Matt O'Sullivan (WA, Liberal Party) Share this | Hansard source

I too rise to speak in support of the Family Assistance Legislation Amendment (Child Care Subsidy) Bill 2021 and I really do take great pleasure in doing so. Step by step and reform by reform we are making child care more accessible for Australian families, particularly for those families that most need it. This builds on the previous reforms that we have made to the childcare sector which have made a significant difference to families and which have also been well received by industry and childcare providers. This bill represents this next step. It gives effect to the Morrison government's commitment to make child care as accessible as possible. It is all about supporting families and backing them in the workforce safely knowing that their kids are getting the best possible care.

This bill targets additional supports to all CCS-eligible Australian families who have more than one child aged under six in child care. This is around 250,000 families, who will benefit by around $2,260 per year. That's a significant number of families, from right around the nation, and they're going to see the practical impact of what we do here in this place. That's what it's all about. While those on the other side are often hell-bent on scoring political points, using the most inappropriate topics—we've just heard contributions along those lines—we're over here plugging away, putting in place the reforms that deliver a practical outcome for Australian families. We're listening to them. We're delivering for them. We always have, and we always will.

Those on the other side often couldn't care less. They're more concerned about the things that do quite the opposite: undermining the vaccine rollout, playing politics with the pandemic. But over here we're talking about a reform that is going to impact 250,000 families across the nation, putting money back into their pocket. That's what we committed to do at the last election, and that's what we're following through with here, even with this bill.

From the middle of next year we will increase the childcare subsidy available to families who have more than one child under the age of six in child care. This means that families who have more than one child in child care will see their level of subsidy increase by 30 percentage points to a maximum subsidy of 95 per cent of fees paid for their second child and subsequent children. Around 50 per cent of families who benefit from the measure—those earning less than about $130,000—will receive the maximum 95 per cent subsidy for their second child and subsequent children. These families will pay, on average, $21 a day for two children in child care. Around 95 per cent of families who benefit from the measure—those earning about $250,000—will receive a subsidy of at least 80 per cent for their second child and subsequent children, paying, on average, $73 or less per day for two children in child care.

We'll also remove the $10,560 annual cap on the childcare subsidy for families earning over $189,390, benefiting around 18,000 families. This means that families with multiple children don't exhaust their childcare subsidy cap sooner in the year for younger children. Those families shouldn't be at a disadvantage—quite the opposite: we need more Australians to be having kids. As Peter Costello famously said, have one for mum, one for dad and one for the country.

These changes will put more money into the hands of Australian families, especially those who need it most. Those on the lowest incomes will continue to receive the highest rate of subsidy. This is a core principle of our childcare subsidy. It will ensure that families are supported to access affordable early learning and care. The activity test remains in place to ensure that families are undertaking activities such as working, training or studying in order to be eligible for childcare subsidies. This is a very sensible measure. This measure reduces workforce disincentives for families and encourages parents—especially second-income earners, who are more often women—to go back to work or to work more if they choose to do so.

What does this mean in practical terms? It means that families who have two children in care for five days a week, 50 weeks of the year, and are earning $60,000 will save $52 week, will be entitled to an 85 per cent subsidy for their first child and a 95 per cent subsidy for their second child and will receive $936 in a weekly subsidy, with an out-of-pocket cost of $104. Those earning $100,000 will save $102 a week, will be entitled to a 75.4 per cent subsidy for their first child and a 95 per cent subsidy for their second child and will receive $886 in a weekly subsidy, with out-of-pocket costs of $154. Those earning $180,000 will save $156 a week, will be entitled to a 50 per cent subsidy for their first child and an 80 per cent subsidy for their second child and will receive $676 in a weekly subsidy, with out-of-pocket costs of $364.

Across the year, the average savings for families as a result of these changes will be $783 for families earning under $70,000, noting that these families already receive a very high subsidy for all children in care; $1,650 for families earning between $70,000 and $120,000; and $2,804 for families earning between $120,000 and $150,000. This support is targeted towards those who need the most assistance. Sixty per cent of the additional investment goes to families earning under $180,000. The maximum childcare subsidy rate will increase to 95 per cent for the second and subsequent child, which means lower-income families, who already receive very high levels of childcare subsidy, will still benefit from these changes. Importantly, all types, except in home care where a family rate is paid, are covered. The measure is primarily intended to support children attending long day care and family day care as this is where most children aged under six attend child care.

It is important that the government assistance remains targeted to ensure that it is sustainable over the long term. This government believes that these settings strike the right balance between providing targeted assistance to those that need it most while maintaining fiscal responsibility. Other models recommend providing assistance to high-income families, including those earning well above $350,000. Those models go against our core principles for the childcare package.

For me, it is all about choice. I know that there are a variety of views in this place on child care. That is fair enough. But this is about giving Australian families options, letting them make the decisions that impact on them based on what works for them and what they think is in their best interests. If parents want to put their children in child care and continue to be in the workforce, pursuing a career and supporting their family, that's great. They ought to be supported to be able to make that choice. If a parent decides to remain at home then that is also good, if that is what is in their interests and what they want to do for their family. This isn't a one-size-fits-all policy for families; they need to decide what's best for them and their own families. They are in the best possible position to do that. It's not our place as legislators to be dictating to Australian families what they need to be doing. It is up to them to decide. That's what we are doing. We are backing them to do that. We are backing them. We are backing them with both of those options. We are providing that choice. These are thoroughly Liberal policies.

With that, I believe that we should keep working to make child care more accessible to those that want to take it up. This bill is just that next step, but it isn't the end. We need to keep plugging away, consulting with parents, providers and industry to continue to make reforms which make child care sustainable, accessible and of the highest possible standard.

One thing I believe that we should be looking at as part of this next step in support and in continuing with these reforms is policies such as income splitting. We know that the early years in a child's development are the most critical. Splitting income for taxation assessment purposes will provide further choice to parents. It will also simplify the options for parents, including supporting a parent that chooses to stay at home or even facilitating informal paid childcare arrangements with grandparents and the like. Income splitting will go a long way to making child care even more accessible to families and backing them as they plan for their financial future. It is something that I strongly believe we should be putting forward in the next tranche of reforms.

This bill supports choice. It backs Aussie families and it will put more money back into their pockets. I commend this bill to the Senate and I commend, indeed, the Morrison government for backing families to make the right decisions for their own circumstances.