Tony Abbott (Warringah, Liberal Party, Shadow Minister for Families, Community Services, Indigenous Affairs and the Voluntary Sector) Share this | Link to this | Hansard source

I apologise if the business of the House had to be slightly rearranged. Speakers are dropping off the list very rapidly, so the ordinary timetable is apparently a little out of joint. The Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008 involves a means test that should have been announced prior to the election. I want to put it to the House and to members opposite, in particular, that you cannot announce good news before an election without also announcing the bad news. The fact that most people will be better off is beside the point. A means test is a means test, and some people will not get the benefit that they were led to expect because of this secret means test which the government has sprung on the Australian public subsequent to the election.

I think it is pretty clear now that the Rudd government won office under false pretences. It took policies to the election without disclosing the fine print. There were policies on means testing the childcare benefit that we are debating this evening. There were policies on the baby bonus, which is now subject to an undisclosed means test. There are policies on family tax benefit part B, also subject to an undisclosed means test. The Australian people are rightly bitter about the fact that the government which they elected was elected with a secret agenda that was not disclosed to them prior to 24 November last year.

I say to members opposite that, if a business went to the public with a policy with secret fine print, that business would now be before the courts of this country for breach of contract. Very likely, the ACCC would be investigating its conduct. And, if that is correct for businesses, it certainly ought to be correct for governments. Any government which goes to the election letting people know the good news but not the bad news is a government which is behaving in a way that would rightly bring a business before the courts and to the attention of the ACCC—and governments should not do it just because, sadly, they are often able to get away with it.

The opposition will be moving an amendment against this dishonest means test, and we certainly intend to divide on the amendment although, in the end, we do not intend to obstruct the passage of the legislation as a whole. Let me concede that the government did promise pre election to increase the childcare rebate to 50 per cent of out-of-pocket childcare costs. The government has a mandate for this, so the opposition certainly does not intend to oppose this aspect of the bill. I want to say, though, that the government, in my view, did not clearly think this through pre election.

If the government had been thinking carefully about this pre election it would have understood that the greater the percentage repaid, the smaller the percentage burden that the consumers must pay, the greater the potential for profiteering by the providers of the service. This move to a 50 per cent rebate has effectively given hard-pressed operators of childcare services a green light to increase their prices. I should remind the House and, in particular, members opposite that in the March quarter of this year, in anticipation of the increased rebate that this government was going to bring in, childcare costs rose 4.5 per cent. Childcare costs rose 4.5 per cent in one quarter in anticipation of the government’s increase to the childcare rebate.

Because this government suddenly saw the benefits of the childcare rebate increase going to providers rather than consumers, we now find the government talking about ‘child care watch’. This was the panicky reaction of the Deputy Prime Minister on Lateline earlier this week to the news that some childcare providers at least are contemplating increasing their fees by 10 per cent. So we have a half-baked policy, that which the government took to the election, followed now by policy on the run. On Lateline, as many of us in this House would have seen, the Deputy Prime Minister repeatedly said that prices would be watched.

When the Deputy Prime Minister was challenged, as she rightly was, by Tony Jones, she kept talking about how the government was considering its options. Then in parliament the next day she said to this House that any unfair price increase would trigger an exercise of the government’s powers. She was not specific about what those powers were or what precisely might be done, but everyone in this House who is at all familiar with this area knows that the only power the government has is the power to change the subsidy. And, if the government were to cut the childcare subsidy for children attending centres which had increased their prices unfairly, the government would be hurting the parents for the sins of the centre. It would be imposing a penalty on the parents who could least afford to bear it, because they would be the parents who would be facing the allegedly unfair increases in childcare costs.

In the wake of the Deputy Prime Minister’s remarkably inept and stumbling performance in the parliament the other day, there is now a suggestion that there will be ministerial approval of childcare price increases, analogous to the system for ministerial approval of private health insurance premiums. I cannot say that in all circumstances a system of ministerial approval is utterly wrong, because it was in fact the Howard government that put in place the system for ministerial approval of private health insurance increases. But I make this important point: there are about 40 private health insurers in this country, and monitoring those prices is hard enough. There are thousands of childcare centres in this country, and any attempt to monitor their prices, any attempt to require them to submit their prices to the minister or the department for prior approval, would be an absolute bureaucratic nightmare.

It goes without saying that any system of price control for child care would be a complete abrogation of the principle of economic conservatism which the government claimed it stood for prior to the election. Any system of ministerial approval for childcare prices would not be a conservative system; it would be, quite plainly, a socialist system. But a socialist system would not, I suspect, particularly worry the Deputy Prime Minister. In fact, any such system would, I believe, be used by her as a weapon with her colleagues to undermine her leader—a leader for whom it is plain she does not have a great deal of respect.

This is legislation which certainly does, in the end, offer significant benefits to most users of childcare services. The last thing the opposition want to do is to deny benefits which were promised by the government at the election and which people have a right to expect, but one thing we certainly must do and will do is expose the dishonesty and deception of this government. If this government were fair dinkum, if the Prime Minister really was mentored by Dietrich Bonhoeffer, as he used to claim, he would have been up front, he would have come clean, about the secret means test. This secret means test, little enough though it may well be, is still an important breach of faith with the Australian people. It deserves to be exposed, and that is why I move:

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:

(1)

records its concern at the proposed amendments to the Child Care Benefit; and

(2)

calls on the Government to maintain the current structure of Child Care Benefit eligibility and to maintain the minimum rate.”

The opposition certainly intends to divide on the amendment.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Mark Coulton (Parkes, National Party, Shadow Parliamentary Secretary for Ageing and the Voluntary Sector) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Maxine McKew (Bennelong, Australian Labor Party, Parliamentary Secretary for Early Childhood Education and Child Care) Share this | Link to this | Hansard source

As opposed to what we have just heard from the member for Warringah, the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008 marks a milestone in the delivery of more affordable child care and points the way to an ambitious and high-quality early childhood platform for Australian families. The government went to the 24 November 2007 election on the promise of an education revolution and right here, right now, as opposed to what we have heard, we start delivering on that promise. This bill contains measures that are focused on our youngest and on their families. We know that access to affordable quality child care is a central issue for over 700,000 families, families where both parents are working, families where a secondary earner is likely to increase his or her hours, or single-parent families.

The measures contained in this bill will help all of these families with the cost of child care. The effect of this legislation is to put money back into their pockets, something that the member for Warringah finally acknowledged. The increase in the childcare tax rebate from the current 30 per cent of out-of-pocket expenses to 50 per cent, to be paid quarterly instead of annually, will reduce the cost of approved child care and bring welcome relief to families. Importantly, families will receive the increased rebate closer to the time they incur the costs, and the benefits are substantial—they are real. The mothers and fathers I have been meeting in my electorate have all done their sums and they know they will be better off. For example, for a family on a household income of $70,000 a year with one child in part-time care, these changes will mean around $300 extra in their pockets each quarter. For a family on an income of $110,000 with two children in part-time care, the changes will mean an extra $790 extra a quarter.

It is important to emphasise that all families who currently receive the tax rebate will continue to do so regardless of their income. There is no sleight of hand here. Although the government has removed the minimum rate of childcare benefit, families will receive more assistance through the tax rebate changes than they will lose in CCB. There has been much discussion—I have to say: much of it ill informed—about the effect of these changes on the fees charged by childcare centres. This has been fuelled by press commentary in recent days about proposed fee increases by some parts of the sector. In fact, annual fee adjustments at the end of this financial year can be expected to be in the order of two to four per cent. That is the view expressed by the Childcare Association of Australia, one of the largest representative groups covering the private sector. I want to address this question a little bit more because it is important.

First of all, families should understand that, with the passage of this bill, 50 per cent of their out-of-pocket expenses will be met with the first quarterly payment coming this October. This is regardless of the fee structure at their particular centre. While the daily fee rate is often quoted in the media, this is not what parents actually pay. For example, a family on a combined income of $70,000 with one child in part-time care have 70 per cent of their childcare costs subsidised by the Australian government. Equally, families higher up the income scale on $115,000 with one child in part-time care attract a Commonwealth subsidy of 54 per cent. This is why Commonwealth outlays for childcare benefit and for the rebate now amount to around $10 billion over four years to 2012. With the measures in this bill, the increase in the rebate to 50 per cent will add an extra $1.6 billion to those outlays over four years. This is a huge investment by the Commonwealth. It is why the Rudd Labor government is determined to get value for money.

On 24 November 2007, families across the country voted for a government that is committed to pursuing an ambitious quality framework for our youngest children. Parents know and value quality early learning. The combined policies that the government will enact—integrated care and learning, universal preschool for all pre-primary children, a rigorous A to E set of quality standards and a highly trained professional workforce—will all serve to give our youngest people the very best start.

We will also be moving over this next period to remove the false distinction between child care and learning. Everyone knows we begin to learn from the time we are born. Parents are the first teachers, but in their absence we have to ensure that those charged with the care of very young children are well qualified and provide the most appropriate developmental opportunities. That means customised programs in centres of excellence that identify the individual interests of children and programs that are delivered by attentive degree trained teachers. We have centres that provide this kind of excellent care but, regrettably, too few of them. It is fascinating to look at how affordable these excellent centres are. What is fascinating to me, as parliamentary secretary with responsibility for this area, is to visit these centres and to realise that, at these premium quality centres, the fees charged are no higher than the industry average. Be they centres in high-growth corridors in our major cities or in regional areas, it is instructive to see that those early-learning institutions that have high staff-child ratios and where the teaching leadership of the centre insists on constant professional development are not the centres at the top of the fees graph. We are committed to the establishment of another 260 additional early-learning centres to increase the supply of available quality childcare places in areas of high demand. We acknowledge that quality costs, but it is a cost that the Rudd Labor government has budgeted for, with $114 million for the first 38 of our new early-learning centres and $126 million over the next four years that will support the development of the professional skills of the workforce that will be needed to staff Australia’s 21st century early-learning centres.

Of course, we are determined at the same time to ease the cost burden for working families—which is why the measure in this bill is so welcome and why, come October, over 700,000 families with children in approved care will see their costs go down. This bill marks the start of the government’s commitment to the future of our children. We are delivering on our commitment to provide affordable and quality child care and we will continue to provide better opportunities for children by pursuing the education revolution to benefit all young Australians.

Tony Abbott (Warringah, Liberal Party, Shadow Minister for Families, Community Services, Indigenous Affairs and the Voluntary Sector) Share this | Link to this | Hansard source

Madam Deputy Speaker, on indulgence: I indicated that the opposition would be dividing on the amendment. I have subsequently been informed that an arrangement has been entered into with the Leader of the House that that will not be the case. So we will not be dividing, and I apologise if I inadvertently misled my colleagues.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

In the 2007 election campaign, my campaign slogan was: ‘Labor for a fair go in Braddon’. The recent budget is about giving people a fair go, and this amendment in the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008, as the Parliamentary Secretary for Early Childhood Education and Childcare has so ably demonstrated, is a classic example. It helps people to cope with the financial stresses of living today in Australia and deals with one of the most precious and valued areas—our children. The days where one parent stayed at home with the children are gone for many, whether it is through economic necessity or a desire to stay in touch with their careers. We must do everything we can to support families in this endeavour. To do this we need, and must have, access to affordable child care—a fair go for childcare costs.

People on Tasmania’s north-west coast are no different from people anywhere else in Australia. We have some fine examples of childcare innovators such as Chantal Williams, who operates some 12 childcare centres in Tasmania and eight out-of-school-hours care centres in Victoria as well as other childcare centres in my electorate such as the Wynyard Child Care Centre and Keiko Child Care Centre in East Devonport. But, no matter how good these centres—or, more importantly, the people who run and staff them—are, if parents cannot afford to access these services they will be left wondering where to turn. This amendment bill is about giving working families a fair go, by increasing the rate of the childcare tax rebate from 30 to 50 per cent for out-of-pocket expenses. That could mean up to $7,500 per child. It will also be paid quarterly, which will help working families to cope with the costs they face from week to week and month to month rather than their having to perform the annual juggling act. The amendment bill will remove the minimum childcare benefit to high-income families, but this change will be more than offset by the increase in the childcare tax rebate.

Giving parents the support to return to work is vital, particularly in regions like mine, where skills are at a premium. We have businesses crying out for skilled people, but what option do people have in returning to work if it costs them too much to put their children in quality child care? Part of delivering quality child care, as the parliamentary secretary mentioned, is a commitment to provide 260 new early-learning and childcare centres, including 38 in this budget year. This includes six specialist centres to provide the best care for children and families with autism. One of these centres will be in my electorate, and I am working hard to see that it is in place as soon as possible. This amendment bill is a vital part of an overall package not only to give parents and their children access to affordable and quality child care but indeed to build a quality system from the ground up.

The Rudd government is determined to meet its commitment to provide a fair go for families, and this is one of the first but most important parts of that $2.4 billion investment over the next five years in integrated early childhood initiatives. To reinforce the importance of this increase in the childcare tax rebate for families, it is worth remembering two important and sobering statistics. An ABS survey has found that concerns about quality, accessibility and affordability of child care were important factors in the decisions of 85,000 secondary earners to stay out of the workforce. More than 700,000 Australian families use child care each year. Between 2003 and 2007, childcare costs have grown much faster than the price of other goods and services. Indeed, in the last 12 months to June 2007 alone, after factoring in the childcare benefit, childcare costs rose by 12.8 per cent—the fifth year in a row of double-digit increases. I have much pleasure in supporting this bill.

Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

I rise tonight to speak in support of the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008. During the 2007 election campaign, Labor committed to increasing support for childcare costs through the childcare tax rebate. The cost of child care has been an increasing burden on working families for many years. The ABS consumer price index published in June 2007 shows that childcare costs doubled under the 11½ long years of the Howard government. The ABS also revealed that childcare costs have grown much faster than the costs of other goods and services.

This bill will implement the Rudd Labor government’s election commitment to help working families meet the costs of child care by increasing the rate of childcare tax rebate from 30 per cent to 50 per cent of out-of-pocket costs up to $7,500 per child per income year. From 1 July 2008, CCTR will also be paid quarterly instead of annually, at the end of the tax year, to help families meet the regular costs of child care closer to when they arise. Indexation for the CCTR will take effect from 1 July 2009.

It took the previous government three years to realise that having families receive their 30 per cent CCTR two years after they had to fund increasing childcare costs was a luxury that many parents could not afford. This pea-and-thimble trick pulled on working families by the Howard government meant that the 30 per cent rebate figure initially sounded attractive. That was until parents realised that there would be no money, no rebate, in their hands to defray the costs of child care for two years.

Even now, under the existing system, parents are waiting too long to receive a rebate on their out-of-pocket childcare costs. Although child-minding fees are payable weekly, fortnightly or monthly, the CCTR currently is only paid annually. That means parents wait for up to a year or more just to receive the 30 per cent rebate on their out-of-pocket costs for child care. These childcare costs can be very substantial, adding up to hundreds of dollars per week in many cases and, therefore, many thousands of dollars out of the household budget when added up over a full year.

Our 50 per cent childcare tax rebate is directed at working families and those parents who are looking to get back into the workforce or undertake further training. Not just in my electorate of Deakin but right across Australia, all parents with children in approved child care or those considering approved child care will benefit. We are providing more frequent payments to help families meet the costs of child care closer to when they are incurred, to provide a positive incentive for families to participate in the workforce. The Rudd Labor government will continue to provide the highest levels of total subsidy—through CCB and CCTR—to working families on low incomes.

It is important to note that all families who are currently receiving the childcare benefit and childcare tax rebate will be better off as a result of the changes being implemented. Families with higher out-of-pocket expenses will benefit the most. All families currently receiving CCB and CCTR will continue to be eligible for CCTR, even if the changes mean that they are no longer entitled to receive a CCB payment, based on their income level. Families may still receive CCTR, regardless of their income, as long as they meet the basic eligibility criteria for CCB. These eligibility criteria are not income related.

Payments for the July to September 2008 quarter will commence from October 2008. We know that, for many parents, the accessibility and affordability of quality child care affects their decisions about staying in or returning to the workforce. Guardians, including foster parents and grandparents, responsible for the day-to-day care of children and grandchildren may be eligible for CCB and therefore may also be eligible for CCTR.

The measures outlined above are in addition to the $46.7 billion of tax relief directed at working families, the 50 per cent education tax refund and the Teen Dental Plan, which will enable eligible families to claim up to $150 per year of preventative dental costs for their teenage children. The Rudd Labor government is delivering on yet another election commitment to working families. This bill will provide parents of children in approved child care with a substantial boost to their household income. I commend the bill to the House.

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I rise in support of the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008. I am very pleased to do so, having been a person who campaigned very hard through the last election on the issue of childcare costs. Those on this side of the House went to the election with a very clear commitment when it came to child care and our plan for easing the costs on families that had their children in child care.

One of the key elements of our package of measures here is that not only do we want to ease the burden on working families; this is also very much targeted towards workforce participation. When you bear in mind both of those factors—easing the burden and lifting workforce participation—that feeds in very much to the overall strategy of this government when it comes to the budget. We have been determined to take the pressure off inflation and interest rates but at the same time to deliver much-needed assistance to those people doing it tough and to deliver it in a timely fashion—and this initiative will do that.

In short, the range of measures outlined in this bill will increase the rate of the childcare tax rebate from 30 per cent to 50 per cent. In addition the new childcare tax rebate, or CCTR, limit will be increased from $4,354 to $7,500. Most importantly for many families in my electorate, these measures will allow them to access the benefit of that rebate in a timely fashion. If they receive their benefit by way of fee reduction, they will be able to obtain that benefit on a quarterly basis.

The speakers on this side of the House who have spoken before me have articulated the arguments in favour of this proposal very well. I know that there are many families in my electorate depending upon this House and the other place to pass this legislation as a matter of urgency so the benefits can flow through and take some pressure off their budgets as soon as possible. But there were a couple of comments that the member for Warringah made that I would like to respond to. The first was that this was some sort of sleight of hand and that the government was misleading the Australian people. To echo the comments of the member for Deakin, I think it is a bit rich for the member for Warringah to come forward with such a proposition when his party, when they first announced the childcare tax rebate in the 2004 election—and I remember that well because I happened to be a candidate in the election—did not tell anyone anything about the fact that they would have to wait until the end of the 2005-06 tax year in order to claim the benefit through their tax return. Talk about sleight of hand! Apart from being a candidate, I have to say I was stung as a parent, and I was not very happy at having to wait that extra period of time in order to get a benefit. Frankly, the reality of the situation is that families need the relief as and when the fees need to be paid, not when they put their tax return in 18 months later.

The member for Warringah also said that this was a sleight of hand because there would be some losers out of this package. He was not very forthcoming on the type of scenario that might yield a loser. I undertook a bit of research—admittedly, I have not had a lot of time in the short space since the member for Warringah spoke—and, taking the average daily childcare cost in my electorate, $60 a day for a child for a 10-hour period, I looked at two scenarios. One is a two-days-a-week scenario for a parent in part-time employment and the other is a five-days-a-week scenario. I looked at a family that is currently claiming the maximum amount of the minimum rate for the CCB, the childcare benefit. They are the only ones that I can infer the member for Warringah is suggesting might potentially be losers. If we take people in that situation and look at the five-days-a-week scenario, under the 30 per cent rebate with the minimum rate of the CCB, the benefit for that particular family would be $109.74 a week. But, if we look at the 50 per cent rebate without the existence of the maximum amount of the minimum rate of the CCB, that family would obtain a benefit of $40.26 a week. For the two-day scenario, the difference would be $16.10. But, still, the family would be better off under our proposal. I challenge the member for Warringah, when he says that there are losers as a result of this package, to identify who they are, to come forward and tell us who they are, because I know that there are none of them in my electorate. In fact, there are none of them in this country. I defy him to come forward and identify them.

The final comment that I would like to make is in response to the comment of the member for Warringah that this would push prices up. That is an interesting revelation from someone who was part of a government that designed the model in the first place. This was the best thing since sliced bread when they introduced it at a 30 per cent rebate. Now all of a sudden they say, ‘This will deliver no benefits to working families because it will simply be passed on by way of increased fees.’ Let us have a bit of balance in this debate. The member for Warringah, who along with his colleagues was one of the great advocates of the 30 per cent rebate when it was first introduced, must concede that the 50 per cent rebate will deliver an even more significant benefit. It is a great benefit to working families in my electorate. I absolutely stand by the election commitment we made, and I am very pleased to be speaking in support of it in the bill that is before the House tonight.

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

I rise tonight to support the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008. Few investments that a government will make are more important or more rewarding than investment in early-childhood education. The previous government’s underinvestment in child care and early-childhood education was a case study in their short-term approach to Australia’s future. At the election, the Rudd government committed to the Australian people that they would take childcare and early-childhood education seriously. This bill is part of the government’s $2.4 billion investment in integrated early-childhood initiatives that will help build a stronger economy for Australia’s future.

I regularly visit childcare centres throughout my electorate, and childcare centre managers, staff and parents collecting their children always tell me about the pressures that childcare costs are putting on family budgets. While a shortage of childcare places is a continuing problem around the nation, in some areas of my electorate after-school-care services and other childhood services have vacancies. The feedback that I am regularly given is that childcare costs are too expensive for parents to afford. This bill makes child care more affordable for families. This bill delivers on the government’s commitment to increase the childcare tax rebate from 30 per cent to 50 per cent of out-of-pocket childcare costs. It also increases the annual cap on the rebate from just $4,354 to $7,500 dollars per child. Together these increases deliver significant assistance to help families make ends meet, with many families receiving an extra $2,000 in assistance every year.

The rebate will now also be paid quarterly rather than annually. This measure has been warmly welcomed by all parents who I have spoken to in the southern suburbs of Adelaide. This means that the assistance to families will be available closer to when the out-of-pocket costs are incurred so that the pressure is eased on family budgets immediately rather than just at tax time.

Assistance with paying for child care will make it easier for more parents to participate in the workforce. Improving workforce participation spurs economic growth and will drive down inflation in the long term by increasing the productive capacity of the economy.

This government knows that, while increasing direct assistance to parents is an important part of the solution to the challenge of providing affordable child care, finding a childcare place can be difficult. In many areas, there is a dramatic shortage of quality child care and it can be very difficult for parents to find a place close to home or on the way to work. Increasing the number of available childcare places is a priority of this government, and that is why this government is committed to supporting the establishment of an extra 260 early-learning and childcare centres across the nation.

While the cost of child care has a deep impact on family budgets, caring for children is not merely a commercial arrangement between two parties. It involves the deepest of trust, and the quality of care provided is a matter of great concern for all parents. Parents have a right to know that their children are receiving the care and opportunities for early learning that they deserve. Therefore, transparency in compliance is the only option. This bill includes provisions that will permit the secretary of the department to publish information on the department website about childcare services that have received criminal or civil sanctions for noncompliance with the scheme.

As a nation, we have a responsibility to provide young children with the best quality early-childhood services in the world. This bill makes quality child care more affordable to many Australian families, and I commend the bill to the House.

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008. The Rudd government has brought down a responsible budget that delivers on all our election commitments, eases cost-of-living pressures on working families and on those doing it tough and invests to secure the long-term prosperity of our nation. At the centre of our budget are measures to put downward pressure on inflation and interest rates. The Rudd budget delivered a $22 billion budget surplus. We need to remember that interest rates have risen 12 times since 2001 and that it is critical that we tackle the 16-year high in inflation left to us by the Howard government by reining in government spending and being fiscally responsible. The budget plans for the long-term prosperity of the nation by establishing three funds worth $40 billion to tackle the infrastructure, skills and health bottlenecks left to us by the former Howard government. Crucially, the budget provides relief for working families through a $55 billion package of measures. This bill is a very important part of that $55 billion families budget package aimed at easing the cost-of-living pressures being experienced by many families, particularly families in my electorate.

This, like all of our election commitments, is being delivered in full by the Rudd government. It will help working families meet the costs of child care by increasing the rate of the childcare tax rebate from 30 to 50 per cent of out-of-pocket costs—up to $7,500 per child per income year—and paying it quarterly rather than annually. All families who currently receive the childcare benefit and the childcare tax rebate will be better off as a result of the changes being implemented.

I doorknocked many houses in the election campaign and had many families raise concerns with me about the increasing cost of child care and the pressures it was placing on their family budgets. I remember knocking on the door of a young family with two kids in Brinsmead, a suburb of Cairns, and the mother talking to me about the costs of child care. Both she and her husband worked, and she had gone back to work after initially caring full time for her two children. They had a mortgage and were feeling the financial strain from not only rising costs of living but rising interest rates and they needed two incomes to make ends meet. She worked in an administrative role in the construction industry. It had not been easy to find places for her children in child care, and the increasing costs of child care were making her reconsider whether it was worth while to keep working, as so much of the money she made went to pay for child care for her two children. She wanted to keep working but the costs were becoming prohibitive.

This measure was welcomed by her as an election commitment, and she will welcome the fact that we are delivering on this, like all of our election commitments. I know that this measure will enable her to keep doing what she wants to do, and that is to remain in the workforce and help pay the bills for her family. There are many families like this in my electorate and all across the country that will benefit directly from this budget measure and our plans to tackle inflation and put downward pressure on interest rates. This budget and these measures deliver, particularly for those working families doing it tough and suffering under rising interest rates and cost-of-living pressures left to us by the Howard government.

These changes are part of a significant new $2.4 billion investment over the next five years on integrated early-childhood initiatives that will provide high-quality services for young children and help build a productive, modern economy for Australia’s future. This measure is supported by our commitment to develop rigorous new quality standards and a quality rating system to raise the quality of services and drive continuous improvement in the sector and by our commitment to support the establishment of up to 260 additional early-learning and childcare centres to increase the supply of quality child care.

I welcome the fact that two of these new early-learning and childcare centres have been earmarked for my electorate of Leichhardt. One of these will be located in Weipa, a mining town on the west coast of Cape York Peninsula. Weipa has a critical shortage of childcare places, with over 100 people on the waiting list for the town’s only centre. The local community established the Weipa Community Child Care Group in 2007 to plan for a new centre. This group consists of senior representatives from Rio Tinto Alcan, a major mining company; the Weipa Community Care Association; the Weipa Town Authority; the local chamber of commerce; Queensland Health; Education Queensland; Weipa Family Day Care; Weipa’s creche and kindergarten centre; state government representatives; and federal government representatives, currently from the Indigenous coordination centre. The group welcomed the Rudd government’s commitment to build a new childcare centre in Weipa and has developed a childcare strategy paper to provide input into the planning of the new centre. I look forward to continuing to work with the Weipa Community Child Care Group and with the parliamentary secretary in the chamber this evening, the Hon. Maxine McKew, in the delivery of this election commitment.

This bill, like other budget measures, delivers for working families and those in the community doing it tough. I am proud to be part of a government that is listening and responding to the needs of the community. We have delivered a responsible budget that tackles the 16-year high in inflation left to us by the Howard government and puts downward pressure on inflation and interest rates. This is a budget that delivers for working families, easing cost-of-living pressures though measures like those in this bill to increase the rate of childcare tax rebate from 30 to 50 per cent of out-of-pocket costs—up to $7,500 per child per income year—and paying it quarterly rather than annually, while investing in the long term to secure the nation’s prosperity into the future. I commend the bill to the House.

Julie Collins (Franklin, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to support the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008, both as a representative of families in my electorate of Franklin and also as a parent of three who has used child care extensively. In fact, my family has used child care almost every working day for the past 14 years. The Rudd Labor government in this bill is delivering on its election commitment to increase not only the rate but the frequency of the childcare tax rebate to help working families meet the costs of child care. For parents with children in approved care, this increase in the childcare tax rebate from 30 per cent to 50 per cent will mean more money in their pockets and more money for the family budget. Increasing the childcare rebate will put an extra $1.2 billion back into the hands and pockets of families around Australia. This will mean an extra benefit ranging from $500 to $2,500 per year for the average family with one child.

All families currently in receipt of childcare cash rebate will be better off under this measure. Providing quality, affordable child care will also have the effect of improving productivity and allowing skilled and experienced workers to rejoin the workforce after having their families. We all know there is a skills crisis and a labour shortage, and this measure will boost workforce participation and productivity. It will allow parents who want to work to be able to work, and parents who want to train or study to be able to train or study, by making quality child care more affordable. Greater workforce participation is needed to help build capacity in the economy and help put downward pressure on inflation.

This bill will also increase the yearly limit of the cash rebate from $4,354 per annum per child to a limit of $7,500 per annum per child. It will also now be paid quarterly, with the Rudd Labor government’s first payment to families, in my electorate of Franklin and in other electorates around the country, beginning in October 2008.

Yesterday we heard from the opposition about the media speculation on childcare cost increases. So I too would like to take this opportunity to remind the House about what happened to childcare fees under the former government. Members would be interested to know that, under the former government, childcare costs increased—yes, in the 11 years they were in government, they almost doubled. In fact, for the last five years of the Howard government costs increased by on average more than 12 per cent per year. For many families paying these childcare fees it was like having a second mortgage. Families at my local childcare centre with two children were commonly paying between $25,000 and $30,000 per year in childcare fees. It was this pressure from the community that forced the former government to provide some form of childcare relief. But what did they do? We have heard from other members about the massive smoke-and-mirror trick that the former government introduced with their legislation that reimbursed childcare costs to families not one but two years after they were paid. That is right—the member for Higgins, the out-of-touch former Treasurer, forced families to wait two long years to get the childcare tax rebate when it was first introduced. And then what did we see? In a desperate bid in the last few months before the last election we saw those opposite change the payment to an annual payment at the end of the financial year. To demonstrate just how out of touch they were I want to quote the former member for Longman. When challenged on the spiralling costs of child care he said in April last year: ‘There is no crisis. I’ve been saying long and hard there are no crises.’ He was so out of touch that he received the ultimate judgement by the people of his electorate.

Not only have the Rudd Labor government delivered on our election commitment with this legislation but, just as importantly, we recognise that child care needs to be affordable and available. That is why the federal Labor government has already pledged up to 260 new early-learning centres around Australia on primary school and community grounds. These childcare measures are part of the Rudd Labor government’s $55 billion Working Families Support Package. It is a package that delivers for families. It is a package that recognises and rewards families’ efforts. And it is a package that provides essential relief against cost pressures for families in Australia. I hope to see those on the other side support this bill, and I commend it to the House.

Maxine McKew (Bennelong, Australian Labor Party, Parliamentary Secretary for Early Childhood Education and Child Care) Share this | Link to this | Hansard source

by leave—I would like to thank all those members of the House who have contributed to this debate. The many comments that I have been hearing from speakers on this side of this House show just what a touchstone issue this is for so many in the community. The Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008 is an important bill. It is a key step, as many members have pointed out, in the government’s plan to equip Australia for the challenges of the future. This is a large commitment, which cannot be achieved easily or quickly.

The government has already announced a comprehensive package of initiatives, including reformed child care, which will boost Australia’s participation rate and improve the productive capacity of the economy. This bill is a responsible investment in early learning and child care. It will help prepare us for future economic challenges by making it easier for parents to return to work after the birth of a child. It will also assist people who want to work to get back into the workforce, boosting the economy and putting more money in the pockets of working families.

As has been pointed out, this bill will increase the childcare tax rebate from 30 to 50 per cent of all out-of-pocket costs. The removal of the minimum rate of childcare benefit certainly ensures that payments to assist families to meet their childcare costs are fair and equitable across the different income levels. The changes provide assistance where it is most needed.

This bill also encompasses a range of other amendments that will enhance the operation of the childcare management system and improve the compliance framework currently in place. We have listened to the needs of the Australian community and we will continue to listen. We have delivered on our commitment to make child care more accessible and we will do more. The government will safeguard this investment in Australia’s future and continue its work to secure the prosperity that all Australians deserve. I commend the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008 to the House.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The original question was that this bill be now read a second time. To this the member for Warringah 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.