Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education and Training) Share this | Link to this | Hansard source

I rise to speak on the Family Assistance Legislation Amendment (Building on the Child Care Package) Bill 2019. Australian families rely on the childcare subsidy scheme to afford appropriate care for their children while they themselves are in the workforce. It is important for Australian children, it is important for Australian families and it is important for the Australian economy that parents are able to be employed. The current childcare system was introduced by the government in July 2018. Since that time, it has become very obvious that there are significant design faults within the current system and high administrative burdens being placed on families and providers. There have been delays, there's been confusion and there's been an abundance of paperwork flowing through the current system.

Registering for the childcare subsidy requires onerous paperwork to be completed. Many families, after successfully completing the paperwork, have been hit with a debt as the childcare subsidy entitlement has been overestimated, resulting in an overpayment. For families working on a budget, being faced with a debt notice by a government agency is highly stressful. The department is being forced to act as a debt collector. Robodebt notices are going to families, with many of them not actually owing any money. In Senate estimates last week, the Department of Education confirmed that 91,840 families, or 16 per cent—yes, 16 per cent—have so far been hit with a childcare subsidy debt. The system is complex, it lacks transparency, it has dodgy IT and families have been hit with debts that they can't verify.

Many families are worse off under the current system. The government's own figures estimated that one in four Australian families would be worse off under the system brought in by Prime Minister Morrison. Families who are trying to access the additional childcare subsidy, the child wellbeing payment, most of whom are vulnerable and at-risk families, are finding the new system very difficult. The number of children accessing the child wellbeing payment fell by over 20 per cent in the first few months of the new system. More recent data shows there are still fewer children approved for this payment than before the commencement of this brainchild of the coalition government.

And child care has become more expensive under this new system. The Abbott-Turnbull-Morrison government claimed the new childcare system would put downward pressure on fees. However, what has actually transpired? The latest CPI figures show that childcare fees increased by 2.5 per cent in the September quarter, the fourth successive increase, and have now gone up by seven per cent since last September. Have wages gone up by seven per cent in the last year? I can assure you they have not. In fact, we've got under the Morrison government the lowest wages growth since they started measuring wages growth. Fees have increased by 30 per cent since the Liberal government was first elected. Here we are in the seventh year of this dreadful travesty that is the coalition government.

There is clearly a problem with the current system, despite the government for months denying that there's any problem whatsoever. And, in what is increasingly becoming their usual style—the advertising flim-flam approach to governing—the government tabled this bill without any warning or any consultation. Nonetheless, this bill does improve a couple of the technical design flaws in the system that the Morrison government rolled out.

However, there is one amendment in this bill that raises serious concern. Currently, families have 28 days after a childcare subsidy claim is submitted to provide their bank account details and tax file number. In some cases debt notices have been sent to families where the payment has been made but the details have not been provided in the time frame. This amendment will require families to provide those details at the time of the claim being submitted. The coalition government argues that this amendment is necessary so that families will not accrue a debt for not providing their details within the time frame. I'm concerned that these families, who are eligible for the childcare subsidy for early learning and care, are being denied the support they need for urgent care simply because they don't have immediate access to their personal information. The committee report on this bill reveals submissions to the inquiry were overwhelmingly concerned about the negative impact this change could have on families in difficult circumstances. It's not hard to think of a situation where a family may not have immediate access to their personal information—for example, the classic case, which I've encountered as an MP, is of a parent and children fleeing family violence or a family who has been caught up in a natural disaster, which also is a phenomenon I'm very familiar with in Queensland. As we've heard from the insurance companies, the scientists and most sensible farmers, we know that there'll be more and more natural disasters coming our way.

Early Childhood Australia, in their submission to the Senate Education and Employment Legislation Committee, pointed out that for families experiencing difficult circumstances this amendment would be detrimental and harsh. They explained that even though some of these families may be able to access the additional childcare subsidy immediately, that will only be possible where the family has disclosed their circumstances. In some situations the parents will not be comfortable disclosing their personal circumstances, nor will they be comfortable being assessed for the additional childcare subsidy.

This amendment makes the childcare system less flexible and less accessible for families who may already be in the midst of a stressful, difficult situation. This amendment may make it more convenient for the Department of Human Services, but where it rolls out, where the rubber meets road, it will actually increase the burden on families trying to access early learning and care for their children. This amendment is unreasonable and lacks compassion and understanding about how vulnerable families actually work.

Labor believes the bill should be amended to retain the current 28-day grace period for providing personal information to better meet the needs of families and providers, and I urge the minister to consider that. Labor notes that the coalition government is proposing to amend the bill in the Senate to provide exemptions from the new rules for families in crisis. Labor will not oppose the government's amendment but believes that the proposal put forward by Labor's shadow minister is a simpler and less complex solution.

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

I also rise today to speak on the Family Assistance Legislation Amendment (Building on the Child Care Package) Bill 2019, and I too support the amendment to be moved by the shadow minister, the member for Kingston. This bill seeks to make a number of changes to the current childcare system to reduce some of the administrative burdens on families, including increasing the number of weeks at which enrolments automatically cease due to nonattendance, removing the 50 per cent limit on the number of children that a provider can self-certify for additional childcare subsidy and improving the application of the third-party contributions to fees, such as state and territory payments.

As others on this side of the House have stated, Labor supports the aforementioned amendments in this bill. However, we oppose one amendment that could potentially have negative impacts on families who already face difficult circumstances. The proposed removal of the 28-day period in which applicants have to provide personal information, including their tax file number and bank account details, could reduce access to early learning and make it much harder for vulnerable families to register for the childcare system. We do not support this aspect of the bill. Indeed, we seek to protect access to early education and eligibility for the childcare subsidy by retaining the 28-day period for the provision of bank account and tax file numbers.

Labor has always invested in education because we believe that education is the greatest investment we can make to the future of our children and our country. On this side of the House, we know that quality early education leads to a range of so many better outcomes, whether they be education, social or health outcomes. Quality education literally lays down the foundations for life.

It's not just Labor that's telling this story. There is widely published research that clearly states that investing in our children's early years leads to a significant return later in life. Studies have shown that children who attended preschool had significantly better reading and maths scores in primary school and better results at age 16. We also know that those children who receive quality early education have higher language and cognition NAPLAN scores in year 3. Children who attend early learning have better success, are more likely to graduate from high school and have better social outcomes. The research confirms that the benefits are, indeed, higher for those vulnerable children.

That's why, on this side, we're very proud of our history of investing in early education. Two of the many critical policies that we implemented in government were the national preschool program for four-year-olds and the national quality framework. The preschool program has been a critical policy achievement. Indeed, universal access led by the Labor government has seen enrolments of four-year-olds in preschools increase from 77 per cent to 93 per cent. We backed this preschool commitment with a national quality agenda in order to lift educational quality and safety standards in those early years. The quality framework is also a success story, with 57 per cent of services having improved their quality rating when reassessed, and 75 per cent of services now meeting or exceeding the national quality standard. Australia's four-year-olds are now enjoying the benefit of universal access, and children attending early learning centres and preschools are enjoying getting so much out of the play based learning environment and being educated by qualified early learning educators.

I, like many members here, am always able to visit many of the wonderful preschools and childcare centres in our areas. I was pleased recently to visit Gumnuts Early Learning and Preschool in Pottsville as part of the Early Learning Matters Week. I saw firsthand the positive impacts of what we feel is our legacy and our investment in preschool and child care. I want to take this opportunity to applaud those early educators at Gumnuts and, indeed, at childcare centres right across the north coast. I have visited many over the years. They provide such valuable care and support to families in our community. I'd like to recognise the important work they do in laying down the foundation for our children's future. Every day, early childhood educators across the country are carrying out the extraordinarily important work of teaching and caring for our children. It's thanks to them that families can really feel secure that their children are not also being properly cared for but also that they're receiving a very high-quality early education.

We know that 90 per cent of a child's brain develops in those first five years, so the quality learning experiences provided by the early educators can have such a positive impact on a child throughout the rest of their education and their life. We recognise early educators as very skilled professionals and we value the important work they do in laying down that foundation. As I said, Labor has been and will always continue to be committed to early childhood development. In contrast, though, we see a very shocking record from this government—which continues to get worse—when it comes to early education and early childhood development.

In terms of this bill and the concerns that we've raised, as we've said, it does improve some of the technical design and some of the flaws and problems in the system. As I said, we look forward to supporting the parts of this bill that can make the system better by reducing some of those administrative burdens on providers and families. However, as I mentioned earlier, there is one part that does raise very serious concerns. The government argues that some of the items will simplify the system for families and providers. Amendments require bank account and tax file number details to be provided at the time that a claim is made and not at any other time. Currently, parents and caregivers have 28 days after they've submitted their CCS claim to provide their details. In fact, the government's changes will remove the 28-day time frame. This really does raise concerns about the ability of some families to provide this information. It raises concerns about the impacts it may have on families who are facing difficult circumstances and who, for a whole host of reasons, may not have access to their personal documentation. Families and caregivers who may be experiencing domestic violence or who may be victims of a natural disaster should not be disadvantaged. Removing the 28-day period is unreasonable and lacks compassion. It does not understand the circumstances that many families may find themselves in. The fact is, some families may not be able to access the urgent care that they need for their children, because they just don't have access to that personal information. This aspect could also result in a debt to families when CCS payments are made without information being provided within the required time frame.

Indeed, a number of submissions to the recent inquiry by the Education and Employment Legislation Committee into this bill make the point that this change will actually remove flexibility currently in the system, and that it is designed to reduce complexity in the system for the government but not for the families or the providers. The proposed changes might reduce the administrative burden for the department, but they will increase the administrative burden for families. In fact, it will make it very difficult for families to provide that information. The reduced flexibility will also have a disproportionately negative impact on families experiencing vulnerability or disadvantage—in particular, women and children escaping domestic and family violence who, as I said, absolutely cannot access that personal information. Removing the 28-day period and blocking families from registering for the CCS without their bank account or tax file number details immediately available will also reduce access to early learning that is so vitally important. So, as I said, it is, first and foremost, unreasonable and does really lack compassion for the circumstances that many vulnerable families find themselves in. Labor doesn't believe the administrative convenience of the government should be above the needs of families and providers. Those families should come first; those children should come first and get access to that care. We believe the bill should be amended to retain the current 28-day grace period for providing personal information to better meet the needs of families and providers.

In talking about the current childcare subsidy system, this government's unfair system was introduced with a multitude of problems, and months on from that introduction of this government's unfair childcare changes the evidence continues to mount about the negative impact that it's having on families right across the nation. According to the government's own figures, we know their childcare changes have left one in four families worse off. We know that vulnerable and at-risk families are finding it harder to access early learning. We know there are so many systemic design flaws and administrative burdens on families, and burdens on providers too have become apparent. There's a very long list, including software glitches leaving families and providers in the dark, two out of three providers saying the transition has been poorly managed, educators going without pay because of problems with the system, an exodus of providers from in-home care, childcare providers being forced to act as debt collectors for Centrelink, the number of vulnerable and at-risk children accessing care dropping more than 20 per cent and, of course, childcare fees going up under the new system. They've increased a staggering 30 per cent under this government. There are so many problems from technical glitches right through to the really concerning aspect of childcare fees going up.

We know that the system itself is essentially very confusing. It's buried in red tape for many of the providers, and it has a lot of problems. Families and providers have experienced significant delays, confusion and additional paperwork to register for the CCS. This has often resulted in families' entitlements being over or underestimated, resulting in overpayments and debts for those affected families. So, in addition to leaving one in four families worse off, reports have revealed that families have received payments intended for providers, leaving many parents and caregivers with huge debts.

Under the government's complicated new system, when families change their details in myGov, such as updating their income or activity, this changes their CCS payment amount. Providers, unaware of this payment change, are therefore billing parents incorrectly, creating a debt. As a result, Centrelink is then issuing a debt to providers, expecting them to seize this from families. There are even instances where centres are still having CCS withdrawn from their accounts by the government after accounts have closed and been reconciled after families leave providers. So it really is creating such a difficult situation right across the board both for the families and also for the providers. When we look at the impact on those in the regions, when we see the cost of living going up and childcare costs going up as well, it is quite extreme. As I said, a 30 per cent increase in childcare fees right across the country has had a major impact on families.

In my electorate of Richmond, recent data shows fees have increased by up to 9.5 per cent over the last year to March 2019. That's a staggering amount. It is well above the average of 4.9 per cent. So it means those families in the regions who are already doing it tough are paying significantly more out of pocket for child care. This is, of course, at a time when we're seeing cost of living increasing and wages stagnating, and now families are finding it really difficult under ever increasing childcare fees. It's an issue they've raised with me many, many times.

All of this evidence is overwhelming—the government's childcare system is, indeed, failing Australian families. Yet they continue to do nothing in terms of reining in those increased childcare costs—as they should be doing—and addressing all those systems. So we know those families are worse off, we know vulnerable and at-risk children are finding it harder to access early education and it seems the government is choosing to ignore a lot of the evidence and not act on it. We call on them to act to make child care much more affordable and much more accessible. It's so important for our children's future. We need to have the whole system improved. As I said, in terms of this bill, we support some of the measures the government has introduced but not the measure around removing the 28-day period. We want our vulnerable families to still get access to child care despite the very difficult circumstances that they find themselves in.

Zali Steggall (Warringah, Independent) Share this | Link to this | Hansard source

I rise to speak in support of the Family Assistance Legislation Amendment (Building on the Child Care Package) Bill. In July 2018, the government introduced its childcare package. At the time, the minister described the package as the biggest reforms of child care since the introduction of the Commonwealth Child Care Act in 1972. It goes a little way, but I call on the government to do more. The purpose of the package introduced last year was to simplify what had become a complex childcare system for both users and the sector. My children are now teenagers, but I remember the difficulty, the red tape and the complexity of the system not that long ago.

The two major reforms of the package introduce the childcare subsidy and the additional childcare subsidy, which will either fully replace or partly replace many of the previous payments. There are 1.1 million families who receive the subsidy, supporting the childcare needs of 1.6 million children. Funding allocated for 2019-20 will be $8.6 billion and this is expected to increase to $10 billion over the next few years.

There are problems with the package introduced last year. Families and providers are experiencing significant delays, confusion and additional paperwork to register for the childcare subsidy, and childcare subsidy entitlements are often being overestimated or underestimated, leading in some cases to overpayments and debts for affected families. Often providers have had to act as debt collectors and, with the government commencing data matching with the Australian Taxation Office, families are being issued with unexpected debt notices.

Providers, particularly those in my electorate, note there was much more flexibility and capability to support vulnerable and disadvantaged families prior to these changes. There is also considerable red tape in order to apply for the additional childcare subsidy. The vulnerable and disadvantaged families who most need access to a secure childcare environment—in particular, culturally and linguistically diverse Australians and families—struggle to navigate the system. The education department's March 2019 Child Care in Australia quarterly report also notes that the number of vulnerable and at-risk children who are accessing the wellbeing payment fell by over 20 per cent in the first few months of the new system, and the data shows that six per cent fewer children were approved for this payment compared to the same time last year. And despite claims that the new childcare system would put downward pressure on fees, fees actually increased by 4.9 per cent in the 12-month period to March 2019 and have increased 30 per cent since 2013. This is a huge cost and impost on working families.

This bill amends the provision relating to childcare subsidy and additional childcare subsidy in response to the feedback from families and childcare providers and early findings from the childcare package evaluation. Specifically, key changes of the measures include extending the eight-week enrolment lapse rule to 14 weeks to avoid the re-enrolment process for children returning to care after eight weeks. This will be particularly beneficial for children who attend only during school holiday care periods and is a welcome measure. In-home care will be integrated with the CCS legislation rather than being in regulations, as is currently the case, with the subsidy available to parents and providers.

The child wellbeing certificates will no longer be limited to 50 per cent of all children attending the service, with the 50 per cent rule being scrapped. This will enable providers to better meet the needs of children at risk of serious abuse and neglect. It will be a requirement that providers ensure that all educators have a current working-with-children check relevant to their state or territory, as well as their existing responsibility to inform the minister of the details of their working-with-children card and checks. Providers who made a mistake that leads to an overpayment of childcare subsidy to a family or are deemed to be responsible for an overpayment on review are liable for the debt to the Commonwealth, not the family.

Overall, the proposed changes that the amendments bring to the family assistance legislation are a step in the right direction to improving some of the issues identified and they're broadly welcomed by the sector. But there are concerns about the removal of the 28-day time period provision. This is not a change that's supported by the sector. It provides that a family's bank details and tax file number must be provided at the time that a childcare subsidy claim is made, and not within the 28 days after the claim is made as under the current rule. As the Childcare Alliance points out, this change, alarmingly, will make an application process, which is already administratively burdensome for families, even more complex and far less flexible and will unfairly impact on families experiencing difficulties, especially for applicants in circumstances of domestic violence and in emergency situations.

The minister has assured me that he's taken on board the serious concerns expressed about this measure and has tabled amendments to make an exception of this provision. I commend the minister for listening to the concerns and attempting to address the problem. However, the amendments still only provide that the secretary is to make a determination in some cases. The government's amendment are a minor remedy. I would strongly urge the minister to consider reinstating the 28-day period rule in the legislation.

Given the government is open to consultation and listening to concerns of families accessing the childcare system and of providers, it's an opportunity to examine other reforms that will improve the system. These could include providing a minimum level of subsidised access for all children. Children are missing out on a minimum level of subsidised access because their families do not meet the activity test, reducing their capacity to afford early learning services. The activity test is difficult for all families to navigate and is unnecessarily complex, particularly for those families with varying work hours per fortnight, along with those not proficient in English.

The turnaround time for families applying for a customer reference number and then the childcare subsidy can be up to two months. In addition, the current base provision of 24 hours per fortnight for low-income earners would better support the policy's objectives if increased to 36 hours. We could also ensure the currency of the childcare subsidy hourly rate. The subsidy is set at an hourly rate and is scheduled to increase annually in line with indexation. However, the indexation rate over the last two years has not kept up with the respective hourly rate increase for educators under the relevant awards, which means the scheduled childcare subsidy hourly rate increase does not necessarily keep up with the running costs for early learning service providers.

The current exemption to the activity test for children accessing a preschool program in a centre-based long day care service has been a huge success. If extended to children in their two years before school it would provide more children with access to an early learning program from the age of three.

We need to understand: where are we? Is Australia doing well in this space? The OECD have reported that Australian parents pay 31 per cent of their combined income towards child care. The average across the rest of OECD countries is 14½ per cent. Only 18 per cent of three-year-olds in Australia are in early childhood education compared to 70 per cent across the rest of the OECD. Australia's share of GDP devoted to early childhood education is 0.5 per cent and this is our future.

There are many young parents in Warringah and the issue of the cost of child care is frequently raised with me. Child care and early childhood education and care is a very real barrier to parents' capacity to work and children's opportunities in the future. If we want to boost our economy—and that is certainly very topical—let's help parents fully participate in the workforce. We still have considerable gender inequity in the workplace, where more improvements are needed to decrease the cost of child care.

Our children are our future. We need to ensure the best possible education outcomes are possible for them, and this starts from a very early age, in early childhood. Thank you.

Alicia Payne (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the Family Assistance Legislation Amendment (Building on the Child Care Package) Bill 2019. I'm glad the Morrison government are building on their current childcare policy, because the childcare funding system that they introduced in July 2018 needs some work.

Poor social policy design is becoming a hallmark of the Morrison government. We have robodebt, a system, now thankfully on hold, that has caused untold anxiety and suffering to thousands of Australians who have done nothing wrong. The implementation of the NDIS raises significant questions, and we've been hearing shocking evidence in Joint Standing Committee on the National Disability Insurance Scheme hearings over recent weeks. We have Newstart, a system that everyone but the Prime Minister admits is too poorly funded to enable people to support themselves while finding work—the key intent of this payment. And we have youth allowance, which is designed to support students to complete their education but sees them struggling to complete their studies while they try to support themselves with work. And now we have the childcare subsidy, a system that sends incorrect and punitive debts to parents of young children; a system that kicks recipients off at the earliest opportunity, creating an absurd administrative burden for parents; and a system that the government knew, from its own data, would leave one in four families worse off but decided to implement anyway.

The Australian government will spend $8.6 billion on child care this year. It is a good thing for government to invest in as there is strong evidence to support the benefits of early-childhood education and care, including improvements to a child's education, social outcomes, gender equality and the economy. But when you are making an investment as significant as this—$8.6 billion—you need to make sure that the system is working and that everyone, including low-income Australians, is able to utilise the full potential of the system. Most importantly, you need to make sure that disadvantaged kids are getting an early-childhood education, because it has the potential to set them up for a better life.

In spite of the federal government's sizeable investment in early-childhood education and care, it remains expensive and difficult to access for many families. This means the benefits are not being maximised for Australian children or the Australian economy. Furthermore, our early-childhood educators and workers are poorly paid despite the vital work they are doing shaping the young minds of our children. As the mother of a 21-month-old who spends time in early-childhood education and care, I have seen firsthand their wonderful work, their dedication to the children and how quickly these young minds are learning at that age. The reality for single parents, low-income parents and parents who do shiftwork or any hours outside the normal nine to five can find this a difficult system to navigate. The system created by the Morrison government clearly isn't designed for these people.

Families and providers have experienced significant delays, confusion and additional paperwork to register for the childcare subsidy. This has often resulted in families' entitlements being overestimated or underestimated, resulting in overpayments and debts for affected families. Providers have been forced by the government to act as debt collectors, commencing data matching with the Australian tax office as families are being issued with unexpected debt notices. As confirmed in Senate estimates, 91,840 families, or 16 per cent of families who access the childcare subsidy, have received debt notices. When 16 per cent of users have accrued a debt, you know the system isn't working properly. And, like other Australians hit with a debt notice, parents are often unable to verify the debt and end up eating into their household budgets to pay it back, whether the debt is legitimate or not.

You would think the government would have learnt from their robodebt disaster, but they are too out of touch with the average Australian family and how they go about managing their budgets. The average Australian household isn't well placed to cover an unexpected debt like the ones being sent out by the childcare system. Furthermore, our childcare providers shouldn't be forced into acting as debt collectors; they are educators. After months of refusing to act, the government tabled this bill without warning or consultation. So now, through a process of amendment, the Labor Party, through our shadow minister for early-childhood education, Amanda Rishworth, is pursuing changes to the bill that the sector and Australian parents are calling for.

The government's childcare subsidy system wasn't designed for the realities of Australian families. This bill increases the number of weeks at which enrolments automatically cease due to non-attendance from eight to 14 weeks. Currently, parents across the country have to re-enrol their child following breaks in attendance at child care, especially families using vacation care during school holidays. Re-enrolment requires again engaging with Centrelink, and it is well known how much of a struggle engaging with Centrelink can be. The sector has long been calling for this change, and this change will reduce the administrative burden for parents and reduce the administrative burden for Centrelink. Any reduction in the workload of Centrelink is a good thing at the moment and will certainly benefit other recipients of social security and the wait times they currently endure.

The bill will remove the 50 per cent limit on the number of children that a provider can self-certify for the additional childcare subsidy child wellbeing payment. This is a positive change that resolves issues for services that enrol significant numbers of children at risk. The sector is pleased with this change. It is my view that we must do everything we can to ensure that disadvantaged kids get an early childhood education because early childhood education is transformative. The benefits of an early childhood education are well known, particularly for disadvantaged children. James Heckman, a noble laureate in economics, found that investment in early childhood education for disadvantaged children improves their economic and health outcomes throughout their lives. It also delivers a seven to 10 per cent return on government investment every year for the rest of that person's life. In Australia, PricewaterhouseCoopers has estimated that investing in child care for disadvantaged children could boost the Australian economy by $10.3 billion per year.

However, the government's own data shows that the childcare system introduced last year has reduced the number of vulnerable and at-risk children accessing early childhood education. The number of children accessing the child wellbeing payment fell by over 20 per cent in the first months of the new system. Thankfully, these figures have corrected to an extent in the latest data from March, but there are still six per cent fewer children approved for this payment compared to the same time last year, prior to the Morrison government's changes to the system. The system was supposed to make child care more accessible. It is clear this hasn't been achieved.

Unfortunately, as someone who has observed the work of conservative governments on social security systems, I am unsurprised. Conservatives always degrade the equality-boosting elements of public policy. For those on the other side who criticise this statement, I'll point to your government's claim that the new childcare system would put downward pressure on childcare fees. The latest CPI figures show childcare fees increased by 2.5 per cent in the September quarter, the fourth successive increase, and have gone up by seven per cent since last September. Fees have increased by 30 per cent since the Liberal government was first elected. Where is the money for this massive increase supposed to come from? Wages have stagnated. How does the government expect Australian families to cover this gap? We need to be helping Australians to build their families, not penalising them.

Many of the states and territories have identified that targeted spending on early childhood education is an investment in the future of their jurisdiction and the people who live within it. In a competitive global economy, it is crucial that our children receive a world-class education. Ultimately, educating our kids from earlier in their lives will help us achieve this and help Australia to develop the workforce of the future. As such, this bill will improve the application of third party contributions to fees, such as state and territory payments. Currently, the Commonwealth requires state and territory assistance to be applied to fees before the childcare subsidy is calculated, thus reducing the CCS entitlement and potentially leaving families with out-of-pocket costs. The change will allow state and territory fee assistance to apply after the CCS calculation and allow the state to effectively eliminate out-of-pocket costs for vulnerable families as per the policy intent.

Parents who utilise the childcare system know the process for registering for the childcare subsidy and making a claim is more difficult than it should be. However, one element of the system acknowledged these realities. Currently, applicants are able to register for the CCS without providing their tax file number and/or bank account details, and they have 28 days to provide this information to Centrelink. For families experiencing difficult circumstances—circumstances which mean that this information isn't readily at hand, such as families fleeing domestic violence or families wanting to retain some normality like child care whilst in the midst of a natural disaster—this leeway enables them to get their kids into child care while they sort out their lives and find the necessary documentation. However, this bill wants to remove the 28-day period in which applicants may provide these details. The government argues that this will simplify the system for families and providers; however, the sector is extremely concerned about this change, and I am extremely concerned about the families who need this provision. Furthermore, the government's own majority report from the inquiry of the Senate Education and Employment Legislation Committee expressed concern about the impact of these changes.

The government believes that this change will simplify the system for families and providers and prevent families from accruing debt, but there needs to be a better way of ensuring this. We should be putting the needs of parents above the administrative ease of government departments. I'm concerned about the children who will miss a month of child care, or perhaps never get enrolled, because this leeway has been taken away for the convenience of administrators. Removing the 28-day period and blocking families from registering for the childcare subsidy without this information will reduce access to early learning and is unreasonable and lacking in compassion. I'm also concerned for the providers who are trying to manage this situation. Labor notes that the government is proposing to amend the bill in the other place to provide exemptions from the new rules for families in crisis. Labor will not oppose the government's amendment, but I believe our amendment is a simpler, less complex solution.

The government could have done so much more with this bill. There are so many more things we could do in our childcare system with the $8.6 billion we invest every year. For one, the activity test is not right. Parents must predict their hours of work within the reporting system. Parents who work casual or irregular hours or parents who are self-employed can struggle to do this accurately and can receive debt notices if their work doesn't take place as anticipated. Further, parents with a disability or who are suffering from serious illness must be constantly vigilant and adapt to an unforgiving system. You'd think that the Liberals would at least be in touch with small business, as they so often claim to be, but small-business owners are reporting that they find it very difficult to receive the childcare subsidy they are eligible for. The government needs to do better to create a more user-friendly system for all of these groups of people.

In my view, Australia still hasn't found the right solution for child care. It doesn't work for families, it doesn't work for parents, it doesn't give children the best start in life and it doesn't provide stable and well-paying work for childcare workers. This morning we saw the launch of the report State of early learning in Australia 2019 from Early Childhood Australia. This is a fantastic report that lays out the evidence of the need for quality childhood education and care and what it contributes to our youngest Australians. But what has raised a lot of concern among those speaking this morning was that becoming an early childhood educator—such an important job—is not an attractive option for people who want to be involved in educating our children, because the pay and conditions are inadequate and it is not something that presents a future progression. We need to find a way to better recognise this very important contribution to our society, which, as I said before, I've seen firsthand in the education and care of my young son—including his being taught to have his naps, which I've not managed at home.

We can do better than the Morrison government's childcare subsidy. We can actually achieve the outcomes that the Morrison government promised but failed to achieve within this program. Early childhood education is going to change the lives of Australians and it is going to push back against the creep of inequality in this country. Unfortunately, it's not yet doing this to the extent that it could. The Morrison government's childcare subsidy needs to be better than it currently is and better than this amendment is going to make it.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

I rise in support of the Family Assistance Legislation Amendment (Building on the Child Care Package) Bill 2019. The bill makes a range of technical improvements to childcare subsidy arrangements, and I will touch briefly upon two of them. One of the adjustments in the bill extends the time frame for the cancellation of a child's enrolment at child care or an after-hours school care facility from eight weeks out to 14 weeks. Currently, parents who only use child care during school holidays have to re-enrol every time a holiday period comes around.

I would like to thank the minister for the shout out to the Woodside Primary School Out of School Hours Care, the Woodside OSHC. The Woodside OSHC is very proactive and presented me with a petition signed by 20 parents calling for these changes. I'm very appreciative of not only the minister's shout out but, of course, these particular changes that will affect many in my community. They told me—this is the Woodside OSHC—that extending the time frame would ease the stress of having to enrol a fortnight before each holiday break and ease having to go through the stress and wasted time involved in dealing with slow department bureaucracy. I was more than happy to write to the Minister for Education about the problem and submit formal questions in writing to his office, and I thank the minister for recognising this issue and addressing this issue in the bill.

The second element of this bill that I'd like to discuss is the amendments to be moved by the minister in the House. The removal of the 28-day grace period for providing tax file numbers and bank account details in order to receive childcare subsidies has caused some concern in the House. In particular, there are concerns—and these are concerns which I share—that the most vulnerable subsidy claimants, such as those facing domestic violence or suffering from natural disasters, will be significantly disadvantaged by the removal of the grace period. I would like to thank the minister for working constructively with my office to find a middle way through. The proposed amendments would allow for discretion to be exercised in the case of exceptional circumstances for people in vulnerable circumstances, and I understand that the minister will be detailing some of the examples where the discretion would apply to give the House a sense of the kinds of protections and exemptions that will apply to people in vulnerable circumstances. We need to make sure that we provide that to people in those circumstances.

I won't delay the House any further. I urge the House to support the government's amendments, and I commend the bill to the House.

Helen Haines (Indi, Independent) Share this | Link to this | Hansard source

Child care is not an add-on or a nice-to-have; it's an essential service in a community where we want a thriving economy and maximum workforce participation. For parents, it allows them to work, to train or to study, to open doors and to provide for their families. For children, it keeps them safe and healthy, assists their development and builds their skills for school and into the future.

In June last year the government introduced the new childcare package, which it described as the most significant change to the early-learning and childcare system in 30 years. The bill we are discussing today, the Family Assistance Legislation Amendment (Building on the Child Care Package) Bill 2019, is required to address some of the unintended consequences—some might say teething problems—of the childcare package, including any unnecessary regulatory burden. These changes have come about based on the feedback from families in the childcare sector about concerns and possible improvements to the childcare package. They also reflect some of the findings of the interim report that the government commissioned. I recognise the government's efforts in listening to the feedback of the families' childcare providers in developing these amendments. It's this commitment to consultation on this momentous reform to childcare support that makes sure this reform reflects reality and delivers what it sets out to do. In child care, it's important that the voice of the user of the service is adequately reflected.

As the Independent member for Indi, I see my role as to neither support nor oppose whatever the government does and to look at legislation on its merits. I see my role as advocating for sensible, evidence based policy that addresses the needs of Indi and the needs of Australia. On this bill, I did consult with people affected by the bill to see whether it is realistic and will make lives better for families with children in child care. I sought the views of leading childcare providers and asked if the proposed changes were administratively burdensome for providers or, indeed, for families. I'm pleased to say that the providers were firmly in support of the amendments and reported that they would welcome them once the bill came into play. They're satisfied that the amendments, particularly the two main amendments, will improve the new childcare package system. The first is to extend the time frame for ceasing enrolments due to nonattendance from eight to 14 weeks. This will mean that children who use child care only during school holidays will not need to go through the tiresome paperwork of being re-enrolled every time. On this change, my constituents told me that this amendment will lessen the administrative burden for both the services and the parents. I recognise the work of the member for Mayo and her persistence in advocating on behalf of the Woodside Primary School out-of-school-hours care service for this really commonsense solution.

The second amendment removes the 50 per cent limit on the number of children that childcare providers can certify for additional childcare subsidy. As we know, the additional childcare subsidy is a top-up payment, in addition to the childcare subsidy, which provides targeted additional fee assistance to families and children facing barriers in accessing affordable child care. However, the 50 per cent cap has created unnecessary regulatory burdens for providers and caused delays for at-risk children accessing child care. My constituents told me that the removal of this cap will allow more flexibility for services to offer places for additional childcare subsidy children.

I'm pleased to support these amendments and the remainder of the bill. I do, however, wish to recommend that the government consider one further change to the childcare package system. This proposal has come from my constituent Tanya Scott, the CEO of Alpine Children's Services. Alpine Children's Services occupies places in Bright, Mount Beauty and Myrtleford. She's called for the childcare subsidy to be extended to children who need a second year of kindergarten, the year before school, where their parents do not meet the activity test. Currently, there is an exemption from the activity test for one year for parents of kindergarten children, whereby they're still eligible to receive childcare subsidy based on their income only. For children who would benefit from an additional year of kindergarten the removal of CCS from the second year means that these children are being pushed to school when they're not socially, emotionally or educationally ready. We know that the best start a child can get to school is if they're ready to start. Removing this restriction would be advantageous. I would recommend that the government consider this amendment, and I'll pursue this with the minister.

Thriving childcare services are critical everywhere, particularly in rural and regional areas, where they build community sustainability. Having services locally means that young families are able to live and work locally. If these childcare centres close then the community loses a main hub. Once the local childcare centre closes down, the parents must take their children somewhere else, which removes their connection with their local community. It leads to a flow-on effect with the child entering schooling in another town and subsequent potential school closures in their home town. It reduces employment opportunity for skilled childcare professionals and, indeed, for primary teachers, contributing ultimately to the desertification of small country towns.

The sustainability of rural and regional providers can be challenging given the low numbers of children enrolled on an ongoing basis and the sometimes transient populations in these communities, which makes it difficult for providers to plan ahead. The government has recognised that providers in rural and regional areas sometimes do it tough and offer support through the Community Child Care Fund, or the CCCF. The CCCF provides grants to childcare services to reduce barriers to accessing child care, particularly in disadvantaged, regional or remote communities. Minister Tehan's office has advised me that under the CCCF the government is providing $333 million to eligible providers to continue to operate. The majority of these providers are in regional and remote Australia, and I'm really pleased to hear this.

Last week, I was fortunate to see the Community Child Care Fund in action at the Bellbridge Early Years Learning Centre and see how important these targeted supports for rural and regional providers are, both for them and for their communities. I was delighted to get to see through a key piece of work which began before I was elected. In November last year, Albury Wodonga Community College announced that they would stop providing childcare services in the small community of Bellbridge, in the northern end of my electorate. Towong Shire Council stepped in and secured emergency funding, from education minister, Mr Dan Tehan, to keep Bellbridge open for another six months. In June this year the centre received an ongoing grant from the federal government's Community Child Care Fund, which will contribute to the centre's sustainability.

I commend the work of my predecessor, Cathy McGowan, in working with the minister; the shire of Towong and, most importantly, the Bellbridge community, parents and friends who helped make this happen. I was so delighted to join the community of Bellbridge on Friday to celebrate this ongoing government funding along with the mayor of Towong Shire and a senior adviser from Mr Tehan's office—this demonstrates to me the seriousness with which the minister sees this issue, and I thank him for that.

With certainty about their future and a guarantee of ongoing funding, the Bellbridge enrolment has grown from seven to 18. This is a story of success. However, we do have ongoing challenges in my electorate. Impending closures of Chiltern and Wodonga childcare services will leave families struggling to find alternatives, and people out of work, if another provider cannot be found before December 2020. Chiltern is a small community between Wangaratta and Wodonga, two regional cities with good job prospects. It has affordable housing and is attracting a growing number of families with young children. This is its only childcare service. The ramifications of closure will be wideranging. I understand that negotiations are ongoing to find a new provider; and I commend Indigo Shire, who are working very hard on the issue.

In conclusion, I congratulate the government on these reforms and its ongoing commitment to quality, accessible and affordable child care. I am looking forward to seeing the final evaluation report of the package in 2021 and whether there is a reduction in out-of-pocket costs for families across Australia and particularly in my electorate of Indi.

Dan Tehan (Wannon, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I thank those members who spoke on the Family Assistance Legislation Amendment (Building on the Child Care Package) Bill 2019. The bill makes some important refinements to the operation of the government's childcare package that was implemented on 2 July 2018. It is clear that the government is delivering on its goal to create a more affordable, accessible and flexible childcare system. With this bill, we will also be making it easier for families and providers to use the childcare subsidy.

Since last July, the government has proactively engaged with the industry and continued to listen to feedback from families and the childcare sector on what aspects of the childcare package have worked well, their concerns and what we could improve. I wish to thank the stakeholders for their continued and positive engagement with us. The key measures contained in this bill reflect feedback from families and childcare providers and will benefit them by making life easier by: extending the time frame for enrolments to be ceased due to a child's non-attendance at a service from eight to 14 weeks, reducing regulatory burden; providing more options for providers to deliver services by removing the limit on the number of children childcare providers can certify as being at risk of serious abuse or neglect to receive a higher rate of subsidy under the additional childcare subsidy, enabling services to be more responsive in assisting vulnerable and disadvantaged children in accessing child care; supporting families who have the most to gain by establishing the capacity for a small number of targeted payments made by third parties to be used in combination with the childcare subsidy to ensure cost is not a barrier to vulnerable and disadvantaged families accessing early learning and child care; supporting families with affordability by enabling parents to receive subsidies when their children are ill and cannot attend scheduled care at the start or end of an enrolment; and making life easier for families with a number of other refinements, corrections and consequential amendments to bring clarity to policy intent and achieve closer alignment with related state and territory laws.

I note that the Senate Education and Employment Legislation Committee recommended that the Senate pass the bill and recognise that the measures in this bill will enable families to more easily participate in paid work by making child care more accessible, affordable and responsive to the needs of families and their circumstances. I also thank those who made submissions to the committee for their valuable feedback, and I thank colleagues who have spoken with me directly.

I welcome the broad support for the measures in this bill and note suggested changes in relation to one measure in particular. As such, I will be moving a government amendment to allow individuals to request to give their or their partner's tax file number up to 28 days after making a childcare subsidy claim in special circumstances, and to obtain an indefinite exemption to providing their partner's tax file number in special circumstances. This amendment will benefit families by enabling the government to more appropriately respond to their individual circumstances and help them access a childcare subsidy earlier. For example, this may include those who are escaping domestic violence; are homeless, hospitalised or otherwise incapacitated; have recently been released from prison or psychiatric confinement; are affected by a recent death in the family; have lost their homes due to fire or floods; who do not have access to their tax file number due to their or their partner's location; or are experiencing other circumstances beyond their control that affect their ability to provide their or their partner's tax file number.

If this amendment is passed, the changes in this bill will make life easier for families and childcare providers; support vulnerable and disadvantaged families' access to quality early learning and child care; and help parents access financial assistance to support their participation in the workforce. I thank members for their contributions to the key debate on important refinements to the operation of the government's childcare package. I commend the bill.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.