PM Turnbull poised to announce overhaul of childcare rebates

child in childcare

Prime Minister Malcolm Turnbull is seeking to overhaul the childcare rebate system and will announce his plans today when he addresses the National Press Club.

Streamlining support

The ABC reports that the Prime Minister is seeking to simplify the current system and hopes to make the system work better for low income families.

“The Government wants to streamline multiple childcare subsidies into one means-tested payment, with the highest amount going to the lowest income families,” the ABC explains.

“It also wants to remove the annual cap on the amount of childcare rebate paid to most families.”

Cuts to Family Tax Benefit?

Thus far, the government has argued that PM Turnbull’s reforms can’t go through unless they skim some funds from (much-needed) Family Tax Benefit (FTB) to pay for them. They’d worryingly be seeking to rob Peter to pay Paul, so to speak and it’s unclear what this means for recipients of the FTB, at this stage.

The changes in the spotlight today have been going back and forth since 2013. Many childcare providers and families are keen to see them implemented ASAP.

The PM’s proposed changes are part of a new childcare bill, due to be introduced when parliament resumes.

If all goes well (and it’s a big if), the government hopes to have this childcare rebate reform legislation passed in time for it to come into effect in the new financial year, July 2018.

That’s still quite a way off, with relief not coming fast enough for many struggling mums and dads.

Inadequately subsidised

The current childcare rebate is capped at $7500 per child. Back in 2008, that was enough to subsidise most families for the entire year, but rising childcare costs mean that most families hit their cap 30 weeks into the year. That leaves 22 weeks with no rebate for those families and parents under pressure to hand over a huge chunk of their income in childcare fees.

Many struggling families are simply unable to afford childcare at all, leaving them excluded from the workforce and leaving kids with limited opportunities, now and in the future.

Positive outcomes

Early Childhood Australia’s Samantha Page says more support can’t come soon enough and that the system pays for itself.

“The childcare package pays for itself, it pays for itself just in terms of improvements in workforce participation.”

“The real economic benefits are in children’s development outcomes over the long term and particularly where we can increase the participation of disadvantaged children,” Samantha told The ABC.


Goodstart Early Learning Advocacy Manager, John Cherry is hopeful this legislation will finally be passed and families can get the help they need.

“We’re certainly hoping childcare doesn’t get stuck in the politics. I mean, this is a no-brainer for Government, it’s fundamental part of jobs and growth,” John said.

“We’re really hoping that after waiting four years for this package to come through, that hopefully this time it will be delivered.”

We’ll be watching this closely to see what it really means for families, across the board.


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