Tanya Plibersek has revealed a startling inability to explain how Labor’s highly irregular economic policy of using taxpayer dollars to top up private sector wages would work.
When asked three times on AM this morning about ‘knock on’ state tax liabilities, which may threaten the viability of thousands of child care centres, the Labor Deputy Leader and Shadow Education Minister showed herself to be astonishingly short on detail.
HOST: But is he right? Would it bump them over the payroll tax threshold?
PLIBERSEK: It is, it is… we’ll… we’ll work with the industry to make sure that there isn’t an impact.
HOST: So you don’t know.
However, NSW Treasurer Dominic Perrottet is quoted in media today stating he “would not entertain exempting child care centres from payroll tax obligations” adding that NSW taxpayers “won’t pick up the bill for Labor’s silly policy.”
Over the course of Labor’s eight year scheme, based on estimates from the available data, providers will be hit with an extra $591 million in payroll tax liabilities alone, not to mention around $1.15 billion in superannuation costs.
The average payroll tax bill per provider of Labor’s irregular and unconventional wages policy is $81,025, while smaller childcare operators will be hit with $28,731 in payroll tax per provider. Around 5,215 small providers will be pushed over the payroll tax threshold and forced to pay payroll tax for the first time.
How Labor will manage these increased costs is not yet known as they have failed to provide any detail, but providers may be forced to pass them onto families through higher fees, staff layoffs or reduced hours, particularly if Labor attempts to stop fee increases. There is a genuine possibility certain child care centres would have to close their doors altogether.
It is a matter of considerable concern that neither the Labor Leader nor Deputy Leader has the first clue about how this staggering intervention into the wages market would actually work, nor are they even remotely cognisant of the crippling impact their policy would have on child care providers and families, who will ultimately pay for it.
Mr Shorten has still not explained the role United Voice played in striking this deal, why only 100,000 of Australia’s 195,000 early childhood educators will receive the salary top up, and whether Labor has indeed received $12 million in donations from United Voice over the past eight years.
Does Mr Shorten agree with independent reports following Labor’s failed Early Years Quality Fund in 2013, that the scheme was used as a “vehicle” to boost union membership?
Is Mr Shorten concerned that United Voice have already been visiting child care centres around Australia to ramp up membership on the back of this announcement?
It is a matter of public record that child care fees increased by 53 per cent under Labor.
By contrast, the Coalition’s ‘Jobs for Families’ package has supported one million families with the cost of child care, making a typical family $1,300 better off.
Since our changes were introduced, ABS data shows the out of pocket costs of child care for families has fallen by 9 per cent. The Coalition secured the passage of this legislation despite the opposition of the Labor Party.