Alan Tudge (Aston, Liberal Party, Shadow Minister for Education) Share this | Link to this | Hansard source

I will start my speech today by pointing out that the Prime Minister misled this parliament in his remarks in relation to this childcare bill, the Family Assistance Legislation Amendment (Cheaper Child Care) Bill 2022. He came into this place and said that we were opposing this bill, when the member for Moncrieff, our spokesperson on this issue, categorically said in her speech on the second reading that we would not be opposing this bill. If the Prime Minister had any decency, he would come into this place and correct the record, because he was indeed misleading this parliament.

We are not opposing this bill, because we do not want to stand in the way of families getting access to higher subsidies, but we do have concerns with this bill, and this is why we have moved the amendment which the member for Moncrieff put forward. Our concerns are fourfold. We have concerns that this will add to childcare inflation. We have concerns that this doesn't add to any supply of childcare places despite spending $4.5 billion. We've got concerns about workforce shortages which already exist and will just be exacerbated by this bill, and we've got concerns about this bill adding to the structural deficit of the budget when we know the budget is in serious deficit already and is going to get worse under this government, according to its own budget papers.

I'll go through each of those in turn, but before doing so let me just say that the coalition has a very proud record in relation to child care. We doubled the spending when we were in office, to over $10 billion per annum. We supported 280,000 more children in the childcare system than there were when we first came to office. Women's workforce participation in this country hit record levels under our government, in part because of the childcare policies which we put in place. We gave access to child care, through various programs which we instituted, to dozens of locations which otherwise would not have had any access at all to childcare services.

Most importantly, though, we did all these things and achieved all of these outcomes without adding to inflationary pressure. Indeed, in the last 12 months, as a result of our childcare policies, out-of-pocket expenses for child care came down by 4.6 per cent. Inflation was going up in almost every other category, according to the ABS, but in child care in the last financial year it came down by 4.6 per cent, a remarkable achievement. That will be the benchmark upon which we now measure the inflationary impacts of this policy that the Labor Party has introduced.

This brings me to my first concern about Labor's new policy, and that is that it will indeed add to inflationary pressure. Inflation is arguably the most pressing economic challenge facing the country at the moment. It has risen to over seven per cent, according to the budget papers' own figures, and so a responsible government should be doing everything it possibly could to remove those inflationary pressures, because inflation just means that what people earn does less—doesn't purchase as much as it used to be able to purchase. In other words, people are poorer in real terms. That's what inflation does, and we've got inflation of seven per cent. But, instead of the government taking all possible means to reduce inflation, they're actually adding to inflationary pressures, in part through this bill, because it's putting $4.5 billion more into childcare demand, when there are already massive supply constraints in place, which I'll outline in a minute. And, as any person who has studied any basic economics knows, if you add to demand but you don't increase supply, prices go up. Even the Treasurer should know that, even though he's only got a PhD in studying Paul Keating. He should understand that basic concept—that, if you increase demand without increasing supply, prices will go up. This is exactly what is happening with this childcare bill—$4.5 billion of extra demand will be put on the system, and we're already seeing prices go up. Fees started to go up as soon as the Labor government was elected, on the basis that people knew that this would be coming. So we're seeing this across the board already.

These fee increases will continue. I think that they will eat up much of the $4.5 billion in additional subsidy which this bill puts in. So, over time, parents actually aren't going to be much better off, despite a $4.5 billion slug on taxpayers, because fees will just rise and gobble up the benefit that they otherwise would have got from this additional childcare subsidy. This happened when the Labor Party were in office last time. When you look back at the figures, fees went up 53 per cent in just the six years that they were in office. It's just going to happen once again. The Minister for Education, in his second reading speech on this bill, promised this place that fees would not go up. He actually said that this is 'a multibillion dollar boost to productivity and participation—without adding to inflation.' Well, I tell you what: we will be watching. Parents will be watching very closely, and we will be holding him accountable, because basic economics says that he is wrong.

Our next concern is that this package does not add a single childcare place in the country—not a single place—despite spending $4.5 billion of taxpayers' money. And we have many areas in the country where affordability is not the issue; it is access overall which is the issue. In fact, as the Leader of the National Party just mentioned, in the previous address, the Mitchell institute did a study on this, and it found that 35 per cent of the population live in an area described as a childcare desert, and those are regions where there are three children for every one available place. So 35 per cent of the population live in such a childcare desert. Many of those are in the regional areas. Anybody who has been to the regional areas knows exactly this problem. Almost every regional town has this problem, where it's the supply at all of childcare places, as opposed to the affordability, that is the issue. This bill expends $4.5 billion but does not add a single childcare place—not a single one. This is in comparison to the initiatives which we put in place when we were in government, which were specific programs of funding to enable new facilities to be built in regional areas, in particular, to add to the supply.

Our third concern is what this does to workforce shortages. This bill, again, does nothing in relation to the shortage of educators working in childcare centres. Labor has no plan to address this. We know that there is already a shortage of 7,200 early childhood educators right now. Goodstart, which is the largest provider in the country, told the Senate inquiry last week that we're going to need another 9,000 workers to deal with the demand which this bill creates. We are already short 7,200 workers and this bill will create a further demand for 9,000 workers. So 16,200 workers are somehow magically going to appear to work in these childcare centres. It's simply not going to happen. The Labor Party says, 'We're putting more money into the universities for more early childhood training places.' I'll tell you what, their plan is for only 14,069 places. There's a 16,200 shortfall. This is basic maths, which that side of the chamber have real problems with. They have problems with economics and with mathematics, because they can't understand that we have massive workforce shortages. They are doing so little to address this. What happens when you have workforce shortages and supply constraints? You add to demand and prices go up. That's what happens.

I'll take interjections from those opposite who say, 'It's all our fault because we didn't process the visas.' I thought those opposite were about training people in-house, training people in the country.

Finally, I point out the budgetary impact of this decision. It's $4.5 billion over the forward estimates. It's structural expenditure as opposed to temporary expenditure. We have a significant deficit already. This budget that was delivered last night bakes in additional structural expenditure to the budget at a time when we need to actually be curbing expenditure. This is also a considerable concern we have in relation to this.

We want to be assured that the stage 3 tax cuts, which we promised and which Labor promised, actually get delivered. They can be delivered while maintaining sensible budgetary settings. If they keep adding to the structural deficit, they won't be able to deliver those tax cuts. Adding to the structural deficit, they won't be able to maintain sensible budgetary settings. It simply doesn't work. They have to get control of the budget. Adding structural expenditure—almost unlimited structural expenditure—doesn't do that. We have these concerns and we point them out in this chamber, but we won't be opposing the bill for the reasons I articulated at the start and for the reasons which the member for Moncrieff articulated in her second reading speech contribution.

The bill does provide $4.5 billion in additional expenditure for the childcare system, but there are concerns and that is why we are moving this amendment. We have concerns about the inflationary pressure, about workforce shortages, that it doesn't add a single childcare place, despite spending $4. 5 billion, and that it adds to the structural deficit of the budget.

I commend the amendment. I hope the parliament support this amendment but we won't be opposing the bill in its substantive form.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Family Assistance Legislation Amendment (Cheaper Child Care) Bill. Every industry in every region of Australia at this moment in time is struggling to find workers. Any time I walk through my community on the south side of Brisbane, I see signs in shop windows advertising positions available. When I talk to my local small businesses, almost every single conversation starts with them telling me that they are struggling to find staff. This is one of the many reasons the Albanese government's plan for cheaper child care is so important for our nation. We have parents and carers, particularly women, across Australia, who want to enter the workforce for the first time, re-enter the workforce or increase work hours. However, the financial cost of child care is one of the biggest barriers affecting them. That's thousands and thousands of skilled workers wanting to work more hours who at the moment simply can't. This Albanese government bill means around 96 per cent of families with children in early childhood education and care will be better off—96 per cent. Importantly, I stress that no families will be worse off. This is not only a much-needed and welcome cost-of-living reduction measure; it will also deliver a significant, positive productivity dividend to the Australian economy. Productivity, the ABS tells us, actually decreased to 102.3 points this year, down from 104.9 points in the first quarter.

Labor's plan means that more than one million Australian families will be better off, which will include around 8,800 families in my electorate of Moreton. Many of the families benefiting from this bill will be those with a combined income of $80,000 or less. This sensible legislation will lift the maximum childcare subsidy rate to 90 per cent for such battler families. An added benefit is that the Albanese government will also keep the higher childcare subsidy for families with multiple children aged five and under who are in care.

Childcare costs have increased by around 41 per cent over the last eight years—those dark years of the coalition government. These home-budget-crunching increases have held back parents and carers from entering and re-entering the workforce or increasing their work hours. Why? Because the money coming in from work barely covers the cost of their child's child care and, in many cases, doesn't cover it at all. Families were going backwards by going to work. That is not sustainable or logical as a society.

According to the latest ABS data, last year there were 73,000 people who wanted to work but weren't looking for work because they simply couldn't make the cost of child care work for their family budget. As I said, if they went to work, they went backwards. Can you imagine if we remove this barrier and connect or reconnect these 73,000 people, from every region in Australia, with the employment opportunities that are now out there? That's 73,000 'worker wanted' ads taken down from the shop windows of Australia. What a positive impact this would have on productivity and the Australian economy. That is why the Albanese government's cheaper childcare policy is so important.

These changes will go a long way to meet the workforce shortages that this country is facing and will allow small and local businesses especially to fill those staffing gaps that I mentioned upfront. These businesses can thrive and make our nation stronger.

A great local example of how this cheaper childcare bill will help is that of Remah, who lives in Pallara, at the southern end of my electorate. Remah has recently welcomed a new baby into her family. Congratulations, Remah, to your household. Remah told me that this cheaper childcare bill will allow her to access more hours at work, which will both benefit her family and help boost the productivity of her employer. Remah said she was right at this moment weighing up her options for a return to more hours of work, but, with the cost of child care being so high, she's not sure whether she can access the level of work that is right for her and her family. Remah added that, with the current impacts of rising inflation and interest rates, having access to a reduced bill for child care would help reduce the barriers to her accessing more hours at work, which would mean a better standard of living for her family. Remah said that being the mother of two young children was about finding that balance between work and care that would provide the best standard of living for her children while also allowing her to have a fulfilling life-work balance. Access to cheaper child care will give Remah the right balance and the right sort of control.

That is what many families with young children are currently facing—that juggling act of weighing up the family budget and the ability to access work. When parliament passes this bill, homes with young children in them will improve across the nation from July 2023.

Another story from my local area is from Matthew and his partner, who live in Annerley, in the northern part of my electorate. They have two children, aged four and two. Matthew and his partner both work full time. Matthew said that, at this moment in time, child care is one of their family's biggest expenses and that at times he and his partner have had serious conversations about the possibility of one of them having to work part time. Matthew informed me that the changes to the cost of child care will mean that they won't in the future have to have those conversations. The removal of phase 2 of the higher childcare subsidy when their eldest child turns five will also make a significant difference to Matthew's family budget.

Another example is Emma, who lives in Yeronga. Emma has a three-year-old going to child care four days a week. Like most families at the moment, Emma and her partner struggle to afford the cost of child care, and, for Emma to continue working at the level she is, they've had to sacrifice other expenses, such as swimming lessons for their daughter. Emma said the changes will be better than a pay rise for them, as the changes will free up money in their family budget. One of Emma's first priorities will be to start their daughter's swimming lessons. I should stress that swimming lessons are essential in Queensland. Emma added that the cost of child care is one of the biggest discussion topics she has with all her friends. They speak of the real-life difficulties when it comes to balancing the benefits of work and the cost of child care. Sadly, too many of Emma's friends have decided that working more hours just isn't viable for them at the present, even though they want to work more. Emma knows that the changes that the Labor government is putting forward will change these conversations for the better, and more of her friends will be able to rejoin or increase their participation in the workforce and improve their family's financial situation in these struggling timeless.

There is also a great new initiative to assist First Nations families, with the introduction of a base level of childcare subsidy entitlement of 36 hours of early learning per fortnight from July next year. Importantly, this new measure kicks in irrespective of the family's activity levels. This will see more First Nations children into early learning by boosting the hours of subsidised care available, and directly addresses target 4 of Closing the Gap. As a former teacher, I know that early learning is such an important building block in a child's educational development. The last report handed down by the Productivity Commission saw, for the first time, that development of readiness for First Nations children actually went backwards. That is shameful. We can't let this continue, and I'm confident that the introduction of the base level of childcare subsidy for First Nations families, as well as other initiatives, will see these rates of development rise again.

Another part of the bill, which I mentioned earlier and which will benefit families just like Matthew's, is the removal of phase 2 of the higher childcare subsidy for families with multiple children. Anyone who would have had two children in care under the age of five would have had their family budget impacted once one of their children reached five or left care. There would have been a reduction to the period that a family was eligible for the higher childcare subsidy. As you can imagine, this would have put a large strain on the household budget for a family like Matthew's, and extra strain right when one of their children was heading off to school.

Funnily enough, in yet another example of the sheer incompetence of the previous Abbott-Turnbull-Morrison governments, phase 2 changes would have had a negative impact on the Commonwealth's budget. It was estimated that the phase 2 changes would have saved the budget around $34 million over the forward estimates, but the IT changes required to implement the measure were estimated to cost around $89 million. A cost savings scheme initiated by the previous government would have cost more to implement than it saved, to the tune of some $55 million—or about one car park, to put it in useful measures—while at the same time disincentivising mothers, in particular, from remaining in work, or forcing them to reduce their hours of work, taking away the availability of skilled workers when small businesses and the economy can't afford them.

It doesn't take much to know the cost of child care for families in this country is a drag not only on the family budget but also on the Australian economy, as Treasurer Chalmers indicated in his budget speech last night. This bill is another positive economic and social step forward delivered by the Albanese government, and will be welcomed by families, including families like Remah's, Matthew's and Emma's, right across Australia. I commend this bill to the House.

Anne Webster (Mallee, National Party, Shadow Assistant Minister for Regional Development) Share this | Link to this | Hansard source

I acknowledge the amendment made to the Family Assistance Legislation Amendment (Cheaper Child Care) Bill 2022 by the member for Moncrieff, and I will speak to the bill and the amendments. My question, to start with, is: where is the detail from the Albanese government on this bill? Where is the plan to address the current workforce shortage and pressures being faced by educators? Where is the plan to address access to care, with many parents struggling to find a place for their child? Where is the plan to address thin markets and childcare deserts, where there are little to no services?

The term 'childcare desert' is worth highlighting. A report from the Mitchell Institute showed that around one-third of Australians live in a childcare desert. A childcare desert is described as being one place for every three children. Nine million Australians live in a place where only one in three children can actually access a place in child care. It's a game of musical chairs, and when the music stops, two children miss out. Labor are throwing $4.5 billion at child care, but not one cent is going to creating additional places or services. What good is a subsidy if there is no service? In our childcare deserts, parents need an oasis. The Albanese government has given them a mirage, a vision of how they could be benefited that is, in truth, just that: a vision, with nothing of substance. This issue is particularly pertinent in my electorate of Mallee. I have seven towns in dire need of a childcare service. Birchip needs child care. Boort needs child care. Cohuna needs child care. Murtoa, Pyramid Hill, Rainbow and Wedderburn all need child care.

The Prime Minister spoke yesterday in this very chamber about how this bill allows parents to return to work. Does he even understand the practicality of that claim? I have people in Mallee who want to go back to work, professionals who offer their towns vital experience and skills, but can't, simply because there is no place for them to leave their children. In fact, Labor has not only ignored the need for services in Mallee but deliberately scrapped funding that would have provided this in the form of the Building Better Regions Fund round 6. For example, the Yarriambiack Shire had submitted an application to fund a childcare centre in Murtoa. How does this bill help them build the services their community needs? It's simple. It does not. This government has shown no appetite to ensure extra places are created to meet the growing demand. But that's only one flaw in Labor's policy.

Let's not forget the existing pressure on the workforce itself. Early childhood educators have been under pressure for a couple of years. They worked tirelessly throughout the pandemic, and now, on the other side, workers are leaving the sector for other careers. Many educators have raised low wages, mental health issues, unappreciation, increase in red tape and burnout as their top concerns. There are currently 7,200 vacancies in this sector. We've asked the government several times how many additional educators will be needed under this policy, and it's failed to answer every single time. This government is getting good at not answering questions. Goodstart Early Learning, the largest not-for-profit provider, estimates an additional 9,000 educators will be needed by July 2023 to match the influx of children expected under this policy. Where are those educators coming from? The government has been doing a lot of talking in this space but clearly no listening.

In 2019, the Labor Party campaigned on a platform of higher wages for early educators. Now, in government, they seem to have dropped that. Instead of delivering higher wages, which they now have the power to do, they point to their fee-free TAFE places. This doesn't deliver the immediate relief to the workforce that is required. Solutions are needed now. Educators aren't happy about this, and, in turn, they are leaving the sector. This leaves childcare centres understaffed and short, and, in the end, it's our children who miss out.

Many centres are already capping enrolments and asking families to keep their kids at home because they don't have the staff to operate at full capacity. An increasing number of centres are applying for waivers because they can't retain teachers, who leave the sector for better pay and conditions in the education sector. It goes back to Labor offering a subsidy over actually helping the service be provided to the level it needs to be. With more children set to enter the sector from July 2023, how will the government ensure there is a workforce to meet those needs? Instead they offer this flawed policy that is going to benefit higher income earners over lower income earners.

Currently, families with a combined income of up to $355,000 are eligible for a childcare subsidy. Labor's bill will blow that out to $532,000. The government has done no modelling on whether increasing the threshold to $532,000 will actually increase the number of hours worked by those families or if it will actually increase the number of days they put their child in care. They can't tell us what the families in those brackets currently do, whether they access care five days a week or whether they use a mix of informal and formal arrangements or whether there is a stay-at-home parent. The bill will have taxpayers forking out an additional $22,524 for a family on a combined income of $360,000 a year with a minimum of two kids. Compare that with a family earning a combined income of $80,000. Taxpayers will fork out $2,488 a year for them. It's clear the government has done no due diligence on this policy and next to no modelling to show what the outcomes of this policy will be. It just heightens Labor's proven inability to mitigate cost-of-living pressures for ordinary Australians.

Australians know Labor cannot manage money. The last time Labor was in government, childcare fees skyrocketed by 53 per cent in just six years. Out-of-pocket costs are already rising, and fees will most likely rise before 1 July 2023, which may erode a significant amount of the increased subsidies before they're even in place. During our time in government, the coalition kept out-of-pocket costs low. The latest CPI data, from June 2022, showed that childcare costs came down 4.6 per cent in the year to June 2022.

Labor has no plans to address rising out-of-pocket costs or rising cost-of-living pressures in child care—or anywhere, for that matter. The 12-month $10.8 million ACCC inquiry they have announced is too little too late. This inquiry will do nothing to alleviate current pressures in the sector, including workforce and access. The ACCC inquiry doesn't start until 1 January 2023 and won't report back until the end of next year. That means they will do nothing to address rising costs until 2024 at the earliest. Australian families cannot wait that long. They need relief now. With early education costs set to increase under this government, Australian families deserve to know if they will really be better off under Labor.

It's time the government focused less on politics and more on a plan to ensure a strong economy that supports Australian workers and families. It's what we did, after all. The model is right there for Labor to look at. We almost doubled childcare investment to $11 billion in 2022-23, locked in ongoing funding for preschools and kindergartens, and made the biggest reforms to the early childhood education system in over 40 years. More than 1.3 million children, from around one million families, have access to the childcare subsidy. As a result of measures under the coalition, 280,000 more children are in early childhood education. We abolished the annual cap on the childcare subsidy. Around 90 per cent of families using the subsidy are currently eligible for a subsidy of between 50 and 85 per cent. Since March 2022, we have provided a higher subsidy of up to 95 per cent for families with multiple children in early childhood education, increasing workforce participation and cheaper access to care. Our targeted extra support, introduced in March 2022, made a real difference. Childcare costs came down 4.6 per cent in the year to June 2022. We saw women's workforce participation reach record highs at 62.3 per cent in May, compared to 58.7 when Labor left office.

Our communities, our families and our children deserve better than what the Labor government are offering. We walked the walk, while Labor simply talk the talk.

Libby Coker (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

Labor made one of its most significant commitments at the last election to families, to cut the cost of child care. The Family Assistance Legislation Amendment (Cheaper Child Care) Bill 2022 implements that commitment. The Albanese government is once again delivering. The government's reforms will cut the cost of child care for about 1.26 million families. Ninety-six per cent of families with children in early childhood education and care will benefit from this reform, and no Australian family will be worse off. This legislation will give children access to critical early education they may otherwise not receive. The cheaper childcare plan is good for kids, it's good for families and it's good for our economy.

Children are our most precious resource, and we know the first five years are everything. Early learning shapes the person we each become, and when we invest in our children we invest in our future. Our government is committed to giving every child the best possible opportunity in life to thrive. I know cheaper child care will help families with young children in rapid-growth areas like mine in the electorate of Corangamite. These families know all too well about the rising costs of child care—costs that have soared across the nation by 41 per cent in the past eight years. I'm especially thinking of young families who are struggling with the costs of establishing a new home while raising young kids, often within newly developing suburbs like Charlemont, Ashbury Estate and Anchoridge within the Armstrong Creek high-growth suburb, or established areas with fast-growing estates, like Bannockburn, Grovedale, Leopold, Torquay and Ocean Grove in my electorate.

A fortnight ago I hosted a baby expo for new parents across my electorate. It was very well attended, and parents were keen to learn about the services for them and their children within their community. Inevitably, as I moved around the expo chatting with parents, child care was a common theme. It's clear that parents, particularly women, want to make the best choices for their families around child care, early education and, importantly, workforce participation. Women want to choose to progress their career, develop their skills and, importantly, earn more. At the baby expo I was able to tell parents of the much-needed reforms in the legislation we're debating today, and the response from parents was overwhelmingly positive. There are some 6,000 families currently using approved child care within my electorate. Of those, some 5,800 will benefit from our government's cheaper childcare plan. Many others could also benefit as they consider the new opportunities offered by this reform. Making child care cheaper will help ease the cost-of-living pressures for many families by giving parents the opportunity to work more and earn more if they want to. That means thousands more skilled workers for our economy. Therefore, this legislation is about not just the cost of living but also economic reform—economic reform that will mean more women retire with more superannuation, with a greater sense of security and with a buffer against the growing rate of homelessness amongst older women. From July 2023 the government will lift the maximum childcare subsidy rate to 90 per cent for families with a combined income of under $80,000. It will also increase subsidy rates for families earning less than $530,000 annually. Analysis by Treasury indicates the impacts of this policy will mean up to 37,000 extra full-time workers, and they will be available for Australian businesses in the financial year 2023-24.

Many Australian parents want to work more but, if they do, under the current circumstances, their income is gobbled up in childcare costs. It's just not worth it. I've met with many families who have sat down with a calculator and figured out that working an extra day, or an extra two days, is just not worth it financially. By making these changes under this legislation, we'll be giving families the option to go back to work knowing they can afford quality child care, earn more and save more. According to the Bureau of Statistics, last year, 73,000 people who wanted to work didn't look for work because they couldn't make childcare costs work for them. Importantly, these reforms also mean that more children will potentially have access to quality early childhood education. As I've already stated, all the research shows that these early preschool years are significant formative years. Children learn to play, and through interaction with others they learn more and develop their skills. It prepares them for school. It prepares them for life. We know that when we invest in these early years we get better outcomes for them later on. At the moment, 60 per cent of mothers with young children work part-time hours. Under these reforms, a family on the median combined income of $120,000 and with one child in early childhood education will save $1,780 in the first year of this plan, and that's good news. The higher childcare subsidy for families with multiple children aged five or under in early childhood education will be retained.

The legislation also introduces measures to increase transparency in the early childhood education sector. It will mean that all large providers need to publicly report revenue and profits, together with commercial leasing information. The bill also helps families make more informed choices and puts in place measures to deter fraud. To attract and retain workers, the bill also allows providers to discount childcare fees for early childhood educators.

I am pleased the Albanese government is also introducing reforms to help more Indigenous children into early education. As part of the government's plan for cheaper child care, all Indigenous children will be able to access 36 hours of subsidised child care a fortnight from July next year. At the moment, First Nations children are eligible for only up to 24 hours subsidised child care a fortnight. These simple changes will benefit around 6,600 First Nations families. Not only do the changes help ease cost-of-living pressures; they provide more opportunities for First Nations children to access the development, education and health benefits of early childhood education and care. At the moment, just 4.3 per cent of children in early education and care identify as Indigenous, despite Indigenous children being 6.1 per cent of the population of children aged up to five years.

We know access to high-quality early education and care can impact the readiness of a child for school. In 2021, for the first time, the Closing the Gap target for school readiness went backwards. That's simply not good enough. We must turn this around. That's why our government will also invest $10.2 million to establish the Early Childhood Care and Development Policy Partnership between the Australian state and territory governments and Indigenous representatives. The partnership will be co-chaired by the Secretariat of National Aboriginal and Islander Child Care and will help drive the development of community led policies and programs that Indigenous families need for their children to thrive. These measures will help improve First Nations children's readiness for school. It's essential all governments work together and in partnership with First Nations people if we're to close the gap and improve outcomes in early childhood education.

Of course, all of these early education measures rely on having enough childcare workers. We know that in Australia at the moment we are short by about 6,500 workers, and predictions indicate this shortage will get worse before it gets better. That's one of the reasons why our government has committed to an extra 20,000 university places for next year and the year after. Those new places will include an allocation for those who are training to be early childhood teachers and educators. That's also why the Albanese government has allocated 465,000 free TAFE places to train up the workforce of the future.

The government knows that things are tough out there, and the Treasurer has said things are expected to get tougher before they get better. That's why the Albanese government is taking a number of practical steps. Cutting the cost of childcare through legislation is a significant cost saver which will help to ease the squeeze on many families. Our government is also cutting the cost of medicine. This will help many Australian families who need to spend at the chemist every week. Other measures include increasing the minimum wage by over five per cent. This will help many Australians who are living on low incomes. So these childcare reforms are one element of an Albanese government package of reforms to foster a better and more caring and inclusive Australia.

This legislation recognises that children are our most precious resource. It's part of delivering on our government's commitment to the parents and children of Australia. Together, we will build a better nation and a better future for families.

Monique Ryan (Kooyong, Independent) Share this | Link to this | Hansard source

I rise to indicate my support for this bill but also to share with the House where I hope that we can improve on this area in the future, as well as my ongoing concerns about the looming crisis in early childhood education. The Family Assistance Legislation Amendment (Cheaper Child Care) Bill is a welcome acknowledgement from this government that, for too many Australian families, early childhood education is unaffordable and not financially worthwhile.

This legislation increases the rate of the childcare subsidy from 85 per cent to 90 per cent for those earning less than $80,000 a year. That increased childcare subsidy will decrease by one per cent from 90 per cent for every $5,000 earned over $80,000 a year. The subsidy then cuts out when the family income level hits $530,000. The legislation strengthens protections against fraud. It also introduces discounts for parents who work as early childhood educators. This is perhaps one of the most direct demonstrations of how providing child care for women benefits workforce participation, and its multiplying benefits for our economy. The bill also introduces a base rate of 36 subsidised hours of child care for Aboriginal and Torres Strait Islander children, regardless of their parents' activity levels. This is a worthwhile reform to the problematic activity test, which I'll speak more about in a moment. Any measure to see more young children attending early childhood education is a good thing. This bill will see more young children being able to attend more hours at child care, accessing valuable developmental benefits to prepare them for primary school and setting them up for a lifetime of better educational, social and employment outcomes.

The evidence is clear about the benefits of quality early childhood education for children. The first five years of a child's life are critical for their physical, social and cognitive development. I know that because I'm a paediatrician. We should aspire to a future of universal access to quality early childhood education for all Australian children. Australia has a strong national framework and quality standards for early childhood education. We know how important this care is, and we have invested in the development of best practice in the provision of this care. But access to services is patchy, and, despite the subsidies in place, it is still highly dependent on a family's hours of employment and its income. In the future, Australia should aim to give every child access to early childhood education, no matter what their parents' income or their employment status is.

One limitation of this bill is that the hours of child care that Australian families can be subsidised for is still tied to their activity levels, or the hours worked by the parent. The legislation amends the childcare subsidy activity test. Currently it is as follows, with exceptions for children in special circumstances—for example, those at risk of neglect. Children whose parents are working eight hours a fortnight have 24 hours of subsidised child care unless their parents earn more than $72,000 a year, in which case they're not eligible for any subsidised childcare hours. Children whose parents work eight to 16 hours can attend child care for 36 hours a week at a subsidised rate. If parents work between 16 and 48 hours, their child can receive 72 hours of early childhood education. It's all very complicated.

It's great to see that this legislation will provide Aboriginal and Torres Strait Islander children with a minimum of 36 hours of subsidised early childcare intervention, regardless of the employment status of their parents. This is a highly worthwhile change to the activity test and to how subsidies are allocated. It will have significant long-term benefits for those children and their families. In this provision for Aboriginal and Torres Strait Islander children, the government acknowledges that the activity test for childcare subsidies is a pernicious measure, as it is underpinned by an outdated belief that children should only go to child care if their parents are at work. A child's access to the lifelong developmental benefits of early childhood education should not be denied because their parents are unemployed, underemployed or in insecure casual work with variable hours. If these children are rendered ineligible to attend child care at the subsidised rate because their parents aren't working enough hours, how are these parents—who aren't working enough—meant to afford child care at 10 times the subsidised cost?

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour, and, the member's speech having just been interrupted, I apologise, you will be granted leave to continue speaking when the debate is resumed.