The Turnbull government has ignited a political brawl by dusting off previously rejected cuts to welfare benefits, such as making young jobseekers wait a month before they can access benefits, and linking them to its long-awaited childcare reform package.
The government wants to pass its childcare changes as part of early efforts in the new political year to signal to families that it is acting on cost of living pressures. It has adjusted its original savings objective downwards to the tune of $2bn in an effort to court Senate support.
Despite adjusting the savings measures for this package, the social services minister, Christian Porter, made it clear on Wednesday the government wasn’t writing off the hit to the budget and would chase the $2bn through other, as yet unspecified, cuts.
The key Senate bloc, the Nick Xenophon Team, is also yet to be swayed. Asked on Wednesday evening where he was likely to land, Nick Xenophon told Guardian Australia: “There’s no landing, we are still hovering, talking to the government and to stakeholders.”
The government wants to overhaul the childcare system by replacing the childcare benefit and the childcare rebate with a new subsidy that would fund 85% of childcare costs for families earning $65,710 or less – a system that would deliver demonstrable hip-pocket benefits for low and middle-income families.
But the omnibus bill presented to parliament on Wednesday says the new system will be funded by cuts to family tax benefits and the paid parental leave scheme, scrapping the energy supplement for new recipients, requiring jobseekers under 25 to wait four weeks before accessing income support and cutting the pension to migrant pensioners who spend more than six weeks overseas.
In an effort to sweeten the package, before the introduction of the legislation on Wednesday, the government said it would abolish the end-of-year supplements for family tax benefit B in stages but increase fortnightly payments for those on family tax benefit A by $20 a fortnight. Some families will also receive two extra weeks of paid parental leave under the revised deal.
The government on Wednesday suggested that, in net terms, a family with a combined income of $80,000 would be $2,964 a year better off under the combined changes.
For a family on $50,000, with a single parent in the workforce, and two children aged under six in long daycare three days a week at $100 a day, the government’s calculation was a loss of $825 in family tax benefit and a gain of $3,295 through the childcare system – meaning a net benefit of $2,470.
But the prime minister, Malcolm Turnbull, avoided responding to direct questions from Labor in question time about how many families would be worse off as a consequence of the proposed cuts to family tax benefits which the government insists are necessary to fund the new childcare system.
Labor says the proposed cuts to family tax benefits will impact more than 1 million families and leave a typical family on $75,000 about $1,000 a year worse off.
The opposition highlighted the fact that single-parent families would lose family tax benefit B entirely when their youngest child turns 16, leaving them $3,000 a year worse off.
The childcare benefits also only apply if families have children enrolled in daycare or after school care.
Instead of addressing the number of people disadvantaged by the proposed cuts, Turnbull instead talked about the childcare changes, which he said would benefit almost 1 million families.
“The greatest beneficiaries will be families on low and middle incomes,” the prime minister said. “It delivers higher rate of subsidy, 85%, to those who need it most, families earning around $65,000 or less.
“It would mean a working family on an income of $60,000 a year would pay around $15 a day for childcare.”
In an interview on Sky News, Porter declined to quantify how many people would be better off in net terms after the cuts and the childcare changes were taken into account because that would depend on people’s “behavioural responses.”
