Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

The committee is considering amendments (1) to (4) on sheet BM231, as moved by Senator Collins.

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

I think on the last occasion I was about to respond to Senator Nash's questions about the amendments. I take her to my comments at the outset when introducing the amendments. The amendments seek to change the start date of this measure from 1 July 2010 to 1 July 2011, and this will ensure that legislation is not retrospectively applied to the 2010-11 financial year and that we do not need to reclaim childcare payments paid to families.

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

There has been some concern about the delay—obviously this has been on the books, so to speak, since last year. Could the parliamentary secretary indicate to the chamber the reason for the lengthy delay, which has created some uncertainty?

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

Even from my distant under­stand­ing, being not the directly responsible minister, Senator Nash has been dealing with people's concerns about and consultation around these measures to ensure that people are satisfied with how they would work with moves aligned with the National Quality Framework.

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

Am I correct in understanding that the legislation, I think you said yesterday, was going to affect less than one per cent of families?

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

I have just checked my recollection—it is less than one per cent of families earning less than $100,000.

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

Perhaps, then, you might clarify for the chamber the media release from the Prime Minister of 11 May last year which indicates that it will affect less than 3 per cent of families receiving the rebate. Could you explain the anomaly in those figures?

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

I think my earlier comments clarify that anomaly. We are referring to less than one per cent of families earning less than $100,000. I think your quote from the Prime Minister did not have that qualifier.

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

Thank you for the clarification. We were also discussing yester­day how the child care rebate relates to the funding that will be provided for the National Quality Framework and from memory you raised the issue of the change in ratios from one to five to one to four. My understanding is that be Department of Family and Community Services in New South Wales undertook some research that said when the new ratios were imposed, to one to four, the average cost increase per place for under twos was $7.59 a day and if you extrapolate that out over five days a week, 48 weeks of the year, it is an increase of around $1,800 a year. Is that research correct, or do you have any alternative view? I would expect if it was the department of community services doing the research then they would be a fairly reputable and reliable source of what the increased cost was going to be.

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

While officers deal with a more detailed aspect of that question I should highlight the most ideal component, which of course is that half of any increase in fees as a response to changes in the National Quality Framework is met, essentially, by the child care rebate. The first point is that some of the figures that have been bandied around, certainly that I have seen in the media, have failed to take into account that the Commonwealth is indeed meeting half of the extra increase in fees by virtue of the rebate payments to families. With respect to the New South Wales Department of Family and Community Services research, perhaps the additional comment I can make is that indeed in New South Wales many years ago many centres moved to the one to four ratio. I have just been informed that New South Wales generally has moved to the ratio of one to four and that has not shown any significant impact.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

I was very interested in the parliamentary secretary's answer to Senator Nash. Parliamentary Secretary, what I cannot understand is that you say half the increase will be paid by the government. To me, that reinforces the view the coalition has had that this is just another cost increase on families. I have to declare that I do not have an interest in child care. It is something I am very concerned about for other Australians but I personally do not have an interest in child care and it is not a subject I have followed closely. In the last couple of weeks, as this bill coming forward became known, some of my young friends, members of the LNP up in the north, have approached me concerning this. Their concern is that this is simply another increase in costs on ordinary Australian families which they can ill afford in this cycle.

Parliamentary Secretary, even your government is aware of the huge increases in costs of living on ordinary Australians. Power prices have been going up in my state of Queensland under the mismanagement of the Bligh Labor government for years now. When the carbon tax comes in, costs of living in Queensland will skyrocket. That will be very hard on ordinary Australian families. It is particularly difficult today if you happen to be a worker in Wollongong, where you are looking in the face of losing your job, along with 999 of your fellow workers. Through various circumstances underlying everything that is happening in Wollongong and in employment right throughout Australia, people with the money to invest in companies like BlueScope Steel simply have no confidence under this government. They have no confidence because they cannot believe anything our Prime Minister says. I am even embarrassed to say 'our Prime Minister'. I prefer to refer to Ms Gillard as the Leader of the Labor Party because she really has not given—

Senator Lundy interjecting—

I'm a disgrace? If I went to an election, Senator Lundy, and promised with my hand on my heart that I would not do something and then a couple of months later, when I won the election on the basis of that promise, I did the exact opposite from what I had promised, I would think I would be described as a disgrace, but I have not done that. It is your leader, the Leader of the Labor Party, who one year ago—

Senator Lundy interjecting—

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order! Senators, please address your remarks through the chair.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

Senator Lundy, you say this is a filibuster. I am asking a question. I do not know what you are doing here. Certainly your interjections are not helpful. The leader of our nation at the present time, the Leader of the Labor Party, made a solemn promise to the Australian public just a few days before an election, a promise upon which many Australians voted for your party, Senator Lundy. Then they found out that the trust they put in the Leader of the Labor Party, our current Prime Minister, was just shattered. If that is what you call filibustering, get used to it, get over it!

Every opportunity I get, I will reflect the views of my constituents, which are, 'How can we have a Prime Minister who is so deliberately dishonest?' It is not only the Prime Minister. You have distracted me, Senator Lundy, from the bill before the chamber—and I want to get back to that. It is not just the Leader of the Labor Party, but the Deputy Leader of the Labor Party, Mr Swan, as well. When Mr Abbott promised people in Australia, 'As sure as night follows day, when Labor and the Greens get together after an election, you are going to have a carbon tax,' Mr Swan said, 'He's being hysterical.' On 12 occasions or more, Mr Abbott told the Australian public that the Labor Party would break their promise and introduce a carbon tax and Mr Swan said, 'He is being hysterical.' Why do I mention it? Please interject again, Senator Lundy, but I want to get back to the bill before the chamber, the Family Assistance Legislation Amendment (Child Care Budget Measures) Bill 2010.

There is no more important facility to support families than assistance with child care. As I understand this bill, it is going to make the costs of child care even greater for the ordinary family. Perhaps living in this wonderful city of Canberra, which has almost every facility, Senator Lundy would not understand that where I come from—a great part of the world; Northern Australia, the future of Australia, is magnificent at this time of the year but around Christmas time it gets pretty hot—there would not be a responsible childcare centre that did not have air conditioning for use in the warmer months of the year Again, I am not sure what people in this chamber know about the cost of air conditioning, but it is a fairly big power user. It eats into the power. With the carbon tax, the cost of that electricity—that power and energy providing the air conditioning and the comfort for young people in childcare centres—is just going to skyrocket. Young families taking advantage of childcare facilities are not only going to be slugged by the bill before the parliament but are going to be slugged with the increased costs of their childcare centre in all sorts of ways. I particularly draw your attention to what a carbon tax will do to the cost of power and therefore the cost of energy in that great part of our country, Northern Australia. It is no longer a luxury in Northern Australia. Northern Australians are entitled to the same sort of comfortable life that people in Canberra have. To do that, air conditioning has become essential.

I ask you to think about what a carbon tax will do to the cost of power and what the increase in the cost of power will do to people in childcare centres who have to have air conditioning to get through the day. Might I add, going to the other end of the scale where perhaps I do have a greater conflict of interest, all of the aged-care facilities in Northern Australia are big users of air conditioning, and so they should be. People in the later stages of their lives who have pioneered the north, who have made a magnificent contribution to the Australian economy over many decades, are entitled in their later years to have the benefit of cooling that air conditioning brings. For many elderly people, particularly those still living in their own homes on a pension, when the carbon tax comes in the cost of their power is going to increase and many of them will of necessity have to turn off their air conditioners. That will not only cause them discomfort but in many cases, as you well know on the other side, it can cause significant health problems and even death. All of this will follow.

I digress to say that yesterday in question time some of the Labor Party people on the other side were suggesting that you cannot believe Western Australian government modelling because it is a Liberal government in Western Australia, or that you cannot believe New South Wales Treasury public service modelling because there happens to be a Liberal Premier. I wonder why you can follow that hypothesis but not follow the hypothesis that perhaps Commonwealth modelling is not accurate because there is a Labor leader who has proved herself to be dishonest. You never know what is happening in the Labor Party with these sorts of things.

Even on the federal government's own modelling across the whole of Australia prices are going to go up by 10 per cent. According to the New South Wales government modelling, which I happen to think accords more with reality, it is going to be up 15 to 20 per cent. The Queensland government are doing things but we get confused answers from them. I know they know the answers but they do not want to tell us about them because it might have a political element. You might be aware that when we talk about climate change issues in Queensland the head of the climate change section of the Queensland government just happens to be the Premier's husband. As I understand it, he got that job without any competitive application. I believe he is quite a competent and able person and probably does a good job. My understanding though is that there was no competitive tendering for that job. On climate change issues with the Queensland government, at times you are never quite sure where the dividing line is.

Getting back to the point I am making, the question I want to ask the parliamentary secretary is: even if, as you said in your answer to Senator Nash, some of the cost is met by the government, isn't it a fact that there are still considerable additional cost increases on average families using the support of childcare facilities? While I am at it, I ask you, Parliamentary Secretary: is the government making any contingency plans for the additional costs in childcare centres and in child support agencies that will necessarily follow the introduction of a carbon tax? As you will remember, that is the tax that the current Prime Minister promised would never be introduced under a government she led. Is the government making any contingency plans for additional support to agencies and support services for children and for elderly people that must follow when a carbon tax is introduced and when prices of power are increased anywhere between 15 to 20 per cent and will keep increasing over the next few years? I do not want to hold up the Senate. I do not want to take my full time on this. I will stop now and ask the parliamentary secretary to perhaps answer my questions.

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

I paused for a moment, Mr Chairman, because I thought you were going to ask Senator Macdonald to withdraw his reference to the Prime Minister.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Macdonald, you did make a reference to the Prime Minister during your speech concerning dishonesty. You reflected on the character of the Prime Minister and you may wish to withdraw that remark.

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

Mr Chairman, on a point of order: my recollection is that Senator Macdonald did not reflect on the dishonesty of the Prime Minister at all—he was reflecting on the pledge she made before the last election but withdrew.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

Mr Chairman, if I have offended anyone I will certainly withdraw. I do not know what the right terminology is, if you promise one thing and then a few days later you break the promise. I do not know what you call that, but I withdraw.

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

I do not think that Senator Macdonald properly understood the response I gave to Senator Nash, and this might help resolve some of his questions—certainly the questions that relate to this measure as opposed to the carbon tax measures that he occupied a good 10 minutes of the time for this debate addressing. It is a very important issue and that is why the government does have contingency plans with respect to the carbon tax in terms of household compensation and the increase in income support for households.

Senator Ian Macdonald interjecting—

I think we will stay on child care, Senator Macdonald. The point I made in respect of Senator Nash's comments reflecting on the New South Wales modelling was that in New South Wales they introduced the one-to-four ratio at the start of this year and the cost increases, if at all, were marginal—essentially in the order of inflation—and were nowhere near what was suggested certainly by some of the modelling similar to that which has occurred in Queensland. The point I was making further to that was that if and where there have been cost increases, the media discussion of those increases has highlighted the full cost rather than the out-of-pocket expenses for families, which of course have been assisted by the childcare rebate and the childcare benefit.

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

It is the issue of cost that I want to go to. Obviously there is no increase in the childcare rebate—and that sounds like a fairly simplistic sort of statement; indeed, we are having a cut to the childcare rebate so there is not extra assistance for families through the childcare rebate that we are discussing today. The chamber is getting conflicting information from various quarters. I must say the government is not doing a particularly good job of allaying our concerns about increases in costs. Quite frankly I think the government trying to purport that it is only going to fall upon a certain number of families so it is all okay is simply appalling. There should be no increase in childcare costs for any family, full stop. I refer to my comments yesterday about the similarity in figures between the $80.9 million that the government has wasted administering an emissions trading scheme that does not even exist and the $81 million that the government is going to find through this savings measure—and let us be very clear, the increase in fees for families is a savings measure for this government. It is no wonder that families are saying that, regardless of the size of the impact that the government keeps reassuring people about, not one single dollar should be applied as an increase to any family across the country. It is as simple as that. The government, if it had not wasted so much money, would not have to be raiding the piggy banks of the kids and the parents of families using these childcare centres. It is simply not on. No amount of justification from this government, saying it is only a few families or it is a minimal number of families, can justify an increase.

I will stand corrected if I am wrong, but my understanding is that the Greens' Senator Hanson-Young will be supporting the government on the changes to the childcare rebate. Is that not hypocrisy in the extreme? Let me take senators to comments Senator Hanson-Young has made on the record. Given that Senator Hanson-Young has yet to enter the debate, and we are probably getting very close to ending the debate, it is important that we have it on the record that Senator Hanson-Young said earlier this year:

We would be extremely concerned about any changes to the childcare rebate that would make it harder for families to access affordable Early Childhood Education and Care (ECEC) services.

Rather than using cuts to childcare services as a potential budget savings measure, what the Government should be doing is a root and branch review of how ECEC services are funded at a federal level.

Perhaps I am wrong, but this is certainly an opportunity for Senator Hanson-Young to put her comments very clearly on the record. If she is supporting the government, why has she changed her view about using cuts to childcare services as a potential budget savings measure.

My colleague Senator Macdonald again raised the issue of electricity costs. I understand there is a childcare centre in Brisbane whose increased electricity cost as a result of the carbon tax will be $2,400 a year—that is an extra cost for the childcare centre. I raise this because this bill is raising money, as the government has said, to go to the National Quality Framework. Perhaps the parliamentary secretary can assist because it has become evident today that concern out there is prevalent and the government's assurance that this is not going to hurt many families simply does not tally up with what is out in the community. This savings measure, which is going towards the broader changes of the national quality framework, has many families concerned about increas­ing costs. I note that the Kids World Kindy director and vice president of Child Care New South Wales, Lienna Mandic, said the reforms will result in price increases of $12 to $20 a day. Parliamentary Secretary, I know you have indicated that that does not account for the assistance, but there is no way that the assistance from the govern­ment—indeed we are seeing cuts to the childcare rebate—will cover the $12 to $20 a day increase in costs or the increase in electricity costs which centres will have to bear. I asked the parliamentary secretary: is the vice president of Child Care New South Wales wrong when she says that the reforms will result in price increases of $12 to $20 a day? I note you have said, Parliamentary Secretary, that New South Wales has changed by and large, but is the vice president of Child Care New South Wales wrong?

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

There are a few issues here because your comments do not seem to reflect an accurate understanding of how the childcare assistance measures work. You have mentioned that there is no increase in the childcare rebate. The point I was making is that, if families are faced with increases in fees, the level of support they receive under the childcare rebate increases up to the cap of $7,500. You will recall that on average most families are only receiving in the order of the lower end of $2,000 per year. So there is more than ample and adequate scope for any increase in fees, if indeed such increases might incur, to be met with further support under the childcare rebate.

I also made the point that the potential being discussed today has not been the experience in New South Wales. You referred to the vice president of Child Care New South Wales and figures of $12 to $20 per day in costs. They are talking about the cost of a childcare place per day; they are not talking about the out-of-pocket expenses for families after they have received income support.

Yesterday we were discussing child care as a cash cow; today we are using highly emotive language such as 'raiding piggy banks'. I need to refer again to the context here. Under the previous Howard government, the childcare rebate was only 30 per cent, unlike the 50 per cent today, and the cap was $4,354, not the $7,500 which this measure pertains to. A point I made yesterday, and one I recall from its introduction, was that parents had to wait up to two years to receive the support introduced under the Howard government, and this is a point to Senator Ian Macdonald. It is also useful to note that under the Howard government we were ranked 13th out of 14 OECD countries in spending on early childhood education. Indeed yesterday I highlighted that it had taken five years and still we had no early childhood agenda—it had been very much paraded but never delivered during that time. There was no commitment at all to improve childcare quality for the almost 800,000 families with kids in care each week.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Reflecting on the parliamentary secretary's comments then and on what Senator Nash and Senator Ian Macdonald brought up reminds me that there are very few in this chamber, particularly on the other side, who run a business of any significance. I do not mean that in any belittling way but running a business does give you an understanding of the financial burden on those who have capital invested, in ensuring they can provide value for money to their customers. Many childcare centres—until they were nationalised in part by this government, which seems to want to nationalise many things—are run as independent commercial entities which need to provide good value for money with minimised cost increases.

On the other side of the equation we have families. It has been acknowledged by almost everyone in this chamber that families are doing it tough. Many families struggle every week to balance the budget, to make ends meet. There are people living on borrowings, using credit cards. That is something I would not like to see continue.

Inflation is starting to pick up. We have seen that from the RBA. When Mr Rudd was Prime Minister, before he was brutally knifed and politically dismembered by the Labor faceless men, he had a war on inflation—with GroceryWatch, and Fuelwatch, and watch everything except his own back—which clearly failed. Inflation is now coming home to roost.

A quick economics lesson here: inflation is purely driven by money supply. When the money supply increases, you have price increases. That is what we are seeing. We are seeing price increases as a direct result of the injection of money into our economy by this government—money they do not have, might I add. It is not backed by anything except the government's full faith and credit. It is money that has been borrowed from overseas and injected into our economy, and that is why we are seeing increases in the price of a range of things that we need. I touched on this yesterday.

One of these things that we need in this country is child care, and of course the cost of child care is increasing. There are enormous burdens on the operators of these childcare centres to provide adequate facilities and services. Senator Macdonald touched on one of these important things, which is air conditioning. Air conditioning takes power to run and a new tax will be placed upon electricity in this country by the Labor Party. I would remind those on the Labor benches that this was the tax you promised never to introduce. You promised that to the Australian people, and it is an unnecessary broken promise because we all know that your carbon dioxide tax is not going to make any difference to the environment.

That brings me back to the cost of childcare centres. I have had experience in this—both my children in an earlier day and age attended child care on a couple of occasions per week, and this was done for my wife's sanity. She maintains she needed to get out and do something else on occasions and this was a reasonable alternative. It was very expensive then. The childcare centre that we attended was trying to minimise the costs to families, and so families were asked to pick up a range of additional imposts to help facilitate the operation of the centre—little things that perhaps people take for granted. We were all required eventually to take a piece of fruit for the shared fruit time at morning tea and things like that rather than have the centre itself do it because that would involve formalising a delivery or paying someone to go out and pick it up. So that was a way they could limit the fee increases.

There was another thing they did which I disagreed with fundamentally, but they said it was to reduce costs. That was that they basically diluted the Christmas show into an end of season gathering. They dressed it up and said there were a whole range of justifications, but I suspect it was because they did not want to offend non-Christians, which was just ridiculous and once again an enormous leap into a politically correct society.

One of the important points is that, whilst childcare centres are doing their best to reduce their costs to provide a more competitive service, we have a government that is so keen on increasing the costs of not only childcare centres but every single business. While we know that the govern­ment is going to impose this carbon dioxide tax supposedly on the 400 or 500 'big polluters'—you can never get to the bottom of this—we also know that costs are going to flow on everywhere, to every small business. Unfortunately, because so many small businesses are doing it quite tough now they are going to be forced to pass these costs on to consumers. In the case of childcare centres those consumers are families, and families are going to have to wear it. There is no doubt about that. Yes, the government will pay this rebate on childcare costs, but they are capping it and the costs are going to increase, on the government's own figures, I think—it relied on Access Economics—by $8.80 or $9 per week on average for some 20,000 families. Once again, that is an additional burden. I have my suspicions and they have been vindicated or validated by industry, who says the increase is going to be between $12 and $20.

But what I am really struggling to come to terms with, and I want to specifically address the government's amendment here, is that this initiative was originally slated to operate for four years and it was going to save the government $86.3 million over those four years. Of course, as Senator Nash so elo­quently pointed out, a saving for the government is an additional cost for families. So there are $86 million in additional costs for families over those four years. This amendment that we are considering, though, is to reduce this savings measure to only three years. So we are reducing the time period in which this bill applies by 25 per cent, and yet the government maintains that the change to three years will still effect a net saving of $81 million over those three years. Over four years the saving—the additional cost to Australian families, who have been ignored over and over again by this government—was $86.3 million, but now the additional cost over three years will be $81 million.

Parliamentary Secretary, I would be interested in an explanation, because it is not contained here in the documents I have in front of me. Why does a reduction in the time period of a full 25 per cent, from four years down to three years, only result in a $5.3 million reduction in the additional cost you are imposing on Australian families? This is just back-of-the-envelope stuff and you may have more detail—I know you have lots of advisers there to tell you about this. But the back-of-the-envelope stuff would suggest to me, just in round figures, that if you are reducing the time period over which this bill applies by 25 per cent you would have a commensurate reduction in the saving. I must have missed something. Parliamentary Secretary, I would invite you to address that and to perhaps explain why, whilst Australian families have been saved a full 12 months in the application of this flawed bill and this flawed process, this amendment does not save as much money through the reduction?

Parliamentary Secretary, I note you are getting some advice, and I still have five minutes in which to reflect on a number of other issues that are related directly to this bill whilst you are getting that advice. We have to understand that ultimately Australian families are the nurturers of the next generation. While much of the learning and teaching is done at home, and should be done at home, we recognise that child care plays an important role in enabling families to live the lives that they choose, to make ends meet and to climb the aspirational ladder. Some­times, as in my own case, it provides a welcome respite from the day-to-day tests that young children apply to, in my family's case, a mother. But having been at home with my children, I know that even fathers can be tested on occasions.

Parliamentary Secretary, I presume you have your advice and are able to answer my serious question which is about, as I will remind you, the reduction in time for the application of this bill from four years to three years, and why the cost savings do not seem to be relative to that time period.

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

Senator Bernardi, in relation to your question about the savings at each year, the year that the delay in this measure means we will miss out on was indeed the year with the smallest level of savings. This is because the difference between the cap and what would have been the indexed cap is the smallest for that year.

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

I thank the parliamentary secretary for her answers. I think the chamber also appreciates the parliamentary secretary being prepared to offer at least some answers to the chamber. While we do appreciate her contribution, and the minister before her, we are still left in doubt. We have not in any way had our concerns alleviated that there are going to be families who have increased costs as a result of this legislation. It is as simple as that. As I said earlier, in spite of the parliamentary secretary's view that it will be only a minimal number of families, in my view and in the coalition's view there should not be one family having to undergo a single dollar of increased cost because of this legislation. The reason I say that is this: if this government had managed the economy properly, if they had not got us into $198 billion debt, and if they had not done things like spend $80.9 million on administering an emissions trading scheme that does not even exist then we would not be in the position of even having to be here today. We would not be in the position of having to deal with this legislation because it would not be necessary.

This is the point that is being made in the community: why is child care the place where the government is finding money for, as they said, their savings measure to go to the National Quality Framework? Why should any single Australian family have to bear the burden of one dollar more because this government is inept and cannot manage money. That is the only reason that this piece of legislation is here. It is a savings measure. It stands to reason—you do not have to be a rocket scientist to figure this out—we would not be debating this if the government had done a better job managing the economy, if the government had not wasted so much money on different things. There is now $33 million going in grants to livestock exporters in the industry because the government completely stuffed up the live export industry by banning the trade.

Senator Adams interjecting—

I note my colleague Senator Adams, who is here, is a tireless advocate for Western Australia. How stupid was that? So there is $33 million that the government has had to find because of a stupid government decision. The point is that people out there in the community realise that this government has a piece of legislation relating to child care as a savings measure. On the table we have a percentage for how many families will have to bear an increased cost. I ask the parliamentary secre­tary this, and if she needs to take this on notice and come back to the chamber, I will be most appreciative: we have a percentage of families that the government says are going to have to bear an increased cost, but exactly how many families are going to bear an increased cost at all across the country?

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

There are a few points there, and some of the points that Senator Bernardi made, that I will address. Some were a bit broader than his specific question going to understanding how the savings actually worked. Senator Bernardi pointed out that when his children were in care it was very expensive then. Indeed, I recall that, possibly about the same period of time. This brings me again to highlight that the cost to families or households by this government's measures have been brought down from 13 per cent to seven per cent. Senator Nash knows this. Senator Nash also knows that if we are committed to a national quality framework, which I remind her is a COAG measure with all states and territories committing to improve quality, then it is incumbent on a fiscally responsible government to look to savings to address those measures. We cannot just sit here with a $70 billion black hole, as is the case in the direct action measures. We do need to look at responsible savings. This government has found these savings and proposed these savings. They have been on the record now for a good 12 months. There is nothing new or astounding in them. The impact on families is relatively limited.

However, this debate has also conflated the impact of these savings measures on the 0.9 per cent of families with incomes less than $100,000 per year who are utilising this assistance up to the cap level and will not receive further than the cap, with the costs associated with the National Quality Framework. I think I need to address that in a bit more detail, since Senator Bernardi raised the Access Economics material. Independent economic modelling from Access Economics, commissioned by COAG, indicates that the expected impact of the national quality framework on any cost increase will be moderate. A family on $80,000 a year would expect to pay an additional out-of-pocket cost—and I stress that: out-of-pocket cost, not fees—of 57c per week in 2010-11, rising to $8.67 per week by 2014-15 for one child who attends full-time care, and we have been through previously how most children attend roughly two days per week of care. The most extreme example of a child who attends full-time care per week is that, going out to the out year of 2014-15, the cost would rise to $8.67 per week.

As I said to Senator Nash yesterday anecdotally, I am yet to meet a family with children in care, particularly a child under the age of two, that would not be prepared to pay a marginally additional amount of money to ensure they had a better carer-child ratio. The national quality framework measure is delivering that. Families are not meeting those costs on their own. Families will receive additional childcare support through the childcare rebate and the childcare benefit for additional costs they face, and the critical figure is what the out-of-pocket costs would be. The most extreme example in the final out year is $8.67 per week for a child in full-time care. That is what we are talking about. We are not talking about figures such as those bandied around today and previously, the $22 per day; we are talking about $8.67 per week to ensure measures such as a child-carer ratio of one to four, rather than one to five, is delivering better quality care to our children.

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

I would like to ask the minister, while the opportunity arises: has the government costed what a carbon tax will cost the childcare industry? While you are here, you may, while answering that question, also answer if you can: what is the additional cost on, say, Catholic nursing homes, hospitals and so forth? Maybe you do not have that information with you, but you should have the information on how much it will cost, additionally, to heat and light all the childcare centres in Australia.

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

I should highlight that we are not actually dealing with the carbon tax measures now, so the information you are requesting, which is specifically related to the impact of a carbon tax on childcare centres, is not immediately available to me. Indeed I am not aware of whether we could distinguish between Catholic and other services in that regard. I would encourage you, though, to raise such important issues in the debate on the carbon tax, because, as other senators have pointed out today, cost increases that may occur in child care due to increases in energy charges are an important issue, which is why the government has developed the householder assistance and the income support arrangements to support families through any additional costs that may be associated with us putting a price signal on carbon.

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

Thank you for that, Minister. I would have thought that a parliamentary secretary such as you, who is always known for getting across the details of these issues and is highly respected in this chamber, would be prepared for a question which is pretty basic and which you yourself say is an important question on what the costs of increased lighting and heating are and what a carbon tax will cost the childcare industry.

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

I reiterate the point I made just a moment ago. Whilst we certainly have the details of the cost impacts for the national quality framework, which is what this measure pertains to, and savings in order to assist in the delivery of the national quality framework, this measure does not relate to the carbon tax. Certainly some of your colleagues have sought to utilise that issue to highlight their concerns about cost-of-living pressures, but this particular measure bears no relationship to the carbon tax.

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

I will not be asking any questions about the carbon tax. I am sure we will have an exhaustive committee stage for that bill when it gets here. I want just to state on the record my position on this bill. In good conscience I cannot support it. I think that it is worth reflecting that the 2010-11 budget provides $273.7 million for the introduction of the National Quality Framework for Early Childhood Education and Care, the NQF, and the commentary is that this framework will involve, amongst other matters, a progressive phase-in of improved carer-child ratios and higher qualification requirements for carers. These are unambiguously good things, and I think that the government needs to be congratulated for going down that path; that is important. But, in terms of good public policy, the measure of capping the rebate is inconsistent with the government's paid parental leave legislation, which I strongly supported, because it will dis­courage some families, some women, from participating in the workforce. We know that the rates of workforce participation by women in this country are extremely low by OECD standards, and are at their lowest amongst women aged between 25 and 44—the prime child-bearing years. The Henry tax review was asked by the government to make coherent recommendations to ensure appropriate incentives for, amongst other things, increased workforce participation. I think any measure that makes child care more expensive, less affordable, will go against a very fundamental tenet of what the government is seeking to achieve.

It is ironic that on the one hand the government wants to support parents through paid parental leave—an unambiguously good measure—but on the other hand this measure will penalise parents by making child care less affordable when they want to return to work. What modelling has been done by the government to determine how many people will either drop out entirely or reduce their use of child care, which will have employ­ment participation implications, as a result of this measure? What assumptions were made by the modelling? What was the nature of the modelling? Does the government still stand by the modelling that was done? If the modelling was done six or nine months ago, it is fair to say that the economy is in different shape now compared to back then. There are issues involved around what has happened in global markets. It may have some collateral impact on confidence here in Australia and on people being concerned about how they will make ends meet.

I agree with Senator Boswell that the Parliamentary Secretary for School Education and Workplace Relations is very much on top of her brief in this and is very capable in this area—although I do not think it is fair to be asking her questions on the carbon tax in this context. Parliamentary Secretary, what estimates have been made? What modelling has taken place to determine either the expected level of dropouts from child care or the number who will cut back on child care? Finally, is there a concern that people will seek alternative arrangements to reduce their employment participation as a result of these measures? I think they are relevant questions in the context of this bill.

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

My understanding is that the internal departmental modelling—which is essentially what occurred—was the subject of consideration by the Senate committee when it addressed these matters. I note Senator Xenophon's concerns about what the assumptions were based on. The assumptions were based on the department's existing data on usage, income levels and payments. Essentially, that was the nature of the modelling work that was done.

In terms of dropouts or usage containment, the assumption is that it would be relatively marginal because you are talking about a cap of $7,500 per year. The main impact will be on people earning higher incomes. In fact, the figure I mentioned earlier is that only 0.9 per cent of families on less than $100,000 per year would have their level of income support affected. Were it to be affected, it will simply be affected beyond that cap of $7,500 in support per year. The likelihood that families will respond to that sort of price signal by reducing their level of care was assumed to be highly unlikely, especially the high-income recipients. Further to that, if you also model out the usual usage of child care then indeed you are looking at families using roughly in the order of two days per week and receiving a little over $2,000 per year in support, and coming nowhere near the cap in this.

These measures were designed to generate savings in a climate where the government is committed to returning the budget to surplus after dealing with the global financial crisis. Indeed, some very hard decisions needed to be made and this is one of those. Some savings needed to be generated in order to move along the national quality framework, which is also a very important priority for this government. I should highlight once again that whilst in ideal public policy terms leaving a cap for a few years, limiting the indexation for a few years is, as has been highlighted, not ideal, these measures are designed to have the most limited impact possible on childcare support and have been designed to effect that most limited impact, particularly a most limited impact on low-income earners. Further to that, if we look at what these measures have succeeded in achieving—that is, the increase to the 50 per cent childcare rebate and the significant increase in the cap level from what had previously applied—we have been able to reduce the cost of child care from 13 per cent to seven per cent of household income. So there have been significant improvements for households and these measures have been specifically designed to have the most marginal impact possible on future support and usage patterns.

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

I thank the parliamentary secretary for her answer. I have some further follow-up questions on this. We will wait and see what happens with the assumptions of the modelling and the studies, but ultimately will the department undertake any monitoring to determine whether usage patterns and dropout rates are being affected? How will that monitoring take place? Is it something that already takes place? I think we will find out pretty quickly. It could be that my concerns are not justified or maybe they are—we will wait and see—but how will we be able to determine the impact of these changes? Will that information be publicly available and subject to robust public inquiry and scrutiny?

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

The simple answers to your questions, Senator Xenophon, are yes, yes and yes. I mentioned yesterday that the government's transparency agenda for childcare funding, income and support has been significant. That data has now been made available by this government and is competent to assess the very factors that you are referring to.

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

I have two final questions that follow on from Senator Xenophon's question. Parliamentary Secretary, you mentioned that in the view of the government this is going to have a limited impact. The Australian Childcare Alliance, which is obviously a very well-respected organisation, did research in 2010 which said that the rising cost of child care was going to force 38 per cent of families to consider reducing their hours. I have no reason to dispute that figure. Are you aware of that? Is that something that the minister or you have discussed with the Australian Childcare Alliance? If that is correct it would be extremely worrisome for not only those of us in the chamber but also those out in the broader community. Earlier you made the point that 50 per cent of the increase in childcare fees is covered by the childcare benefit.

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

No, the rebate.

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

Okay. Regarding the impact of the capped childcare benefit, has any work been done on the over-the-cap hours that parents have to partake of for their children? Would any increased costs then be coming out of a family's pockets?

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

Sorry, Senator, but I missed the last part of that question. Could you repeat that?

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

It was about the capping in the broader context of the increases. If there are increased costs that come out of a family's pockets because there are places over the childcare benefit limit, has any work been done to assist those parents with those out-of-pocket costs?

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

I think I need to differentiate between the discussion that I was having Senator Xenophon, which was in relation to these particular measures, and the issues just raised by Senator Nash, which are more related to the cost impacts of the national quality framework and the assessments of those. I think it might be important to make that distinction.

With respect to modelling associated with the increase in costs likely to occur from the national quality framework, it was the COAG commissioned work from Access Economics that I was referring to. Again, given that this was independent economic modelling commissioned by COAG, I think that the veracity of this modelling should perhaps be considered when comparing work done by particular groups within the sector on the potential cost increases. I am aware of similar figures in the past which were in the order of $22 a day, as we talked about today. There were concerns that families, as a consequence of increases of such magnitude, would reduce their hours by 38 per cent. I think my earlier comments dealt with those matters. We have referred to the Access Economics work. We have highlighted that measures have been introduced from the start of this year in New South Wales without such dire consequences. I think I have also made the distinction between the national quality framework and what we are addressing in this bill, which are the savings designed to assist in the implementation of the national quality framework.

We can go back to the Access Economics figures, going up to the year 2014-15, for the increased costs that families will face. I stress that these are out-of-pocket costs rather than fees per day or per week costs, which do not deal with the significant component of government assistance in childcare support. The Access Economics estimate is that the increases are likely to be 57c per week for a child in full-time care. Again, that is the extreme example; most commonly, it is children in care for two days per week, on average. For a child in full-time care in 2010-11 the increase would be 57c per week. Has the government modelled the likely impact of containing the cap in that respect? I would have to say that the data to do that would obviously be available, but I think I can take it from the nod from my advisor, given what we believe is a reliable estimate of the likely impact, that the 57c per week has not been taken into account in the $7,500 per year cap, nor has the likely impact of that extra 57c per week on the 0.9 per cent of families who are under $100,000 per year been taken into account. I think that just comparing those figures demonstrates that it is likely to be an extraordinarily marginal effect.

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

I have a couple of final questions. I would say that many people are having difficulty accepting the 57c a week figure that you are putting forward when other modelling is showing it is $12 to $22. There is a huge discrepancy between those two things. Perhaps the minister could provide to the chamber exactly the modelling that is used to get that 57c. I am assuming that it was the Access Economics modelling. I would say that there is still a great deal of concern around the fact that other modelling is showing that it is $12 to $22 a week.

Parliamentary Secretary, you have referred numerous times to the fact that the 1 to 4 ratio has been introduced already in New South Wales with little impact. My final question is this: isn't it quite likely the case that it has had little impact, in your view, in those centres because rather than going to the expense of putting on extra staff they have simply cut their childcare places and not incurred the expense that way?

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

I am well aware of the potential for 0 to 2 places to be impacted. That is why I am greatly assured from the advice I have just received from the department that there has been no indication that that has occurred in New South Wales at all.

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

Just to clarify: any of the changes from the 1 to 4 ratio have been as a result of extra staff and not from the cutting of places? Is that what you are indicating?

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

I would be loath to make indications about how each and every centre might have managed achieving a 1 to 4 ratio, and what changes that may have led to in their staffing arrangements. I am aware that some centres have been operating on a 1 to 4 ratio for some time for quality related purposes. Some other centres may well have had to make other adjustments in order to achieve a 1 to 4 ratio. I would not like to say that that has necessarily involved additional staff or, indeed, additional hours for particular staff; it may have involved other rearrangements within their current staffing arrangements. I would not want to second guess that element of the situation. What I am assured by the department is that there is no indication that the removal of 0 to 2 places has been a result of these quality measures.

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

Has any work been done on whether, because of the decrease in places available as a result of the 1 to 4 change, parents have not been able to get childcare places where previously they would have? Has any work been done on the various make-up of changes that may have taken place to hit the 1 to 4 ratio? Has any work been done across New South Wales, where you have indicated this has already happened, to determine what route, if you like, a childcare centre has taken to reach the 1 to 4 level? If not, wouldn't it be prudent to do so to get an understanding of the changes that childcare centres are having to undertake and whether they are cutting places or putting on extra people. That would be useful information for the government to have.

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

Under the National Quality Framework we do have trial sites across the country looking at how these transitions are being managed. The outcomes of that work are likely to be available relatively soon, but are not available just now. We are still trialling the monitoring of those issues. As I said, the most critical issue is that, in New South Wales where these measures have been introduced from the start of the year, there is no evidence that there has been a decline in the number of 0 to 2 places.

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

What is the date of the Access Economics report that you have been referring to? I just ask that in the context of ensuring that all the information available has been taken into account for the report. It is quite important that we know when that Access Economics report work was done.

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

We are just looking to find the date of that. As I am sure you are aware, these measures have been delayed by 12 months so the date may, indeed, be more relevant to the development of the National Quality Framework rather than these particular measures. What factors might need to be updated subsequent to that, which directly relate to these measures, I am not really sure—other than the obvious economic data about inflation. I understand the Access Economics paper is dated towards the end of 2009.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

I note that we are moving towards the conclusion of this debate. I have sat in on parts of it and heard this parliamentary secretary and the previous parliamentary secretary make some of their contributions. It is important that, as we move to the end of this debate, the core element of this is not forgotten. The core element of this is that it is not going to do anything to help the cost of living pressures that Australians face. In fact, quite the contrary, it is going to harm Australians, and increase those cost of living pressures. The minister can cite the statistics as to what extent that may be and what families may be affected, but there is no way you can look at this without coming up with the conclusion that there is a negative impact. It is not just a negative impact in terms of putting a freeze on the indexation of the rebate in future years. That is not the only thing that occurs here. What we actually have is a reduction in the rebate. The amendment that the government has had to move to its legislation makes it very clear that there is an effective reduction in the rebate. It is having to put in place a new subclause in this legislation that will ensure a rebate that could have been $7,941 as at 1 July 2010 will be brought back to $7,500. An indexed rebate that would have kept going up from that $7,941 will be brought back to a flat line of $7,500.

We should not forget core principles; we should not forget that this is one of a range of factors in the cost-of-living pressures that are building up on families. Since December 2007 we have seen electricity prices around Australia go up on average by 51 per cent, gas prices around Australia go up on average by 30 per cent, water on average by 46 per cent, education by 24 per cent, health costs by 20 per cent, rent and housing costs by 21 per cent, grocery prices—and in fact this statistic is a little old and they have probably gone up even further—by 14 per cent and, as we have heard in the evidence that has been highlighted, childcare fees since June 2005 go up by 35 per cent. These are massive increases for families doing it tough. Not just is this legislation, this approach of the government, doing nothing to help those pressures; to some extent it will add to those pressures. That is an undeniable fact and an undeniable consequence of what the government is doing here today.

It is critically important that if and when this debate wraps up it is very clear and on the record that this government is for families who use childcare services putting in place barriers, putting in place structures, that will see them face higher costs. That is the clear outcome of it. That is before we get into the carbon debate—and some of my colleagues have raised the carbon tax and the extra cost pressures that all of that will pile onto families and households—and it is from a government that within that carbon tax debate wants to keep highlighting the so-called compensation that it is going to offer, the compensation arrangements for house­holds that it plans to have.

If this is the type of approach this government takes to support services around compensation and rebates and assistance for services, it is a demonstration that this government cannot be trusted when it promises some form of compensation. It is a demonstration that over time this government is happy to let rebates, compensation or assistance be eroded, because that is what it is doing here. It is letting those things be eroded here and it will let them be eroded under the carbon tax mechanism as well. Anyone listening to or looking at this debate needs to be absolutely clear that, despite the nice words from the parliamentary secretary in dealing with the many sensible questions that Senator Nash and others have asked her, this is a cut in assistance, a reduction in available assis­tance. It is a reduction now, it is a reduction of what might have been in the future, it comes on top of so many increases in pressure on the cost of living that everyday Australians face and it is going to do nothing to assist them. If anything, it will harm them. I think that the parliamentary secretary should acknowledge that very basic and core premise of the change that is being proposed.

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

I thank Senator Bernardi for high­lighting one of the critical issues that has been lost over—

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Senator Birmingham.

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

Senator Birmingham. Sorry about that. Senator Bernardi has indeed left the debate at this stage. Senator Birmingham highlights the point about supporting services, and I think we have lost in this discussion the point I made at the very commencement, which is that all the savings achieved through these measures, which will impact less than one per cent of families, families earning $100,000 per year, are being directed to assist services to deliver the national quality framework. This is not money being taken out of child care. Child care itself, to revisit Senator Nash's earlier words, is not being used as a cash cow. We are reconfiguring a marginal element of the significant support that has achieved such significant reductions in the out-of-pocket expenses of Australian families over the last two to three years. We are redirecting a very marginal element of that, in savings, towards supporting services to deliver better quality care. Question put.

That the amendments (Senator Jacinta Collins's ) be agreed to.

The committee divided. [11.02]

(The Chairman—Senator Parry)

Question agreed to.

Question put:

That the bill as amended, be agreed to.

The committee divided. [11.06]

(The Chairman—Senator Parry)

Question agreed to. Bill, as amended, agreed to.

Bill reported with amendments; report adopted.