Allegra Spender (Wentworth, Independent) Share this | Hansard source

Early education is absolutely critical to Australian families and to Australian children. Having accessible and affordable early childhood education makes a massive difference, a huge difference, to community members and their families and certainly to people in Wentworth. Affordable and high-quality child care allows parents, particularly women, to return to the workforce, contribute to the economy and boost productivity. As someone who at some stage of my life was dropping off three children at the same time to my local early education child care up in Paddington, I couldn't have done it without them. The confidence with which I could drop off my children, knowing they would have a day of fulfilment, would be safe and would be learning, and with which I could then go and do my job—which I loved—was not only integral to my mental health and to my ability to pay the bills but also to the lives of my kids.

Research from the University of Chicago and Stanford estimated that between 20 per cent and 40 per cent of our rise in living standards since the 1960s has been a direct result of increased female workforce participation. So much of that has been about how our children can be looked after. But let's not forget the demonstrable impact that great, high-quality early childhood education has on kids, because you see that from children participating in child care. The first years of a child's life are about setting them up for success, and, if they have access to high-quality child care, it improves language, motor skills and social skills during this critical time of their lives.

This bill makes an important contribution to our childcare system by modifying the flawed activity test that determines the number of hours of subsidised child care for families based on recognised work, training or study. Under this legislation, families will have access to a guaranteed three days of care regardless of their activity. Now let's look at the context of this. This activity test was introduced in 2018, but, ever since then, the activity test has been criticised. In particular, the Productivity Commission, in its most recent report, agreed that the activity test has disproportionately impacted low-income families and kept children from disadvantaged backgrounds from fully receiving the benefits of the childcare system. Impact Economics and Policy estimates that around 126,000 children from low-income households, from the poorest households, are missing out on child care. In particular, they could find no evidence that the activity test had the effect of increasing workforce participation, which was the major argument for the activity test. In fact, research by the Economic Inclusion Advisory Committee attested the opposite: that the test complicated the system, created uncertainty around funding and impacted employment decisions, around the margins, leading to a decrease in workforce participation. I think that's the context we need to see this question in.

The activity test was there to increase workforce participation. It appears that it has done the opposite. The activity test is restricting access to high-quality early learning for kids from our most disadvantaged backgrounds. We know the numbers. We know that the kids who are most likely to be behind when they start school are those kids from the most disadvantaged backgrounds. Those are the ones we need to be investing in the most to make sure they start school with the skills that will allow them to succeed and go through the school system with those skills, and that means having great access to high-quality early childhood education. That is why the removal of the activity test is so important, and that is why I'm supporting the bill.

I do want to acknowledge that, while we are working on the childcare system in this parliament, there are some fundamental issues with the entire system. I think it is incumbent on the parliament in the next term, whatever form it takes, to really fundamentally address them.

Let's look at the numbers. Gross childcare fees in Australia are the third highest in the OECD; after the inclusion of the CCS, they are still the seventh highest. Those are the statistics. Around my electorate, which is an economically advantaged electorate, higher childcare costs are stopping people from having more children. I was doorknocking the other day and I met a young woman. She's got two kids. Her family are really good earners; they've just bought a house, and she and her husband have great jobs. Despite both of them literally earning well into the six figures, she said, 'We can't afford to have another child right now because of the cost of child care.' If you are not receiving the Child Care Subsidy, you're spending around $60,000 of post-tax income on childcare fees alone, and that's just for three days a week. For families in my area, some of whom are at the edges of the Child Care Subsidy, this is stopping them from having more kids. It's wrong for families in our country to have to choose not to have children because they can't afford the child care.

It's also bad economics. We know that we've got a birth rate that is at a record low at 1.5. It's historically low, but it's not a surprise given how much child care costs at the moment. Even with the subsidy, the average family in my electorate of Wentworth is still spending around $40,000 on out-of-pocket childcare fees to put two children into child care just four days a week. That goes up to $60,000 if they're not getting the Child Care Subsidy. We're talking about $120,000 of income that is required to pay for child care. Research by the New South Wales Productivity and Equality Commission showed that a one per cent increase in fees paid by a family led to a 0.16 per cent fall in the number of hours worked by the primary carer, which, in 80 per cent of cases, is the mother. As I said, it's no wonder that Australia's birth rate is so low.

We do need to look at broader reforms. As well as looking at how we fund this, how we make sure that we address childcare deserts and how we increase access, as we are looking to do through this removal of the activity test, we also need to look at supply-side factors that are driving up the cost of child care for Australian families.

When I talk to my local childcare centres, they tell me time and time again that some of the quality and compliance that is put in place—which is there for good aims, good reasons, in relation to maintaining childcare quality—is turning into a tick box that is not actually adding a lot of value. It has just become an administrative burden. In some cases they are pulling workers away from their kids because of all this documentation and the pressure to provide parents with updates constantly through the day, with photos and things like that. There are some rods that we've created for our own backs, with parents getting all this information. The system as it stands is making it more expensive and harder for childcare centres to offer high-quality child care at a price affordable to families and affordable to the government.

Similarly, I talk to them about training in relation to early childhood education. I was speaking to a woman who had been involved in early childhood education as a nanny for eight to 10 years. She had entered her training with a great desire to learn new skills and learn more about child development, but she spent her time learning about the compliance. That is ticking the boxes but not building her skills, and it's making it harder for her to continue with her childcare education because she's earning a lower wage but not feeling like she's building her skills. I think we need to look at the education system and also the compliance system, and say, 'How do we make sure that these are well-targeted to deliver high-quality but more affordable child care into our country?'

Finally, we need to look at the complexity of the system for parents. I've had numerous contacts from people in the community talking about the challenges in accessing the system, where young families are being caught out because they're unaware of the convention and the necessity of applying for childcare positions when the child hasn't yet been born. After 12 weeks of pregnancy I was calling all the childcare centres in my area, and I still struggled to get my children into a childcare centre. Families are seeing their hourly fees skyrocket well above the rate cap that's meant to be adjusted, and families are stuck and unaware of their eligibility because the application process for child care is archaic, complicated and inflexible. I remember trying to apply for the CCS myself and finding it notoriously complex; I'm well-educated and happy to deal with government systems, but this is a difficulty. For people in my area, an area that is relatively well served with child care compared to many parts of the country, the idea of shopping around for child care is a joke because families are completely beholden to the availability of places and often take whatever hours they can get—and that doesn't start to deal with shift workers and other complexities.

While I think we should celebrate each of the incremental steps in improving the childcare system as progress, I think we need to be honest with ourselves; history tells us the joy will be short-lived. I support the government's direction on child care and believe the Productivity Commission's recommendations provide a modest reprieve to working families. We need to accept these modest changes but look at a redesign of the system. We need to prioritise this issue in the next term of parliament and work out how we can get better outcomes at an affordable price both for families and the taxpayer. Having such high childcare and early learning costs compared to other countries around the world is hurting families and hurting the economy as well. We are tinkering on the demand side, and I think we need to look at meaningful and substantive supply-side reform.

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