further measure will mean that pensioners who have worked less than 35 years in Australia and who receive a pension and remain out of the country for more than six weeks will have their pension adjusted. Currently, these recipients can remain outside of Australia for 26 weeks before their pension is adjusted, regardless of whether they have worked for two years or 35 years in Australia. Now the adjustments will be proportional to the years the pensioner has spent working in Australia. Taxpayers should not be asked to pay for pensioners to live overseas indefinitely without consideration of the time the pensioner has spent contributing to the Australian community. We will also be stopping payment of the pension supplement once a person has been overseas for more than six weeks. This payment was designed to help pensioners with their cost of living in Australia.
There are a number of other savings measures contained in this bill that help bring government payments into line with today's expectations and standards. For example, we are closing the energy supplement to new welfare recipients. The energy supplement was introduced to compensate Australians for the economy-wide carbon tax which was abolished three years ago. We are ceasing the pensioner education supplement because we now have other incentives and more appropriate programs and supports available for people who want to train or study.
In total, this bill delivers savings of almost $5.5 billion over the forward estimates. That is what responsibility looks like. We are paying for the reforms we are making, and we are using the savings in other areas. We are not saddling future generations with a growing debt problem. The passage of this bill is critical to providing a solid and sustainable future for all Australians. This bill will provide a foundation for better productivity and participation which will improve our economy for the future.
I am pleased to be part of a strong, coalition government which, unlike those opposite, is supporting hardworking Australian mums and dads, and their families. I commend this bill to the House.
What an absolute disgrace it is that this piece of legislation is before the federal parliament. Let us be very clear. What we have before us is a slap in the face to every mother, every father and every family who has cried out and said, 'We need greater assistance when it comes to the Australian childcare system,' because what the Turnbull government is saying to every one of those families is: 'You are just not a priority for us. We cannot possibly deliver anything unless you agree, at the same time, to cuts to the assistance that is given to some of the most vulnerable Australians in our community.' That is the choice that the Turnbull government is putting forward here—that, unless you are prepared to let pensioners have it, to let new mums have it, to let low-income Australian families have it, to let young unemployed Australians have it, there can absolutely not be any childcare reform for you. Every one of those members opposite is saying that to every family in their electorate.
It is not just families that have been waiting for many, many years to see some reform in this area. This government has also made history. They actually went an entire term of parliament in which they did absolutely nothing to assist the Australian childcare system. Sorry, I should correct that—they did one thing. They introduced their absolute dud of a nanny pilot program. That is the only thing they managed to achieve when it comes to trying to help Australian families with the cost, accessibility and quality of Australian child care.
I want to say up-front that Labor absolutely wants to see more investment in early childhood education and care. Labor absolutely was to see improvements and reforms to improve the system both for Australian parents and, importantly, for Australian children. For years, we have said that we would try and work with the government to come up with a package that this parliament could support and see through, and it is a great pity that the government have not taken us up on that offer.
This is the third time now that we have seen these proposed changes to childcare reform. Even though Labor and many stakeholders have been pointing out the problems with these childcare reforms for more than 18 months, the government still just do not get it or they still just do not care, because what they are proposing, putting aside all the cuts and just looking at the childcare changes, will leave one in three families worse off. It takes the special kind of genius that the Turnbull government seems to possess to spend hundreds of millions of dollars to make Australian families worse off! But we should be very clear that that is exactly what the bill before the House would do.
We should also consider that this government which says it is so urgent that this bill be passed by the House because Australian families are relying on these childcare changes is the very same government that has pushed back the implementation of these changes. They will not come into effect this financial year, and they will not come into effect next financial year.
What the government have done is refused to fix the problems in their proposal, and now they are holding any childcare reform to ransom for an extended shopping list of cruel cuts—cuts to pensioners, cuts to new mums, cuts to jobseekers, cuts to lower-income families, cuts to the very Australians who can least afford to bear the burden of more cruel targeting from Malcolm Turnbull and this out-of-touch government. And isn't that a story we are hearing far too often from this government?
Let me say now what the Prime Minister will not: 1½ million families will be worse off as a result of this government's cuts to family tax benefits. There are around one million families accessing the early education system right now in Australia. This bill before the House seeks to rob Peter to pay Paul. Families on the FTB A supplement will be worse off by $200 per child per year. Around 300,000 families losing the supplement will not receive the increase to the fortnightly rate, because they are on the base rate FTB A. They may already be struggling to make ends meet, but, according to Prime Minister Turnbull, they are the ones who must be forced to pay. They are the only ones that this government can find to target. A single-parent family on $60,000 with a 17-year-old child in high school will be around $3,300 a year worse off. If that is help for families, I think families would prefer the Turnbull government to just leave them alone.
On top of the family tax benefit cuts, this bill has even more cuts. It will slash paid parental leave, hurting around 70,000 new mums trying to raise their young families. We all know that the overwhelming evidence about the importance to mums but to their babies of having time in the newborn phase to spend together, to bond and to breastfeed. Other cuts include: ripping away energy supplements to pensioners, to Newstart recipients, to people with disabilities and to carers; pushing young people onto lower bands of Youth Allowance; scrapping the Pensioner Education Supplement and the Education Entry Payment; and stopping the pension to migrant pensioners who spend more than six weeks overseas. These are the proposals that the government speakers are not going to stand up and talk about, but these are the very real impacts that this legislation would have.
Linking their proposed childcare changes to these cuts is not only unfair—they are not even needed. Arthur Sinodinos, Malcolm Turnbull's right-hand man, said it best and most honestly when he admitted that the link between these cuts and the childcare reforms was for purely political purposes. At least he was up-front about it—more than any of the government speakers in this House are going to be. It is also important to remember that Labor has already supported over $6 billion in saving measures, which we saw as fair. We do not pretend that early childhood education comes free of charge; we just think that the government is charging the wrong people here. Just today in the media we have seen the government announce that it will finally be acting on rorting in Family Day Care and expecting to save another $250 million, which could be redirected back into the childcare system. That could mean that $250 million is not required in cuts to vulnerable Australians, but they have not amended the bill to do that. This is on top of close to $1 billion in savings that they have already made through changes to Family Day Care rules, changes which were supported by this side of the chamber.
Let's call it out for the rubbish that it is—that these cuts to vulnerable Australians are needed in order to deliver reform to child care is simply not the case. It is government spin and it is purely for political purposes. Of course, government is about priorities, but this government is saying that families are not a priority of theirs and that early childhood education and care is not priority of theirs. Yet, funnily enough, they have a priority to spend $50 billion on corporate tax cuts for multinational companies. You do not see them coming in here and talking about the need for cuts to fund that, because it is a priority of theirs and they can find the money for that, but child care is not.
We know that the government thinks that the only way they can pay for child care is by making lower- and middle-income Australians pay for it, but that does not stack up. Labor will stand up and call out that lie; and we will fight for the families that we represent. The government has also admitted to a significant reduction in the cost of their own policy. When they reintroduced their childcare changes in September last year, their election material and their campaign newsletters talked about their $3 billion childcare reform package. They repeated this claim in the media and in all of their backbenchers' newsletters, but the documents now before this parliament are showing that they are only investing half of what they initially promised into their childcare changes. Investment has dropped to just $1.6 billion. But does this mean that they have abandoned the cuts to pensioners, the cuts to the unemployed, the cuts to families, the cuts to new mums? No, of course not. It is just another example of this government being cruel and tricky.
Let's be very clear: this is not a plan to help families, and the government knows it. The only plan is to rip money from household budgets across Australia whilst giving tax breaks to big multinationals and, of course, to the banks. Labor cannot and will not support this bill, not just because of its farcical links to family tax benefit cuts. It is not just because parents would not see any relief when it comes to the childcare system until mid-2018, but it is also because there are details in these changes that have long caused us great concern. As I have made clear, we want to see improvements to the childcare system. We will support government measures to streamline, to improve and to simplify the system, but these proposals also include measures like threats to Indigenous and remote child care services and like the unfair activity test which would have a detrimental effect on some of the children who most need this parliament to stand up and fight for them.
There is nothing new about these problems. They have been exposed by two Senate inquiries; they have repeatedly been pointed out by Labor; they have been raised by early childhood experts and the sector. Proposing a package with such serious flaws once could possibly be considered as a mistake, but to introduce a bill three times in a row shows that the Liberals simply do not care about the most vulnerable children in Australia. It is shameful that each one of the government speakers will come in here and not once will they try to justify why they will threaten the viability of Indigenous services—why it is that they will see some of the remote regional services shutdown as a result of these proposals and why it is that they will cut the access of disadvantaged Australian children to early childhood education as a result of these measures.
We know that the government's proposed childcare changes will negatively impact Indigenous children—children who already have lower early education enrolment rates than the average in every state and territory. We are also worried about the impact on mobile services that serve families and children in Australia's rural, remote and regional communities. These are services that families rely upon and that are the only way those children have access to early childhood education. The government's package will scrap the budget-based funded program that provides subsidies to services. They have not been able to explain how pushing 300 Indigenous and mobile providers into so-called mainstream funding arrangements will work and they have not been able to guarantee that these services will not be forced to close. There is a very good reason they will not give that guarantee. We know that the services provide education to around 20,000 children, many of whom come from the most vulnerable and marginalised groups in our society. For Indigenous children Labor will stand up and fight. We will stand up and say that we cannot support a package which would see more money going towards the childcare system and less money going towards the most disadvantaged and vulnerable children in Australia. It is immoral to turn our focus away from the children who need this parliament to stand up and fight for them the most. We know the Secretariat of National Aboriginal and Islander Child Care has warned that:
These changes will diminish our kids potential to make a smooth transition to school compounding the likelihood of intergenerational disempowerment and unemployment. Children will fall behind before they have even started school and they will suffer greater risk of removal into out-of-home care.
That is what we will be voting on in this parliament.
The second major concern that Labor has is with the government's proposed activity test for subsidised care. The introduction of the new complicated test would remove the current entitlement of all children in Australia to have access to two days of early education. We know that this test—