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Tony Abbott and Scott Morrison announced key changes to Australia’s childcare system and funding model on Saturday with a 3.5 billion dollar Jobs for Families package to be introduced in the 2015 budget on Tuesday.
The move will streamline childcare funding, by rolling the three current childcare payments into one means tested childcare subsidy.
In a move to encourage parents back into the workforce, this subsidy will not be available to families with a stay-at-home parent earning a household income over $65,000.
“This is a jobs package, not a welfare package,” Social Services Minister, Scott Morrison told reporters at a press conference on Sunday.
Families with a household income of $65,000 or under will have 85 per cent of childcare costs covered and Australian families on average will be earning an extra $15000 a year.
To fund the package, the 2015 budget will cut the current 18 week Paid Parental Leave funding to parents who are already receiving Paid Parental Leave from their employer.
Joe Hockey said thousands of parents were currently “double dipping” and receiving both payments.
The move will save the government a billion dollars in the next four years.
The Prime Minister hoped to introduce a six-month Paid Parental Leave (PPL) scheme during his time in the top-job but after the leadership crisis Abbot announced he would abandon the introduction of the scheme and focus on child care reform.
Critics – including those in his own party – raised concern over the PPL scheme becoming too expensive and claimed child care reform a bigger and more important issue to tackle.
While the family benefits tax is expected to be cut to help fund the childcare reform, the government is planning to put 10,000 shift worker families into two year trials for nannies, costing $246 million.
If the package passes the senate, it will be brought into full effect on the first of July, 2017.
“It is a very important economic reform, as well as a very important social reform,” the Prime Minister told reporters on Sunday.
The 2015 Budget will be announced at 7:30pm (AEST) on Tuesday.
