The Turnbull government has been forced to re-double its efforts to resuscitate its childcare package after Labor, the Greens, and the Nick Xenophon Team rejected the proposal.
Simon Birmingham, the minister for education, said new departmental data showed more than 3,600 families have hit the $7,500 child care assistance cap in the first two weeks of 2017, demonstrating how quickly families are coming under financial pressure thanks to childcare costs.
Families would get financial relief under the Turnbull government’s childcare package, he said, but the Senate needed to support it – including the welfare cuts the government says are needed to fund the measures.
“Thousands of families are starting the new year having already run out of assistance for meeting the cost of early childhood education and care and by the end of June we estimate around 94,000 families will hit the rebate cap,” Birmingham said.
“Our fully funded reforms will give relief to around 129,000 families by abolishing the $7,500 rebate cap for the vast majority of families and increasing it to $10,000 for higher income families earning $185,000 or more each year.
“We’ll give families relief from the out-of-pocket child care cost pressures they face, end the stress of reaching a funding cliff mid-year and empower parents to make decisions about when or how much to work that best suit their family circumstances.
“Unless Labor and the minor parties support the early childhood education and care reforms the Turnbull government introduced to parliament last week, the number of families set to hit the rebate cap will rise to around 129,000 each year.”
Birmingham’s data comes from the education department and is not publicly available.
The government is under pressure to find a circuit-breaker for its $13bn worth of savings measures stuck in the Senate.
Its latest omnibus savings package - including multibillion-dollar cuts to family tax benefits, paid parental leave and unemployment payments - was rejected by Xenophon, Labor and the Greens on Tuesday.
Just last week, the government had 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.
Then, on Monday afternoon, the government tried to ramp up pressure on the Senate crossbench – after months of negotiations – to pass its welfare cuts associated with its childcare package by announcing $3bn of the proposed savings package would be allocated to a special account to fund the full roll out of the National Disability Insurance Scheme.
The move sparked an angry reaction from political opponents and disability advocates, with Xenophon warning it was “dumb policy and dumb politics” to link future funding of the NDIS with billions in welfare cuts.
With the first parliamentary fortnight of the year winding down, senior government figures have begun warning that for the budget to return to surplus, in the face of continued senate intransigence, taxes may have to start rising.
But they have refused to say which taxes.
The finance minister, Mathias Cormann, told Guardian Australia the government remains committed to all savings measures in the budget and will seek to legislate them through the Parliament.
