this other life

”They are managing the wellbeing of your children” … Jayne Hrdlicka with her four-year-old, Josh, left, and the family’s nanny, Caroline McKeon, with Alec, seven. Photo: Marco Del Grande

THE federal government should think twice about subsidising nanny care when it cannot protect nannies from exploitation or ensure children get quality care, say experts.

The Opposition Leader, Tony Abbott, has started a debate about extending the childcare tax rebate to nanny care.

Despite the apparent popularity of the suggestion, it is no accident Australia has so far avoided going down this path, some public policy experts say.

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A senior lecturer in economics at the University of Sydney, Stephen Whelan, said it was unclear whether more women would go to work or simply substitute nanny care for centre care. And given women with higher incomes would be the main beneficiaries, it went against recent moves to tighten ”middle class” welfare in private healthcare and family benefits.

A lecturer in political economy at the University of Sydney, Elizabeth Hill, who is an expert in childcare policy, said nanny care was convenient for many parents ”but what is convenient is not necessarily the best for kids, best for workers, or the best way to spend limited public money”.

The government had no means to regulate what happened when the home was someone’s workplace. ”International evidence shows nanny work can be highly exploitative and next to impossible to regulate,” Dr Hill said. ”This is not a matter of nanny care is for the wealthy, it’s the bigger question of subsidising private solutions in private homes using untrained staff.”

The long-time childcare policy analyst Eva Cox said a much expanded nanny force would inevitably lead to more cases of exploitation, and possibly use of immigrant labour on 457 visas: ”It’s very difficult for these workers to assert themselves about their hours or conditions.”

However, Jayne Hrdlicka, a group executive at Qantas who is also a non-executive director of Woolworths, said parents had the best possible incentive to treat their nannies decently: ”They are managing the wellbeing of your children. It’s a virtuous circle.”

Her nanny, Caroline McKeon, works from 10am to 6pm minding Alec, 7, and Joshua, 4. When they are at school she does chores, ”all the stuff I would do if I were home”, Ms Hrdlicka said.

She said the combination of a nanny and technology allowed executives to be home for dinner and to put their children to bed, and then go online to finish the day’s work. ”Especially at middle-management level, women need the mechanism to afford the right support or it feels too hard and they drop out,” she said.

The president of Chief Executive Women, Belinda Hutchinson, said the Productivity Commission should investigate making childcare, including nanny care, tax deductible. While an extension of the rebate, now capped at $7500 a child, was important, that measure alone would not provide enough financial incentive for middle-income workers earning $80,000 or more.

Wayne Swan … revenue picture has worsened. Photo: Alex Ellinghausen

Government programs will be either cut or wiped out in the upcoming federal budget as the government strives for a surplus in the face of dwindling tax revenue, the Treasurer, Wayne Swan, will warn today.

In his first major speech setting the scene for the May 8 budget, Mr Swan will say delivering a surplus next financial year, as the government has promised, is an economic imperative.

To suggest it was a political strategy was ”misleading and ill-informed” and ”rubbish”, he will say.

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With economic growth returning to normal, a surplus will help ease pressure on the dollar and give the Reserve Bank greater flexibility to cut interest rates as stimulus should there be another economic global downturn.

Mr Swan will tell a business breakfast in Sydney that ”we will need to cut and cancel existing programs if we are to meet our targets and we’ll need to redirect some spending to where it is needed most”.

”Because the surplus is a vital economic objective and because revenues are being written down, we need to find even more substantial savings than we had earlier anticipated.”

Privately, sources say the government is concerned that the opprobrium it will wear for the budget cuts will outweigh any kudos it receives for achieving a surplus and, consequently, will stress between now and the budget the benefits of a surplus.

At the midyear budget update released late last year, the Treasury forecast a $37.1 billion deficit for this financial year, followed by a $1.5 billion surplus for next year, 2012-13.

Mr Swan will say today the revenue picture has worsened since then due to a combination of the European sovereign debt crisis, consumer caution and a continued high dollar. These combined to produce a 6.5 per cent reduction in company profits, meaning less company tax.

Mr Swan will say longer-term factors mean that even as the economy recovers, tax revenue will remain lower than it was before the global financial crisis when ”revenues were at an unsustainable peak”.

Back then, the mining boom and strong household consumption were feeding government coffers to the point that tax receipts accounted for 24.2 per cent of gross domestic product.

That ratio fell to 20 per cent due to the financial crisis and is expected to rise back to only 22.8 per cent by 2016.

Mr Swan will say that if the ratio were the 24.2 per cent Labor inherited from the Coalition, the forecast budget surplus for next year would be $23 billion, instead of $1.5 billion.

The reasons for the long-term reduction in tax revenue are that households are saving more, company losses from the financial crisis are now being claimed against current profits, and miners are investing heavily and claiming significant tax reductions.

”Simply put, the consumption boom that characterised the years leading up to the global financial crisis has been replaced by an investment boom, driven by the mining sector,” he will say today. ”We can expect a lower share of corporate tax to GDP for some years to come.”

But this morning shadow treasurer Joe Hockey expressed doubts that the budget would be as tough as Mr Swan was predicting.

“Well, this is like Groundhog Day. Every budget Wayne Swan has delivered, before each budget he promises Armageddon, then we get a series of confused, deliberate leaks from the government and then we end up with a budget that looks nothing like what the actual outcome of the budget ended up being,” Mr Hockey told ABC radio.

“It’d be the first tough budget he’s had if it’s a tough budget and I just think in this case, a Swan’s not going to change his spots.”

Budget speculation will again surround the 50 per cent childcare rebate, a $1.7 billion annual measure and one of the last areas of so-called middle-class welfare yet to be means tested.

Yesterday the Childcare Minister, Kate Ellis, appeared to rule the rebate off-limits by daring the Opposition Leader, Tony Abbott, to means test the rebate to find the money for his promise of extending the benefit to nannies.

with Judith Ireland

Follow the National Times on Twitter: @NationalTimesAU

Wayne Swan … revenue picture has worsened. Photo: Alex Ellinghausen

Government programs will be either cut or wiped out in the upcoming federal budget as the government strives for a surplus in the face of dwindling tax revenue, the Treasurer, Wayne Swan, will warn today.

In his first major speech setting the scene for the May 8 budget, Mr Swan will say delivering a surplus next financial year, as the government has promised, is an economic imperative.

To suggest it was a political strategy was ”misleading and ill-informed” and ”rubbish”, he will say.

Advertisement: Story continues below

With economic growth returning to normal, a surplus will help ease pressure on the dollar and give the Reserve Bank greater flexibility to cut interest rates as stimulus should there be another economic global downturn.

Mr Swan will tell a business breakfast in Sydney that ”we will need to cut and cancel existing programs if we are to meet our targets and we’ll need to redirect some spending to where it is needed most”.

”Because the surplus is a vital economic objective and because revenues are being written down, we need to find even more substantial savings than we had earlier anticipated.”

Privately, sources say the government is concerned that the opprobrium it will wear for the budget cuts will outweigh any kudos it receives for achieving a surplus and, consequently, will stress between now and the budget the benefits of a surplus.

At the midyear budget update released late last year, the Treasury forecast a $37.1 billion deficit for this financial year, followed by a $1.5 billion surplus for next year, 2012-13.

Mr Swan will say today the revenue picture has worsened since then due to a combination of the European sovereign debt crisis, consumer caution and a continued high dollar. These combined to produce a 6.5 per cent reduction in company profits, meaning less company tax.

Mr Swan will say longer-term factors mean that even as the economy recovers, tax revenue will remain lower than it was before the global financial crisis when ”revenues were at an unsustainable peak”.

Back then, the mining boom and strong household consumption were feeding government coffers to the point that tax receipts accounted for 24.2 per cent of gross domestic product.

That ratio fell to 20 per cent due to the financial crisis and is expected to rise back to only 22.8 per cent by 2016.

Mr Swan will say that if the ratio were the 24.2 per cent Labor inherited from the Coalition, the forecast budget surplus for next year would be $23 billion, instead of $1.5 billion.

The reasons for the long-term reduction in tax revenue are that households are saving more, company losses from the financial crisis are now being claimed against current profits, and miners are investing heavily and claiming significant tax reductions.

”Simply put, the consumption boom that characterised the years leading up to the global financial crisis has been replaced by an investment boom, driven by the mining sector,” he will say today. ”We can expect a lower share of corporate tax to GDP for some years to come.”

But this morning shadow treasurer Joe Hockey expressed doubts that the budget would be as tough as Mr Swan was predicting.

“Well, this is like Groundhog Day. Every budget Wayne Swan has delivered, before each budget he promises Armageddon, then we get a series of confused, deliberate leaks from the government and then we end up with a budget that looks nothing like what the actual outcome of the budget ended up being,” Mr Hockey told ABC radio.

“It’d be the first tough budget he’s had if it’s a tough budget and I just think in this case, a Swan’s not going to change his spots.”

Budget speculation will again surround the 50 per cent childcare rebate, a $1.7 billion annual measure and one of the last areas of so-called middle-class welfare yet to be means tested.

Yesterday the Childcare Minister, Kate Ellis, appeared to rule the rebate off-limits by daring the Opposition Leader, Tony Abbott, to means test the rebate to find the money for his promise of extending the benefit to nannies.

with Judith Ireland

Follow the National Times on Twitter: @NationalTimesAU

“We know that criminals target our staff and our systems.” … chief executive of the Custom and Border Protection System’s Integrated Cargo System, Michael Carmody.

CRIME syndicates are exploiting flaws in a federal government computer system that have enabled them to learn if shipping containers holding their drugs are being scanned and searched by authorities.

The flaws are in the Australian Customs and Border Protection Service’s Integrated Cargo System, which provides importers of goods with a means to track the movement of their cargo through port terminals.

Law enforcement agencies have discovered the system is being used by criminals to check if their shipping containers have been moved to a Customs Examination Facility or treated in a manner that suggests police attention.

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State and federal policing agencies have discovered several instances where criminal syndicates have abandoned contraband-filled containers as a result of being tipped off via the computer system that their cargo was to be examined.

A confidential maritime ”vulnerabilities” paper compiled by state and federal policing agencies about corruption and organised crime in the shipping sector identifies the computer system as a big problem.

”Customs has made protecting industry and trade a priority over law enforcement and it has to change,” said a senior federal government source aware of the problems within Customs.

Customs and Border Protection chief executive Michael Carmody last night said he was working ”on a comprehensive overhaul” to strengthen the security of the computer system.

”We know that criminals target our staff and our systems. That’s why we work so closely with federal and state law enforcement agencies. And why we invest so heavily in intelligence collection and in the security of the Integrated Cargo System,” he said. ”Where there is evidence of criminality we take action, often using covert methods to conceal the work we are doing to disrupt criminal activity.”

The revelation about criminal exploitation of the Customs computer system comes after Home Affairs Minister Jason Clare yesterday promised to boost the powers of the Commonwealth corruption watchdog, the Australian Commission for Law Enforcement Integrity.

Mr Clare was commenting in response to Fairfax’s report about more than 24 customs and border protection officers being investigated for alleged corruption or misconduct.

Rejecting Opposition Leader Tony Abbott’s renewed call for an inquiry into Customs, Mr Clare said the government would soon introduce an integrity testing plan for Customs and other law enforcement agencies, with ACLEI to be given the power to conduct stings to ”weed out inappropriate behaviour”.

The vulnerability of the Customs computer program has been apparent since at least 2008, when a police operation found a suspected drug importing syndicate tapping into the system to find out if their containers were being screened.

Communications intercepted by police on bugged phones revealed the suspected traffickers discussing the results of their computer system searches and agreeing to abandon an allegedly drug-filled container.

In addition to the Customs computer system, Fairfax is aware of at least one privately owned cargo tracking program that relies on data provided by Customs. Police believe this privately owned system can also be easily accessed by criminals.

The Crime Commission has also warned that criminal syndicates are using false identities or shelf companies to import goods into Australia and avoid detection.

Commonwealth Auditor-General Ian McPhee has recently identified other potential weaknesses in Australia’s cargo inspection regime.

In a report released last year, Mr McPhee said the big increase in online shopping posed a new contraband risk. Goods with a value of $1000 or less require less detailed information to be provided to Customs.

Know more about this story? investigations@theage.com.au

Julia Gillard and partner Tim Mathieson arrive in Canberra this afternoon ahead of tomorrow’s leadership ballot. Photo: Andrew Meares

Kevin Rudd has batted away suggestions that Labor should put up a third candidate in tomorrow’s leadership ballot, as Prime Minister Julia Gillard moves to reassure the party faithful that Labor can recover from the infighting.

Asked whether a third MP should run as the best chance of ousting Ms Gillard from her position, Mr Rudd said he believed the party had to choose between electoral defeat or a chance at winning the next election.

Those “carrying leadership batons in their backpack real or imagined” should put them away, he said.

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Kevin Rudd leaves home in Brisbane today. Photo: Harrison Saragossi

MPs and senators have begun arriving in the national capital ahead of tomorrow’s ballot with each new arrival greeted by a throng of media at Canberra Airport.

After several public engagements in Melbourne, Ms Gillard arrived at the RAAF Base Fairbairn in Canberra with partner Tim Mathieson.

In an interview with the Nine Network earlier today, Mr Rudd reaffirmed his promise that if he was defeated  – as expected – in the ballot that he would go to the backbench and cede any further leadership ambitions.

Transport and Infrastructure Minister Anthony Albanese arrives in Canberra, followed by Employment Participation Minister Kate Ellis. Photo: Alex Ellinghausen

But he also admitted that he feared the internal attacks by ministers and former cabinet colleagues would continue and that the timing of the ballot had put him at a disadvantage because he had not had enough time to campaign within caucus.

“I think it’s time people accepted responsibility for their own actions,” he said.

“This thing is bigger than all of us. If I get mowed down by a bus tomorrow … the party is much bigger than me. It’s time for us to unite rather than divide. I say to my supporters, unite behind the government…But it having come to this, it should be resolved.”

Julia Gillard is presented with the no. 1 jumper at today’s Western Bulldogs family day in Melbourne. Photo: John Woudstra

Mr Rudd said reports that he called the Prime Minister a ”childless, atheist, former Communist” at a hotel in Adelaide were wrong.

“I don’t have any recollection of having said anything of the sort,” he said.

Mr Rudd made a plea for the party to listen to the Leader of the House, Anthony Albanese, who came out in support of Mr Rudd yesterday.

Mr Albanese called on the  party to immediately stop its internal brawling, saying they should get back to ”fighting Tories”.

In what is seen as a final pitch to caucus, Mr Rudd said he had changed considerably since he was prime minister, and even promised to sleep more.

”We can always all do better. I’d be a mug if I didn’t learn from my experiences,” he said.

Mr Rudd said his hand was forced into his dramatic resignation from the foreign affairs portfolio in Washington as Ms Gillard refused to ”repudiate” comments made against him by senior ministers.

The former prime minister revisited the painful history that saw him deposed in 2010 and said he was given no warning that he was at risk of losing the party’s confidence because his colleagues believed he was running a paralysed and chaotic government.

Mr Rudd said he was doing his ”absolute best” to steer Australia through the ravages of the global financial crisis and that his closest confidantes had ample opportunity to raise their concerns.

He singled out Treasurer Wayne Swan for criticism and said he had only discovered his intentions to support Ms Gillard on the evening she announced she would challenge.

”Oh, I’m backing change,” Mr Rudd quoted the Treasurer as saying.

”That was it,” Mr Rudd said. ”No prior warning, no nothing.”

Mr Swan today avoided questions over whether he would resign from cabinet if Mr Rudd emerges victorious tomorrow, describing them as ”hypothetical”.

Despite Mr Rudd indicating he would not make changes to the senior ministry, Attorney-General Nicola Roxon, Environment Minister Tony Burke and Education Minister Peter Garrett have led the charge declaring they would quit cabinet if Mr Rudd was to return to the Labor leadership.

Immigration Minister Chris Bowen said that despite his public support for Mr Rudd he expected he would remain in his portfolio if Ms Gillard remained in her role.

”I think Kevin has indicated he would want a government of all the talents and he would invite senior ministers or ministers to continue to serve,” he told Sky News.

”Personally, I think there’s an obligation on those of us at cabinet level to continue to serve, regardless of whether our preferred candidate (wins).”

Ms Gillard today adopted a line used first by former prime minister John Howard and recycled by Mr Rudd in his bid to reclaim the Labor leadership.

”The things which unite us as…are infinitely greater and more enduring than the things that divide us,” was first attributed to Mr Howard in his 2003 Christmas message to the nation.

Ms Gillard said she was confident Labor would pull itself back together after a damaging week of public brawling.

“At the end of the day and at the end of what has been a very difficult week, the things that unite us in the Labor Party are far, far stronger than anything else,” she said.

Ms Gillard added she remained ”convinced” that Labor could defeat Opposition Leader Tony Abbott at an election in 2013.

Defence Minister Stephen Smith was the first high profile government figure to touch down in Canberra this afternoon and appeared to toe the newly adopted party line of ”unity”.

“I think after tomorrow’s ballot we draw a line under it and move on,” he said.

Arriving in Canberra, Mental Health Minister Mark Butler said that he was backing Ms Gillard as she was ”the right person to lead us to the next election in 18 months.”

”I am confident she is going to win,” he said.

Queensland MP Graham Perrett – who made headlines last year when he threatened to quit if Mr Rudd challenged for the leadership – said his office had received a large volume of calls from voters in his Brisbane electorate Moreton.

He said support for Mr Rudd and Ms Gillard was split in his electorate, which adjoins Mr Rudd’s seat of Griffith.

”They’re telling me both,” Mr Perrett said. ”[But] I support stability, I support the prime minister. This is not Australian Idol.”

Victorian senator David Feeney, who was instrumental in the 2010 coup that overthrew Mr Rudd, refused to comment while Resources and Energy Minister Martin Ferguson continued to battle the tide of caucus opinion by backing Mr Rudd.

South Australian backbencher Amanda Rishworth said she was confident Ms Gillard would win convincingly.

In an interview today, Ms Roxon said the former prime minister should give up all pretensions of ever leading the party if he could not attract 40 votes or more in tomorrow morning’s ballot.

Ms Roxon, who has been one of most vocal and vicious critics of Mr Rudd, said she believed Ms Gillard would receive the overwhelming support of caucus to keep her job.

”The truth is if Kevin has really anything under 40, that means that his colleagues have voted against him two to one,” the Attorney-General told ABC television.

”That is [then] time to tuck that leadership baton in the knapsack forever … because we cannot afford to drag down a Labor government because of one person’s ambition.”

Ms Roxon said she did not view Mr Albanese’s backing of Mr Rudd and emotional plea for the party to unite as a game changer.

”I just don’t think it means that people will move one way or the other,” she said.

Follow the National Times on Twitter: @NationalTimesAU

 

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