Budget cuts $230m from childcare subsidies

Childcare services may become more expensive.
Childcare services may become more expensive. 

Childcare organisations have blasted the Abbott government for a budget change that will remove $230 million in childcare subsidies over the next four years.

The income eligibility threshold for the childcare benefit (CCB) will be frozen for three years from July 1, saving the budget $33 million next financial year, rising to $77 million by 2017-18.

Overall spending on childcare subsidies will reach $28.5 billion over the next four years as the number of children enrolled in formal childcare swells. But the freeze on the indexation means $230 million less will go to parents than would have been the case. The savings will be redirected ''to repair the budget and fund policy priorities'', the budget papers say.

Chief executive of Early Childhood Australia Samantha Page called on Labor and the Greens to block the changes in the Senate.

''Childcare fees have risen 7 per cent on average over the past decade, well above indexation, meaning that childcare payments are already losing real value over time,'' she said. ''These changes will put pressure on low and middle income families.''

The Greens' childcare spokeswoman, Senator Sarah Hanson-Young, said the government should be pumping money into childcare. ''Ripping more than $200 million out of the pockets of Australian mums and dads is not the way to fix our nation's broken childcare system,'' she said.

The Greens will oppose the changes in Parliament, she said.

Assistant Minister for Education Sussan Ley said maintaining eligibility thresholds at the current levels would help ensure these payments are ''sustainable'' in the future. She said the Productivity Commission is looking for ways to make childcare more affordable and flexible and restored $12.6 million for occasional childcare that Labor cut.

The Labor government curbed the growth of the rebate by capping its upper limit at $7500. The rebate pays half the annual costs of childcare users up to that amount.