Jacinta Collins (Victoria, Australian Labor Party, Parliamentary Secretary for School Education and Workplace Relations) Share this | Hansard source

by leave—Despite discussion during the committee stage, I understand we need to formally move the government amendments. I move government amendments (1) to (4) on sheet BM231 together:

(1)   Schedule 1, item 2, page 3 (lines 9 and 10), omit paragraph 84F(1)(e), substitute:

  (e)   for the income year ending on 30 June 2011—$7,941; and

  (ea)   for each of the income years ending on 30 June 2012, 30 June 2013 and 30 June 2014—$7,500; and

(2)   Schedule 1, item 4, page 3 (line 18), omit “1 July 2010,”.

(3)   Schedule 1, item 4, page 3 (line 20), omit “1 July 2010”, substitute “1 July 2011”.

(4)   Schedule 1, item 4, page 3 (line 22), omit “1 July 2011,”.

These amendments seek to change the start date of the measure from 1 July 2010 to 1 July 2011. As Senator Hanson-Young highlighted, it has been before the Senate for quite some time. This will ensure that the legislation is not retrospectively applied into the 2010-11 financial year and that we do not need to reclaim childcare rebate payments paid to families.

I take this opportunity to reiterate that the average childcare rebate claim is below $2,100, well under the cap of $7,500, meaning that the overwhelming majority of families will not be affected by this measure. In 2011-12 we expect more than 95 per cent of families will have no change—I stress no change—to their assistance. This measure will not affect the vast majority of families but will provide funding for essential improvements to the quality of care for Australia's children. Following some of the earlier remarks from Senator Bernardi, I can stress that the savings produced by this measure will be directly reinvested into delivering the national quality framework and thus improving the quality of care that families are experiencing.

For a family to reach the cap of $7,500, they would need to be paying for care for at least 10 hours a day for more than four days a week at average fee levels. The average use of child care in Australia is much lower, with most parents using around 2½ days of care a week. The most recent childcare rebate information shows claims of less than $2,100, well below the cap of $7,500. We expect that fewer than one per cent of families using child care, who earn less than $100,000 a year, will be impacted. Most importantly, as I have stressed, the measure produces savings to be directly reinvested in delivering the national quality framework. It will also help fund our $59.4 million investment in improving the quality of around 140 budget based funded early childhood services located in rural and remote Australia that provide care to some of Australia's most vulnerable children.

Perhaps I might also use this opportunity to stress a few further points, following Senator Bernardi's contribution—at least so far as it related to these particular measures. Apart from what seems to be a fairly obvious filibuster, Senator Bernardi is seeking to use this opportunity to attack Labor's record on affordability. The affordability issues in child care are critical and are very important, and Labor's record here is quite strong. Let me highlight that over the next four years, as I think Senator Farrell mentioned earlier, our government will provide a record $20.1 billion in childcare assistance for families. It is important to contrast this figure with what occurred under the Howard government. This is more than double the funding for direct assistance that was provided in the last four years of the Howard government. So for Senator Bernardi to talk about the pressures being faced by families—and we certainly do acknowledge that there are some significant cost-of-living pressures faced by some families—and to seek to use childcare assistance as a means of making that point is almost laughable.

The boost in funding is a direct result of delivering on our commitment to increase the childcare rebate from 30 per cent to 50 per cent of parents' out-of-pocket expenses and of increasing the maximum limit for each child from $4,354 under the Howard government to $7,500. Remember that distinction: $4,354 under the Howard government and our cap, which will be $7,500 a year. This 72 per cent increase in the rebate has assisted more than 735,000 Australian families to pay for their child care since 1 July 2008. The proportion of family income is perhaps the most critical point when we are talking about cost of living expenses and the cost of child care, as we know from some of the modelling and other data available to us since becoming far more transparent about childcare costs and funding arrangements. We know that the proportion of the family income being spent on childcare out-of-pocket costs has almost halved since 2004, dropping from 13 per cent to just seven per cent in 2010 for families with one child in care and earning less than $75,000 per year. Rather than those measures that seem to be plucked out of the air by Senator Bernardi, such as the $8 per week increase in childcare fees, the most critical figure for Australian families is what the out-of-pocket expense is for them. We know that that has decreased from 13 per cent under the Howard government to seven per cent last year.

The other important issue that Australian families are most sympathetic about is the quality of child care, and that is what this measure targets. We are not reducing overall spending in child care; we are generating a small amount of savings to ensure that the support to deliver the National Quality Framework is there and that it will deliver better quality care. I would ask any senator to contemplate the questions that I often ask families with children in child care: if you had a child under two years of age, would you prefer a five-to-one carer-child ratio or a four-to-one carer-child ratio, and would you be prepared to pay a marginal amount more to increase that level of care? Almost unanimously, those families I discuss this issue with say yes. This issue around the quality of care is extremely important.

There was one final issue in Senator Bernardi's remarks that I would like to clarify because it is relevant to these amendments—that is, the amendments mean that the paused indexation is now only for three years and not four years. To correct the record, Senator Bernardi was reading from an old copy of the bill and his figure of $86 million is now $81 million.