The Turnbull government has agreed to reconfigure key savings measures required to pay for its childcare reforms in an effort to finally clear the Senate roadblock to the package.
The childcare reforms have stalled because Senate blocs, most particularly the Nick Xenophon Team, object to the fact they will be funded by a $3bn cut to family benefits.
Key crossbenchers have not budged, despite the prime minister telegraphing in his year-opening speech to the National Press Club last week that the government would bring forward a new bill this week wrapping the childcare reforms, and the savings measures required to pay for them, in a single proposal.
On Tuesday, Xenophon warned the NXT’s support for the package would depend on how it was configured.
The government on Tuesday secured party room support to adjust the key savings measures – taking a hit to the budget in the process – in an effort to push the package through the parliament, with a formal announcement about the backtrack expected on Wednesday.
The government is expected to announce the end-of-year supplement for family tax benefits will be abolished, in line with the previous savings measure, but people eligible for family tax benefit A will get a boost to their fortnightly benefit of $20.
It is also expected to announce that family tax benefit B would be scaled out once a dependent child reached the age of 17. Previously, the savings measure was to scale out the payment progressively after dependent children turned 13.
The government will introduce the new omnibus bill on Wednesday morning. Politically, the government wants to send a signal to voters that it is concerned about cost of living issues.
The move on the controversial savings measures associated with the childcare package comes amidst broader deck-clearing as the government attempts to kick start its policy agenda for the new parliamentary year.
On Tuesday the government dumped the Life Gold Pass, which allows former politicians to fly business class at taxpayers’ expense – without any phase-out period.
It also rolled over and scrapped plans to forcibly acquire prime agricultural land in Queensland to be used as new training sites for the Singapore military.
