Tony Abbott is seeking backbench and Labor support for new policies aimed at regaining voter approval, including a childcare package that is likely to require substantial extra spending despite government warnings about a deficit “crisis”.
But the prime minister still insists the only thing the government got wrong with its 2014 budget was that it had “failed to get legislation through ... a senate controlled by our political enemies” and that the only promises he had actually broken were spending cuts to foreign aid and the ABC.
The social services minister, Scott Morrison, said on Thursday he had written to Labor seeking discussions on the childcare and families package the government will release before the budget because he wanted it to have bipartisan support. Abbott repeated that it would put more money in families’ pockets.
The government says its new policy is based on a Productivity Commission report which recommended a single means-tested childcare payment paid directly to childcare centres – with a preferred scheme costing almost $1bn a year more than the federal government currently spends on childcare.
But that scheme assumed families were paying around $80 a day for childcare, whereas many families actually pay much more. According to modelling done for the Goodstart childcare company, the commission’s preferred scheme would leave most families with a household income over $110,000, and families paying $100 a day or more for childcare, worse off.
To avoid hurting families the government is likely to have to spend more than an additional $1bn a year, which is likely to mean the childcare package costs more than the $5bn net cost of the paid parental leave plan – which is now abandoned so that this money can be redirected towards childcare.
“See, where I’d like to get to on this (childcare and families package)…. is the same place that we’re able to get to on the National Disability Insurance Scheme and that is to be able to bring both sides of politics on this, I think that’s what families want and I’m hoping that our families package can attract that sort of support,” Morrison told the ABC.
Abbott confirmed the package would involve “more government spending” which he said would be “an investment in a stronger economy for the longer term” because of the impact childcare support has on workplace participation.
“We are preparing a major families package, it is coming out in weeks rather than months, the focus will be on childcare, and I think it will be a good fair deal for the families of Australia that puts more money in families pockets...this won’t just be more government spending, it will be more government investment in a stronger economy for the longer term,” he said.
He said he wanted “all of our decision making processes this year to be as open and as transparent and as collegial as they possibly can be.”
Abbott also recast what the coalition used to call the “debt and deficit disaster” as a “long term threat” that could cause “certain major weaknesses over time.”
“We do have a serious long term problem, our economy is fundamentally sound ... but if we don’t address certain major weaknesses. yes over time we could be in trouble, so it is a balancing act, the last thing I want to do is talk down our economy ... but I do need to alert people to the long term threats that we face,” he said on 3AW.
“The point I made at the press club is we are not going to give up on the search for savings but we are going to make government tighten its belt because we appreciate the public has already had its belt tightened,” he said.
Despite the treasurer, Joe Hockey, saying that without the passage of the GP copayment and the higher education reforms the budget would never return to surplus, Abbott repeated that “there won’t be any further proposals coming from the government (on the GP copayment) without the backing of the medical profession.”
But the president of the Australian Medical Association, Dr Brian Owler, has told Guardian Australia the AMA was opposed to all the government’s proposed savings, which involve cuts to some Medicare rebates and an across-the-board freeze in their levels.
He said the AMA would only consider a co-payment, with exemptions for pensioners and children, if the money raised was invested back into general practice – which would deliver the government no savings to be directed either towards the budget bottom line or to its proposed medical research fund.
“These mixed messages are not fair to GPs or to patients. The treasurer is still marching on with the current budget plans, others are saying the co-payment should be dumped and the prime minister says he wants our agreement … We would like to meet the prime minister to try to sort out what direction the government is taking,” Owler said.
Despite mounting pressure to remove his controversial chief of staff Peta Credlin, Abbott again insisted he would not, saying: “I am a person who stands by my team ... the buck stops with me”.
The government has released the Productivity Commission’s draft report on childcare, but not the final report, which it received last October.
