Nick Xenophon (SA, Independent) Share this | Hansard source

I indicate that I do not support the Family Assistance Legislation Amendment (Child Care Budget Measures) Bill 2010 in that it will reduce the annual childcare rebate limit from $7,778 to $7,500 for four income years starting from 1 July 2010 and it also crucially caps indexation. The government says it is doing this to save $86.3 million over four years, but who actually pays for this? It is the mums and dads of Australia.

Under these changes the cost of care could increase by as much as $22 a day, and I oppose this additional impost on Australian families. It makes no sense at all to be adding to the burden on families and it is extraordinarily difficult for many parents to access affordable child care. It is even harder to access affordable quality child care and it is even harder again to access affordable quality council-run or not-for-profit child care. I think the point needs to be made: what was the point of passing the Paid Parental Leave scheme last week, which I strongly supported, and then ramping up the costs of child care this week?

I note that Senator Hanson-Young shares similar views to mine in relation to this and in fact has been championing the cause of affordable child care in this country. She is on Q&A at the ABC, and I have not had a chance to see her this evening. It is unfortunate that she is not here for this debate because I know she has some very strong and passionately held views in relation to this.

I think it is also important to reflect on what the Childcare Alliance is saying. The case for opposing the cuts to the childcare rebate cap has been put very well by the Australian Childcare Alliance and Childcare Associations Australia. It gives a reminder of what quality long day child care means for families in the economy. The alliance makes the point that women’s participation rates in this country are extremely low by OECD standards and are at their lowest among women aged between 25 and 44, the prime child-bearing years.

Secondly, the Henry tax review was asked by the government to make coherent recommendations to ensure appropriate incentives for, among other things, increased workforce participation. The key finding of an April 2010 Treasury department working paper was that ‘in contrast with previous Australian estimates, the cost of child care does have a statistically significant and negative effect on the labour supply of married mothers. This finding supports policy that reduces the costs of child care to encourage maternal labour supply.’

The alliance makes the point that on average a gross price increase of one per cent would be expected to decrease the hours worked by married mothers with young children by 0.7 per cent. This is entirely contradictory of the government’s policy intent in the Paid Parental Leave scheme—something that I think was welcomed overwhelmingly in this nation. The government is pulling the policy levers in the opposite direction to discourage working families, to discourage families from having kids and making it more difficult for them to cope with having kids by increasing the cost of child care.

This is a bad piece of legislation. It is a case of penny-pinching. If the government wants to penny pinch, it should not be pinching the pennies from families who are already struggling to balance their obligations to their jobs and their families. This is a miserly measure on the part of the government. This is something entirely inconsistent with the rhetoric of the government and indeed with the government’s very good actions last week on the Paid Parental Leave scheme. When you consider it in the context of the budget, $86.3 million, it is something that will be disproportionately felt by working families and mums and dads across the country. It will unfairly increase the costs of child care and therefore it ought to be opposed.

I would like to hear from the opposition in relation to this. Initially they were going to oppose this, and I would like to hear from the coalition why they have had a change of heart in relation to this. They had an opportunity to stand up for the whole issue of affordable child care, affordable community-run child care, yet they squibbed on that opportunity. I think it is incumbent on the coalition, when they had an opportunity to block it, to give an explanation to all those parents who will be paying more for child care. I think the coalition had an opportunity which they have squibbed because they know that, given the position of the Greens and my position, this is something that could easily have been defeated. I think it would have been a defeat that would have been welcomed by families across the country and by the childcare sector, particularly those not-for-profit childcare operators that provide such a valuable service in this country. With those words, the government stands condemned for this penny-pinching measure.