Women's Economic Equality Taskforce calls on Katy Gallagher to scrap ParentsNext and childcare activity test, as part of federal budget advice

The interim Economic Inclusion Advisory Committee made 37 recommendations aimed at tackling disadvantage in a pre-budget report released on Tuesday.

The committee called for a substantial increase to the payment for people seeking employment, as well as other working age payments such as Youth Allowance. It also called for the abolition of the ParentsNext scheme, the "activity test" for child care subsidies as well as certain income tests from Family Tax Benefit calculations.

The recommendation follows a push by community sector organisations and social welfare recipients to "raise the rate" in order to lift more Australians out of poverty.

The committee found that the current rates of these payments are "seriously inadequate", and identified lifting their rates to 90 per cent of the Age Pension as one way to make them more effective.

This would require $24 billion over the forward estimates, a cost the government is unlikely to assume in the May federal budget.

The government could adopt some of the other recommendations made by the committee, some which include committing to a full employment objective and the creation of a National Energy Transition Authority to support a fair transition process for workers in emissions intensive industries.

The report came at the same time that the advisory group tasked with improving women's economic equality called for a policy overhaul in the upcoming budget, including bolstering social welfare, extending superannuation entitlements and a pay rise for childcare and aged care workers.

An election commitment by the Albanese government, the Women's Economic Equality Taskforce was established in September last year.

The group comprises 13 eminent Australian women, including the head of the Business Council of Australia Jennifer Westacott and the president of the ACTU Michele O'Neil.

In advice prepared for Katy Gallagher, Minister for Women, Finance and the Public Service, the taskforce earmarked six priorities for urgent action in the federal budget, due to be handed down on May 9.

This includes expanding the parenting payment to single women with children over the age of eight, meaning single mothers can be classified as doing parenting work, rather than as being unemployed.

The controversial ParentsNext program should also be abolished and replaced, the taskforce advised, echoing recommendations made by a parliamentary committee earlier this year.

The program requires parents to complete activities, as well attend regular appointments in order to receive their social welfare payments. Participants and advocates have called out these criteria as punitive and harmful.

The taskforce has also called for the activity test for childcare subsidies to be scrapped. The test ties the total hours parents work, study or volunteer to the amount of subsidised childcare they're eligible for.

The fewer hours they work, study or volunteer, the less subsidised childcare they can access.

The group also wants to see superannuation extended to primary carers who are on Paid Parental Leave, an interim pay rise for all early childhood educators and aged care workers, and a boost to Commonwealth Rental Assistance, to improve women's housing stability.

The experiences of Aboriginal and Torres Strait Islander women should also be centred in the delivery and evaluation of policy programs for women, the group says.

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The taskforce has urged Senator Gallagher to take up the recommendations and prove to Australian women "the government's commitment to gender equality is real".

"In presenting our six key budget priorities to you, we believe that in combination they present the government with a timely opportunity to clearly support single mothers, young parents, and their families, recognise and value the care economy, the role of childcare and paid parental leave; and alleviate the acute rental stress facing women across the course of their lives," the group stated, in their letter to the minister.

"We believe this would demonstrate your conviction that these women matter to the future of our economy and society."

Senator Gallagher said the government was considering whether it could responsibly deliver the recommendations in the upcoming budget.

"I welcome the taskforce's advice and I thank them for their effort in reaching out to women around Australia, as well as drawing on their own significant and credible expertise and experience to inform this advice," she said in a statement.

"We are considering the taskforce's recommendations in the context of the 2023-24 budget, including what we can responsibly deliver in a tight fiscal environment.

"The investments we make to drive gender equality in this budget will be built upon in subsequent budgets, in the same way that we are already building on the over $7 billion investment made in the October Budget to make child care cheaper, boost paid parental leave and support women's safety."

The taskforce will continue to work on a full report with a broader suite of recommendations to inform the government's National Strategy to Achieve Gender Equality.

That report will be sent to the minister by the end of April.

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