$5b childcare lift for lower incomes
The childcare system will get a $5 billion injection under an Abbott Government plan that aims to increase workforce participation and keep a lid on costs for parents.
_The Weekend West _ can reveal that lower and middle-income earners will get more support under a revamped childcare system that will wind back taxpayer support for high-income earners.
It is understood the Government will embrace a benchmarked price for childcare, with rebates likely to begin at 85 per cent for low-income earners, tapering to 20 per cent for the well-off.
Under the current system, parents get a 50 per cent subsidy regardless of income.
Benchmark pricing will mean some parents will pay more in some high-priced centres but the Government believes this is not only fair to taxpayers but will put downward pressure on prices in the long term.
Childcare eligibility will be tightened, with stay-at-home mums to be denied access to rebates. This is designed to prevent wealthier families getting taxpayers to subsidise babysitting.
The Government ruled out covering the extra childcare funding with the 1.5 per cent levy planned for PM Tony Abbott's now-shelved paid parental leave scheme.
It is believed Cabinet's Budget razor gang has instead earmarked some of the $5 billion in proposed savings from Family Tax Benefit payments.
These measures extend a freeze on FTB rates to 2016, worth $2.6 billion over four years, reduce the FTB Part B means test from $150,000 to $100,000 ($1.2 billion) and reduce end-of-year FTB supplements ($1.2 billion).
The Government is not banking on using $1.9 billion it would get by limiting FTB-B to families with children aged under six.
Social Services Minister Scott Morrison has been consulting Labor's shadow minister Kate Ellis with a view to ensuring bipartisanship on child care, including the proposed savings.
The Government favours direct payment to childcare centres to spare parents paperwork and reduce the likelihood centres need to chase families to pay bills.
It is understood Mr Morrison decided on a cautious approach to the Productivity Commission's recommendation to extend childcare subsidies to nannies.
The Government does not want a system that encourages childcare centre workers into private practice.
The childcare package will be announced before the May 12 Budget.
Last month, the Productivity Commission recommended a shake-up of child care so that 60 per cent of families got bigger subsidies at the expense of wealthier parents.
