What do the major parties have in store for parents, kids and people on welfare?

The federal election has been billed as a referendum on the economy and climate change - and a showdown between Scott Morrison and Bill Shorten.

But in among the debates about franking credits, carbon credits and space invaders, the parties also have some major policies on the table in terms of families and welfare. So are there any differences between the two? Who stands to benefit? Who could miss out?

Opposition Leader Bill Shorten and Deputy Opposition Leader Tanya Plibersek (right) at a childcare centre. Picture: AAP Image/Darren England

Opposition Leader Bill Shorten and Deputy Opposition Leader Tanya Plibersek (right) at a childcare centre. Picture: AAP Image/Darren England

What is the Coalition doing on childcare?

The Coalition overhauled the childcare payments system as recently as July 2018. Along with rolling several payments into a new, single "childcare subsidy" the Coalition increased payments to low- and middle-income families. Families need to pass an "activity test" to get the subsidy, which means the hours families work per fortnight have a bearing on their hours of subsidised care.

Under the current system, if your family income is up to $66,958, you can get 85 per cent of your childcare fees paid (based on an hourly rate cap). This then slides down to 20 per cent for those earning $341,248. Those who earn $351,248 and above receive nothing.

According to the Liberal Party, a "typical" family is about $1300 better off per year under the changes, which it says is helping about 1 million families. As part of these changes, the Coalition put an extra $2.5 billion into the system.

Ahead of election day, the Coalition is not suggesting any more changes to the existing system.

Does Labor have a different plan?

Labor surprised the childcare sector, midway through the election campaign, by announcing it would put an extra $4 billion over four years towards reducing childcare fees.

This would see families on incomes up to $69,527 get 100 per cent of their childcare fees paid for by the government (so long as their fees are under the government's cap of $11.77 an hour). There would also be more generous subsidy rates for other families who earn up to $174,527.

Labor says about 887,000 families would be better off and that average annual savings would be about $1400 or $1200 per child, depending on a family's income level.

Labor has previously been critical of the activity test, arguing it is unfair on kids from disadvantaged backgrounds. It has not made any changes to the activity test so far but has said it will "look at" the drop in the number of children from vulnerable families attending early education and care. "We're committed to reviewing the circumstances for those families," deputy leader Tanya Plibersek says.

Is this the same as boosting childcare workers' wages?

No, that's a separate policy but one that goes to the heart of the value placed on childcare and the people - mostly women - who provide it. Childcare workers earn as little as $22 an hour and have been campaigning for many years for a pay increase. Labor has recently pledged to boost the pay of about 100,000 early childhood educators by 20 per cent over eight years. It says this will be in addition to any wage increases made by the Fair Work Commission or any wage increases from employers.

Labor says the policy will cost almost $10 billion over the next decade. The Coalition has released modelling that says it would cost more than $1.6 billion a year, once it is fully up and running.

Labor says it would start negotiations with the early childhood sector in its first 100 days of government to boost wages but, so far, there is little detail about how the boost would be implemented. Childcare policy experts warn the set-up will be very complicated.

Since the announcement, Labor has given mixed messages about whether this approach could apply to other industries. Asked recently why aged care workers were not considered for a wage boost too, Bill Shorten told ABC television show Q&A: "The fact that we look after early childhood educators now does not mean that we won't work to help aged care workforce in the future."

The Coalition, meanwhile, has attacked the plan as "highly irregular" and a "socialist experiment".

Won't all this extra money - for both parents and workers - just drive up childcare fees?

Labor says it will get the Australian Competition and Consumer Commission (ACCC) to make sure childcare operators don't just increase fees in line with the increase to the childcare subsidy. It also insists the boost to workers' wages will not hurt fees because a) government will fully fund the pay increase and b) it will ensure there are "audits".

The Grattan Institute, a public policy think tank, has warned that childcare centres will be tempted to increase their fees, given the extra subsidies. It notes previous attempts to use the ACCC to monitor prices, such during the introduction of the GST, had "mixed success".

Prime Minister Scott Morrison meets children from a nearby school following a press conference in Perthin March. Picture: AAP Image/Richard Wainwright

Prime Minister Scott Morrison meets children from a nearby school following a press conference in Perthin March. Picture: AAP Image/Richard Wainwright

What are the major parties pledging on preschool?

In the most recent budget, the Coalition announced it would continue to fund an agreement with the states to ensure children get 15 hours a week of free preschool education in the year before they start school (preschool is also called kindergarten or kindy). It set aside $453 million to ensure funding until the end of 2020 for four-year-olds.

When asked about longer-term funding, Treasurer Josh Frydenberg said the government was "committed" to the program but added there needs to be a review and more work with state governments. Morrison has also flagged concerns with the "rates of the actual take-up" for the program.

Labor has committed to permanently funding the preschool program and will also expand it by adding a year for three-year-olds from 2021, also for 15 hours a week. Labor says this will cost about $1.8 billion for the first four years and about $8.6 billion over the next decade.

Are there any changes planned to paid parental leave?

Paid parental leave (PPL) policy has been a controversial topic over the past two terms of government. It became a flash point under Tony Abbott's prime ministership, thanks to his generous (read: expensive) policy that would have provided primary carers with six months of leave. The Coalition then swung around to a much harsher policy, which would have stopped women accessing both the full 18 weeks of government PPL (which is set at the minimum wage) as well as whatever PPL their employers gave them. Neither policy was ever legislated.

As of late last year, the Coalition has a new plan. From July 2020, it would allow families to split their 18-week government entitlement into blocks, any time over a two-year period. This is aimed at giving self-employed women more flexibility. The Coalition would also ease the work test in order to qualify for PPL, to open it up to women who have casual or irregular work, as well as women with hazardous jobs who need to stop work early in pregnancy.

These changes would also need to be legislated. There is not yet any specific costing for the policy, nor detail about the work test nor indication of the number of women who would benefit.

What about Labor's paid parental leave policy?

Labor also has a planned change with a pledge to begin paying superannuation on the government's PPL scheme. The government pays $719.35 for 18 weeks but without offering anything towards superannuation. Labor says its policy will be available to about 170,000 primary carers, who are mostly women, and is due to start in July 2020. Labor has set aside about $657 million for a range of measures to boost women's super (of which PPL is a component).

Both Labor and Coalition policies fall short of what experts recommend when it comes to PPL. According to a recent paper by 32 Australian academics with the Work + Family Policy Roundtable, paid parental leave should immediately be extended to 26 weeks, including superannuation, with consideration being given to paying this at wage replacement levels (ironically, pretty much what Abbott was proposing back in 2013).

Will we see a dole rise after the election?

Australian Council of Social Service chief executive Dr Cassandra Goldie says raising Newstart is the single most effective step Australia could take to reducing poverty. Picture: Alex Ellinghausen

Australian Council of Social Service chief executive Dr Cassandra Goldie says raising Newstart is the single most effective step Australia could take to reducing poverty. Picture: Alex Ellinghausen

One of the biggest potential changes in the welfare space is Labor's review of Newstart. Dole payments have not been increased in real terms since 1994, leading to a years-long campaign from welfare advocates for a boost to Newstart. A single person with no children receives a maximum payment of $555.70 a fortnight. The Australian Council of Social Service wants to see payments raised by at least $75 a week. A range of other groups, from the Business Council of Australia to the Country Women's Association, are also pushing for an increase to Newstart.

Labor has committed to doing a review of Newstart but there are not many other details yet, other than an acknowledgement that this will probably result in an increase. Shorten has said, "I do think Newstart is too low ... we are not reviewing it to lower it."

For its part, the Coalition does not think that Newstart needs to change. As Social Services Minister Paul Fletcher said recently, "our policy is to get people back into the workforce".

Do the parties agree on other welfare measures?

The Coalition's key plans for welfare include continuing a number of controversial programs such as the Work for the Dole scheme, the cashless debit card (which prevents welfare being spent on alcohol, gambling and cash withdrawals) and ParentsNext (which is designed to help those receiving the parenting payment return to work but which has been criticised as causing "anxiety, distress and harm" for parents ).

Labor has flagged plans to overhaul - but not scrap - the Work for the Dole and ParentsNext programs. It says it will not support any expansion of the cashless debit card (which is being trialled at various locations) unless the local community concerned wants it introduced.

  • SMH/The Age
This story What do the major parties have in store for parents, kids and people on welfare? first appeared on The Sydney Morning Herald.