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

I indicate that I will not be supporting this bill as the cost implications of these measures on working families are far too great. There has been a real political blame game in relation to childcare, but may I note that famous phrase from former Prime Minister John Howard, who talked about 'the barbecue stopper'. The issue of childcare is one of those barbecue stoppers, because if you do not have affordable childcare, if fees are continuing to rise, if benefits and support for people to have their kids remain in childcare is diminished, then that will have a major impact on families in this country.

We know that the purpose of this bill is to affect the current childcare rebate, the CCR, retaining its annual limit of $7,500, and the current childcare benefit, the CCB, which will have its income tax thresholds at their current levels for three years from 1 July 2014, so basically the limits will be maintained and the current benefits will be maintained. But normally the CCR limit and the CCB income tax thresholds are indexed on an annual basis in line with movements of the consumer price index, so these measures effectively constitute a freeze on the annual indexation of these amounts, and the consequence of that is to make them less affordable.

I think it is important to put this into perspective. The former government implemented the National Quality Framework, which, unambiguously, is a good thing in terms of childcare. But there are costs associated with that, and my concern is that under the NQR, additional support has not been given to the childcare sector, and that additional cost pressures have been placed on the childcare sector. That needs to be acknowledged in a bipartisan way: that the NQR, with all the benefits contained within it, is actually going to cost more, and that unless you have greater government support for the sector, such as greater rebates or improvements to the childcare benefit, it is going to make childcare less affordable. And what is the consequence of that? The Australian Childcare Alliance, in their submission to the inquiries currently before the Senate—one moved by my colleague Senator Hanson-Young and the other moved by myself—made the point that removing disincentives for women to enter the paid workforce is a very, very significant issue. In their submission they quote the Grattan Institute report which reinforces the economic imperative of improving affordability, particularly for female workforce participation. The report said:

Removing disincentives for women to enter the paid workforce would increase the size of the Australian Economy by about $25 billion per year. The most important policy change is to alter access to Family Tax Benefit, and child Care Benefit and Rebate so that the second income in a family—usually, but not always, a mother—takes home more income after tax, welfare and child care costs.

That is what the Grattan Institute says.

The risk is that, if you reduce the incentives, if you call them back, if you make it less attractive for families to have their kids in child care by making it uneconomic for them to do so, you will go backwards. Our economy would miss out on an extra $25 billion a year in GDP and we would actually go backwards. From some figures I have seen, if you had a significant reduction in the number of women in the workforce, there would be a cost to GDP in the order of $25 billion. So we are talking about a $50 billion differential here.

At this stage, I want to inject the government's proposed Paid Parental Leave scheme into this debate. I do not support it. I do not support it because I believe the policy focus ought to be on making child care more affordable. The Paid Parental Leave scheme, whether it is gold plated, platinum plated, silver plated or copper plated—it does not matter what it is plated with. Even if it is scaled back, it is something that, philosophically, does not make sense. We ought to be ensuring that we have greater participation in the workforce, particularly by women, by making child care more affordable. This bill takes us further away from that—is making us go backwards. I urge the government to reconsider its position on the Paid Parental Leave scheme. I hope that the wise heads in the coalition—those who are prepared to say that this scheme will take us backwards—prevail on this issue. It would effectively make child care less affordable.

The policy imperative, the barbecue stopper that John Howard so famously talked about, is affordable child care. Constituents stop me in the street to say, 'If childcare fees go up another $5 or $10 a day, I am going to forget about staying in the workforce, because it is just not going to be economic.' We know that this has been a political football. We know that this is an issue where it is easy to get involved in a blame game.

In The Australian on 22 June, there was an AAP story by Katina Curtis. Citing a new report, the story said:

Childcare costs have skyrocketed 150 per cent in the past decade, with only electricity and tobacco prices rising at a faster rate.

You can understand why tobacco prices have gone up. Electricity prices are another issue altogether. Ms Curtis's article continues:

Parents returning to full-time work after having a child can now expect to lose up to 60 per cent of their gross income to childcare fees, loss of benefits and higher income tax rates.

That is not the way we should be doing things. We need to look around the world to see which countries are dealing with this issue better. Some provinces of Canada have a much more comprehensive system in place and their level of female participation in the workforce is significantly greater.

The Australian Childcare Alliance made an excellent submission to the Senate inquiry into the delivery of quality and affordable early childhood education and care, or ECEC, services. Their report said:

The ACA Parent Survey 2014 and ACA What Parents Want Survey 2013 highlight that the high cost of care is a determinant of families' ability to access ECEC. More than 60 per cent of families indicated that they would increase their use of childcare if cost were not a barrier.

Respondents to the parent survey also highlight that when fees increased by 10 per cent, approximately 48 per cent of parents would decrease their usage of childcare by one or more days or withdraw completely from care. This result is exacerbated with a 20 per cent increase in fees, where more than 70 per cent of families indicated that they would reduce usage by one or more days or withdraw completely.

We need to take that into account. This is not the way to go. I believe these measures are foolish. Mr Acting Deputy President Bernardi, I know it is unfair of me to address you while you are in the chair—because you are not able to interject—but I wonder if you will be raising this at your National Press Club speech in a few weeks' time?

I cannot support this bill. I can think that this government has inherited some real problems from the former government. The former government put a framework in place—very worthy, very laudable—but there was no funding for it. That has led to an increase in childcare costs. This is not a greedy sector. This is a sector doing its very best. The for-profit, the not-for-profit and the community childcare centres are all trying to do their best to deliver quality care and education for children, but life has been made difficult for them—and this bill will make things even more difficult.

We need to address those issues as a matter of urgency. I believe that this bill will make child care much less affordable. I am grateful to the wise heads in the Australian Childcare Alliance for their submission. Indeed, all the submissions made to that inquiry—from the union movement and from the not-for-profit sector—made a lot of sense. By freezing the indexation of this support to families for child care, we will see more and more women leaving the workforce.

I want to take issue with what the assistant minister, Susan Ley, said this morning on Radio National. I acknowledge that the minister has a difficult job in grappling with the challenges of this sector, especially given the current budgetary environment. I acknowledge that and I acknowledge her genuineness in trying to deal with these issues. But I take issue with the government when they say, 'We will look at these issues once the Productivity Commission inquiry has been dealt with.' I suggest that this government is capable of walking and chewing gum at the same time. It can deal with the immediate issue of ensuring that child care is not made less affordable. This bill makes child care less affordable. I do not think we can use the Productivity Commission inquiry as a smokescreen, cover or excuse not to act now on this immediate issue.

The Productivity Commission inquiry will be important, but I believe that we need to reject this bill. The government has to go back to the drawing board and that includes having a good hard look at the Paid Parental Leave scheme—what it will cost and what the benefits would be if we scrapped that scheme and looked at making child care more affordable. That to me is the real barbecue stopper for working families out there in the suburbs.