Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Community Services) Share this | Link to this | Hansard source

The Families, Community Services and Indigenous Affairs Legislation Amendment (Child Care and Other 2007 Budget Measures) Bill 2007 relates to a number of the government’s recent budget measures, including those relating to child care, the one-off increase in the childcare benefit and the change of the childcare rebate from a tax offset to a direct payment. Labor supports these initiatives insofar as they go to helping families with the spiralling costs of child care, and we support this bill. However, we do believe that for 11 very long years the government has ignored the concerns of many Australian families, especially when it comes to their difficulties in finding affordable, high-quality and accessible child care. We believe the government has certainly not done enough to support families with the cost of child care, nor to help the early learning and development of those children. Accordingly, I move the following second reading amendment:

That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House notes that:

(1)

child care out of pocket costs are increasing five times faster than average prices for all goods and services;

(2)

for the past four years, child care out of pocket costs have increased by more than 12 per cent each year;

(3)

on average families will receive $813 from the changes to the child care tax rebate, not $8000 as the Government claimed;

(4)

many parents continue to experience difficulties accessing appropriate child care for their children;

(5)

high quality child care must be assured by a rigorous accreditation process focused on quality improvement;

(6)

despite the international consensus on the benefits of early childhood education, Australia ranks last in the OECD on the percentage of GDP spent on pre-primary education; and

(7)

there are currently 100,000 four year olds in Australia that do not attend preschool”.

This bill implements two of the government’s budget measures on child care. The first is a one-off increase in the childcare benefit; the second will convert the childcare tax rebate from a tax offset into a direct payment administered by Centrelink.

We certainly welcome this extra support for Australian families, and we also welcome the fact that the government have finally acknowledged that there is a crisis in the affordability of child care in Australia—something that they have consistently denied. You would have to say that this is more of a pre-election fix than any real understanding of the many difficulties families face when it comes to the costs of child care.

Australian families are very right to be sceptical of the government’s genuine understanding of the cost pressures that they face, because for too long the government has insisted that there was no problem with childcare affordability in this country. I will illustrate this point by giving a couple of recent examples. Earlier this year, the Commonwealth Treasury said of the Australian childcare system:

... contrary to popular perceptions, there is not an emerging crisis in the sector; supply is generally keeping pace with demand and—

and I emphasise this point—

child care has remained affordable.

That was said by the Commonwealth Treasury earlier this year. The Treasury paper went on to say:

... unmet consumer preferences represent more of a problem for parents than access itself.

In other words, the Commonwealth Treasury is saying: ‘There’s nothing wrong with child care; no problems with access, no problems with cost. It’s really just that parents are too choosy.’ I have to say that this is the most outrageous and arrogant dismissal of parents—a dismissal that we have seen repeated by many government ministers, who really do not understand how critical this issue is for parents. I will come back to this question of parental choice a little later in my remarks.

The Minister for Families, Community Services and Indigenous Affairs, Mr Brough, claimed recently that paying high fees was not too much for families because, he claimed, few people have more than one child in formal care. Yet figures from his own department show that one-third of families receiving the childcare benefit have two or more children in child care. Plainly, the minister for families does not understand the cost pressures on Australian families who are juggling caring for their children, meeting the costs of child care and returning to work or study.

Of course, we cannot forget the Prime Minister’s remarks just a few months ago, when he said, ‘Working families in Australia have never been better off.’ Plainly, he does not know those working families who are paying very substantial amounts for the cost of child care. The Prime Minister is normally pretty careful with his words. We know this is the case; he is a very, very clever politician. But this was yet another indication that he is slipping. One of the reasons for that is that he has been Prime Minister now for 11 years. I think these comments represent a further example of just how arrogant the government have become. They think that things are just so good for families; that families should not complain. As far as the Prime Minister is concerned, they have never had it so good.

It does seem to be the case—and I am sure many families struggling with the cost of child care would say—that after 11 years in power, this government is more and more out of touch with the realities faced by thousands of working families, who are facing not only the increasing costs of child care but also are struggling to keep up with their mortgage repayments and the increasing cost of petrol to keep their car running. All of these things are putting increasing pressure on so many families.

After all of these statements, after months—in fact, years—of families being told by the Prime Minister and his ministers that there is no problem with childcare affordability, that they have never been better off, families are right to be sceptical when, just moments before an election, we see the government scrambling to do something about spiralling childcare costs. I want to take a moment to recall just how much families have been paying for child care in Australia over the last four years. Let us look at how much their childcare costs have risen, so that we can put this pre-election childcare benefit increase into perspective.

The average cost of child care in Australia is $240 a week. However, we know that in some cases fees are as high as $350 per child per week. Childcare costs have been rising five times faster than the average cost of all other goods and services. According to the Australian Bureau of Statistics, out-of-pocket childcare costs for families in the past four years have increased by 12.7 per cent, then 12 per cent, then another 12 per cent and almost 13 per cent last year. Independent analysis by Saul Eslake from the ANZ Bank undertaken for the Taskforce on Care Costs shows that childcare affordability has declined by 50 per cent in the last five years. We have had year-on-year increases in childcare costs of more than 12 per cent and then moments before an election, when the government is under some political heat, a pre-election 10 per cent bonus appears. Parents understandably will be very sceptical about it. Juliet Burke, the chair of the Taskforce on Care Costs, whose own research indicates that costs are rising on average by 13 per cent per annum, said after the budget:

Increasing the child care benefit by 10 per cent takes parents back to the position they were in a year ago.

Of course the opposition supports this increase in childcare benefit, belated as it may be. Any help that the government provides for families is welcome, even if it is long overdue. Like parents, however, we are sceptical about the government’s sincerity and doubt, given its many statements on in these issues, that it has any real understanding of the pressures on families when it comes to the cost of child care, largely because it keeps denying that there is any problem.

The opposition’s other concern is that this one-off increase will not make a real difference to affordability for families if it is swallowed up by increased childcare fees. An article in today’s Queensland Courier Mail quotes the Tigger’s Place Preschool and Kindergarten at Logan announcing to parents that it is already increasing its fees by 10 per cent. The legislation has not even been passed by this parliament and a childcare centre is increasing its fees by 10 per cent—the same amount as the government’s childcare benefit bonus. The centre wrote to parents recently to explain the increase and stated:

The government has increased the CCB rate from $2.96 to $3.37 an hour. This will make our fee increase a lot more affordable to families.

As the headline in the Courier Mail states, ‘Fee rise to slice childcare rebate’. This is even before the legislation has been passed. Already the benefit of the increase this bill is seeking to implement will be eaten up by higher fees for families using this childcare centre. The newspaper article went on to say:

The nation’s largest child care provider, ABC Learning, is also set to increase fees.

The newspaper does not report what the increases will be, but we on this side of the House are concerned that families across the country will miss out on the benefits of the childcare benefit increase because childcare operators will use this one-off bonus to net a windfall gain and parents will be left with the bill.

I raised this issue with the Minister for Families, Community Services and Indigenous Affairs during consideration in detail of the appropriations bill in the Main Committee last night. He said last weekend that he would not be a ‘casual bystander’ if centres increase their fees in this way. The minister is now saying that he will publicise the fee increases in an attempt, I suppose, to name and shame operators. I would certainly like to ensure that all parents are informed of these increases. I call on the minister to honour the commitment that he gave last night and release all details of childcare fee increases that he or his office is aware of. As he becomes more aware of these fee increases I ask that he make it publicly known. Parents have a right to know if their childcare fees are increasing and by how much. Of course they also want to know what the government is going to do about it.

Another report in a newspaper today also puts paid to yet another claim by this minister and the government. The minister has been very quick to claim that there is no problem—he is absolutely definite about this—in finding a childcare place in Australia. Parents know the reality and they do not believe for one minute these denials by the minister. The minister said in the parliament two days ago:

There is no shortage of child care for the zero to two age group, preschool age or any other age.

That was a very categorical statement from the minister. However, his claims have been shown to be completely false in an article in today’s Daily Telegraph with a headline that speaks for itself: ‘Yes, there really is a crisis—waiting lists refute government’s childcare claim’. The article describes the situation faced by residents in Sydney, particularly in the electorate of the member for Wentworth. The article describes the situation best, so I will quote directly from it:

ALMOST 900 children trying to squeeze into fewer than 70 places, an average waiting time of more than two years and parents on the phone in tears but the Federal Government says there is no childcare crisis here.

This is the Waverley Child Care Centre, the face of Sydney’s childcare crisis and possibly the most in-demand daycare centre in the country.

A total of 895 children are currently waiting for just 68 places. Most will have to wait at least two years, many will simply never get a place at all.

And it is not alone. The other two centres operated by Waverley Council have about 50 places and waiting lists of about 700 children each.

“You actually have people on the phone crying,” children’s services coordinator ... told The Daily Telegraph.

The children’s services coordinator also said:

... the situation for places for newborns to two year olds was desperate.

So we have direct evidence that contradicts Minister Brough’s statements in this House just two days ago when he said that there was no shortage of child care and, in particular, emphasised—demonstrating just how out of touch he is—that there was no shortage in the nought to two age group. I hope for his own sake that the member for Wentworth does not share Minister Brough’s arrogant view that there is no childcare shortage, certainly in the Wentworth electorate.

The minister makes these claims at his own peril. Firstly, he admitted in the Main Committee yesterday that his information collection does not break down vacancies by age group, so he does not actually know whether there are vacancies in the nought to two age group, nor is he able to make the claim that there are no shortages at all. He is misleading parents in many places who are desperate for high-quality care. The second problem for the minister is that he makes these claims that there are no shortages based on his own decision that parents should take whatever child care is available even if it is not what they want for their child. The minister admitted in the Main Committee yesterday that when he says there are childcare vacancies in a particular area he refers to availability in both family day care and long day care. So when he says that there are vacancies in any particular part of Australia and insists that there really is care available, he is ignoring the preferences for family day care or long day care or for a particular type of care that parents might want. Minister Brough’s claims about vacancies are premised on ignoring parental choice. In contrast, Labor supports parents’ choices as to the type of child care they want for their children.

We believe there should be a range of care settings available and that all should meet the highest quality standards. Unlike the government we are not in the business of telling parents that they should take one option for their child if they prefer another or if they think that a different form or place of care is better for their child. We are certainly not in the business of denying the reality for many parents that they cannot find the child care they need. Labor, in contrast to the government, have committed to addressing the shortage of child care in Australia. We have committed to a $200 million investment to build up to 260 new high-quality childcare centres, on either primary school sites or other community land, because we want child care to be affordable, accessible and of the highest quality.

The other childcare measure from the budget that is in this bill is to change the childcare tax rebate from a tax offset into a direct payment administered by Centrelink. These amendments to the childcare rebate are simply the government finally delivering on a promise made at the last election. The coalition’s 2004 election childcare policy document said:

Legislation will need to be passed to enable families to receive payment of the 30 per cent child-care rebate from 1 July 2005.

But after the election, as parents in particular know, the Treasurer reneged on this promise. He made families wait until 1 July 2006 to receive their childcare rebate for the 2004-05 financial year. Parents have had to wait up to two years to get some relief for their childcare costs through this childcare rebate. These amendments we are debating today are only delivering on the coalition’s original 2004 promise rather than leaving families in limbo for up to two years. The government should also be more honest with families who are accessing the rebate about the number who are likely to receive the payment of $8,000—some people might remember that banner headline screaming at everyone one Sunday morning just before the recent budget. In the recent Senate estimates hearing, officials from the families department admitted that the average rebate would be $813, not $8,000. Minister Brough admitted a few days ago that many families would only receive between $300 and $500 from the rebate. Very few families are likely to receive payments of the order that the government claimed before the budget. Not $8,000 a child; $800 a family—that is the reality, stripped of the spin. I have tried a few times to get the government to own up to how many families will get the $8,000 and, not surprisingly, the government has not been able to tell us how many families will get that extraordinary figure. The reality is that the average is around $800, and I think families will be sorely disappointed when they see that at the end of the financial year.

Labor supports the decision to pay the rebate through Centrelink to make sure that low-income families will be able to get this assistance in accessing childcare benefit. Nevertheless, it will still be the case that families will have to wait until the end of the financial year to get the new childcare rebate. We know that since the budget the minister has said that he hopes that by 2009—a couple of years away yet—the new childcare rebate will be paid fortnightly. Of course, what Labor wants to know is whether or not the childcare management system that is being put in place will in fact enable this to occur. Parents certainly would welcome this rebate being paid fortnightly rather than having to wait until the end of the financial year. Given the government’s history on the childcare tax rebate, parents are understandably just a little sceptical of any promises that the government makes in this area.

What is blatantly clear in both of these areas is that we have a government that really only bothers to do something about childcare costs in an election year. And, true to form, in this election year the government is planning yet another round of taxpayer funded advertising, on child care. During recent Senate estimates hearings, officials from the Department of Families, Community Services and Indigenous Affairs admitted that a print and electronic media advertising campaign is planned to sell the government’s childcare changes and that this campaign would be up and running by the end of July. The officers also admitted that whilst they:

... have not had a program approved yet—

they also admitted that—

... letters to families are already starting to be mailed out ...

So the advertising program was not approved but they were in the process of mailing letters out to families. We have heard this before, no doubt we will hear it again from this government. There will be more taxpayer funded advertising, coming on top of the near $2 billion this government has spent on ads promoting itself since coming to office.

I ask the minister to actually come into the House during his summing up and provide the full details of the planned advertising campaign that is now, as we understand it, underway to sell these childcare measures to the public, including the full costs and the expected duration. If the government holds true to form, it will be more taxpayers’ money going on a political advertising campaign. That is sadly what we have all come to expect from this out-of-touch and increasingly arrogant government.

In addition to the two childcare measures I have previously mentioned, the bill also amends the Social Security Act to allow all students who received the carer allowance child healthcare card at the time they turned 16 years of age to continue to have access to a healthcare card while they are full-time students until they reach the age of 25. At present only those students who qualify for a low-income healthcare card or an alternative income support payment, such as the disability support pension, have access to a concession card after they turn 16 years of age. This measure will help about 25,000 full-time students who are ex-recipients of carer allowance child, and we certainly support this extension. We believe fundamentally that all Australians should be able to get an education, and this measure will help more young people with a disability to remain in education beyond the age of 16. We do think that it is a very good measure.

One area where the government failed to move in this recent budget was to provide a comprehensive agenda for early childhood education. Labor want a future for Australian children where their care and development are matters of national importance. I have spoken many times on the value of early childhood education, and I will not repeat here today the volumes of very well documented research that support Labor’s arguments in this area. But I will remind the House that, under this government, Australia spends the least in the OECD on preprimary education. We get the wooden spoon. We only spend 0.1 per cent of GDP, compared to the OECD average of 0.5 per cent. And according to the Australian Bureau of Statistics, 100,000 four-year-olds in Australia do not attend preschool. There is no coherent policy agenda from the government, no clear direction, no desire by this minister to actually make sure that these Australian children attend preschool.

By way of contrast, the Labor opposition are providing the fresh policy ideas needed in this area. We do believe that early childhood programs are an opportunity for foundational growth that all Australian children should have, and we intend to provide it to them. We have committed to providing all four-year-olds with 15 hours of early learning a week for up to 40 weeks per year. We will provide $450 million each year in new Commonwealth spending to make sure that this occurs, and also to make sure this service expansion does not increase fees for parents.

We do want a fresh agenda for our young children. We want to make sure that child care is accessible and affordable for parents and is maintained to the highest quality standards. We also want to see early learning and development integrated with high-quality care to make sure that our children are set on a path to future health and prosperity.

Harry Quick (Franklin, Independent) Share this | Link to this | Hansard source

Is the amendment seconded?

Alan Griffin (Bruce, Australian Labor Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Cameron Thompson (Blair, Liberal Party) Share this | Link to this | Hansard source

It is a pleasure to be part of this debate today and to welcome the Families, Community Services and Indigenous Affairs Legislation Amendment (Child Care and Other 2007 Budget Measures) Bill 2007, which gives effect to some important measures from the budget this year. It is welcome news for families across Australia, not least for those in my electorate of Blair. I note that the opposition’s spokesperson spent some time reading from the newspaper in her speech and I would like to retaliate with some articles that I read this morning. The Australian has a large article talking about how Australian families are better off as a result of the tax reforms and other changes that the government has made. This goes directly to the debate that we are having today, because the fundamental proposition being put forward in the article on the front page of the Australian today is that:

... only 40 per cent of households actually pay any net tax, after the value of all government benefits is counted.

The average household pays total taxes of $360 a week, but gets back $375 in both cash benefits and government services, such as health and education. Tax raised from the corporate sector covers the difference.

After taking account of inflation, real incomes rose by 8.9 per cent over five years, while the value of government services rose by an additional 7.2 per cent, with big increases in government spending on pharmaceuticals, community health services and other health benefits.

We are discussing the issues that confront families in Australia every day about child care, raising children, and affording the necessities of life. It is what has been called the ‘barbecue stopper’—the work-family balance. I heard from the opposition spokesman a lot of words about policies but, to be honest, particularly when it comes to the question of education, the opposition has been pushed to the periphery of the debate and are playing catch-up on points on which the government has a well-established track record. On several of these points, the opposition has in the past pooh-poohed government initiatives and discounted them as being unnecessary or in some way frivolous and are now being forced to come back and confront the inadequacy of their own position in the past. It is a welcome position when they come back and start looking again at education and at these kinds of issues. But it does them no credit to criticise the government when, really, they are coming back and following along in the government’s wake.

Another point that was made in this morning’s Australian newspaper, under the heading ‘Tax take helping Howard battlers’, was that savings from the reduced cost of maintaining unemployment benefits have been redirected into an increase in family benefits, which have risen from $20 per household a week to $28, and in the age pension. The study also shows there is a massive recycling of tax and cash benefits from the rich to the poor. It says:

The poorest segment of the population by contrast—

with the best paid segment of the population—

pays just $22 in tax and gets $300 a week in cash benefits.

That brings a smile to your face, I can see, Madam Deputy Speaker Bishop. This is a very effective policy that assists young families, and in this legislation that we are reviewing here today we are talking about child care and we are talking about families and how they cope under the improved tax regimes introduced by the Commonwealth and the increased support for child care provided by the Howard government.

I found a very interesting fact in doing research for this debate. The opposition are very keen, on occasion, to quote activities happening in the OECD or in other situations, but they have become less willing to do that in recent times, because quite obviously Australia is performing so well by comparison with the rest of the OECD that those sorts of comparisons are no longer popular among members of the ALP. However, I would like to discuss something about the OECD. What I have discovered is that the OECD has found that Australia has higher levels of subsidy support for parents’ childcare choices than comparable nations. The OECD estimated that, in Australia, the government contributed, on average, around 60 per cent of parents’ childcare costs, where other comparable nations were more likely to contribute about one-third. That is the first thing. Also, a non-government Taskforce on Care Costs before this year’s budget—before these measures were taken into account—showed that many families earning under $80,000 a year were receiving more than 47 per cent of their costs from the taxpayer. The government has a very proud record in relation to child care, and I compliment the Minister for Families, Community Services and Indigenous Affairs on his efforts to take it further ahead, particularly the measures that are contained in this budget.

Some post-budget modelling has been conducted by the Department of Families, Community Services and Indigenous Affairs which found a range of very interesting things about these new measures. For example, for some low-income families returning to work and receiving JET childcare fee assistance, the government contributes more than 98 per cent to the total fee. Also, the subsidy for common working family types using approved long day care will be between 55 per cent and 93 per cent of the fee as a result of the increased childcare benefit and the improved childcare tax rebate, which we have heard is now going to be paid by way of a direct payment. So a common example of a working family on a combined family income of $60,000, using part-time care for one or two children, showed they had between 55 and 79 per cent of their fee subsidised, depending on the centre they used. As we have heard referred to on occasion in this House recently, this modelling has been conducted using what is a relatively high fee figure of $350. So it shows that the government is making a very solid impact, and the very real measures of assistance that I referred to in relation to the tax environment provided by the government are also important.

But I would like to just speak generally about how families are benefiting from the strong economic conditions that have been provided as a result of fundamental reforms pursued by this government with direct opposition from the Labor Party over the past 11 years. These achievements have happened because of the efforts of the government and despite the efforts of the opposition, not with any assistance from them.

There are now more Australians in work than at any other time in history, with seasonally adjusted employment surging by 39,400 in May to stand at a record high of 10,453,800. Full-time employment increased by 66,800 in May to a record of 7,530,000. A while ago it was popular among the members of the Labor Party to talk about how all the jobs that were being created in our country were part-time jobs. Since the advent of Work Choices—since the industrial relations reforms implemented by the government—that has been turned on its ear, and you do not hear that argument from Labor any more. Why? Because people are getting full-time jobs. In the context of this debate about families, there is easier access to family-friendly hours. There are more people taking up jobs where they work 25 or 30 hours a week. Although that is a part-time job—and there are more people taking up full-time jobs—people are being taken into these family-friendly jobs. That means that women who might have had children are being lured back into the workforce not only by more jobs with higher pay but by the opportunities to make use of hours that suit them and their families. It is what they want to do.

This is the environment that the government has delivered by providing for workplace flexibility. The government’s family-friendly measures have delivered a scenario within which families can be more confident when they pursue child care and they can do it in a less stressed environment because of those flexible measures that the government has introduced. The female participation rate is at the highest level on record, 57.5 per cent. When people look back and say, ‘Unemployment was at two per cent after the war; if only we could get back to that,’ it is worth nothing that we did not have then the kind of workplace we have now. In 1966, when I was a young whipper-snapper, my mother was one of the first teachers allowed to go back to work after having been married—an incredible occurrence in those days. Prior to that time, when women married they said goodbye to their jobs and they did not go back. It was only in 1966 that that started to change. It was way before then that a two per cent unemployment figure was achieved.

The female participation rate, at 57.5 per cent, is the highest on record. Of the 309,600 jobs created since the introduction of Work Choices, 134,300 have been filled by women. This is a very fast-moving process which has seen many more women enter the workforce, and many more women are making these choices. Against that environment the government is making very real advances in the provision of child care. We on this side of the House deserve special credit not only for providing the environment that encourages the work but also for facilitating the work by providing support for child care and incentives for people, and women in particular, to take a greater part in the workforce.

I do not want to continue for too much longer on the conditions that apply to the employment of women but, interestingly, the Australian Bureau of Statistics has shown that there has been a narrowing of the wage gap between men and women. That is significant. Once again, the government’s measures have supported the movement of women into the workforce. That is a good thing, and long may it be so. The Melbourne Institute’s wages report of May 2007 showed that employees on individual contracts experienced an average increase of 6.8 per cent compared with an average of 3.4 per cent for those on enterprise agreements and 2.6 per cent for employees on the safety net or the award. I throw that in because this is the fundamental point about workplace flexibility. Workplace flexibility is advantageous not just for the traditional blue-collar workers—it is not something that happens only in mines; it is happening all over our economy—but for women as well as men. From these flexible conditions they are getting more money, not less, and they are finding family-friendly opportunities to support them as well.

There will be an increase of 10 per cent in the childcare benefit from 1 July. Child care was an important focus of the 2007-08 budget, and the expenditure included a $2.1 billion investment to help families with their childcare costs. The government is investing $11 billion in child care over the next four years, with a 10 per cent increase in the rate of childcare benefit from 1 July—730,000 families will benefit from that change, and that is just the first part. This is of significance to people in my electorate as well as across Australia. In my electorate, 7.3 per cent of the population are aged under five and 16.5 per cent of the population are aged between five and 14. There is a demand for child care in the electorate of Blair, but I do not agree with the opposition when it says that places are not available. There are different types of child care that people can access. If you want a particular type of care, you might encounter difficulties—I have experienced that myself locally—but there are places available and in this area the government has demonstrated continual improvement.

If only the government is empowered to continue with its program, to continue with the good, sound economic management that it has delivered, the availability of those places will continue to improve, the availability of support for child care will strengthen and the opportunities will improve. But, if it goes the other way, if the Labor Party and the unions are given power over our country, then we are heading for an economic disaster zone. Support for child care cannot be retained if the government is plunging into debt and if the economy gets into difficulty. One of the things that I think is most significant is the way in which the Labor Party continually say to people, ‘Imagine if there is a downturn,’ and then they threaten people about their jobs and their security if there is a downturn. I know one way of guaranteeing a downturn, and that is to put the Labor Party in power. You would have a self-fulfilling prophecy courtesy of the Labor Party.

Dependent on the incomes that people have, the investment that the government has made in their childcare costs will mean up to an additional $20 a week for families to help them cope with childcare costs. The childcare benefit gives parents a choice about working—it provides the resources to allow them to do so and alleviates the expense.

The member opposite spoke about the change in the way the rebate is paid. The fact is that there is a bonus for families who paid for child care in 2005-06 and 2006-07. They will receive two payments after 1 July: one through the tax rebate system and one through the family assistance system that this bill implements. That is $8,000 worth of assistance. There is just one point that was not covered by the member opposite, and I am disappointed that it was not. I would like to flip to that now. The bill helps young people with disabilities and severe medical conditions by giving them access to the healthcare card from 1 October 2007. Twenty-five thousand full-time students aged 16 to 25 who used to be carer allowance child receivers may be eligible for the card in their own right. Previously, unless they qualified for a low-income healthcare card or had access to income support related concession cards, they were not eligible until after they were 16. So this will help them through their education, reducing their costs and giving them more long-term opportunities. I am disappointed that was not covered by the member opposite, but I think it is very important that we focus on that matter and give support to all members in the community, particularly in relation to child care and disability support.

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

There is a political saying that the government obviously knows only too well. It goes along the lines of: ‘You can fool some people some of the time but you cannot fool all of the people all of the time.’ Members may recall that just before the last election, in 2004, this government made the promise that it would allow a tax rebate for 30 per cent of the cost of all child care. That was a big issue then, as it is today. So I am sure many working families across Australia took that promise at face value and worked out how much they would get back on the cost of child care. Many would have supported the government as a result of that promise. But guess what happened after the 2004 election? The Treasurer told us that we should look at the fine print. For a start, he said that it would not be the full cost of child care but only that part not already covered by childcare benefit, and it would be capped at $4,000 per child per year. It is very funny that we did not hear that before the last election. What sounded like a $4,000-a-year tax deduction worked out at something a lot less. To make matters worse, the Treasurer said that you could not get the rebate straightaway. You would have to wait well over a year before you actually got the money. There is another saying that is well worth noting. It goes like this: ‘Fool me once and it’s shame on you, but fool me twice and it’s shame on me.’

Working families might be excused for being a bit suspicious about anything that the Prime Minister might promise in the lead-up to this year’s election. ‘Once bitten, twice shy,’ you might say. So the Treasurer needed to sound a lot more convincing this time around. You would not have believed this government promising anything about child care after they had ripped everyone off last time. You would not trust them again, would you? So I am sure that when the Treasurer sat down to frame this year’s pre-election budget he might have started by thinking about what he needed to fix before he could make any more promises for this election. One thing that would have been staring him in the face would have been the childcare tax rebate rip-off. The fact is that the Prime Minister could not look the Australian people straight in the eye with any sort of promise on child care after the way he handled this mess three very long years ago. So somewhere close to the top of this government’s agenda for the budget was this measure to fix part of the childcare tax rebate. We can only wonder what promises this desperate government will come up with for the election due later this year. But we should all be wary of the fine print, because we can be sure that, once again, what we finish up with will be a long way short of what the government promised.

I want to get down to the measures in the Families, Community Services and Indigenous Affairs Legislation Amendment (Child Care and Other 2007 Budget Measures) Bill 2007 in detail. I took the opportunity of the budget debate to mention some parts of the changes which this bill covers, and I will now go over some of the detail of the measures and how they fit into the overall scheme of childcare assistance as it operates at the present.

The issue of assistance to working families with children is indeed—as the Prime Minister described it—a barbecue stopper. For thousands of working families across Australia the cost of child care is definitely the third biggest item on the household budget. After rent or mortgage payments and the family grocery bill, childcare costs come in at third place. In much of the Sydney area child care for two days a week can cost a family $100 a week or more, even after the childcare benefit is claimed. The effect of the childcare tax rebate, as it currently applies, reduces this amount by less than a third. That is just the start. Getting the right child care when you need it is an even bigger concern.

For the sake of this bill I will concentrate on the cost of child care to working families. We know that the average payment to families under the childcare tax rebate was $813. That would suggest that the full cost to the average family was over $2,400 a year or close to $50 a week. But I stress that $50 a week is the average, and for many working families the cost would be much higher. We should not forget that the rebate was capped at $4,000 per child per year. That is a very big sum to be out of pocket for when it takes more than a year before it is paid back under the existing legislation. Just to put that into the picture, from next month when working families start putting together their tax returns for the 2006-07 financial year they will be able to claim the cost of their childcare expenditure for the 2005-06 financial year. It will be well over 18 months from the time they paid for their child care to the time that they get their childcare tax rebate.

It really never made sense why working families were expected to wait that long before getting the childcare assistance that they so desperately needed. I cannot imagine the bank that holds their mortgage saying, ‘It is okay to not pay us any interest for 18 months.’ I cannot imagine their credit card issuer saying, ‘It is okay, you do not have to make any repayments for 18 months.’ But that is what this government has asked working families to do when it broke its 2004 election promise. To meet the cost of child care for 18 months before the government pays for any assistance is a very big ask for struggling working families. We know that the main reason for women going back to work when they have a young family is the pressure of making ends meet. High mortgage repayments mean that for many families it is necessary for both parents to return to work. Knowing this, the government has been happy to reap the economic benefits of the increased participation of women in the workforce but it has definitely failed to meet its end of the bargain. A report in the Economist looked at the economic benefits of increased participation of women in the workforce. It said:

Arguably, women are the most powerful engine of economic growth ... Over the past decade or so, the increased employment of women in developed countries has contributed much more to global growth than China has.

That is just one measure of the importance of women rejoining the workforce. As Deputy Chair of the House of Representatives Standing Committee on Family and Human Services of which you, Madam Deputy Speaker, are chair, we inquired into the issue of balancing work and family. We looked closely at participation rates for women in the workforce in Australia and other countries. On the 2003 figures the committee found that the participation rate for women in Australia with two or more children was 56.2 per cent, compared to 61.8 per cent in the United Kingdom, 64.7 per cent in the United States, 68.2 per cent in Canada and 77.2 per cent in Denmark. In a survey of OECD participation data, Ian Campbell Sarah Charlesworth commented:

Motherhood appears to have a bigger impact in impeding employment in Australia than it does in comparable countries.

And in particular:

The absolute drop in employment rates associated with the presence of two or more dependent children in Australia is dramatic ... These data suggest that there is something distinctive about the labour market transitions in relation to Australia.

I do not want to suggest that the flawed and deceitful childcare rebate scheme is the only cause of this. For that matter, I do not think that there is a silver bullet solution. But I do know from listening to mothers, especially in my electorate, who are either in the workforce part time or considering re-entering the workforce and making decisions about how much work they do, that they place a great deal of emphasis on the cost of child care—it is a factor in their decisions. And it is not a simple calculation. As well as the cost of child care, there is the loss of family tax benefit part B and in many cases the loss of family tax benefit part A as well. The delay in payment of the childcare tax rebate is a big factor in all of this.

What the government has failed to realise in the disgraceful way that it has handled this issue is that working families know that a bird in the hand is worth two in the bush. The promise of assistance in two years time does not put food on the table today, and that was always the fatal flaw in the childcare tax rebate. Businesses can account for deferred payments—they do not keep their accounts on a cash basis. But working families depend on their weekly cash flow, and that makes all the difference when families make decisions about a parent re-entering the workforce or increasing the number of hours worked. Those decisions will not always be based on economic factors alone.

Increasingly, I hear working families taking a longer term view. When a mother is deciding to return to work, she will weigh up the cost of child care and, if the outcome is a very small return for the effort, she will often decide that it is just not worth it. The choice is to go out to work for very little return or to stay at home and reap the benefits of family tax benefit part B and then return to work when the children are of school age. More working families are making that decision, especially in my electorate—enjoy your children in the early years and make up for the lost income when they go to school and there are no expensive childcare fees to worry about. That is one way to account for the low participation rate for women in Australia compared to other developed countries. But this comes at a great loss to the economy. We are not just talking about low-skilled women staying away from the workforce. In 1951 women made up only 20 per cent of tertiary enrolments. By 2004 women made up 54 per cent of tertiary enrolments. By failing to address the twin issues of childcare costs and balancing work and family policies, the government is throwing away the economic growth potential that can flow from increasing the participation rates of women in the workforce. The importance of this was highlighted in research presented to the family and human services committee. Access Economics made the impact of improvements to participation crystal clear when it commented on the results of its modelling, which revealed that increasing the full-time participation of women could increase per capita output by 4.4 per cent. Access Economics added the comment:

Past analysis has suggested that the tax reforms of 2000 may have added somewhere in the region of 2.5 per cent to the national income of Australians ... while promoting national competition policy may have added 5.5 per cent. Therefore, the results are revealing. They suggest that the benefits to the national income of boosting full-time female participation rank somewhere above those of tax reform and below those of promoting competition policy. Such estimates are imprecise, but they are a timely reminder of the importance of an issue that will grow with the passing of time. The potential bang for the buck in policies which help to unlock the participation and productivity of women workers is large, not merely in the longer term, but—given the current capacity constraints which the Reserve bank has highlighted—in the short-term as well.

Child care is not just a policy area suited to election gimmicks. It is not something to be played with when the government needs something to save it at the polls. It is an element of the economic policy of this country. If we get it right—and we have to get it right—according to Access Economics it can give our economy one of its greatest boosts. If we get it wrong, and that is the record of this government so far, it will cost us dearly, both in the short term and the long term.

To come back to the detail of the measures proposed in this bill, we see a one-off increase of 10 per cent for the childcare benefit but, as any parent with a child in child care would know, the cost of care has been rising faster than most other costs. The 10 per cent increase will ease the burden slightly, but will not take the family outlay on child care back to what it was five years ago, even allowing for inflation. The 10 per cent increase in childcare benefit is welcome, but it is nothing to get excited about. As I have said, unless there is some real relief from the high cost of child care, we will not see an increase in the participation rate of women in the workforce. The changes to the childcare tax rebate are also welcome and long overdue. Labor proposed the earlier payment when the original legislation was debated in this parliament two years ago. But as we have seen, it is only the prospect of annihilation at the polls that has forced the government to see the light and make the necessary changes. The proposal to change the payment from a tax rebate to a payment through Centrelink will not only avoid the earlier excuse for delays in payment but will call the payment what it really is. I have always thought it was a bit of a con calling such payments ‘tax rebates’. Maybe it goes over well at Liberal Party branch meetings, where I am told—and I have one or two friends who are members of the Liberal Party—there are calls for tax rebates for just about everything. But in reality it is a transfer payment made to families to offset the cost of child care, and we really should call it by its proper name. The other amendment deals with the extension of the healthcare card to all former carer allowance child recipients while they remain full-time students until age 25. This is a common sense measure and is supported.

As we approach another election, I am sure that childcare policies will again be centre stage. Voters were taken in last time by the government’s announcements on the childcare tax rebate and I have a feeling that they will not be so gullible this time. In any case, I would suggest that voters take the government’s announcements on child care with a grain of salt. They have seen in this sad experience that you cannot trust the government when it comes to child care. Voters will have every reason to be once bitten, twice shy.

Justine Elliot (Richmond, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Families, Community Services and Indigenous Affairs Legislation Amendment (Child Care and Other 2007 Budget Measures) Bill 2007. I support the amendment moved by the member for Jagajaga—namely, that this House notes that:

(1)

child care out of pocket costs are increasing five times faster than average prices for all goods and services;

(2)

for the past four years, child care out of pocket costs have increased by more than 12 per cent each year;

(3)

on average families will receive $813 from the changes to the child care tax rebate, not $8000 as the government claimed;

(4)

many parents continue to experience difficulties accessing appropriate child care for their children;

(5)

high quality child care must be assured by a rigorous accreditation process focused on quality improvement;

(6)

despite the international consensus on the benefits of early childhood education, Australia ranks last in the OECD on the percentage of GDP spent on pre-primary education; and

(7)

there are currently 100,000 four year olds in Australia that do not attend preschool.

This amendment really sums up the difficulties that so many parents face in both the accessing and the affordability of child care. The bill contains some changes that the opposition and the community have been calling for over many years. The sad fact is that the Howard government has not taken child care seriously over the past 11 years; it has not been seen as a priority. Indeed it seems very convenient, some would say cynical, that a few months before an election we are seeing the Howard government finally willing to take some action and act on the concerns of thousands and thousands of families who are struggling with the rising cost of, and decreased accessibility to, child care. Every parent who has had experience of placing their children in child care can talk about the difficulties of navigating the current system of rebates and subsidies. The system is very confusing and, for the most part, very time consuming. As this situation is the case for many parents, Labor supports the bill. Any bill that gives even a fraction of help to working Australian families will always be supported by us. Even if it is only bandaid assistance provisions motivated by an election cycle, no matter how small the improvement may be, the fact that it will benefit families is indeed a good thing.

Essentially, the bill gives effect to three childcare measures. Firstly, there is to be a one-off increase of 10 per cent in the childcare benefit, without any other further indexation in 2007. This is indicative of this government’s preferred way of governing, which is one of payment rather than sustained relief from the rapidly rising costs of child care. This 10 per cent, one-off payment is supported by us. But it is worth noting, and perhaps it is worth the government paying attention, that out-of-pocket childcare costs have been rising at the rate of over 12 per cent for the past four years. This is a staggering four times the rate of inflation and it is rising five times faster than the average cost of all other goods and services. It is indeed a rapid increase.

It is obvious that Australian families need sustained support to help with out-of-pocket childcare costs, and that is exactly what federal Labor is committed to providing. From this side of the chamber the message we are sending to the government is very clear: what Australian families need is an ongoing commitment to help them deal with accessing more affordable child care. Certainly in my electorate of Richmond many families raise the issue of affordability of child care. For so many families it is just not feasible to use child care at all. This places great stress upon their families. Also, it often places great stress upon grandparents whom I speak to. They tell me that of course they love their grandchildren and want to spend time with them, but a lot of childcare needs have to be borne by them because the parents have to work and simply cannot afford child care. So affordability does place great stress upon families. As I say, it is an issue that many locals, particularly many retired people and grandparents, do raise with me. We need the government to look at the genuine concerns of Australian families with regard to child care rather than simply looking at the next election. The government needs to be properly analysing the needs of Australian families.

The second aspect of this legislation deals with the childcare tax rebate. Despite its name suggesting that it would be a good thing for families, any financial advantages are instead wiped away by the sheer complexity and delay experienced by families attempting to access it. This truly has been a nightmare for families who are struggling from week to week. Accessing the rebate has been a total debacle, as we have heard many speakers say this morning, particularly for families who are struggling from week to week and who are waiting such a long time to access that rebate when they need the money a lot sooner. Currently, the childcare tax rebate is delivered as a tax offset. This legislation will change that arrangement and convert the rebate to a direct payment to families, eliminating the costly delays in the current system.

The legislation deals with families’ long documented frustration with the current system, but it is legislation that is long overdue. Many families have suffered in the previous years while waiting to access that rebate. Again, it is motivated by the government looking at the calendar, realising an election is imminent and then remembering that it is has yet to deliver on its 2004 election promise in this area. Let us just touch on what that promise was. In 2004, the government stated clearly in its childcare policy document that ‘legislation will need to be passed to enable families to receive payment of the 30 per cent childcare rebate from 7 July 2005’. Unsurprisingly, this legislation was never passed at that stage and Australian families were forced to wait until July 2006 to receive rebates for the 2004-05 year. That was certainly a very long time to wait for money that they desperately needed.

We in the Labor Party have been talking about child care for 11 years, a very important issue of vital concern to Australian families, while the government has simply been paying lip service. In fact, processing rebates faster is a common theme from the Labor Party, with the Leader of the Opposition Leader saying in December last year that ‘working families would be able to claim childcare rebates faster under a federal Labor government’. He said that Labor would work with the childcare industry to find ways to give families the rebate much faster. I am pleased to see that the government has finally listened to the opposition and has finally acted on this. This legislation should have been brought in years ago and this problem rectified. But, unfortunately, what happened is what we have come to expect: this government had to be dragged and kicked into making sure that changes which really are vital to Australian families are made.

The final aspect of this bill deals with the healthcare card for full-time students aged between 16 and 25 who are ex-carer allowance recipients. It will extend the healthcare card availability to this group, while they remain full-time students, until the age of 25. It will provide extra support for students with a disability or medical condition and will help reduce the associated costs. At present, access to a healthcare card is limited to those who are eligible through low-income provisions or who receive some other Centrelink payment—such as the disability pension. This change will affect 25,000 full-time students between the ages of 16 and 25 and Labor welcomes and supports it. Continuing with further education, or in some cases even finishing years 11 and 12 at high school, can place a large financial burden on students. This is especially the case when one considers the increases in HECS fees, with a large proportion of students now looking at full fee paying courses, and a general underinvestment in education by this government over the past 11 years.

This is a belated bill—belated by 11 years of government inaction and belated by a government that believes that child care has nothing to do with them. Just as we often hear from this government that dental health and education have nothing to do with them, they often wipe their hands of these very important issues, and working families feel growing frustration in this area. In contrast, we in the Labor Party look to investment in our nation’s infrastructure and investment in our people. We believe in providing support for families from when their children are in child care and early education, right through to tertiary education or skills training. We believe it is good for families, good for the community and good for our country’s sustained economic growth. The Labor Party is listening to Australian families, hearing their concerns and acting on them.

This legislation contains some rather serious holes. The reality is, of course, this one-off payment will quickly be absorbed by increased costs, which, as I stated earlier, are rising more quickly than the cost of any other goods or services. The changes in accessing the tax rebate are a step in the right direction, but two years too late.

The healthcare card changes will benefit thousands of Australians who have been waiting a long time for attention from this government. In my electorate of Richmond, families have been struggling with the increased costs of child care, which is hardly surprising when we look at the fact that the average fee for child care in New South Wales is $247 per week—a staggering amount. The simple fact is that because of these exorbitant costs, families are having their options limited, especially with the rising cost of living.

For many families right across the country, particularly in Richmond, child care is not a viable option. It is something they are not able to access. This is the situation whether parents need child care to continue working on a full- or part-time basis or to retrain or attend further education. The cost of child care is becoming a major determining factor in how Australian parents bring up their families and in how they survive from day to day. We can and must do better in this vital area.

Another key concern regarding this legislation is that it fails in its entirety to address the accessibility and quality of child care—an area about which the federal government has continually been in denial, despite Australian families crying out for recognition of the problems they face. It is simply staggering that the federal Treasury stated: 

... contrary to popular perceptions, there is not an emerging crisis in the sector; supply is generally keeping pace with demand and child care has remained affordable.

I implore the  government to speak to thousands of Australian families and hear firsthand about their experiences of childcare accessibility and affordability. I implore the government to ask Australian families how many would agree with that analysis provided by the Treasury. I am sure Australian families, certainly those from Richmond, would give a very different opinion. I think the government would be surprised at how widespread and ingrained problems are in the current childcare system. We on this side of the chamber, however, are not surprised because we hear about those concerns every day.

As I have said, the Labor Party takes a different approach to child care and early childhood education. We see it as an investment in the future. The policies we have already announced in this area reflect this commitment. The Labor Party has announced a $200 million commitment for 260 new childcare centres on school sites in areas identified as those with real need. It is a commitment to deal practically with the problems Australian families face. It is disappointing, to say the least, that the government has failed to match this commitment—one that would make a real difference in the day-to-day lives of our children and families. It is also disappointing that the government continues to regard child care and early childhood education as two entirely separate issues. There is no doubt that these areas are linked and should go hand in hand when developing policy. It is a view backed up by not only research but also parents throughout the nation.

Labor is looking to our children’s future. Around 100,000 four-year-olds totally miss out on early childhood education—a huge number. Australia is ranked last in the OECD on investment in early childhood education, spending just 0.1 per cent of GDP on preschool education. This is simply not good enough. It is as simple and straightforward as this: if you invest in early childhood education when children are young, the investment is repaid many times over once they move through the education system.

As we know, this country is currently experiencing a massive skills shortage, which did not just suddenly occur or occur in a vacuum. It is attributable to this government’s underinvestment in education, which starts with their underinvestment in early childhood education and continues right through all levels of education. Under a Rudd Labor government, funding will be available for all four-year-olds to receive 15 hours a week of play based learning, taught by a qualified teacher, for a minimum of 40 weeks per year. This right to early education will be enshrined in new Commonwealth legislation. It will be a $450 million commitment per year to help our kids get a head start on pre-literacy and pre-numeracy skills which are crucial to their development. The size of Labor’s commitment means that there will be no additional costs to parents who already struggle with the increased living costs such as high petrol prices and increased health costs. Of course, they are experiencing lower real wages due to the Howard  government’s unfair and extreme industrial relations changes. 

In contrast to all this, federal Labor is committed to an education revolution—some of which I have already outlined. We will also expand the number of university places to train early childhood teachers and waive all fees for TAFE courses for eligible childcare courses. These initiatives will attract many more people into what is a growing industry, and therefore benefit the entire community.

In concluding my remarks about this legislation, I emphasise that the amendment moved by the member for Jagajaga highlights the areas that must be addressed now by this government. This is overdue legislation, finally delivering on a 2004 election promise. I am glad the government has finally done something.

That being said, the simple truth of the matter is that this bill does not go far enough. It is a stop-gap measure, like so many aspects of this year’s budget. Nonetheless, it is a start and, for that reason, will be supported. The government, however, do need to get serious about this issue. They need to understand the connection between child care and early childhood education and the rewards in seeing them as part of the same investment. They need to understand the day-to-day difficulties facing Australian families in terms of both accessibility and affordability and respond accordingly to those concerns. They need much greater financial commitment in this area, simply because it is a good investment in our nation rather than simply because there happens to be an election in the near future. Rather than addressing it for that reason, it needs to be done because it is a good investment in our nation’s future.

In contrast to all that, as I have said, federal Labor is committed to ensuring that our kids get the education they need and deserve. It is federal Labor that is listening to the concerns of the community, hearing about those concerns and releasing policies such as those in Labor’s Education Revolution that will address those concerns, particularly when it comes to issues in relation to child care. Making sure that our kids get the best start from that early age is so vitally important.

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

in reply—I thank the members that have participated in this debate. I will take issue with a few of the silly comments that those opposite have made yet again and put the facts before the public. The government’s two key childcare measures from the 2007 budget are the primary focus of the Families, Community Services and Indigenous Affairs Legislation Amendment (Child Care and Other 2007 Budget Measures) Bill 2007. In turn, these childcare measures are key components of the government’s extra $2.1 billion investment to help Australian families with the cost of child care. I say that again: that is 21 thousand million dollars. That will take the total government expenditure on child care to some $11,000 million the next four years. This gives parents more choice about participating in the workforce and their children more opportunities for the quality of child care. This is not something that the coalition government have come new to. Since 1996 we have progressively increased childcare assistance to Australian families to the point now where it is more than double what it was in 1996. The number of places have doubled.

Through the first measure in this bill, the rate of childcare benefit will rise by an additional 10 per cent from 1 July 2007. This increase will be on top of the normal CPI indexation applying from that date, which means that families will have a 13 per cent increase on the current rate. In practical terms, what it means to a family using full-time child care is that they will receive up to an extra $20.50 per child per week subsidy for their childcare fees. More than 730,000 families who will benefit from the increase need to do absolutely nothing at all in order to receive this assistance. The Family Assistance Office will adjust their entitlements automatically. For families who are paid childcare benefit as a fee discount, their childcare service will pass the increase on through reduced fees. Families on lump sum payments instead will get a larger payment when they lodge their 2007-08 tax return.

The second childcare measure in this bill will convert the childcare tax rebate currently delivered through the tax system as a reduction in the family taxes liability into a direct payment by the Family Assistance Office. The current rebate allows families to claim up to 30 per cent of their out-of-pocket childcare expenses. That is up to $4,000 per child per year, indexed annually. However, delivering accurate payments through this tax based system has meant families have had to wait up to two years to claim their rebate. A further concern has been that families with low or no tax liability may not have been able to claim their full childcare tax rebate entitlement. Simply put, what that means is that families with such a low taxable income that they have no tax to offset this rebate against were missing out. By now putting it through Centrelink, whilst a family may have no tax liability, they will still receive this money, so it is going to be of direct assistance to very low-income earners. We expect that in addition to their childcare benefit they will receive in the order of $300, $400 or $500 per year per child. That is another $10 per week on top of the $20.50 that they may be expecting to receive for a child in full-time care. That is $30 a week less for their child care than they are currently paying. We will come to what they are actually paying in a moment, which puts a huge lie in what the Labor Party has been leading people to believe. An improved and more responsive rebate will apply from 1 July 2007. So parents and carers, once they have put in their tax return for the current year, will receive their rebate for the 2005-06 year, and then from September this year they will be receiving their rebate for the 2006-07 financial year through Centrelink.

I would like to go to some of the points made by the member for Fowler, the member for Jagajaga and the member for Richmond. They talk, as they do incessantly, about the cost. I go particularly to the member for Richmond, who rightly pointed out that the average fee for full-time child care in New South Wales is $246. We have no issue with that—that is about correct. Let us have a look at the average families in Richmond, the average families in Australia, and what they will be paying. If they have one child in care, will they actually be paying $246, as the Labor Party would have you believe? The answer is no. In fact, a couple family earning $60,000 per annum income with one child in care for 24 hours per week will have 65 per cent of those fees covered. So, on average, the fees are just under $50 a day, and 65 per cent of that will be Commonwealth funded. So $17 a day is roughly what that person would be paying: $17 for a 10-hour day—less than $2 per hour to have your child looked after with quality child care.

If a couple family is on $63,000 per annum, and perhaps they have two children in care two days a week—20 hours of care per child each week—then the actual money paid by the Commonwealth is not 65 per cent; it is in fact 70 per cent of this total. So, again, the person could be expecting to pay about $15 per day for each of those children. A single-parent family on maximum childcare benefit—a low-income earner—with one child in care for 28 hours per week would in fact have 79 per cent of that total fee picked up by the Commonwealth. And it goes right up to 81 per cent for a single-parent family with two children on maximum childcare benefit.

This demonstrates that those people who need the care the most are paying nothing like the $250 a week or $50 per day for care that the Labor Party would have us believe, and which scares parents away from going out and seeking a childcare place. They think: ‘My God! There’s no way I could afford $250 a week; that’s beyond our means.’ That is not the case. So we encourage people to talk to their family day care coordinators, their long day care providers and their before and after school care providers, because all of those services are now uncapped; there is no limitation; there is no upper ceiling; and those places are available. People need to know how much the Commonwealth government, through its $11,000 million investment in child care, picks up in order to allow parents to have the flexibility to return to the workforce.

Why did I use as examples those particular groups? It is not because they were the best; it is because they are the average. They are the groups that are most represented in child care. Only about seven per cent of the population actually has a child in child care five days a week. The average is in fact two days a week. It is important that people know these things when they hear the spurious arguments put forward by those opposite.

I will make a couple of other points about this bill. With respect to the childcare tax rebate, we have rightly pointed out that families are entitled to receive up to $4,000 per child per year. Labor have said that the reality is that families are only receiving, on average, $813. That is correct, because they only get back 30 per cent of their out-of-pocket expenses. As the member for Fowler said, if you extrapolate from that, it means that their out-of-pocket expenses turn out to be $1 per hour per child of quality child care. That is what she said. And the Labor Party want the public to believe that this is somehow too expensive. I ask: what value do you put on a quality childcare place for your child? That is what a large percentage of families are being asked to pay. The Commonwealth is picking up a huge percentage of the cost. In fact, in some cases the Commonwealth is picking up in excess of 90 per cent—up to 93 per cent—of the total cost of child care.

When the Labor Party talk about the affordability of child care, they really do mislead many in the Australian populace. In doing so, firstly, they do those people a disservice by frightening them away; and, secondly, they do the childcare industry a disservice because there are over 100,000 vacancies in child care today. These vacancies could be used by people who could then be back in the labour market. These quality childcare places are affordable because of the federal government’s childcare benefit and childcare tax rebate.

On the issue of availability, the member for Jagajaga said, as did an article in one of the Sydney papers today, that this whole claim that there are not shortages was a mockery. A particular childcare centre at Waverley was referred to. I have no doubt whatsoever that there is a waiting list for a quality childcare place at Waverley. The reality is that, if you have been in business for a long time, in any industry at all, and you have a good reputation and you have established yourself as reputable, reliable, affordable and of quality, you would expect whatever business you are in to be a strong business and that people will want your services. This particular Waverley childcare centre is no exception to that rule.

However, the facts are that within a three-kilometre radius of that childcare centre there are multiple vacancies at a number of other childcare centres. Is there a separate set of rules that applies to these other centres? No. They have to abide by the same New South Wales laws which apply to staff ratios, space available for the children, the same stipulations regarding a vibrant environment and hygiene standards. Maybe they have not been in business for as long; maybe they do not have the same reputation that comes from decades of quality service. But they have to abide by and have the same level of standards—and those centres have vacancies. Nothing whatsoever on the part of the federal government is precluding the quality childcare centre from expanding or duplicating itself. There are no artificial barriers. We have not set some sort of target and said, ‘That’s it.’ If this centre has such a long waiting list, the option is open to it to expand its services.

There are a couple of other measures in this bill which are very important and which very few people have spoken about. I refer to extending the benefit of the healthcare card to young people with disabilities and severe medical conditions. Under this very important measure, around 25,000 full-time students aged between 16 and 25 who are ex carer allowance (child) care receivers, may now apply for a healthcare card in their own right. The carer allowance (child) already applies a healthcare card in the name of the young care receiver. However, when the young person turns 16, that healthcare card is no longer available. Therefore, they will no longer have a concession card unless they qualify for a low-income healthcare card or they have access to a concession card through their qualification for an income support payment such as a disability support pension.

The new healthcare card will be valid for 12 months and will be renewable annually when young people confirm their full-time student status. This measure will make a huge difference to students with a disability or medical condition and to their families in managing their ongoing medical costs. A very practical result of this measure will be to help them continue their education in order to improve their own prospects and those of the Australian economy in general. It is the sort of thing that good economic management allows you to do—to be able to put $11,000 million into child care, to be able to provide things such as the healthcare card to people who we all know genuinely need it and who will benefit from it. These are very proud achievements of the Commonwealth government under the stewardship of Prime Minister Howard and Treasurer Costello.

I will make one last comment before I conclude. I refer again to the erroneous reporting and quoting of figures by those sitting opposite from an OECD report into Australian early childhood. The report does say that Australia underinvests in pre-primary education. That is because it ignores the participation of a large number of children in early childhood experiences gained through the quality-assured childcare system. In other words, it looks at only one layer of young children receiving this early childhood education. It does not take into account the full picture in Australia, and if it did it would have a totally different story to tell.

However, if it were to relate only to New South Wales where, interestingly enough, two of the speakers in this debate—the member for Richmond and the member for Fowler—come from, it would have to point out that that state’s Labor government spends less on preschool education than any other state of the Commonwealth. That is an appalling situation. The New South Wales government has an opportunity to remedy that next week when its budget is handed down. I will not hold my breath in the hope that a Labor government will contribute additional money to this needy area in New South Wales. Instead, it will palm off the responsibility; it will pass the buck to the Commonwealth government and the community sector and deny young children in New South Wales the right to have a preschool education like nearly 100 per cent of children in Queensland do. That is a crying shame on the part of the Labor Party. We had two members speaking on behalf of the Labor Party, crowing about the government’s underexpenditure in this area when they are condemned by the actions of their own party in their own state.

The federal government is now rolling out the childcare management system. It is improving the childcare accreditation system to ensure that directors have more face-to-face time with children and with the staff under their control. This is being done because the government wants to ensure that the children of our nation have an affordable, quality childcare place, parents have choice, the cost can be offset by the Commonwealth government’s childcare rebate and there is the assurance of a quality system of accreditation. By putting those things together, the Commonwealth shows its total and ongoing commitment to the program it established in 1996. Since then, it has more than doubled expenditure and has doubled the number of places available. It has opened up the market so there are no more restrictive regulations around where places can be and what sorts of targets can be met, which has allowed the market to flourish. That is the Howard government’s record. It is a proud record and one that we continue to build upon. I commend the bill to the House.

Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Jagajaga has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Question agreed to.

Original question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.