Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Hansard source

I move:

That the Senate condemns the Howard Government for ignoring in the Budget the urgent needs of parents struggling with the cost, availability and quality of child care, noting:

(a)

the incompetence of the Howard Government in allocating $60 million for child care places that will never be delivered given that there are already 100 000 unallocated places due mainly to the shortage of child care professionals;

(b)

the failure to bring forward the 30 per cent rebate on out-of-pocket child care expenses despite criticism of the rebate from the Government’s own backbench and the fact that child care fees are rising far in excess of other goods and services; and

(c)

that parents who can not find child care, can not work, adding to the skills shortage.

This motion condemns this tired and arrogant government for their incompetence and failure in handling child-care policy and programs. This budget disappoints parents who cannot find or cannot afford child care. I remind those opposite that if you cannot find child care you cannot work. It is the budget where skills shortages and education are ignored by this government. Not only have they ignored the needs of Australia’s future growth; they have ignored the negative effect of the lack of child care on workforce participation.

To illustrate their folly, the Australian Bureau of Statistics released a survey on 6 February 2006 titled Barriers and incentives to labour force participation, which shows that: child care is one of the top barriers to work; problems finding suitable or affordable child care is the number one reason why women who want to work are not looking for work; almost 98,000 mothers who want to work are unable to start within four weeks because child-care and family factors prevent them; and another 160,500 women who want to work, or to work more hours, and consider themselves available to start immediately are not looking for work due to child-care and family factors. We also know that, at last count, more than 174,500 children were waiting for child-care places.

So what was in the budget for child care? Last night the government announced that it will get rid of the cap that currently applies to outside school hours care—which includes before- and after-school care and vacation care—and family day care from 1 July 2006. The government claims this will result in another 25,000 new places at a cost of $60.2 million over four years. But there is no modelling or any evidence at all to support this claim. In fact there is evidence that no new places will eventuate from this measure whatsoever. That is why Labor condemns this government’s figures.

There are already 67,000 outside school hours places and 30,000 family day care places unused from previous budgets. So any increase in the cap previously has not had the claimed effect of translating into actual care. These places are not being used for a variety of reasons, none of which have anything to do with the cap. With respect to family day care, for instance, the 30,000 existing places are not being used because family day care schemes cannot attract enough workers to deliver those places. The pay is poor, and many women are better off staying at home, raising their children and receiving family tax benefits.

The Howard government has cut operational subsidies to family day care schemes, which exist in order to recruit and train family day care workers. More than 50 per cent of family day care schemes have had their funding reduced at a time of increased compliance costs and an exodus of skilled people due to low pay. Recently, locally, here in Canberra, I was advised that there are existing services under pressure for these reasons. So when the government creates or announces what they claim are new child-care places this means they are creating new places in services that the federal government controls the supply of or caps. But because the federal government does not cap—indeed does nothing to stimulate the supply of—long day care, ‘new places’ never refers to the problem of ongoing chronic shortages, which are in the long day care centres.

It is as though this government does not understand the difference between out of school hours care and long day care. They are different. A parent with a child of nine months or two years who is pursuing care arrangements faces a very different prospect from one who is looking for out of school hours care. Creating places that will not be able to be utilised in the after school hours is no help at all to someone who has a baby and wants to return to work after six months.

The bottom line is: this policy and funding announcement in the budget relating to child care is a con. The Howard government wants to give the appearance of creating places while actually giving up on the supply problems and leaving parents and providers to struggle on with the real problems that have plagued the system for a long time. How dare the government claim that parents’ worries are over—as I note my Senate colleague here in the ACT tried to do in this morning’s Canberra Times. It is just untrue.

There is not a single extra place guaranteed to eventuate, and child care will not be a single cent cheaper. It is not just the Labor Party saying this. The CEO of the National Family Day Care Council, Linda Latham, said, ‘You can have all the theoretical places in the world, but if you can’t find carers then they remain political promises.’ This government is taking the unplanned, market based system that has created shortages—and, indeed, gluts in some areas—in long day care and is now applying it to other types of child care. It is adopting a system that is failing parents and providers in many areas of Australia, and it is turning a blind eye to the reasons why family day care places in some areas languish unused while desperate parents still cannot find child care near their work or home. This is why the Labor opposition condemns this government. It was outrageous and misleading in the build-up to this budget to promise that child care would somehow be a big winner.

It is also a painful irony that the only money in this budget that is actually guaranteed to be spent is $2.3 million that is earmarked for advertising the 30 per cent rebate on out-of-pocket child-care expenses. Yes, you got it: more advertising—on top of the millions of taxpayers’ dollars that have been spent on promoting the government’s extreme industrial relations changes and other Howard government policies. I remind parents that the rebate was promised to them in the lead-up to the 2004 election. It is still not being delivered.

The tax offset is payable on out-of-pocket expenses for approved child-care services—for example, the gap fee paid by a parent between their child-care benefit entitlement and the actual child-care fee. The offset is payable for the first time in the 2006-07 financial year through the 2005-06 tax returns; so government expenditure starts in the 2006-07 financial year at $280 million, followed by $305 million and $330 million in subsequent years. So, as a continuation of the arrogant character of 10 long years of the Howard government, the rebate has been delayed, capped and now denied to some parents.

As I said, during the 2004 election campaign the coalition promised that all Australian parents would be able to claim 30 per cent of their child-care expenses back on 1 July 2005 and look forward to a tax refund in a matter of weeks. But, two months after winning that election, the government announced that it was pushing back the rebate by 12 months. Claims can now be lodged for the first time on 1 July 2006. Also, there is a cap on the amount claimable, so parents can claim only a maximum of $4,000 per child—even if this amount is considerably less than 30 per cent of the child-care costs. Finally, the rebate cannot be claimed at the end of the financial year in which child-care bills were paid. Instead, parents have to wait another year. For example, child-care fees for 2005-06 cannot be claimed until July 2007. This appears to be the first offset in Australian history that cannot be claimed at the end of the financial year in which the relevant expenses were incurred—at least for individuals and parents, as opposed to companies in some of the R&D schemes.

Due to post-election changes to the rebate, the following groups of parents will not get the amount of rebate they were promised during the election: parents on minimum child-care benefit who have a child in full-time care and fees over about $65 per day—they will hit the cap; single parents who are starting up a business or who are on low incomes will miss out on every cent of the 30 per cent rebate that exceeds their tax liability in a given year; parents who have not kept receipts for all child-care sessions for each child dating back to 1 July 2004; and parents whose children attend a preschool—because preschools are regulated and run by the states—or are cared for by a nanny or other carer. No amount of advertising or awareness raising will change the fact that many parents are now not eligible for the child-care rebate. These parents are bearing the brunt of a shameless broken promise.

The government has also committed no money to planning. Despite promising to expand the existing Child Care Access Hotline so that parents can find out about the vacancies that exist in child-care services and centres in their area, there is no funding allocated for this phone line. The government also announced that it would introduce a child-care management system, which appears to be at least a start to collecting much-needed facts and data to better manage child-care centre places. Strangely, there is no money for it in the budget.

It is ludicrous for the Howard government to finally admit that child-care planning has been sorely neglected—which they appear to have done by virtue of the inclusion of that particular item in the budget—after having been dragged, kicking and screaming, by child-care providers and Labor to this point and then not fund the solution. It is smoke and mirrors. It is all talk and no action. Just on the side, there is news today that the ACCC is allowing the merger between two of the very large corporate providers, ABC Learning and Kids Campus, which will create just two very large corporate providers. Where is the competition that ought to help parents make sophisticated choices—and, indeed, allow them to have choices? I know that there are some towns, like Tamworth, which will have only one provider after this merger takes place. With no choice of provider, what will happen to the fees?

I would like to turn to this issue of fees. Some families are paying in excess of $20,000 on a net salary for child care—for instance, those with two children under five in care for three or more days a week. Many other families cannot even afford this. They cannot come close. The take-home pay of the second earner would be less than the child-care fees, so working becomes a bad financial proposition for these families.

In the 2005 budget, the Howard government reduced the number of parents studying who qualified for the JET Child Care program. This was last year. Under JET, eligible parents, who are very low income parents reliant on welfare benefits whilst they are looking for work or training, do not have to pay for child care. JET pays the gap between the fees and the child-care benefit. Those 2005 budget changes meant that JET Child Care was available only to those studying for less than 12 months, which knocks out parents wanting to be hairdressers, mechanics, social workers and child-care workers, for example, given that all these diplomas take more than 12 months to complete. Note again that these professions include many that are in great demand in Australia due to the skills shortage, yet the Howard government’s policy is counteracting the efforts of these people who are being encouraged to study and train.

In this year’s budget, the government has committed to providing a one-off boost in funding for the JET Child Care program for next year. While Labor welcomes this extra money, it is a mere drop in the ocean. Tens of thousands of sole parents will be forced into the labour force from 1 July 2006, and many of them will not even be aware of this child-care entitlement. They will not be told about it by Centrelink and they will never benefit from it. If the government were serious about JET as an affordable solution for sole parents, it would advertise this entitlement—it would use the money that it spends on advertising on this entitlement, not on the 30 per cent rebate that parents have been expecting for the last year.

It is clear that the main reason for the overall decline in affordability is that fees are rising very fast; in fact, they are rising five times faster than the average cost of other goods and services. Here are some important facts. In 2002-03, the cost of child care rose by 17 per cent, whereas CPI was 3.1 per cent. In 2003-04, the cost of child care increased by another 12.2 per cent, whereas CPI rose by three per cent. In 2004-05, the cost of child care increased by yet another 12.4 per cent, compared to a rise in the general CPI of 2.5 per cent. And in the first quarter of 2006, from January to March, child-care costs rose by five per cent, compared to the general rate of inflation of 0.9 per cent. This 5.1 per cent rise in the cost of child care in the first quarter of 2006 is a huge rise for one quarter—the largest, in fact, in three years. Many parents already know that the primary government subsidy, the child-care benefit, has not kept up with fee increases. It only increases in line with CPI.

The following figures show the average cost in each state of full-time centre based care for one child five days a week. These figures came from the federal government in reply to a question on notice from the opposition in August last year. Perhaps not surprisingly, the arrogance of the Howard government has led them to refuse to update these figures. I know Ms Plibersek, Labor’s shadow minister for child care, has been putting questions on notice about more recent fee figures since November 2005. Let’s have a look at these numbers. Average weekly fees in each state for full-time day care in 2004 were, from highest to lowest: the ACT, $251; Victoria, $242; New South Wales and Western Australia, $225; Tasmania, $215; South Australia, $211; the Northern Territory, $207; and Queensland, $204. Apply these amounts to your average weekly household budget and it is easy to see why full-time child care is almost out of reach for most of middle Australia.

In speaking to this motion, which does condemn the Howard government’s poor handling and neglect of child care, it is impossible to ignore the impact of other extreme policies on the ongoing struggle for families to achieve the right balance between work and family. A big part of this equation is of course how family friendly workplaces actually are.

In 2005, the Howard government passed through the parliament the Workplace Relations Amendment (Work Choices) Bill 2005. The act came into effect in May 2006. The new industrial relations system puts employees at risk of being made to work longer hours at shorter notice and for less pay. Women, especially those who have caring responsibilities and who are low paid, are most at risk of losing under these new industrial relations laws. In 2005, the former independent AIRC, the Australian Industrial Relations Commission, prescribed in their family provisions case that employees should be able to take an extra 12 months unpaid parental leave, return to work on a part-time basis after parental leave until the child reaches school age, and extend simultaneous parental leave to a maximum of eight weeks. But not one of those provisions was protected by the Howard government’s extreme industrial relations changes. The flexibility that the government champions is one way, and it is all the employers’ way.

Unpredictable hours affect family life. It is impossible to arrange child care. It is impossible to coach your son’s or daughter’s soccer team. Unpredictable pay affects the family budget. You cannot get a car—let alone fund the petrol—or get a mortgage if you do not know what you are earning from week to week. And what about holding a child-care place? If you have unpredictable casual work, it is almost impossible.

The Howard government’s removal of unfair dismissal protection has also had an immediate effect, and we need look no further than the example of a child-care worker here in Canberra, Emily Connor, who only a few days after the introduction of the industrial relations legislation was sacked unfairly. Emily’s situation was dire. She was given no reason and was told she had 10 minutes to leave the premises. When she—an employee of nearly five years—asked to finish her shift or at least farewell the children, she was refused these reasonable requests. This is the Australia we live in under Mr Howard’s government. It is unfair, those changes are extreme and the neglect of child care has meant that many people—predominantly women but men too—do not have any choice. (Time expired)