Julia Irwin (Fowler, Australian Labor Party) Share this | Hansard source

I rise today to speak on the report of the Standing Committee on Family and Human Services inquiry titled Balancing work and family responsibilities. I do so with a feeling of great disappointment. I say that because I think all members of the committee participated in the inquiry with genuine enthusiasm. This was going to be a report into the most important issue in the lives of so many Australian families and, as I will discuss later, an important matter for the Australian economy as well.

Parliamentary committees play a special role. I know from my experience that members often begin an inquiry with very different views but in the course of the inquiry both sides move closer to recommendations which can be agreed on. Consensus is more often than not the outcome of inquiries. But I regret to say that, in the later stages of this inquiry, there was a breakdown in the accord that had existed and, in the end, members of the committee went their own ways. Labor members have taken the step of including a dissenting report which, given the very limited time that we had to put it together, expresses the very different views held by the Labor members of the committee.

This is in no way a bipartisan report. The process of deliberation on the report excluded Labor members from the most important recommendations. The end result is an ill-considered report which flies in the face of the expert advice contained in the Econtech report—a report commissioned by the committee at a cost of $17,000. It is now clear that the committee chair had already reached the conclusion that we see in recommendation 18—that is, allowing tax deductions for child care. The consultants were asked to look at the effect of replacing the current 30 per cent rebate for child care with a general tax deduction and extend the fringe benefits tax exemption for employer funded child care. That report found that this would cost $500 million a year, with an increase in income tax collected of only $1 million or a net cost of $499 million. Less a saving from removing existing arrangements, the net cost would be $218 million.

Econtech also found that low-income earners would decrease their hours worked and be worse off. The chair went back to Econtech to change the model. This time she wanted the childcare benefit to remain and parents to be given the option of claiming the childcare tax rebate or a tax deduction. The result was that the cost blew out to $262 million. The committee report concludes that this is affordable and believes that a significant number of Australians will be better off. But the Econtech report makes it clear that tax-deductible child care only leaves parents on incomes above $75,000 a year better off. There is no benefit to families with lower incomes. The greatest benefit goes to those on incomes above $150,000 where a higher marginal tax rate applies. While the childcare tax rebate is capped at $12,000 a year, the recommendation does not cap deductible childcare expenses. If nanny care is deductible, as the report recommends, the greatest benefit will go to those families who can afford the high cost of nanny care. This is nothing but welfare for the wealthy.

The report does say that the cost to revenue should be regarded as investing to stimulate greater full-time female participation, and particularly targeting tertiary-qualified mothers to rejoin the full-time workforce. But it ignores the fact that full-time tertiary-qualified nurses and teachers with incomes of less than $75,000 would not benefit at all.

I take this opportunity to say to the member for Mackellar that I personally agree with much of her view that child care should be considered tax-deductible, but as I have just said, that would lead to greater benefit going to higher income earners. The member for Mackellar does attempt to justify that proposal, but I cannot accept that higher income families should pay less than middle-income families for child care. I can agree to tax deductibility so long as it is capped at the same rate as the childcare rebate, which is capped at the 30c in the dollar rate. For that matter, I can even accept other forms of child care, such as employed nannies and, to some extent, where their position is strictly related to child care, I could even accept au pair arrangements, subject to appropriate qualifications and defined working conditions. But, as I said, I could only accept those arrangements if there was a cap on the amount that could be claimed as a tax deduction, and that cap would be equivalent to the childcare tax rebate. I did not have the opportunity to put that proposal to the committee. We may never know if my suggestions might have been accepted by a majority of committee members. That is part of the opportunity that was lost through the rushed deliberations on this report, and it was not the only lost opportunity.

The focus on government assistance for child care left some of the more important issues out in the cold. The most important of these is the question of flexibility for working parents. The report suggests that the government’s Work Choices legislation provides the basis for flexibility in work hours. But the evidence given to the committee suggests that much stronger initiatives must be taken to give real flexibility to working parents. Opposition members were attracted to the right-to-request laws in Britain. While we have not yet seen the results of these laws, they do recognise that flexibility is a two-way street. Parents must be able to request flexible work conditions without prejudice. As we face severe skill shortages, more and more employers will be forced to rethink the flexibility of their work operations and the need to fit in with the family requirements of their employees. We may need a legislative framework to give greater certainty to all working families.

The second issue of flexibility is that of child care. There is an ongoing debate in this country about the need for more child-care places. I find that strange, when I get fliers in my letterbox telling me of vacancies at child-care centres in Western Sydney. When I speak to mothers about access to child care, they tell me about shortages on particular days and the impossibility of getting care at short notice. Where a parent may be asked to work an additional day in a week, they often have to refuse because there is no vacancy at their child-care centre on that day. Casual and part-time workers can find their life thrown into chaos if they are asked to change their work roster. They cannot change their child care as easily as an employer can shuffle work rosters.

Another issue which was not given the consideration it deserved was the interaction of the range of family assistance measures. If the committee had modelled the cut-off for family tax benefit part A, it would have found that it produces an effective marginal tax rate which is a disincentive for working parents, such as teachers and nurses. I know from the experience of my own daughter, who is a teacher, that she is better off working two days a week rather than three. If she increased her working hours by 50 per cent she would be worse off. But these issues are not addressed in the report.

Balancing work and family issues is important to our nation, not just for the barbecue-stopper effect on families; it is crucial to the economy. The Access Economics research shows that increasing female participation in the workforce can produce greater economic growth than tax reform and almost as much as national competition policy. This is the real challenge that the report overlooks. If we do not get the policy right when it comes to balancing work and family, our economy will suffer. We will find ourselves facing severe shortages in many areas of skill. I mentioned the nursing and teaching professions—both areas where a large proportion of the workforce is approaching retirement. Getting the right policy settings to maximise the participation of parents with young families is crucial to achieving this outcome, but this report cannot be taken as a serious contribution to that policy debate. Sadly, this report looks at gimmicks rather than solutions. It has been a wasted opportunity.

I add my thanks to the outstanding committee staff. They worked hours that were far from family friendly. We are fortunate to have highly skilled and dedicated staff to advise and assist our parliamentary committee, but we must manage those resources effectively to get the full benefit of their contribution. (Time expired)

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