Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

I rise this evening to make some remarks regarding the Family Assistance Legislation Amendment (Child Care Rebate) Bill 2011 and I am very pleased to do so. The shadow minister for child care and early childhood learning, Susan Ley, the member for Farrer, is responsible for this in the other place. The childcare rebate is available for families and it covers a percentage of the—

Helen Kroger (Victoria, Liberal Party) Share this | Link to this | Hansard source

Senator Nash, can we just hold it there. There is just way too much noise in the chamber. Could senators who are leaving the chamber please do so quietly. Thank you, Senator Nash.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Thank you, Madam Acting Deputy President. It is available to cover a percentage of the out-of-pocket expenses associated with approved child care. The aim is to assist parents who are working, studying or undertaking training by providing that extra financial assistance that they need. It covers 50 per cent of those out-of-pocket expenses.

Before the last election the coalition committed to change the payments, which currently happen quarterly, to weekly payments. We certainly believe that a weekly payment is going to be far more beneficial for families who are struggling, as many of them are, to meet the costs of child care. It certainly seemed appropriate and the right thing to do to support the move to have that rebate paid weekly. This is about affordable and accessible child care for parents. It is interesting to see—and the coalition is very pleased that the government has followed our lead—that this bill requires the change in those payment to a weekly or fortnightly arrangement. The bill says it can be either a weekly or fortnightly arrangement because that depends on whether the childcare centres’ reporting is weekly or fortnightly. The majority are done weekly.

The rebate under this bill can also be paid directly to the provider. That is an option that has not been available before and one that we support in terms providing assistance to those childcare providers. Of course, if those parents choose to have the rebate come directly to them, that will continue to be the default mechanism and the rebate will still go to those parents. It is about helping parents. It is about ensuring that they have ease of access to that funding mechanism from the government. As I said, we support that from the government and we are supportive of that aspect of the bill.

It is interesting that this legislation to ease the way these payments happen for parents is actually even more necessary for parents because of the government’s changes to the childcare rebate. What we have seen them do recently, through a bill that was debated here recently and is still before the Senate, is to decrease the childcare rebate from $7,778 down to $7,500. The government has also cut the indexation for that rebate completely.

I did make some comments in the last sitting around that bill on that aspect. I certainly believe it shows that this government is out of touch with the needs of families out there in our communities, particularly our regional communities. What we have seen from this government is a cutting of the rebate through that other legislation and taking away the indexation completely. This government should be doing more to assist families with their childcare costs and childcare expenses. They should be making it easier, not making it harder. Parents will welcome this speedier mechanism for that childcare rebate because at least it will be one thing—one very small thing admittedly—that will assist to ease some of their childcare burden.

I know many of our families out there in the communities have been quite astounded by the fact that the government would actually move to cut the childcare rebate. I know many families in regional areas were quite furious that the government would move to cut that. When the government talks about assisting families and assisting working families and then turn around, drop the rebate and cut the indexation simply just does not make sense if this government really believes that families need to be better assisted.

The government has said that $86.3 million will be saved by those changes that it has made. The government claim that they need that funding to fund the national quality framework. It seems quite extraordinary that this government would be identifying funding that is going to make it more difficult for parents to fund the national quality framework, especially when you compare it to some of the waste and mismanagement that we have seen under this government. It was $81.9 million that has been wasted by this government administering an emissions trading scheme that does not even exist. It is no wonder that families out in our communities are at least perplexed and probably at worst furious with this government where they need to strip $80 million off families by lowering their payments for the childcare rebate when they have wasted around the same amount of money administering an emissions trading scheme that does not even exist.

If this government had any ability at all to manage the economy properly we would not need to see that cut in those childcare rebates to go towards funding the national quality framework. We only have to look at things like the pink batts debacle, the Home Insulation Program—$2.4 billion that has been wasted and mismanaged in that program. Yet here is the government ripping $80 million away from Australian working families to pay for another program because they have wasted and mismanaged so much money in other areas. We only have to look at things like the BER, the school halls, the Building the Education Revolution, Madam Acting Deputy President Fisher. I know you have been very focused on that and making sure that people out there in the Australian community are aware of the waste and mismanagement. It is about a $1.7 billion blow-out on the school halls program. Yet here we have the government—

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

Have you talked to any parents?

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

I will take that interjection. Senator McLucas asked me if I have talked to any parents. I think Senator McLucas would know that I talk to parents very regularly out there in our regional communities, having been one myself. They may well love the program, Senator McLucas, but you know as well as I do that they hate the waste and mismanagement. Interestingly, when we compare the private sector and what they have managed to do and the public sector through the state government, the waste and mismanagement in the state government sector has been nothing short of appalling. It is no wonder that we see this absolute disaster in New South Wales of a Labor government when they mismanage programs like that so badly.

The point is that the Australian people are absolutely astonished that the government can waste billions of dollars on the one hand and yet on the other hand expect Australian working families, through cuts to their childcare rebate, to pay for the national quality framework. I think anybody with any sense and sensibility would see how incredibly stupid that is. If the government had just managed to in any way, shape or form manage the economy properly they would not need to be putting this pressure on Australian families. Next they will be raiding the kid’s piggy banks saying, ‘Quick, we need a bit more money, where can we drag it out of next?’ Instead of focusing on the proper management of the economy, they do as they always do and move to taxes, move to raiding, move to cutting programs like the childcare rebate. It is simply not acceptable.

That leads me to the national quality framework itself. It is all interrelated in one way or another. It is all about child care. It is all about how government addresses the needs of the childcare sector. With the national quality framework, we believe that it sounds good if every childcare worker has to be qualified and there has to be an increase to staff to child ratios. Sure it sounds good and we all want the best system possible, but the policy needs to be realistic. I made some comments about this in this place recently. There is a critical shortage of qualified workers, and there has been some talk about exemptions—not a lot of detail around that. But if we have a requirement for every childcare worker to be qualified when we have something like three out of 10 alone in Victoria who are not, how on earth are we going to provide the workforce for those childcare centres? We have hundreds of centres currently searching for qualified staff and we are going to particularly see the impact of this on rural and regional communities. I was recently up on the North Coast chatting to a lady there. Senator McLucas will be pleased to hear I was again out on the ground talking to people in these centres.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

I do not doubt it.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Thank you, Senator McLucas, I will take that. For the Hansard record Senator McLucas did indicate that she didn’t doubt that I spoke to those people out in the communities and I thank her for that.

The lady who was in charge of the childcare centre had 15 years experience in this centre and was working 12-hour to 13-hour days and had an amazing connection with and a real love for these children that she was looking after. It was a brilliantly run centre. Yet she has no formal qualifications, so she is in this limbo land at the moment—and I am sure there are many senators, even on the other side of the chamber, who would agree with me that this is an issue that needs to be addressed—of not knowing if she is going to have a job next year, if she is going to be able to apply for an exemption and how it is all going to work. I think we need to be very clear as to what we hear from government about how this situation is going to be managed, because we all support improving quality but we have got to be practical and realistic in how we deliver that improved quality. So we will certainly be listening very closely to the government as to how those exemptions are going to be applied and how that is going to impact on those childcare centres.

The National Quality Framework for Early Childhood Education and Care is going to put increased pressure on families. That is very disappointing for people out in our communities, particularly those in our regional communities, when what they need is assistance. They need things to be made easier and not harder. The cut to the childcare rebate is going to affect about 20,700 families. While the government have all the arguments up their sleeve about why this is a good thing, it is interesting to note that Childcare Alliance Australia has indicated, from the work that they have done, that about 74 per cent of parents will have some difficulty in meeting the $13 to $22 a day extra cost that is going to be put on their families.

That is something that we really need to be very aware of. If we allow things to get more difficult for our families in terms of being able to access child care then it is going to be harder for parents to return to the workforce, to manage that juggling between work and family. I think many of us in this place know that juggling between work and family, and it is certainly not something that relates only to this place. Families right across the country are having to balance their work commitments with their family commitments. Many choose to do it and many have to do it, but we in this place have to be very mindful of that and we need to be mindful that any of the decisions that the government takes and any of the policies that the government wants to put in place through legislation should be of benefit to those families. There should not be policies that are going to make things more difficult. Increasing the costs, so making it more difficult to access those childcare places, is by any stretch of the imagination a step backwards for those families.

I and many others in this place including, I am sure, Senator Hanson-Young, who is down at the other end of the chamber, have all faced the issue of having children in child care. It is vitally important that we get it right. On that basis, the coalition certainly believes that the government should reconsider the national quality framework to put some practical common sense into it, to put some realism into the requirements of that framework. As I said, we are all supportive of improving quality right throughout the childcare sector, but it has got to be sensibly done. There have got to be measures that improve opportunities for families and parents and in the meantime do not place a greater burden, an unnecessary burden, on the operation of childcare centres. We certainly believe that indexation should be reinstated immediately. To cut indexation simply to find some money to be able to fund the national quality framework, given that this government has wasted billions and billions of dollars, is simply absurd and quite abhorrent to many of the Australian families out there in the community.

It is interesting to note as to that national quality framework that the bill has not yet been passed but apparently Centrelink has already enacted the reduced rebate, which means a lowering of those dollars being paid to parents. It is really quite extraordinary, and I stand to be corrected if that is not the case but I do understand that indeed it is the case, that the government would move to have Centrelink do that before the legislation has actually been passed. I am sure colleagues on the other side will correct me if I am wrong about that. If I am right, I think it is an extraordinarily arrogant act of government to move down that path, to enact this before this place has even had the opportunity to deal with the legislation.

As for the bill before us and the related childcare measures, the government made promises before the 2007 election that they simply have not kept. The government said that they would make child care more affordable. We can see from the fact that the rebate is being cut that that is simply not the case. There is no way anyone can argue with that. Before the election they said they were going to make child care more affordable. Now they have cut the rebate, which is going to make it harder. Senator Williams, you do not have to be a rocket scientist to figure out that is going to make it more difficult for families.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Not at all.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

So that is a promise that simply was not kept by this government.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Another one!

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Yes, thank you, Senator Williams, and I will get to that. The government also promised an additional 260 childcare centres. I think we all remember the Kevin07-version Prime Minister. Are we going to go to a Kevin11-version Prime Minister? Who would know? The Kevin07-version Prime Minister promised to fix the double drop-off and have 260 more childcare centres.

Opposition Senators:

Opposition senators interjecting—

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

That woke up everybody on the other side, didn’t it, Senator Williams?

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Yes.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

So what have we got? Two hundred and sixty? No. Two hundred and forty? No. A hundred and fifty? No. Eighty? No. Seventy, do you think, Senator Williams?

John Williams (NSW, National Party) Share this | Link to this | Hansard source

No.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

We have got 38—another broken promise from the Labor government. While we are on broken promises the best one—I cannot let this one go by, Senator Williams—is about the carbon tax. What was it that the Prime Minister said? Let me refresh my memory: ‘There will be no carbon tax under any government I lead.’ What do we have now? This has really woken the other side up, Senator Williams.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

It is so embarrassing for them, isn’t it?

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

I know they defend it. It relates to the issue of government not being trustworthy when it comes to child care, because they have a track record. I think it relates perfectly, Senator Williams, because the government has a track record of this and cannot be trusted to deliver a decent environment, a decent framework, for the childcare sector, which is what we are seeing.

The cutting of the rebate is obviously going to create real difficulties for families. We support the legislation before us today because, as I said, it was our policy going up to the last election that we would change the payment arrangements to weekly rather than quarterly. I am happy to say it: that is a good thing. But when you compare this with the other measures that the government has in place for child care, it is clear that the government simply does not understand the needs of families in this community. It simply does not understand the pressures that families are under. It cannot possibly understand, because it is going to make it harder for the families, not easier. Certainly those families out there, particularly in the regional centres, are incredibly disappointed that this government has not recognised the needs of the families and has not recognised that the lower rebate is going to be a very difficult impost for them. This government should simply reconsider all of that as it moves forward.

But I will commend the government. The bill before us today is a good move forward. We have seen the move to weekly or fortnightly payments under this legislation, which I am sure will be appreciated by families. We will look to see the government reconsider some of the other measures they have in place for the childcare sector and for families and children right across the country.

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

I rise today to speak in favour of the Family Assistance Legislation Amendment (Child Care Rebate) Bill 2011. To finally see some legislation in this place to deal with this issue is a welcome move. Of course, back in June last year, before we took a break before the last election, the Senate actually amended a piece of legislation to do exactly this—to bring forward the payments for families. So the Senate has indeed already agreed that this is a good idea. Unfortunately, because of antics in the House, we were never able to deal with that piece of legislation and get it moving for families sooner. After the Greens’ amendment went through this place and got stuck in the House, we went to an election. During that election campaign the government—the Prime Minister herself—announced that this would be a new government policy: to bring forward childcare rebate payments from quarterly to fortnightly. That was exactly what the Greens had already amended the legislation to do, but we have had to wait until March the following year to see the government fulfil that promise to families.

But it is a welcome step. Finally we are starting to see some common sense coming out of this. Look at the cost of child care to families across the country. We know that families are paying anywhere from $80 to $150, $200 or $300 a week in childcare costs, depending on the centre, the number of children and the number of days. That means that some families are waiting for three months to get their $1,800 back through their childcare rebate. That is a lot of money and a big chunk of the family budget to be waiting on every quarter as opposed to every fortnight, even though we know that most people pay their childcare fees monthly if not fortnightly.

So it is going to make a big difference. It will put money back into the pockets of families, giving them the ability to manage their budgets better and the flexibility they need, as well as ensuring that they can give their child the care they choose on the basis that they can afford it. So this is all a very good thing. It is unfortunate that this place agreed to do this in June last year, yet it has taken until March the following year for the government to agree. But there you go; that is the way this place works. Sometimes, even though the parliament decides that something is a good thing, it still takes the executive a little while to catch up.

We really want to see the Senate agree and support this piece of legislation again, because it is really important. Many of us, including several people in this chamber—Senator McLucas and Senator Bilyk—have spent a lot of time working on these issues in the past. Most would agree that the way we currently structure and pay for childcare services and early childhood education in this country would, if you were going to start from scratch, be done differently. You would start to fund the services and the quality frameworks and ensure that we have the best quality care. That is the link you would make. We are not there, but we can try to make some things easier for families in the meantime. Bringing forward those rebate payments from quarterly to fortnightly is definitely going to help.

I want to put forward here in the chamber a warning that we need to make sure we do not go backwards on this and that we see this as an opportunity to keep making things better and reforming the system. The last thing we want to see is any measure in the upcoming May budget that would make it more difficult for families to afford the costs of early childhood education and care. Let us not make it more difficult. Let us use this as an opportunity to say, ‘Yes, we agree that children in this country—the youngest citizens—deserve the best start.’ That means ensuring that families can afford to give them the care that they deserve and that they need to manage their daily lives. We all know the stories of working families juggling all those different commitments. Let us not make it harder; let us make it easier. This is a good first step towards doing that. Let us make sure that when the May budget comes around, this area of the childcare rebate—early childhood education and care—is not seen as a pot to dip into for further budget saving measures. I do not think that would be a good look for anyone.

Let us accept that this was a good idea. The Greens amended the legislation in the first place and the Senate agreed. Finally we have got the government to take it on board. Fantastic. Let us tick it off and move on. Let us start to get the money that families deserve back into their pockets. But let us also have an eye to how we can continue to make things better, easier and of course carry out delivering on those quality framework issues. I believe that we have to ensure that we are investing as much as possible in the care that we give our children in those really crucial years from zero to five. That means that we do need good quality standards. We do need good child-to-carer ratios. There must be quality standards in centres that must be adhered to across the country so that our kids are given the best quality care and the best start to life.

That kind of reform needs to be funded and it should not just end up being whacked on at the end of the bill for families to cover. If we believe as a country that the best way to give a child the best opportunities we have to start it in those early childhood years. That means not trying to find ways of saving money in that pot. It means that we have to put a bit more money in to ensure that early childhood education and care is the best it can possibly be and that Australia values it and sees it as an investment. The effort that we put in at this end pays off at the other end. We know it does. Students who graduate from high school and go on to TAFE or university are going to be much better equipped and resourced, and they will be able to do anything if they are given a good start in the beginning. That means investing in the early years and not waiting till the end and hoping that you can catch up there. It needs to be done right at the beginning.

I commend the bill to the chamber. It is a good initiative. Let us get on and start making this area of early childhood care and education something that we do not just talk about but invest in. That means we are going to have to put a bit more dosh in the pot to ensure that we can fund the system properly.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I thank the previous two speakers for their contributions. I am one of, I understand, only two people in this chamber who have actually worked in the childcare industry—and here comes the other one in the door now: Senator Jacinta Collins. I am happy to be corrected if that is not the case. Senator Collins and I have both worked in the childcare industry. In fact I spent 12 years in the industry—

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

Three!

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Sorry, Senator McLucas. I apologise. There are three people in this place who have worked in the childcare industry. I did say that I was happy to stand corrected, so my apologies to you.

Having spent 12 years in the industry both in the ACT and in Tasmania I would like to speak about the Family Assistance Legislation Amendment (Child Care Rebate) Bill 2011 and the important changes it makes to Australia’s system of childcare assistance payments. As we have heard from other speakers tonight, these are the really formative years and people have to be able to afford their child care.

The Gillard government is certainly making sure that people are more able to afford their child care by giving them a choice. It is an important change for Australian parents and it is an important change for Australian families. It gives Australian families choice and flexibility as to how their childcare rebate payments are made. It allows families to choose a frequency of payments and a rebate method that suits them. It builds upon the significant reforms the government has already made in improving the affordability of early education and child care. It is the most critical area, I believe. It shapes a person’s future so it is absolutely critical that child care is not only of a high quality but affordable.

This legislation will make paying for childcare services easier for around 700,000 Australian families. It shows that the Australian government understands the needs of families, because it gives families access to the childcare rebate when they need it most: when the child care fees are due. This bill will make a number of key changes. The first is that it will allow families to choose how their childcare rebate payment is made. Under the arrangements introduced by the Howard government, families had no choice as to when the payment was made. They had to wait until the end of the financial year to receive this very important payment whether it was convenient or not. For the majority of families it was not convenient.

Senator Nash mentioned that she thought Centrelink might be already enacting this procedure. I have not heard that from anywhere. I stand to be corrected, but maybe Senator Nash is confused, because the Labor government introduced changes to allow families the choice of receiving quarterly payments. So maybe she is a bit confused about that. Now we are again expanding the range of choices that families have.

With the passing of this bill, from July 2011 families will have a number of options in regard to when and how they receive their childcare rebate payments—options that they can choose to suit their needs in the circumstances of their families. Firstly, they can have their childcare rebate payment paid fortnightly direct to an approved childcare service provider on their behalf by way of a fee reduction. As at June 2010 there were around 14,000 approved childcare services in Australia, including long day care, family day care, outside-school-hours care, occasional care and in-home care. This is the fist time that these various childcare service providers are able to receive the rebate on behalf of families. This will significantly reduce the up-front costs of child care. Currently, 98 per cent of families receive their childcare benefit this way, and it can be assumed that many families will wish to take up this option, not least because it is probably the most convenient.

Families can elect to receive their childcare rebate payment directly into their bank account following the submission of the approved childcare service’s usage report to the government. Childcare service providers are required to submit their usage data to the government fortnightly, although the majority actually report weekly. That means that those families that choose this option will be paid their childcare rebate either fortnightly or weekly, depending upon when their chosen childcare service provider does their reporting.

Families can elect to have the child care rebate deposited into their bank account quarterly. This gives parents a significant quarterly payment which they can rely upon to meet expected household expenses. Finally, families can continue to receive their payments annually as a lump sum payment, as many currently do. Some families may prefer to stay with this option and, if this is the most convenient option, it is right that they be allowed to keep it that way.

Families currently receiving the child care rebate will be contacted prior to the commencement of the financial year to ascertain their preferred method and frequency of payment. Those who are unable to be contacted will default to their current quarterly or annual payments. To ensure fairness, families that were unable to be contacted and, consequently, were unaware that they were able to change the method of payment, will be allowed to change their payment method during the first year of operation.

The next major change is that this protects families from accidentally accumulating debts. In the past, some families have accumulated unforeseen debts due to mistakenly underestimating their income—a situation that has caused many families financial stress and heartache.

This bill includes a safeguard, which is the temporary withholding of 15 per cent of each child care rebate payment for those who are on higher than the zero rate of child care benefit, to ensure that families do not incur such a debt. This will ensure that families will not have to deal with the shock of receiving a significant debt due to changes in their taxable income, by offsetting any potential debts that may arise. This is a fairer mechanism than the current arrangements for the child care rebate, where the final quarterly payment is withheld until the end of financial year reconciliation.

The bill will make the payment of the child care rebate simpler for the many families who elect to have their child care rebate payment paid directly to their childcare service provider. Never before has this option been made available to Australian families. Currently, a family earning $80,000 per annum, with one child in full-time care, faces $240 per week in out-of-pocket childcare costs while waiting for their child care rebate to be paid quarterly or annually. By opting to have their child care rebate paid directly to the childcare service provider or paid into their own bank accounts fortnightly, these costs drop to around $138 a week—a significant sum for families trying to meet their day-to-day expenses.

The bill also allows families to change their payment method if they meet with exceptional circumstances, such as hardship or family break-up, part way through the financial year. The government understands that families are not static, that family income and expenses change and that flexibility is required for households to meet their expenses. A lump sum payment that may have been convenient at the start of the financial year may no longer be convenient, and families should not be tied to a payment delivery type that no longer meets their needs.

These changes continue the government’s unprecedented investment in child care and early education. It is this government that understands just how important investment in child care and early education is for Australian families. It is the Labor government that understands just how much child care costs take out of the family budget and it is the Labor government that understands that Australian families need flexibility and assistance.

It is also the Labor government that is providing them with this flexibility and assistance. We are providing $14.9 billion over the next four years through the child care rebate and the child care benefit to assist 800,000 Australian families annually to pay for the costs of child care. This includes $8.7 billion over the four years to 2013-14 to reduce childcare fees for low- and middle-income earners under the child care benefit and $6.2 billion to assist working families with out-of-pocket childcare expenses under the child care rebate.

It was this government that in 2008 delivered on our election commitment to increase the child care rebate from 30 to 50 per cent of out-of-pocket costs, from a maximum of $4,354 to a maximum of $7,500 per child per year. This is a fundamental change to this payment and it highlights the difference between us and the opposition. Under the Howard government, families could claim a maximum of only $4,354 per child per year—some 72 per cent less than under the Gillard Labor government.

It is this government that is delivering decreases in the cost of child care for families. As a result of increasing the child care rebate for out-of-pocket costs, after subsidies, for a family earning $55,000 a year with one child in long day care, costs have fallen from 13 per cent of disposable income in 2004 to seven per cent in 2010. Changes like these show that the government understands just how significant a cost child care is to families and their household budgets. It is changes like these which show that the government is doing everything in its power to reduce these costs for Australian families. Australian families have never had access to more financial assistance with child care than they have under this government. And now, thanks to this legislation, they will have even greater access and even greater choice.

In closing, because Senator Nash did get off the track a bit over there and started talking about all sorts of things, I would like to publicly say thank you to the workers in the childcare industry, who work very hard to deliver quality care to Australian children and to give them the best start that they can in their early education. As other people have mentioned tonight, it is very important for the future of Australia that we continue to have an affordable and quality childcare system in Australia. Certainly, the Gillard government is moving to make sure that we continue to improve it all time.

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

I thank senators for their contribution to this debate. I must say, though, Senator Nash, that I heard most of your contribution, which I would reflect was truly audacious. I am sure we will get some tedious repetition of the rhetoric that was covered in other matters that may be soon before us. I was very pleased to hear that you do indeed talk to parents and I thought, somewhat glibly, that some of my closest friends are parents. But, truly, in relation to the Family Assistance Legislation Amendment (Child Care Rebate) Bill 2011 and the general agreement to progress what I think is a very sensible matter, I think we will keep it as light as that.

As others have highlighted, this bill will for the first time enable families to access the child care rebate no later than fortnightly, and in many cases earlier than that. This has been a particular public policy venture of mine since the Howard government introduced the child care rebate and parents needed to wait until the tax year after the tax year in which they had expended those costs. As a result of this measure, as has been highlighted by others, around 700,000 Australian families will be able to receive this essential assistance at the time when their childcare fees are due. Importantly, many families will be able to receive this payment weekly, as the majority of childcare services submit attendance information weekly.

From July this year families will have the choice of four options for receiving the child care rebate. Families will be able to elect to have their child care rebate payments made to the childcare service fortnightly, at a minimum, on their behalf as a way of fee reduction; to receive their child care rebate payments directly into their bank account fortnightly, at a minimum; to have their child care rebate made to their bank account quarterly; or to have their child care rebate payment made annually as a lump sum payment. By providing families with these choices, the Australian government is ensuring that families have significantly more flexibility to manage their childcare costs within their family budget.

For the first time, childcare services will be able to receive the rebate on behalf of families, delivering a direct fee reduction for those families that elect this method of payment. Currently 98 per cent of families choose to receive the child care benefit this way. To ensure that families do not accumulate any unforeseen debts as a result of overestimating their income, this bill also contains amendments to temporarily withhold 15 per cent of each rebate payment for families receiving a higher than zero rate of child care benefit. This is consistent with current arrangements for the quarterly child care rebate payments, where the final quarterly payment may be used to offset any childcare payment debts incurred by the family. This measure builds on the government’s impressive record of improving the affordability and quality of early education and care and it will be widely welcomed by Australian families.

In 2008 we delivered our election commitments to increase the child care rebate from 30 per cent to 50 per cent of out-of-pocket expenses, from a maximum of $4,354 to $7,500 per child per year, a significant benefit to families and childcare affordability. Under the Howard government, families could claim a maximum of only $4,354 per child per year, which was some 72 per cent less than under the Gillard Labor government. I highlight these points to stand in contrast to the claims that Senator Nash was outlining earlier and to her rhetoric. The point I made earlier was that we have also increased the frequency of the child care rebate payments to families from yearly to quarterly and now to fortnightly, which is far better than in 2004, when families had to wait 18 months or so before they saw any support. Senator Nash may talk to parents, but many parents I talk to who were involved with childcare providers still remember the complexity of and the wait they had for childcare payments. At this stage I should mention that Senator Bilyk referred to herself and to me working in child care, and I should clarify that my involvement was in outside-school-hours care rather than in long day care—although outside-school-hours care is relevant here as well.

Overall, the Commonwealth is providing $14.9 billion to help 800,000 Australian families annually with the cost of child care through the child care benefit and the child care rebate. This includes $8.7 billion over four years to 2013-14 to reduce childcare fees for low- and middle-income earners, under the child care benefit, and $6.2 billion to assist working families with out-of-pocket childcare expenses, under the child care rebate. As a result of this massive investment, we now know that, since 2004, out-of-pocket costs for families earning $75,000 have reduced from 13 per cent of their disposable income to seven per cent in 2010. I think this point warrants repetition, given some of the rhetoric earlier, because there has been a huge increase in the affordability of child care in recent years. Fortunately, with a relatively considerable income, long day care is not a cost I need to meet, but for the many families who have significant childcare costs, some of whom have been referred to by other senators, this figure is very important. When people raise in debates the childcare costs to providers, it needs to be remembered that a significant proportion of those can be met by the Commonwealth government’s rebate, so in this debate we really need to be looking at issues around the out-of-pocket expenses faced by families. Indeed that is a critical and important issue amongst the issues of childcare service delivery such as improving the quality and the standards. The costs of improved quality and standards are at the very minimum met by a 50 per cent contribution from the Commonwealth through the child care tax rebate. Let me reiterate this point: as a result of Labor’s massive investment in child care, we now know that, since 2004, out-of-pocket costs for families earning $75,000 have reduced from 13 per cent of their disposable income to just seven per cent in the year 2010.

In conclusion, there are a few points that I would return to. When it comes to improving the affordability of child care, our record stands head and shoulders above the record of those opposite. Through this bill we will give 700,000 Australian families real and immediate assistance with child care. It is important that that assistance occurs at the time they incur their childcare fees. But it is also important, in conclusion, to go into some of the broader areas covered by Senator Nash in, I reiterate, some of her rhetoric. I remember the years 2003 and 2004, when I was working as shadow minister for children and youth. The minister at the time was Larry Anthony, and I recall that there was an agenda for early childhood that the Howard government paraded and paraded with no action, to the extent that the sector became more and more frustrated. The only action at that stage was the growth and further growth of organisations like ABC child care, whom of course Larry Anthony then went to work for.

So I think the credibility that this opposition has in child care needs to be very seriously questioned. They can criticise other measures that this government has undertaken whilst supporting this bill, but what they can never claim is that they actually acted on a national agenda for children. This is a very important and critical issue for the Labor government and we will continue down this path. It may well be that there are measures that need to be addressed that will not benefit 100 per cent of Australians, but we cannot be criticised for not having a national agenda, a national plan for significantly increasing the affordability and the quality of childcare services for Australian families.

Within that broader context, we return to the issue immediately before us, which is improving the regularity of payments for Australian families. This issue has a long history, dating back to when the Howard government first introduced the rebate at 30 per cent. It is now 50 per cent and families no longer have to wait 18 months, up to two years, before they see the assistance that should be immediately associated with their expenses in supporting their children. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.