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Childcare operators could be hit with $591 million tax bill under Labor plan

According to federal government modelling, NSW child care providers will pay $228 million in additional tax over the eight years, operators in Victoria will pay $126 million, and Queensland-based companies will be up for $116 million to the state government.

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Suzie Cockerill, who owns Green Eggs Childcare in the Brisbane suburb of Mansfield, pays her experienced staff above the award wage but warned the increased tax burden will force her to reconfigure the centre.

“I’d be looking at employing less staff… and take less children,” Ms Cockerill said.

Green Eggs Childcare claimed it would also be left with a permanent increased annual cost base of $307,000 unless the taxpayer-funded pay increase is guaranteed by the government beyond the eight years phase-in period.

“At that point you close the doors and staff lose their jobs,” Ms Cockerill said.

Mr Shorten has promised to sit down with the sector to work out the best way to deliver the wages boost, which Labor says will eventually lift a worker’s salary by an average $11,300 a year.

“The detail of how we work out the implementation will be done with employers, with consumers.” Mr Shorten said on Wednesday.

NSW Treasurer Dominic Perrottet said his state would not entertain exempting childcare centres from payroll tax obligations.

“We won’t pick up the bill for Labor’s silly policy,” Mr Perrottet said.

The Morrison government has acknowledged childcare workers are under-paid but has condemned the Labor plan as a “childcare jobs tax”.

“Siphoning off public money to top up the wages of just some groups or individuals is not only a highly irregular economic policy, it is also exposes the radical changes that a Labor government has in mind for our country,” Trade Minister Simon Birmingham said on Wednesday.

The government is also concerned the proposal is a fig leaf to increase union membership. United Voice, which represents childcare workers, set up a meeting with staff at Green Eggs Childcare only days after Mr Shorten announced his policy in late April.

“It was absolutely a push for membership. Staff were asking questions about the application of this [the payrise] and they [union reps] continually asked my staff if they would be joining the union,” Ms Cockerill said.

Helen Gibbons, the assistant national secretary of United Voice, said union representatives had simply talked to staff about what the Labor commitment meant for them.

“This is the biggest commitment for early childhood education in history,” Ms Gibbons said.

Labor has said the plan will cost $9.9 billion over the next decade. Modelling by the government suggests the cost to the budget will exceed $1.6 billion a year once the phase-in period has passed and the full 20 per cent pay rise has taken effect.

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