Are struggling Aussie parents really about to get more money for childcare?

Families with kids in childcare have been hanging out for some relief. Costs have been rising, and an increase in government subsidies is overdue.

The Government has been promising childcare subsidy reform since 2013. A childcare package worth $1.6 billion has been dangled in front of parents. Now, finally, it looks like the proposed changes could become law.

But why have other parties fought the bill for so long? And if it does pass, what will the real cost be?

Here’s all you need to know.

What would the changes mean for parents who use childcare?

• The cap on the childcare rebate would be removed for families earning less than $185,000. Currently, the cap is set at $7500 per child for each financial year. It’s estimated that 114,000 families will reach the cap before this financial year ends, with some having reached it as early as January. For families earning more than $185,000, the cap would be raised to $10,000 per child.
• Childcare subsidies would be streamlined into one payment, with low-income families benefitting the most. Families earning less than $65,000 would receive a subsidy that would cover up to 85 per cent of their costs. This would gradually taper away for families with higher incomes. Those earning more than $340,000 would receive a subsidy that would cover 20 per cent of their costs.
• An online payment system would be introduced for families and childcare centres. The reduction in paperwork would give staff more time to devote to children.

Education Minister Simon Birmingham claims 800,000 families will be better off under the changes. He says a family earning $80,000 a year will have an extra $3400.

Listen: Why some mothers ban men from looking after their children. (Post continues after audio.)

Why haven’t the changes been introduced before now?

The Government was trying to tie the increase in childcare subsidies to 16 different cuts to social security payments, in what they called an omnibus bill. These would have included reducing family tax benefits, making job seekers under the age of 25 wait four weeks before getting the dole, and cutting the pension to migrant pensioners who spent more than six weeks overseas.

The cuts, estimated at $5.6 billion, would have also been used to pay for disability services.

Deputy Prime Minister Barnaby Joyce insisted the Government had to “balance the books”. However, the CEO of Early Childhood Australia, Samantha Page, said modelling had shown that higher childcare subsidies would pay for themselves through “increased workforce participation”.

Who hasn’t been supporting the bill?

Basically, everyone apart from the Government: Labor, the Greens, and crossbenchers including Pauline Hanson’s One Nation and the Nick Xenophon Team. Labor's early childhood development spokesperson, Kate Ellis, said there was no need to hit 1.6 million families with “cruel cuts” to deliver on childcare reforms that had been promised for years.

Last month, the Government tried to get crossbenchers on side by offering to increase paid parental leave from 18 to 20 weeks, and to boost Family Tax Benefit Part A by $20 a fortnight. But it didn’t work.

Yesterday, Pauline Hanson refused to support the bill, saying it cut “too hard, too broadly and too deeply” into the hip pockets of Australian families. That meant the omnibus bill couldn’t pass.

What’s the latest?

This morning, the Government set aside the omnibus bill and unveiled the Social Services Legislation Amendment Bill 2017. It proposes freezing Family Tax Benefit rates for the next two years. This is expected to raise $1.3 billion. (The offer to boost Family Tax Benefit Part A by $20 a fortnight has been dropped.) Savings will also be made by freezing the means test threshold for other payments, and extending the waiting period for the parenting payment and youth allowance.

Nick Xenophon has confirmed he will support the revised bill, saying the alternative would have been “a stalemate and a childcare package that would have been held up”.

The changes are set to be debated in the Senate later today, but the Government is confident it will get the nine crossbench votes it needs for the bill to pass. Parliamentary sitting hours have been extended until midnight today and tomorrow and into Friday, if necessary.

Listen: Vanessa Alexander tried to open her own childcare centre. (Post continues after audio.)

What’s the rush?

Parliament will soon be going on a long break leading up to the May budget. The Government is keen to push this bill through before then.

Prime Minister Malcolm Turnbull visited a Canberra childcare centre today.

"The important thing is, for the sake of these little kids and their parents and many others like them, that these reforms are passed," he said.