Press Conference at Narrabundah Cottage

  • Joint transcript with:
  • The Hon Josh Frydenberg MP, Treasurer
  • Senator the Hon Marise Payne, Minister for Foreign Affairs, Minister for Women
  • The Hon Alan Tudge MP, Minister for Education And Youth
  • Senator the Hon Jane Hume, Minister for Superannuation, Financial Services and the Digital Economy, Minister for Women’s Economic Security
Subjects: Child care Budget package, Budget 2021-2 and Australians in India.
02 May 2021

Josh Frydenberg: Well thank you very much, it’s a great pleasure to be here with my colleagues Marise Payne, the Minister for Women, Jane Hume, the Minister for Women’s Economic Security and Alan Tudge the Minister for Education. Today is a very important today. The Morrison government is making a $1.7 billion investment in the children of our future. We are ensuring that around 250,000 families will be better off as a result of this package and around half of those families have an income of $130,000 or less. The Morrison government has made significant progress in boosting female workforce participation, as well as narrowing the gender gap. But there is still a long way to go. That is why we are making today's investment. Today's investment will see families, like one who is on $95,000, a parent who earns $70,000, a partner who is working two days a week on $25,000, who wants to work a couple of extra days a week, but would currently see all that income pretty much eaten away by child care costs, if they have two children in child care. That family will now be $109 a week better off.

Today's measures are proportionate, they’re targeted, and they are an investment in making our economy stronger and boosting female workforce participation. It is Treasury's estimate that the measures we are announcing today will help to boost GDP by about $1.5 billion a year. We will see up to 300,000 hours a week worked additional than what is today. That is the equivalent to 40,000 people working and extra day a week. These measures today are very much focused on making our economy stronger. The Morrison government is already investing more than $10 billion a year into child care. This is an additional investment, it is designed to give families choice and to make our economy stronger and to make child care more affordable.

Marise Payne: Thanks, Josh. Good morning everyone, Karen can I thank you and everybody here at Narrabundah Cottage for having us here this morning, and the opportunity to make this very important announcement. As Josh said, we have seen women's workforce participation moving in the right direction currently at 61.8 per cent, and the gender pay gap narrowing. But as the Treasurer also said, we know there is more to do and this announcement today is integral to that. It’s about supporting women into the workforce, supporting women in the workforce who want to work more days or more hours. It’s about ensuring that families have choice and the support to make those choices in terms of the arrangements that they want to have for their families. I am very pleased that we’ve been able to discuss this through the process of the Coalition's Task Force, Co-Chaired by the Prime Minister and by me, in which Ministers participate, the Treasurer, the Finance Minister, Minister Hume, key parts of that task force are looking at the issues that are barriers to women's workforce participation, barriers to increasing that, but focus absolutely on women's economic security. We’ll have more to say, I am sure, Treasurer, in a week or so, about these issues. But this measure that we are announcing today is a very important one for Australians and for Australian families, but particularly for Australian women and their opportunities for participation in the workforce. I’m going to ask the Minister for Education, Minister Tudge, to say a few words.

Alan Tudge: Thanks, Marise and Karen thanks so much for having us here today. This package is targeted, it’s measured, and is geared towards those families who really need it most, and that is, families with two or more children in child care. Now, the measures consist of two parts. The first is that it adds an additional 30 percentage point subsidy for every second and third child. So, if you currently have an income of $150,000 as a family, and you might have an average subsidy of, say, 50 per cent for your children, that will go up to 80 per cent of the subsidy for the second and third children. It will cap out at 95 per cent, which means that every single person will still have to pay something, and that is an important principle in our package here. The second element of the package is that it removes the price cap as well. Now that price cap has been set at $10,560. We're getting rid of that price cap because we know from families becomes a real barrier to working more. By getting rid of that price cap, people can have confidence that they can work those additional days without hitting the limit and even just discussing with Karen and some of your staff this morning, they were saying exactly that, that many families would stop working because they were concerned about hitting the price cap. Those two important measures overall will support about 250,000 families. It will encourage women in particular to work more, should they want to, but obviously supports cost of living pressures as well. The average family in child care earns about $110,000. If they have two or more children now and say they’ve got two kids in four days a week of child care, they will be $95 a week better off and that’s a real benefit to them financially but also a real encouragement to those families if they want to have the second partner in the family working those additional days. The measures are targeted, the measures are responsible from a fiscal perspective and they very much go to supporting those families that really need it most and that is those families with two or more kids in early childhood.

Jane Hume: Good morning everybody and can I reiterate our thanks to Narrabundah Cottage for having us here today. So we know that the best way to improve women's economic security is to increase women’s participation in the workforce. We’re at record levels of female participation in the workforce right now at 61.8 per cent. We’re well on the way. We also know that a lot of women, in fact a third of women who work, work part-time and the Business Council of Australia tells us that around 90,000 people last year cited the cost of child care as a reason why they had not returned to the workforce. We also know that reducing the cost of child care and also reducing those disincentives to taking on more hours or more days, is the best way to encourage women to participate more fully in the workforce. And it is particularly the cost and the complexity of child care for those who have more than one child can be a burden and I speak from experience there. I had three children under the age of five in child care and the cost and complexity is quite overwhelming. But it’s not just about women with children now. We know that women who work, that have children under two, about 50 per cent of them use grandparents as an informal source of child care and we also note that about a third of those women who are working with children under two, use grandparents solely as their only form of child care. By making child care more accessible and more affordable, we can actually encourage older women to re-join the workforce as well and to fully participate in our economy. So, reducing the cost of child care and removing those disincentives is the best way to ensure that women have more choices and more chances to increase that lifetime earnings and secure their economic futures.

Josh Frydenberg: Are there any questions?

Reporter: Treasurer, what happens to families with just one child? What’s in it for them?

Josh Frydenberg: Well we’ve removed the cap so there will be benefits to them as well but our focus has been targeted, as Alan said, on those families with two or more children in child care who have an effectively higher marginal rate of tax. And that as Jane has just said very powerfully, is that disincentive for parents to re-enter the workforce. So, today's measures are all about making child care more affordable, more accessible, giving parents and families choice but also strengthen the economy at the same time. At $1.7 billion, this builds on our more than $10 billion a year that is going into child care and the additional reforms that we had made earlier in our term in government.

Reporter: Treasurer, while your Government looks to improve its standing among female voters, why not consider improving the lot of the child care workers who work in centres like this who were considered essential workers during the pandemic. Why not look at doing more for the overwhelmingly female workforce in this sector?

Josh Frydenberg: Well what we have focused in terms of the pandemic and you reference about providing additional support to the sector and that meant supporting the staff who were able to be kept employed even though children may not necessarily have been coming through the doors in the same numbers that they did…

Reporter: Pay rises though?

Josh Frydenberg: Again, those sorts of decisions are independent of government. As you know, they go through a formal arbitration process. The government is very much focused on the needs of the workforce in areas like child care, aged care, disability support, because we’ve got growing demand. There are 280,000 more families now using child care than when we came to government. That’s a massive increase, more than a million Australian families are using child care. To provide those additional services, you are requiring a greater workforce and we will have more to say about workforce skills in the budget in just over a week's time.

Reporter: Will this be a Coalition policy, if it wasn’t for the Cabinet Taskforce?

Josh Frydenberg: I’m sure Marise will want to add to that. The Cabinet Taskforce has been a very important new body we have established. Where we’ve been able to talk through a range of issues to do with women's workforce participation but also women’s safety. More of which we will have to say in the budget. Child care has always been a key priority for the Coalition Government and indeed the Prime Minister, when he was the Treasurer, oversaw significant changes in lifting that rebate up to 85 per cent. Now we're lifting it to 95 per cent and we’re making even further significant investment so regardless of that Taskforce, the government will continue to be investing in child care but this new Taskforce has given an added opportunity for us to discuss and work through those issues.

Reporter: So why did it take the Taskforce for this policy to come about?

Josh Frydenberg: Well again, this is not the first and last word we have had on child care. We’ve had significant announcements on child care ahead of today. We have a new Minister, Alan Tudge, who has been working on this proposal, previous Ministers have worked on other proposals which have been brought into legislation. Our focus has been on ensuring that families have choice and right now without this package, there wouldn’t be as much choice for families where the parent that would want to work that fourth or fifth extra day and those cameos, those practical examples are the most powerful illustrations of that very point. As I said before, a family with a household income of $95,000, one parent is earning $70,000, the other parent is working two shifts a week, earning $25,000, let's say in the health sector. They want to work an extra couple of days while they’ve got there two kids in child care. Right now, they have all of that additional income from their wage eaten up in additional child care costs. This will remove that disincentive, this will see that parent now make a more viable option to return to work.

Alan Tudge: I might just add something very briefly to that question as well. Since we’ve come to office, we have increased child care expenditure by 77 per cent. So in total now, in terms of our expenditure in early childhood it is $10.3 billion per annum. A 77 per cent increase since we came to office. Scott Morrison was the major architect of the package which was introduced in 2018, which was a very significant boost to child care and very much targeted at those families who need it most. This package today builds on that and providing some additional support, particularly for larger families and, in some ways, people will be familiar, particularly those families who have got kids at say Catholic schools, they tend to get a bit of a discount on their second and third child because they know the costs add up. This policy is very similar. Where the costs add up, when you have two or more children in child care. So it is geared towards those families in particular because that is where the cost adds up and where the workforce disincentives apply and this provides some relief to those families and provides incentives for parents to work those extra days should they want to do so.

Reporter: Minister where is the incentive for a family that have two children but not both of them are in child care one of them might be in preschool or after school care. Does this policy, this discount still apply? And by removing the cap, the $10,000 cap, you’re acknowledging that the potential for a cliff is a barrier for women returning to work. Do you also acknowledge then that way that the taper rates steps rather than smooths is a barrier and are you committing to address that issue as well?

Alan Tudge: So, our policy is outlined today, what it is in terms of providing the additional 30 percentage point subsidy for second and third children in child care.

Reporter:Only if they’re both in child care at the same time…

Alan Tudge: In addition, It applies to all children who are five years or below so some of those children, it’s rare, but sometimes they will be in after school care, so it applies to all five year-olds and below because that’s where our measures are targeted at that particular group because that’s where we know the need is the greatest. That’s where the expenses are the greatest for families. What was the other part of your question?

Reporter: The taper rate steps — which is a barrier.

Alan Tudge: Certainly there are some barriers and we acknowledge that, for women going back into the workforce but the single biggest barrier is when you have two or more children because basically you will hit certain points in time whereby it makes no economic sense to work that fourth or fifth day and so this package removes those disincentives and that price cap measure, particularly removes that disincentive. I was speaking to a teacher this morning who approached me at the airport who said, this will make a big difference to her and her husband because she monitors, weekly, where she is on that price cap and she reduces her hours so she does not go above that. We want to remove that price cap so that families can have confidence to work what they want to work knowing that subsidy will continue to apply. And that’s exactly what that measure does.

Reporter: Just on that after school care, can you just confirm if you’ve got one child in after school care and the other child in daycare. The one that’s in after school care is over the age of five, will the other child then count as the second child? Or is it just one child?

Alan Tudge: So it’s for, if you’ve got two children under the age of five or under. That’s where the policy applies.

Reporter: Treasurer, just in relation to the budget. Obviously, we’re expecting to see improved figures on May 11 but still deficits for a very long time. Does the Government remain committed to Stage Three tax cuts currently legislated and do they continue to be affordable under the current circumstances?

Josh Frydenberg: Yes and yes. The Stage Three tax cuts were taken to the last election by the Morrison Government and the contrast was very clear at the last election. Just like it’s pretty clear now on child care. Labor is helping families with an income of about $500,000. We’re not. When we went to the last election we were proposing to cut people's taxes and the Labor Party were proposing to increase peoples taxes by $387 billion. The Australia people chose the Coalition and our policies and we subsequently legislated and have implemented them. So we brought forward stage two by two years in last year’s budget in October. We added an additional year of the lower middle income tax offset and we remain committed to stage three of those tax cuts.

Reporter: Minister Payne, did you think you would be the first Foreign Minister who would be overseeing a decision on Australian Citizens returning? Is that an immoral decision or even racist?

Marise Payne: Absolutely not in any way. The decision which has been made under the biosecurity act on the basis of the advice of the Chief Medical Officer is a temporary pause on returns. And is entirely founded on the advice of the Chief Medical Officer. That’s what invokes the operation of the Biosecurity Act.

What is most important is that it is temporary. We absolutely recognised the very, very difficult circumstances occurring in India right now. Absolutely recognise that. For so many families. And indeed here in Australia, for Indian Australians who are so worried about their families overseas but the experience we have had in the month preceding this decision was that 57 per cent of positive cases in quarantine had been in arrivals from India, that was up from 10 per cent in the previous month and was placing a significant burden on health and medical services in the states and territories and through the quarantine program. So it is very targeted temporary period of time, it will be reviewed on the 15 May and we will continue to work closely with the Australian Indian community here, with officials overseas, High Commissioner O’Farrell and three Consulates in India are very focused on supporting Australians in India. Before the travel pause was invoked, we had brought back more than 19,000 Australians from India since March last year across 38 facilitated flights. In fact, in May we had eight flights booked to return Australians from India. That has been a very important part of returning Australian process. Once the 15 May review occurs, we will then plan what the resumption of those flights looks like and if we are able to increase them.

Reporter: Minister Payne, the UK’s Daily Telegraph has a story today saying that UK AstraZeneca supplied 717,00 jabs to Australia from the UK in return for 10 million doses being flown to the UK from Britain. Can you confirm that any of the AstraZeneca doses that we received here in Australia were manufactured from the UK and were part of that secret deal?

Marise Payne: You would have to seek advice from other ministers. I do not have that information.

Reporter: You said the decision was going to be reviewed on 15 May, we know that the situation, what are you waiting for on May 15? Are you expecting to reverse the decision?

Marise Payne: I am not going to speculate on that. We’ve said the government through the process of in which we made the decision, taking the advice from the Chief Medical Officer will be reviewed on May 15. The Chief Medical Officer will provide us with updated advice and the government will review that in accordance with the commitment that we’ve made.

Reporter: What is the value of Australian citizenship if in the middle of a humanitarian crisis, you cannot seek safe harbour in your own country?

Marise Payne: We have brought more than 500,000 Australians back from countless places around the world since March of last year. More than 500,000 Australians. The operation of the Biosecurity Act, which has a range of penalties in it, doesn't just apply on this matter, actually. For example, it applies in relation to cruise ships as well. If a cruise ship breaches the arrangements that have been made under the Biosecurity Act, the same penalties would be applied there. It is a short and temporary step that we have had to take based on the medical advice from the Chief Medical Officer and his officials and one which we will review on May 15.

Reporter: Has the Chief Medical Officer advised why that rate of infection in India in particular is of more concern than when we had north of 20 or 30 per cent of returned travellers from the UK or the US coming in with the South African variant, the UK variant, the Brazilian variant that are all incredibly infectious. If the rate of overall infection in hotel quarantine hasn't shifted, just the country that its coming from, why is only India being targeted with this? And why wasn't the UK or the US targeted several months ago?

Marise Payne: Well, the point I made in response to Andrew's question about the increase in infections, 57 per cent of the infections in quarantine had come from returned travellers from India. In contrast to just the month before, 10 per cent of infections. The burden that has placed on the health systems in the states and territories, including through particularly Howard Springs, is a very significant one. And the decision to place a temporary pause, a temporary review on returning travellers from India has been to enable our systems to deal with that and then once we review that on May 15, we'll make further decisions. Thank you, all.

Reporter: Doesn't it just prove that you're not confident with the hotel quarantine arrangements? You're saying it's the best in the world?

Marise Payne: I think that the hotel quarantine arrangements as the Prime Minister said the other day have been operating at around 99 per cent efficacy. It absolutely does not prove that we are not confident about the hotel quarantine arrangements. Let me say, again, that the burden that such a high infection rate was placing on the states and territories' medical systems and health system tolls address such a high positivity rate was one which had become difficult for them to deal with. So pausing the returns process allows the system to manage those infections. To reduce those numbers and then we can review the process again on May 15 and as I said, I hope very much that as soon as possible, we are able to resume our planning for what was eight flights in May. Most certainly, we are very aware of the importance of that process. We can resume that planning and we can enable those Australians in India, as well as many other Australians who are returning on our facilitated flights to come back.

Reporter: Just on that, you said you were looking at a potential increase in those flights, is that on the table and would you consider Christmas Island again as a quarantine facility?

Marise Payne: We've been very clear that Christmas Island is being used for other purposes and it is not suitable for the current cohort of returning Australians, because of that. And it is well known that it is in use for a number of other reasons - mostly Home Affairs immigration related reasons. We have Howard Springs increasing its capacity. We have the states and territories endeavouring to take as many returning Australians as they are able to. They do change their rates from time to time, but we have used that process very solidly since March of last year, and we will continue to do that. Thank you.

Media enquiries

  • Minister's office: (02) 6277 7500
  • DFAT Media Liaison: (02) 6261 1555