Labor says the government will be breaking an election promise if it considers means testing the childcare rebate, but stopped short of ruling out the measure itself.
The Productivity Commission is reportedly set to recommend that the family payments be means tested when it releases its report into child care, expected later this week.
The means test would reportedly apply to families that earn more than $150,000.
The government is refusing to be drawn on the speculation.
“As we are yet to even see the final document, I obviously can’t comment on what those findings will be or, more importantly, how the government might respond,” the assistant education minister, Sussan Ley, said.
Labor said considering means testing goes against an election promise.
“Tony Abbott and his government went out of their way to promise to the Australian people that they would not means test the childcare rebate. What we have here is yet another lie, yet another broken promise on the scrap heap of broken promises which this government has already left behind them,” Labor’s spokeswoman for early childhood, Kate Ellis said.
“The Australian public is entitled to say that this is just another occasion where Tony Abbott has directly lied.”
The government said Labor has no credibility on the subject.
“Labor will leap on any sort of speculation but the truth is they had six years to address a growing crisis in child care and did nothing, even refusing to back our call for this Inquiry,” Ley said.
Labor has criticised the government’s handling of the Productivity Commission inquiry, but has refused to rule out supporting means testing.
“We will look at any policy proposals that the Productivity Commission puts forward, and judge them on their merits,” Ellis said.
A draft Productivity Commission report into child care, released in July, called for a sliding scale of rebates, starting with 90% of childcare costs repaid to families earning less than $60,000 a year, and falling to 30% for families earning $300,000 or more a year.
It also recommended streamlining the numerous payments available into one simple payment, a move backed by Ley.
The draft report also recommends extending payments to cover nannies.
The commission said its preferred model would have tangible benefits.
“The Productivity Commission’s preliminary economic modelling found that implementation of their measures would most likely result in up to 47,000 more full-time people entering the workforce. The economy-wide impacts of this are likely to be relatively small, with a GDP impact of, at most, an additional $5.5bn, but the social significance of this should not be underestimated”, the draft report says.
Childcare advocacy groups are “broadly supportive” of means testing, saying it is something they “can live with”.
“The system at the moment is regressive,” the chief executive of Early Childhood Australia, Samantha Page, said. “What we really need to do is to make quality child care affordable for low-income families.”
Page said creating a simpler, easier-to-understand rebate system should be the government’s priority.
