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Parents of all newborn babies will receive $3000 after July 1 under a new maternity allowance which will rise to $5000 by 2008.
This is the Howard Government's new initiative to woo parents and combat Labor's offer of a $3000 baby care payment which would be means tested.
The Government is also scrapping its unpopular baby bonus which voters found too complicated and also thought was targeted at the well off.
As well, about 35,000 new child-care places are being created in recognition that many families - in which both parents are required to work - are struggling to find spots for their children, particularly those needing minding after school.
About 250,000 parents each year will receive the new maternity allowance.
But Treasurer Peter Costello yesterday failed to announce anything to reduce the soaring cost of child care and did little to fix the shortage of care for those under two years old throughout Sydney and NSW.
The Howard Government has matched Labor's baby care payment - the maternity allowance starts earlier than Labor's and, while $380 less at its peak than Labor's, reaches the $5000 maximum two years before Mark Latham's plan.
"There are no more places for babies in child care centres and nothing to make child care fees more affordable," said Carol Lymbery, of the NSW Community Childcare Co-operative.
The Opposition said the changes did nothing to help 46,300 children unable to secure long daycare and were not enough to meet demand for outside-school-hours care.
But Mr Costello told The Daily Telegraph tax cuts and the new Maternity Allowance would help parents meet their childcare bills, which have risen 30 per cent since 2000, by "giving them more money".
From July 2006, the new allowance will rise to $4000, while babies born from July 2008 will attract a $5000 payment.
Labor's payment is to begin at $3000 in 2005 and rise to $5380 by 2010, but starts to phase out for families earning more than $85,700.
- reprinted from the Daily Telegraph