Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

I rise to speak on the Family Assistance Legislation Amendment (Child Care Budget Measures) Bill 2010. This bill comes at a difficult time for Australian families. They can only be feeling profoundly disappointed at the failures of this government to support them and their families, given promise after promise that was made before and since the last election. The general report card on the government is pretty poor. Before the last election, the commitment was to high-quality, affordable child care and universal access to early childhood education. The actual impact of the government’s policies has been to reduce the government’s financial assistance for child care and increase costs for both child care and early childhood education.

Let us have a look at some of the promises that have gone absent without leave—and many of these were canvassed at the recent Senate estimates. The commitment to 260 new childcare centres was quietly withdrawn in April this year—coincidentally, on the same day as the Melbourne Storm salary cap debacle erupted in the media—and it was buried on the second page of a ministerial press release with no indication in the heading of the press release as to what the most profound part of that press release was. We always look to the second page of the press release for the key announcement, don’t we, Mr Acting Deputy President? The upshot of that press release was that 222 childcare centres will now not be proceeding. After all of the excitable claims about ending the double drop-off, which we heard time and again before the last election, that was not to be. That is another promise not met, amid suggestions of supply issues, which is one thing if you live, as many constituents obviously do, in outer metropolitan areas but another thing altogether if you are fighting for an affordable space for your child in inner city Sydney or Melbourne.

Rural childcare centres that operate on a part-time basis are also under threat. Minister Ellis will only guarantees six months accreditation, which it virtually impossible to employ staff or to start new services. If you are a parent looking for childcare services, your choices will now also be reduced with the removal of the government’s start-up funding for family day care and remote area day care. Clearly, reduced numbers of small business people, particularly women, will be able to start this home based service without the grant; so families who want to opt for the alternative, and often cheaper, family day care will face further shortages of places from 1 July 2010. The government has also cut funding for occasional care. This is an essential service for parents wanting emergency child care or access to a playgroup. Even the after school community program will cease operation from the end of this year. All of these decisions have a cumulative effect on the choices and abilities of parents to find good reliable care for their children so women can maximise their participation in the workforce.

In the recent budget a raft of supposed savings were announced. These included a reduction in the childcare rebate cap by $278 per year for the next four years, which is contained in the bill before us at the moment. This comes at a time when the new quality agenda is also expected to push up daily fees and reduce the number of childcare places. This will significantly increase the cost of child care. Clearly, the new national quality agenda means that additional staff with higher qualifications will be required. Parents will face extra daily costs of between $13 and $22 for babies and toddlers in care.

In relation to the budget decision in this bill, the new capped limit is cut to $7,500, which is reached as soon as child care costs hit $15,000. This will not be indexed for years. Full-time care over 48 weeks per year at just under $70 a day would reach this limit. Parents of babies and toddlers who pay higher fees because of higher staff ratios will be hardest hit. Three days of care a week at $125 a day, which is not uncommon for baby and toddler care in high-demand city centres, would cost $18,000 a year. Parents would be $10½ thousand out of pocket.

I have already referred to estimates by Childcare Alliance Australia that fee increases of between $13 and $22 a day will be necessary from next year to cover the small staff ratios and higher staff qualifications required of centres to meet the national quality standard reforms. It is worth noting that, in a survey by the Daily Telegraph in Sydney in March, parents were found to be paying an average of $100 a day for toddler child care in Sydney’s CBD.

Labor is selling this rebate cut on the basis that it will only affect three per cent of working families receiving CCR and that these families are wealthy. This is not a realistic assessment. The reality is that parents all over the country are reassessing whether they can afford good quality child care or the number of days of care per week now used. There is a direct relationship between affordable child care and the number of hours that parents, especially women, can work. The finance minister’s claim that these reductions are ‘just a bit of a haircut’ shows how removed from reality the government is.

Parents and the childcare sector have every right to feel let down by this government. The government has attempted to justify the CCR reduction by claiming that the savings of $86.3 million over four years will instead assist in paying for the national quality reforms agenda. But, again, we know from the budget papers and Senate estimates that the government is spending some $100 million on administration and red tape and $120 million on advertising. This is not ‘a haircut’; it is an insult to Australia’s working families.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on the Family Assistance Legislation Amendment (Child Care Budget Measures) Bill 2010 put forward, sadly, by the government on budget night. It is going to have a significant impact on families who access child care right around the country—and the pain will grow not just for the coming financial year but across the forward estimates.

It was interesting to sit here listening to the opposition’s spokesman because I agree with a number of his points. This is not a good piece of legislation; we should not be looking for budget savings in the really important essential service area of child care. We need to see more funding directed into the area and a better way of ensuring that the government can get their quality outcomes addressed through how they actually pay for child care. Of course, the Greens have put on the record numerous times that the childcare rebate is not the best way of delivering good quality, affordable or accessible child care. But that is what we have got and that is what parents rely on week in week out to go some way towards meeting the very expensive cost of good quality child care.

It does cost money to pay qualified people for their wonderful skills in educating and caring for our youngest kids. It is an essential service for parents and it is an essential service for the country. We know that between the ages of zero and five is the most crucial time for educating and caring for children. The best investment we can make in their educational outcomes into the future is to get it right in that age group. The three core principles that should underpin any type of early education and care in this country are quality, affordability and accessibility. The government’s move to cut the childcare rebate, to freeze the indexation and to make it more difficult for families right around the country to afford good quality child care shows a total misunderstanding of the struggle that working families and parents have every week.

Every week they make choices to ensure that their children are looked after in good quality care and it is expensive. The government needs to accept that if we want good quality childcare, if we want a framework that insists on that right around the country, if we want qualified people looking after our most vulnerable kids at the time when we need to be investing in good quality care and education then we are going to have to pay for that. This cost should not just be slapped on the shoulders of parents; we need the government to help foot the bill to ensure that we are investing in these kids’ future.

The government should not be using childcare and early childhood education as the scapegoat for finding budget savings. On the point of budget savings, it may not seem an awful lot in the big scheme of things—$86.3 million over four years is all this measure would save the government—yet it would work out as hundreds if not thousands of dollars per child for families that this is going to affect. It may not be much for the government in the big scheme of things in the global budget, but it would have a very significant impact on families right around the country. As I said, as the quality framework continues to be implemented the cost of delivering good quality care is going to rise and unfortunately the government have not met this challenge with a way of supporting parents to meet those costs. Instead they have done the exact opposite and they are going to make it more difficult for them to accept it. While I said I agree with a number of the points that were raised by the opposition in relation to this bill, I am sad to see them support it, that they are simply going to wave it through. It is not good policy, it does not make financial sense and it is going to make the lives of families far more difficult.

The Greens will move an amendment to this piece of legislation which would make the childcare rebate accessible on a fortnightly basis. At the moment parents have to wait to access the rebates every quarter, so every three months. You pay your childcare fees weekly or fortnightly and you keep paying, keep paying and keep paying yet it is not until three months later that you get your rebate. That has a very significant impact on family budgets. I have written to the minister about this and spoken publicly about this. Let us try and ease that burden by at least helping with the budgeting situation by ensuring that that rebate is paid fortnightly. This was promised by the Rudd Labor government during the 2007 election, but the government has not done so. It seems that they are not prepared to put more money in to ease the cost for families. As the cost of childcare is going to rise because of the quality framework and ensuring that we have good quality care then, at the very least, let us try and help families manage their budgets. Waiting for three months for their $6,000 or $7,000 rebate is not very helpful. That is the crux of it.

I do not understand why the government have targeted childcare as a place to try and find budget savings. It does not make sense. It is going to make family budgets more difficult and it is going to make it more difficult for the government to sell its message about the importance of a good quality framework that needs to be rolled out around the country. We need well-qualified people and good quality care for our kids. The government are going to have a big problem trying to sell the importance of those reforms if they are not prepared to fund them. They are reforms that the childcare sector, families and parents have been waiting for for a long time, yet it seems that this government will have an uphill battle on their hands in trying to sell the importance of it if they are not going to carry the costs to help parents afford good quality care. The move by the government to cut the childcare rebate, freeze the indexation, is going to make things far more difficult and flies in the face of the three core principles of quality, affordability and accessibility.

This is just another issue in a long line of broken promises by the government in this area. We saw the axing of the 260 childcare centres and the flimsy figures used to excuse that, saying that there was a 91 per cent-plus vacancy rate across the country. Parents were told they did not need to worry as they could get their kids into childcare centres. We know that is simply not true. If you are in a metropolitan area or you are in a rural or regional area that is simply not true. If you have a 12-month-old child chances are you will be on a waiting list for quite some time or you are going to have to go back to your employer and negotiate to work on a different day because there are no spots on the particular day that your shift has been offered. The government have not been genuine with the Australian community or families in relation to their commitment to childcare. They keep talking about it yet everything they do is making things more difficult for them.

Yes, we need good quality care. Yes, we need a framework that implements that. But the government must fund that properly and support parents to afford that. Cutting the childcare rebate and cutting the commitment to build new centres which would provide more affordable places is simply going to make things much harder. I hope that under the new leadership of the federal Labor Party Prime Minister Gillard will see sense, that making things more difficult for parents to afford good quality care and access places will be reviewed. I hope that the government sees sense on the amendment that we are putting forward, which is not going to cost the government any more money. Exactly the same amount of money will be given back in the rebate, but it will make it more affordable for parents because they will not have to wait to get their rebate every three months; they will only have to wait a fortnight—just like all other government and parenting payments. It simply makes sense. I would like to think that the opposition would support that amendment because it is a fundamentally important one. Government bureaucrats may not care much about this as they draft these pieces of legislation, but to families who have to carry the cost of weekly childcare fees it is important that they get the rebate in a fortnightly instalment as opposed to waiting for a quarterly rebate. This is going to have a very significant impact.

I thank my colleague Rachel Siewert for clearly putting forward the Greens position on this piece of legislation earlier in the week. She pointed out how important investment in early childhood education is for any government, regardless of who their leader is. Regardless of what side of the benches we sit on, we need to be investing in the early education and care of our kids. We need to ensure kids have access to education and care of the highest quality. We must make sure that people can access it and it is affordable. There is no use having the best quality care in the world if parents cannot afford it. We need to help them to carry that cost. Child care and early childhood education are not a luxury, they are an essential services that families right around the country rely on every day. We need to make sure not only that families can afford it but also that it is good quality. I will be moving an amendment in the committee stage.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

You would have every right to question the government’s commitment to working families after looking at the Family Assistance Legislation Amendment (Child Care Budget Measures) Bill 2010. The government is trying to slash the childcare rebate by $278 per child per year. This is a blatant attack on working families by the government and it represents a real kick in the guts to Australian working families. It is a heartless decision that strikes at the heart of the family budget and puts even further pressure on families who are already struggling to pay the bills and make ends meet.

The government has ripped into one of the most important items for ordinary hardworking Australians and pretends it is nothing. The government has abandoned its pledge to help working families when it comes to accessible and affordable child care and has put mums and dads out of pocket by an extra $278 per child per year. But we should not be surprised, because this broken promise only adds to other broken promises by the government.

For a family with two children, this budget cut will cost more than $500—that is, a family budget will be hit with $500 extra in childcare expenses. Any family that pays more than $57.70 per day in childcare fees for five days a week will be worse off under this change. On top of this, the childcare rebate will no longer be indexed to the CPI, like it has been in the past. What this means is that, as childcare expenses go up and up each year, Australian families will be left more and more out of pocket. Even the Henry tax review was urging for greater support. It suggested giving low-income families a 90 per cent subsidy for child care. But the government has done the very opposite and hiked up the effective cost of child care for those that depend on it most.

This latest attack on working families comes only a few weeks after the government broke another election promise by scrapping its plan to build 260 childcare centres. These 260 new centres were needed because there are already many families who have trouble finding an affordable spot in child care for their kids. Clearly the government does not really care about the extra costs and looking after working families in the area of child care when it goes back on promises like this.

The government has said it is committed to helping working families, but how are families supposed to go to work if there are not enough affordable childcare centres to look after their kids and it is too expensive for them? We know where this promise went: it went to the Labor election promise graveyard. Before Mr Rudd was elected in 2007, he said in a campaign ad:

… I believe you make your own luck.

He wasn’t wrong there! You have no choice but to make your own luck under the Labor government, because it has broken its promises in regard to child care and has slapped working families in the face with higher costs.

On budget night, when these stingy cuts to the childcare rebate were announced, Family First was the only party to speak up. There was little or no objection from any other party about the cut to the childcare rebate. It was Family First that first raised the issue. There was such an overwhelming public outcry against the government’s cuts to the rebate that the coalition finally took notice and pretended to care. I use the word ‘pretended’ because the pretenders, the alternative government, said they would also oppose the cut to the childcare rebate. That promise had a shorter life than any promise by the Rudd government. That is what you get when you are dealing with the hollow words of the two major parties.

Family First is the only party that is genuine about helping families. Family First will not be voting for this bill because it is a cruel bill that punishes families who need to put their kids in child care and hits them hard in the hip pocket. If the government wants to cry poor about needing the extra savings in the budget, perhaps it could stop feathering its own nest. It just stinks to think that this is the second year in a row that former Prime Minister Rudd—and Prime Minister Gillard, I am sure, is probably not going to go back on it—has increased staffing levels by more than 60 in the Prime Minister’s own department. It is a real smack in the face for all Australian mums and dads who will now be faced with higher out-of-pocket childcare fees when they see Prime Ministers feathering their own nest. At a time when Australians are told to cut back and make do, the excesses of a Prime Minister increasing their own staff is obscene. We raised this after the previous budget and we have raised it after this budget. It is incredible to think that, in the last two budgets, the Prime Minister’s own staff has increased by nearly 60 each time. That is excessive. The government cries poor and says that it just does not have the money to maintain the childcare rebate at the same rate but has no problem splashing out $18 million of taxpayers’ money to boost the Prime Minister’s office budget. I find the government’s priorities warped. This is a government that has clearly lost sight of helping its working families. Family First will not be voting for the stingy cut to the rebate, and I am surprised the opposition has gone for it.

Mark Arbib (NSW, Australian Labor Party, Minister Assisting the Prime Minister for Government Service Delivery) Share this | Link to this | Hansard source

I thank the senators for their comments. I also note the opposition’s support for the Family Assistance Legislation Amendment (Child Care Budget Measures) Bill 2010 and thank them for it. I will make a number of points in response to some of the concerns, particularly from Senator Hanson-Young and Senator Fielding. Our government has a clear record on early childhood education, on child care and on supporting Australian families. I do not think there is any doubt that we have prioritised affordable and high-quality child care for Australian families and their children and we remain committed to this. Evidence of this commitment is clear in our investment of $17.1 billion in early childhood education and child care over the next four years. That is $10 billion more than was provided in the last four years of the Howard government.

In July 2008 we delivered on our election commitment to increase the childcare rebate from 30 per cent to 50 per cent of parents’ out-of-pocket expenses, something that senators failed to mention today. This extra support goes directly to parents to help them with the cost of child care. We also met our election commitment to lift the maximum families could claim from $4,354, as it was under the previous government, to $7,500 per child per year, a substantial increase of $3,146 a year, or some 72 per cent. Last year 670,000 Australian families benefited from the significant reforms, enabling them to claim back half of their out-of-pocket childcare costs up to $15,000 a year for each child in care. Further, as a result of these changes, ABS statistics also show that childcare costs to parents fell by over 20 per cent. Under the previous government families were also forced to wait until the end of each year to access their childcare rebate payment, something that we all remember. This put pressure on family budgets throughout the year, something that the Rudd government acted on. We promised it; we changed it, going to quarterly payments giving parents assistance closer to the time they incurred their childcare costs.

In addition to the childcare rebate, we also provided $8.4 billion over four years for low- and middle-income earners through the childcare benefit. This means we cover more than half of childcare costs for these families. In total, we will provide $14.4 billion over four years for parents through childcare benefit and childcare rebate. This is $8 billion more than the Howard government provided in childcare fees assistance in their last years. This is a commitment to childcare quality, to reducing costs and to helping Australian families. That is what the Gillard government stands for, and it is something we are proud of.

Question agreed to.

Bill read a second time.