Reforms to childcare will be a boost for small business

Thursday 23 March, 2017 | By: Darrell Giles | Tags: childcare reform, paid parental leave, family tax benefit, omnibus bill

The Chamber of Commerce and Industry Queensland (CCIQ) welcomes childcare reforms, which should increase workforce participation through financially assisting parents in returning to work.

The changes will see the complex system of rebates and payments replaced with a single means-tested subsidy as part of a $1.6 billion package agreed to by the Senate.

CCIQ senior policy advisor Catherine Pham said the changes signal a win for business, particularly with the eligibility criteria, including parents must work or study for at least eight hours a fortnight.

“Measures which will increase the workforce mean that household incomes will rise and a likely increase in spending will translate to more jobs for Queenslanders,” she said.

“Childcare has given millions of parents the opportunity to continue to be productive and active in the workforce. The reforms are a sensible and valuable way of keeping this option open for many.”

As part of the deal, the Federal Government will freeze family tax benefit rates for two years and abandon the $20 fortnightly increase to family tax benefit payments, saving a total of $4.25 billion. 

The government had initially combined the $1.6 billion childcare reform package with a $5.6 billion plan to cuts in welfare payments as part of a single omnibus savings bill. The bill was split to get it through.

The following measures are expected to be debated or dumped:

•           Phasing out annual family tax benefit end-of-year supplements;

•           Making young people wait four weeks before receiving income support;

•           Shifting unemployed people aged between 22 and 24 to youth allowance instead of the dole;

•           Ending carbon tax compensation for new welfare recipients;

•           Scrapping the pensioner education supplement; and

•           Stopping pension payments for people (who've spent less than 35 years of their working life in Australia) after six weeks overseas.

CCIQ believes that the government should continue its focus on budget repair, as management in recent years had left a legacy of deficits which required intervention.

“We support the view that balancing the nation’s books should hinge on reducing government spending rather than the implementation of additional revenue grabs,” Ms Pham said.

“Cooperation in the Senate will inevitably be required to achieve the restoration of financial integrity back into the budget.

“However, we acknowledge that the focus must remain on striking the right balance between encouraging household consumption and business investment, while keeping government expenditure firmly under control.

“Against a backdrop of subdued revenues and a delay in the return to surplus, CCIQ calls on government to continue doubling down on budget repair and pushing forward a broad reform agenda.”

 

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