Rick Wilson (O'Connor, Liberal Party, Shadow Assistant Minister for Trade) Share this | Hansard source

I rise to speak on the Early Childhood Education and Care (Three Day Guarantee) Bill 2025. This bill amends the A New Tax System (Family Assistance) (Administration) Act 1999 and replaces reference to the childcare subsidy activity test with a three-day guarantee. The bill is set to commence in January 2026, and the three-day guarantee will provide all families with a combined income of up to $533,000 with access to 72 hours a fortnight of subsidised child care. For Indigenous families, this will be increased to a maximum of 100 hours a fortnight of subsidised child care. The legislation does not guarantee or prioritise access for working families over non-working families. The government estimates that the cost of these measures will be $426.7 million over five years from 2024-25, despite the policy not rolling out until January 2026. This is also in stark contrast to the Productivity Commission's report estimating that the full removal of the activity test would cost $2.3 billion per year.

The coalition will oppose this legislation. There are several issues with this bill, including the removal of priority access for working families. It disincentivises aspiration, increases access without addressing supply issues, does nothing to increase access or flexibility for families and does not address the current cost-of-living pressures. The bill has been referred to a Senate inquiry with a reporting date of 21 March. I'll remind the House that that is prior to the House being scheduled to return for the budget on 26 March. This policy was first announced by the Prime Minister on 11 December 2024, and it's been described as the next step in the Albanese government's plan for a universal early learning system.

The government estimates that over 100,000 families will have access to more subsidised care and more than 66,000 families will be better off overall. This represents only about six per cent of all families currently engaged with the childcare subsidy system. Under the current activity test, parents and carers need to be looking for work or working, studying or volunteering to be eligible for subsidised care, noting that volunteering and looking for work only count towards the first 16 hours of your activity level. To calculate a family's hours of subsidised care, Services Australia uses the lower activity level of a couple, even if one of them has an exemption. In a single-parent household, only their activity levels are used to determine the number of hours of subsidised care.

There are exemptions to the activity test in which parents and carers are eligible for 36 hours of subsidised care a fortnight, including, firstly, if you identify as Indigenous, and, secondly, if you're a parent pathways participant and receive an eligible income support payment. A parent or carer is exempt from the mutual obligations if they receive one of these payments: JobSeeker, the parenting payment and special benefit. Or they're exempt if they have a preschool-age child that attends preschool through centre based day care. Parents and carers can access 72 hours a fortnight if they're receiving a care allowance. Grandparents and some eligible families accessing the additional childcare subsidy, including vulnerable children in the foster system and families escaping domestic violence, are exempt from the activity test. As part of the 2022 cheaper child care legislation, the Albanese government amended A New Tax System (Family Assistance) Act 1999 to provide Indigenous children with a minimum of 36 hours a fortnight of subsidised care.

Removing the activity test for three days a week means parents who require the support of early childhood education while they work, study, train or volunteer will be competing with families who don't work or don't require support in order to work. The coalition's childcare subsidy reforms came into effect on 2 July 2018, including the activity test. Prior to this, parents and carers were required to satisfy a work, train or study test. The activity test was introduced to encourage labour force participation and to ensure priority of access was given to vulnerable and working families.

Australia has a long history of priority access guidelines for child care, which this new legislation removes. This legislation brought forward with this timing is just a political game to create a wedge for the opposition. The policy was initially announced as an election commitment, along with a $1 billion Building Early Education Fund on 11 December, and somehow this legislation just popped up last week. Despite the government claiming urgency and having the numbers to pass the legislation this fortnight, they have agreed to the motion in the Senate to refer it to an inquiry.

Labor's three-day guarantee is fundamentally unfair and divisive. While it appears that this will only increase access for a small number of families, it will have a wide-ranging effect on all. Families who need early childhood education so they can work will be competing against families who now have extra subsidised access but may not be working, studying or volunteering at all. So, generally speaking, families already in the system are unlikely to be impacted, but working families about to enter the system or trying to enrol a new child will be greatly impacted.

I see this across my electorate where childcare places are desperately short in our regional towns and cities, which haven't seen any new investment in childcare facilities. They are desperately short. These are the towns and the communities that produce this nation's wealth. Across the goldfields, for example, $14 billion of mineral wealth is produced from those towns, yet childcare places across the goldfields and, in particular, the major regional city of Kalgoorlie are desperately short. Families are leaving town because they can't access the sort of child care they need for both partners in the family to work and earn the money they need to earn in a high-cost regional town like Kalgoorlie.

Once again, Labor is at war with aspiration. It's at war with working families, and it's actually at war with working mothers. Over the last three years, Labor has failed to meaningfully address supply-side constraints. That's what I'm referring to, certainly, in the towns and cities in my electorate where there are massive constraints on supply. Modelling from the Productivity Commission shows that most children affected by the activity-test changes live in major capital cities. Families in thin markets and childcare deserts, such as the ones I'm describing across my electorate of O'Connor, who have little or no access to child care at all will be most disadvantaged. There is no point in having access to three days of care if there is no care available. Once again, Labor is dividing the nation—working versus non-working families and metropolitan versus regional families. Labor argue that their $1 billion BEEF policy will boost supply, but history tells us they will not be able to deliver.

Families have the right to choose what their working family looks like, and the coalition respects this choice. Labor's three-day guarantee does nothing for families who choose to remain at home to raise their children until primary school or families who use flexible arrangements, such as grandparents or nannies. The bill also does nothing for parents who need flexibility, such as families who do shift work or non-standard work hours. Once again, across my electorate, there are a lot of shift workers—the mines that produce this nation's wealth run 24/7. There is nothing in this legislation for those families. Again, hardworking families will not benefit from this change, but families who aren't working, studying or training will. It's similar to Labor's other policies. This rewards families who access child care, at the expense of those who aren't able to or choose not to.

There is a significant discrepancy in costings. We believe the $426.7 million over five years is well and truly undercooked, and the true impact of removing the activity test will not be fully known. The department was unable to advise how many families are eligible for CCS but are not enrolling their children nor how many families are completely engaged with CCS. The government costing does not account for these groups. The Productivity Commission's 2024 report A path to universal early childhood education and carecosted the complete removal of the activity test at $2.3 billion per year. I'll repeat that: $2.3 billion, versus the government's costing of $426.7 million, over four years. The Productivity Commission's modelling suggested that the complete removal of the activity test would increase hours of early childhood education by only four per cent. They also estimated that it would lead to a 0.9 per cent decrease in hours worked by sole parents and primary carer parents in coupled families. These are not our numbers; these are the Productivity Commission's numbers.

Some sections of the community have labelled the three-day guarantee a cost-of-living measure, but in reality it is nothing of the sort. Since Labor came to power, the cost of child care has increased by 22.3 per cent. I'll just repeat that in case anybody missed it: since Labor came to power the cost of child care has increased by 22.3 per cent. At this rate, childcare costs will have soared by 124 per cent by March 2032. That is the equivalent amount of time, a decade, that the Labor Party are saying that under the previous coalition government prices rose by 49 per cent—which in hindsight we may look back on as the golden era for childcare costs.

The last time Labor was in government the cost of child care rocketed almost 53 per cent in six years. Since Labor's cheaper childcare policy came into effect, out-of-pocket costs increased by 12.7 per cent. Almost one in three services are charging above the fee cap as providers struggle to keep up with rising regulation and operational costs. We see this, I hear this from my constituents—

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