Julie Owens (Parramatta, Australian Labor Party) Share this | Hansard source

The Family Assistance Legislation Amendment (Building on the Child Care Package) Bill 2019 was tabled without warning or consultation with the opposition. Nevertheless, it does improve on a range of things concerning the new childcare system, which was introduced in July 2018. I suspect this bill, as one of the many administrative bills this government has presented to the parliament, has been prepared essentially by the department, as many administrative bills are. When you look at what the government has been doing over the last seven years—and this is a third-term government—what you find, relative to what we've seen from past governments, is an extraordinary number of administrative bills and very little else. It's as if the government has had its finger firmly on the pause button. Departments have been going about fixing up things that went wrong with past legislation, putting together the kinds of bills that we always see them put together. But it's hard to find the bills before this parliament that are about vision: anything that ennobles, or enables growth—anything at all. Nearly all the legislation we see in this parliament is this kind of administrative bill, essentially prepared by the departments, or bills that persecute: drug-testing welfare recipients, the cashless debit card, trying to make pensioners work until they're 70—you name it. There are punitive and vindictive bills, and administrative bills, but virtually nothing else.

Here we have, once again, one of those administrative bills. I have spoken to a number of people in the public sector, actually—and I won't say who they are! They commented what a pleasure it is to actually get their administrative bills through. Those of us who have been in the parliament under previous governments know that these bills are quite often pushed down the agenda because more important bills—those to do with vision and growth, and things that make the country and the economy stronger—tend to get pushed up. But the departments are having a field day at the moment; their bills are all getting through. If we look at the speakers lists over time we can see this pattern emerging absolutely. On the speakers list today, government members aren't even bothering to speak on four of the six pieces of legislation. They're not even bothering to speak, because these are clearly purely administrative bills, even though, as I said earlier, these administrative changes are quite important because they fix problems in earlier bills.

The new childcare system that was introduced in July 2018 had problems. We said so at the time and the sector said so at the time, and those problems have been apparent. Over the last 12 months we have seen a number of systemic design flaws, and administrative burdens on families and providers have been absolutely apparent. The government has denied that there was a problem—it denied it right up until the moment this administrative bill was tabled in the parliament. Now they're not even bothering to speak on it: they're absent.

But we on this side will speak on this bill, because child care is an incredibly important matter. It's important for the children—incredibly important for the children. Anybody in this House who has children or grandchildren knows that you can watch the milestones of a child in child care. You can watch them developing; it's quite extraordinary. And we have, essentially, a very good system with some very qualified and well-trained childcare workers.

But there were a number of flaws. The substantive aspects of the bill will increase the number of weeks at which enrolments automatically cease through nonattendance from eight to 14. At the moment, if your child doesn't attend for eight weeks then you have to re-enrol through Centrelink. That means that families using childcare centres for the school holidays, for example, where their child goes there for the school holidays and then is off for eight weeks, have to re-enrol. It's one of those unnecessary burdens on both the centre and the child, and this bill removes that by increasing it to 14 weeks. That's a big improvement, and the sector has been calling for that change since the changes were made in July 2018.

It also removes the 50 per cent limit on the number of children that a provider can self-certify for additional childcare subsidy, which is about the child's wellbeing. This is also a positive change, because it resolves issues for services that enrol significant numbers of children at risk. There are centres which are located in places where there are large numbers of children at risk; many of us have suburbs or parts of our electorates where that is the case. Again, the sector has been calling for this. It's pleased with this change, and we on this side are pleased to support it in getting that change through.

The third one is to improve the application of third-party contributions to fees. State and territory governments quite often make payments as well, but currently, under the system from July 2018, the Commonwealth requires that state or territory assistance be applied to fees before the childcare subsidy is calculated, thus reducing the CCS entitlement. In other words, it transfers who pays from Commonwealth to state; it doesn't make the family better off. This change will allow the assistance to apply after the calculation, to allow the state to effectively eliminate out-of-pocket costs for vulnerable families. That was always the policy intent, so the requirement that it be taken into account before the subsidy was calculated effectively wiped out that policy intent and simply transferred the cost from one level of government to another.

There is also a change in the process for registering for the childcare subsidy. Currently, applicants are able to register without providing their tax file number or bank account details, and they have 28 days to provide this information to Centrelink. The changes here will remove that 28-day period. You've heard many speakers on this side say that we think that's problematic. There will be families who, because of their circumstances, will not necessarily have access to their records—families fleeing domestic violence, for example—but there may be other circumstances on which it's extremely difficult for a family to find that information as required and we wouldn't on this side want to see children excluded from child care and the parents unable to work because they couldn't actually provide this information within 28 days. Twenty-eight days is reasonable. We haven't seen evidence that there's a whole stack of families ripping off the taxpayer for 28 days when they had no intention of providing their TFN. We haven't got any examples of that. So it seems to be, again, a punitive move without any real benefit.

The government introduced the childcare system, as I said before, in July 2018. Families and providers since then have experienced significant delays, confusion and additional paperwork to register for the childcare subsidy, and this has often resulted in families' entitlements being over- or underestimated, resulting in overpayments and debts for affected families. Once again, the government is data matching with the Australian tax office and providers have been forced by the government to act as debt collectors if families are overpaid.

I want to go back to some things I said early on, when these changes were first made in July 2018, and talk about the complexity in this system. I'm a fairly smart person. I'm good with maths. If I had a full-time paid job or my family received full-time work and we had $65,000 or $70,000 a year, this system that was introduced would actually be quite good for me. It provides a higher level of subsidy. It's quite consistent. It's actually quite good. But I want you to consider what happens to families where one or both parents—or single families with just a sole parent—have sporadic or casual work. People that I meet sometimes in my electorate tell me that they find out at six or seven in the morning each day whether they're working that day. They can't project their annual earnings. They can't even project their weekly earnings. And yet the requirement in this is that you meet two conditions that determine your payment.

The first one is how many hours you work; families will receive 36 hours per fortnight when both parents undertake activity for eight to 16 hours per fortnight. If you think you're going to be working for eight to 16 hours per fortnight for a couple then you receive 36 hours per fortnight. But, for many families, sometimes they do and sometimes they don't. For many families, it's impossible to hold their working hours within that frame. There's also that the subsidy rate changes depending on your annual income. If a family earns up to $65,710 per family—and these figures may have been adjusted in the last year, but these were them at the time—then you get 85 per cent, but, if you earn $65,000 to $170,000, it tapers down and eventually gets to 50 per cent if you earn from over $170,000 to up to $250,000. In order to get your childcare subsidy right at the time you register, you have to know what your annual income is likely to be and you have to know what your range of hours is likely to be.

You can imagine a couple where one or both parents are working some casual hours where they suddenly hit the next threshold unexpectedly. At the end of the year they suddenly get a dream job and then, instead of their $65,000 estimate being right, they hit 70 and, instead of being entitled to 85 per cent, are only entitled to a lesser subsidy. I would dare anybody in this room who lives a life of casual and sporadic work or who is trying to get back into work, trying to increase their hours or seeking promotion to sit down at the beginning of the year and actually calculate within this ridiculous framework what their actual childcare subsidy should be. I would dare anybody. That could be why, now that the data matching is going on, there are so many families being hit with debt. In Senate estimates last month, the Department of Education confirmed that 91,840 families—16 per cent of families—have been hit with a childcare subsidy debt so far, and it's not over yet.

The system is complex, lacks transparency and has substandard IT, and families are being hit with unexpected debt that they then have to verify. Again, I would dare, in spite of your best efforts to keep your payslips and all the rest of it, anybody who's working casual work, taking whatever work they can get or moving in and out of the workforce to actually keep records or project at all. This debt issue is particularly worrying when we have a government that made such a stuff-up of what is known as robodebt. Not everybody knows what robodebt is. It's called robodebt because it's done automatically. For Centrelink payments there's an automatic matching of ATO data and your Centrelink payments. If they don't match, a letter is automatically sent to you telling you that you have a debt—that's the 'robo' bit of it. Then it's up to the person who receives that letter to prove that they don't owe a debt.

This is an extraordinary botch-up, because, unlike the childcare subsidies, which are actually calculated on your annual income, Centrelink payments are calculated on your fortnightly income. You could be on Newstart for the first three months of the year. Quite appropriately, you're telling Centrelink if you get a few hours of work, and they're adjusting your Centrelink payment and everything's correct. Then, towards the end of the financial year, you get a job—totally legitimate; you're supposed to do that. Suddenly you earn income. Maybe you earn $20,000 in the rest of that year. Maybe in the last seven months of the year you get a job, you go off Centrelink benefits, you get paid and you earn $20,000 that year. The data matching with the ATO then takes that $20,000 and averages it out over the year, which is not the way the calculation works. This was never going to work. This is ridiculous. It was a ridiculous idea to start with. The shocking thing about it is that the person who receives the letter then has to prove the government wrong. In this data matching, the government has reached back sometimes seven to 10 years. You don't have to keep your paperwork more than seven years. Again, I would dare anybody, if you suddenly had to prove to the government's standards that you didn't owe debt from seven years ago from when you had casual work or had a job where the business is no longer in business—it's incredibly difficult. That's what robodebt is.

Now, finally, after a year of people saying it was terrible, with case after case that was clearly a stuff-up by this government, they are finally suspending it while they have a look at it. I suspect that in a year's time, when the 16 per cent of families that have so far been hit with a childcare subsidy debt grows as the rest of the families are covered, we will once again find family after family who, through no fault of their own, who tried to do everything right, are suddenly hit with crippling debts. Many families, particularly low-income families and many middle-income families, would find it very difficult to handle an unexpected debt, particularly when they did everything they could to get it right. I would really ask the government to reconsider what they're doing with this. These changes are essentially good, but there are a lot more problems with the system that you have that you really must address.

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