Mr Albanese dismissed the government’s budget as an “incoherent grab bag” of proposals and called for bigger ambitions to rebuild the country from recession with “strength and fairness” as guiding principles.
“This is an opportunity to reset and renew,” he told Parliament in his budget reply on Thursday night.
Mr Albanese contrasted his plan with a federal budget that offered nothing new on childcare at a time when economists at the Grattan Institute forecast a boost to economic growth and family earnings if childcare subsidies are increased.
“Women are the key to kickstarting our economy again,” Mr Albanese said.
“In the worst recession in a hundred years, we have to make sure women aren’t forced to choose between their family and their jobs.”
Mr Albanese said the changes would be matched by an order to the Australian Competition and Consumer Commission to make sure the extra funding flowed through to savings for families.
“This is real reform – it will boost women’s workforce participation, boost productivity and get Australia working again,” he said.
Grattan Institute chief Danielle Wood and her colleagues called in August for an extra $5 billion in childcare subsidies, saying it would lift workforce participation and increase lifetime earnings by $150,000 for mothers.
Ms Wood estimated the payoff would be an $11 billion increase in gross domestic product each year.
The move intensifies the political fight over the treatment of women at the same time Labor supports the Coalition’s biggest new policies in the federal budget.
Labor voted in the House of Representatives on Thursday to support the government’s $17.8 billion personal tax package, and is backing a $26.7 billion company tax break to allow employers to claim a full deduction on capital assets they purchase before June 2022.
This sets up a Senate vote on Friday that is also expected to endorse a $4.8 billion measure to let companies carry back tax losses, a $2 billion commitment on research and development and a $105 million boost for small business.
The Labor childcare plan rejects the government argument that existing subsidies are enough because 85 per cent of families on low and middle incomes can access an 85 per cent rebate on childcare fees.
Prime Minister Scott Morrison argued this week the spending in response to the recession had to be temporary.
“If you’re suggesting that we should have free childcare for everybody well that’s not something we’re proposing,” Mr Morrison told the ABC’s 7:30 program on Wednesday night.
The Labor policy is not free childcare but is a substantial boost that aims to subsidise 90 per cent of costs for all families, subject to a Productivity Commission inquiry into the system.
Labor would scrap the $10,560 child care subsidy cap that now applies and is blamed for giving women no incentive to work more than a few days each week.
Labor would also increase subsidy rates and taper them for every family earning less than $530,000, a relatively high threshold that ensures the gains go to most families.
At a cost of $6.2 billion over four years, the Labor policy represents a 15 per cent public funding increase for the system.
The budget papers forecast $38.4 billion in outlays on the Child Care Subsidy over the four years to June 2024 as well as $2.6 billion in other support for the childcare system.
Mr Albanese named three elements to the manufacturing plan: to use federal funding for rail networks to require the construction of trains in Australia; to use $270 billion in defence spending to build more local products; and to offer a “skills guarantee” to mandate apprentices on projects backed with federal funds.
This element of the budget reply was uncosted.
The energy upgrade reprises and modifies one of Labor’s election policies from last year to take on debt to set up a fund to spend on projects.
The fund, called the Rewiring the Nation Corporation, would be asked to modernise the electricity grid in line with advice from the Australian Energy Market Operator and with the agreement of state governments.
The corporate structure would mean the work would be considered an asset rather than an expenditure item that would deepen the deficit.
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David Crowe is chief political correspondent for The Sydney Morning Herald and The Age.