Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

On 29 October we shall be digesting the recommendations of the Senate inquiry into provision of child care, looking at the ABC Learning collapse and related matters. The focus of the inquiry is on non-parental child care in Australia; however, its findings must be viewed in the context of the care of all Australian children. We must widen the definition of ‘child care’ to include Australia’s biggest child care provider by far: parents. If we continue to devalue and neglect parents as the nation’s preferred childcare providers, we are headed for a social and economic disaster. As the coalition shadow minister for early childhood, education, child care, women and youth, Sophie Mirabella, has warned on numerous occasions, parents are being cut out of the Rudd government’s childcare consultations.

What has gone unnoticed in the childcare debate is that the Rudd government has steadily increased funding for day care and other non-parental care at the expense of parental child care. By 2011, spending for parental child care via family tax benefit B is projected to be around $3,100 per family, which is around half the average funding of $6,000 in childcare funding for families using day care and other non-parental care. So mums and dads who care for their own children will get an average of half as much as families who outsource their childcare work.

The Rudd government is intent on increasing this funding gap. The Minister for Early Childhood Education, Childcare and Youth, Kate Ellis, announced on 17 August 2009 that the Labor government will pay an uncapped additional amount to fund third-party child care. Minister Ellis committed the government to paying half the increased cost of new day care sector regulations affecting 830,000 children. That could mean families will pay an extra $1,500 for child care per year. The Secretary to the Department of Treasury, Ken Henry, in a speech offering his inappropriately personal views on 3 September 2009, proposed phasing out the family tax benefit supporting parental care once children reach the age of six. This makes no sense when many of the problems in today’s teenagers result from undersupervised and underparented children.

The funding discrimination against parental careers applies both to post birth and to ongoing funding for children’s care. The Rudd government’s proposed Paid Parental Leave Scheme would pay for 18 weeks at $544 per week. It is a form of childcare funding because it subsidises parental child care in the short term in order to encourage women to return to paid work when their babies are four months to a year old. This promotes non-parental care of children when mothers return to paid work.

The baby bonus is also a form of short-term parental childcare funding, but it generally supports parents who plan to do their own childcare work. If the Rudd government is re-elected in 2011, post-tax paid parental leave will give an average of $7,342 to paid workforce mothers. This is 1½ times the baby bonus of $5,000 per family for less valued mothers caring for their own children. The figures I refer to are set out in the analysis of children’s care funding tied to care type and workforce status dated July 2009. The analysis was provided to me by one of my constituents, Mrs Tempe Harvey, of the newly formed Kids First Parental Association of Australia.

Why should we allow parents who want to do their own childcare work to be discriminated against, both at the time of birth and in the longer term? Australia’s social policy gurus suggest various economic and social arguments for this discrimination. Let us first look at the so-called productivity argument for giving more funding to institutional child care than to parental care. According to the Productivity Commission, the Rudd government’s expensive Paid Parental Leave Scheme would add an extra six months to the working life of women. We are told that, on average, this will increase national productivity. I note that the Productivity Commission concedes that the scheme would also cause a slight reduction in the wages growth for females, given the increase in the female labour supply.

Every parent is a working parent contributing to the national productivity. The Paid Parental Leave Scheme will simply move mothers from family work into paid work. Many would argue that family work is the most productive job in Australia. What about the lost productivity of decreased participation in the family workforce? Parents are doing the job of childcare workers, chefs, dieticians, financial managers and psychologists, to name just a few. By subsidising parents into paid work, we also lose the economic benefit of their volunteer community work. In the UK in 2008 it was reported that mums caring for their own children saved the economy an estimated £1 billion per year in volunteer work alone.

As the forward estimates for 2011-12 reveal, institutional child care costs far more to support than parental child care. Taxes will increase every time day care subsidies or paid parental leave entitlements go up. Rising taxation to pay for institutional child care and paid parental leave will stop many new businesses from forming and will force marginal ones to close down, causing job losses. Less business activity will result and there will be lower productivity. Increased childcare subsidies will therefore reduce our capacity to provide priority social services, such as care for the aged.

The so-called childcare affordability crisis is being fuelled by the Rudd government. Its solution is to throw money at the problem—in this case, day care. However, everyone’s childcare costs would go down if the government stopped pumping taxpayers’ money into the day care industry. If subsidies were the same for all childcare choices, many more parents would choose to do the caring themselves or use informal care arrangements. The market for non-parental childcare would decline, so there would be no more ‘crisis’. In short, the Rudd government’s productivity argument is fundamentally flawed. It fails to recognise the much greater economic downside of lost family work productivity, increased childcare costs, higher taxes and job losses, not to mention the cost to future governments of serious harm to our social capital.

Australia’s social policy gurus argue that children will benefit from increased government funding for institutional care. But where is the evidence? The Centre for Independent Studies published an excellent article in 2008 entitled Six Social Policy Myths. The first myth is that all children can benefit from an increase in government spending on institutional child care. Let us look at the evidence. The gold standard research into childcare effects is the United States longitudinal study, known as the NICHD study. It stands for the National Institute of Child Health and Human Development and it is the government body that is funding the research to the tune of $150 million. This study is the largest and most extensive investigation of childcare effects ever. The children in this study—more than a thousand—were cared for in a broad range of settings, which included their own parents, nannies, family day care and day care centres.

The NICHD study found a higher risk of depression, aggression, anxiety, lack of empathy and behavioural problems in daycare children proportional to the amount of time they spent in day care, regardless of its quality. The children have been followed up for 15 years so far, and these problems have not gone away. The 15-year-olds who spent long hours in day care when very young now have abnormally low cortisol levels, a previously unknown effect indicating increased stress in early years. Australian daycare advocates tend to dismiss the NICHD findings, claiming that Australian conditions are different and that we have higher quality child care than that in America. However, there is no evidence that this is so, and in any case the NICHD study found harmful effects even from high-quality day care. The question could be settled definitively if a properly conducted, randomised, double-blind, independently evaluated longitudinal study were undertaken in Australia. In the meantime, the NICHD research cannot be ignored.

It is not surprising that countries that have heavily subsidised day care at the expense of parental care are experiencing social problems. In Sweden, for example, policies similar to those now being pursued by the Australian Rudd government have led to over 80 per cent of children aged between one and five being placed in daycare centres in 2008. Mr Jonas Himmelstrand addressed the Swedish parliament in December 2008, citing the social breakdown in that country which he believes is associated with non-parental care in the Swedish child’s first five years and the ongoing absence of parents in Swedish schoolchildren’s lives, brought about by a highly taxed society of dual-income families. Mr Himmelstrand drew attention to plummeting educational results in Swedish schools; unprecedented levels of youth violence, suicide and depression; more hostile and less consistent parenting; stressed parents; lower quality parental relationships; high divorce rates and high absenteeism from paid work.

The Rudd government’s policy for children’s care has been hijacked by social engineers and dubious economic advisers who have not considered the effect of their proposals on children’s wellbeing. The Rudd government’s economic and social arguments for paid parental leave and extra funding for institutional child care are fundamentally flawed. Rudd’s childcare policies will harm the health, happiness and productivity of our citizens in the long term. Australians instinctively realise this and that is why we are constantly hearing that women, in particular, feel trapped and unable to satisfactorily juggle the demands of paid and family work under the current system. Subsidies biased towards non-parental care are forcing more and more women to give up their family’s childcare work for paid work outside the home. Despite being punished by the childcare funding system, most parents choose to care for their own children.

Australian parents do not like Rudd’s social engineering agenda. They overwhelmingly believe their children are better off, happier and more productive if they are able to spend more time caring for them by forgoing part of the family income. Parents do not want or need expensive hand-outs, such as Rudd’s paid parental leave, that will tax them heavily and drive them away from their children into paid work. Instead, they must be free to choose the best care for their children, guided by their instincts and wishes. The federal government must scrap its discriminatory childcare system and provide one childcare system for all Australians. We need a new system that equally respects and funds the childcare choices of all parents, whether that is for parent care, nanny care, family day care or a childcare centre.