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

I would like to refer interested senators to the Greens amendment on sheet 8109. This is in relation to lifting the number of hours in the safety net from 12 to 15. We have heard consistently from the sector, the childcare providers as well as education experts, that we should not be reducing the number of hours available for vulnerable and low-income families, and children in particular.

This safety net can only operate as a safety net if it indeed gives children the protection that ensures they are able to succeed and benefit from the care and educational experience and opportunities they are given. This amendment goes to put into practice the idea that two days of child care and early childhood education would be available to vulnerable and low-income families. These are families who do not meet the activity test for a variety of reasons. This might include single parent families or families where one parent is at home and not able to work or is transitioning through different work arrangements.

I heard the minister in his speech just now trying to argue that 12 hours of care is sufficient, but it is just not. Currently, these families have access to 24 hours of care a week. The current bill, unless this amendment is accepted, would halve that access for some of the most vulnerable and disadvantaged families we have. I would like to keep it at 24 hours per week, but I am being realistic here tonight that there has been a lot of consultation and compromise from people on many fronts to accept that 15 hours would be the bare minimum. The rationale for 15 hours is that it is neatly split between two days, at 7½ hours per day, which ensures children can get the maximum benefit from that care.

We also know that from a provider's perspective—that is, each individual childcare centre—that it is more realistic for them to be able to operate a system where they can provide 7½ hours of care each day, or 15 hours of care split evenly over two days. It makes their whole system more viable. Centres have told us this, and we have all of the evidence provided through the various Senate inquiries. There is very little belief that centres, particularly small-business operators and those in rural and regional areas or outer suburbs, will be able to be viable and provide services if they can only provide six-hour blocks. It is just not viable or realistic for those centres to operate under those circumstances.

To be absolutely frank and honest with those in this place, the government has cut in half the current safety net for all children. For vulnerable kids and kids from low-income families and families where only mum or dad is working for whatever reason, it is just unthinkable that we would punish those children by forcing them to get access to only one day of care per week. It flies in the face of everything we have seen from experts and evidence about how we get the best benefit out of funding early education and care.

This is a big package. There is a lot of money in this package, but it is not going to be able to do its real, good work or have a significant benefit for children if we cut off our nose to spite our face and force kids into one full day 12-hour session or bits and pieces over a week. That is not how you deliver a comprehensive, effective education and care service.

In my speech on the second reading I also spoke about children who are on the margins in terms of vulnerability. For many of these kids sometimes the childcare centre is the safest place to be. And we are about to say to those children, 'It might be the safest place you can be, but you're only going to get half the time there now.' I just think that is unacceptable. How can we say to these kids, who are amongst the most vulnerable and disadvantaged in our community, that they deserve less because others who happen to have both their parents working are going to get more. These kids deserve a decent safety net, a proper safety net. And lifting the hours from 12 to 15 seems like a small amount, but it will make a significant difference to ensuring that these children do not fall between the cracks.

I plead with the government and I plead with my fellow crossbenchers: three extra hours a week will make a huge difference to the lives of these children. This is an opportunity to fix it tonight and an opportunity not to throw these children and their families under the bus. This is an opportunity to work with our small, independent mum and dad operators of childcare centres out there and ensure that they can continue to care and deliver services to vulnerable kids and low-income families. I plead with the committee: this amendment is a huge compromise, but it will go a long way to fixing the major flaw in this legislation. With that, I move:

That the House of Representatives be requested to make the following amendment:

(1) Schedule 1, item 41, page 49 (line 23), omit "24", substitute "30".

Statement pursuant to the order of the Senate of 26 June 2000

Amendment (1) is framed as a request because it potentially increases expenditure under the standing appropriation in section 233 of the A New Tax System (Family Assistance) (Administration) Act 1999. The amendments will increase the maximum number of hours for which child care subsidy can be paid in relation to a low income result individual and thus may have the effect of increasing total expenditure under the standing appropriation.

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000

The Senate has long followed the practice that it should treat as requests amendments which would result in increased expenditure under a standing appropriation. If the effect of amendment (1) is to increase expenditure under the standing appropriation contained in section 233 of the A New Tax System (Family Assistance) (Administration) Act 1999, then it is in accordance with the precedents of the Senate that the amendment be moved as a request.

Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the opportunity to speak at this stage of the debate tonight. I would like to open by saying that Labor has always been willing to work with the government to improve the early education and care system in Australia. We have been consistent about that for two years and about what needs to be fixed in the government's child-care changes. Indeed, two years ago the shadow minister, the Hon. Kate Ellis MP, wrote to the then minister, Scott Morrison, outlining Labor's preparedness to work with the government around improvements for early child care and education, making it clear that we want those discussions to be as productive as possible and really putting out the hand of collaboration and cooperation to make sure that particularly low- and middle-income families, single parents and disadvantaged and vulnerable children were appropriately protected in any reforms to the child-care system. That letter goes back two years now to where we find ourselves this evening.

We still have some serious concerns with what the government is proposing through this package. I think we all realise that we are here until the bitter end tonight and that this really is the last chance for the parliament to fix the outstanding problems with the government's reform package. There have been around two years of warnings about how many children will be worse off and how in particular vulnerable and disadvantaged children will be hurt. Unfortunately, the government has chosen not to listen to that nor change its position.

The changes will cost $1.6 billion but will halve access for some of Australia's most disadvantaged children, as Senator Hanson-Young has already drawn the chamber's attention to. It is hard to believe that the government can actually be spending so much money and at the same time leaving so many of the most vulnerable and disadvantaged children worse off. Over the last months of debate, particularly as this legislation has been nearing its conclusion in the Senate, early education experts and the sector have been calling on the government to fix particular elements of the child-care changes and this really is the last opportunity to do it.

Labor will strongly argue that the government and the crossbench have a moral obligation to join with Labor to simply make sure that these changes will not damage some of Australia's most vulnerable children, the exact children that this parliament should be working to protect. The early childhood sector issued a final plea to the Senate today, with Early Childhood Australia's Sam Page saying:

We call on the Senate to block the bill today unless there's an amendment to increase the base entitlement to 15 hours a week.

That goes to the request that is before the chamber. The Australian Childcare Alliance has written to all senators warning that the sector cannot be satisfied with the current reduction in access for low-income families. Goodstart Early Learning has claimed that up to 100,000 lower income families could be worse off if the activity test is now fixed.

For two years now Labor has been campaigning on the changes we need to see to support this package. Along with experts and the sector, we have been trying to convince the government of the changes that are needed. We strongly believe and urge the government to fix the activity test so that vulnerable children do not have their access cut in half and at the very least increase access from 12 to 15 hours a week so children can access two days care in line with what experts and the sector have been recommending.

I note the comments of the minister in the second reading stage that he believes that two sessions from nine to three are adequate. For many children that does not necessarily fit. Their life does not fit into convenient nine-to-three boxes. Anyone who has worked in child care and anyone who has any understanding of the children who would fit into this category would understand that two sessions from nine to three probably do not meet the needs of this particular group.

So we strongly support the request that has been put by the Greens tonight. We do believe it represents some improvement for vulnerable and disadvantaged children, although we note it is well short of the 24-hours access currently received. This is what the sector and experts have outlined as the absolute minimum if two days a week are to continue to be provided. However, Labor does not think that this is the best solution. There is no clear explanation of how it would work for all children in all centres. We have concerns about the workforce implication for the educators if it means moving to a system where shorter sessions become common. The same is true for parents looking to get back into the workforce. Short sessions are not much help when telling an employee your availability. If this request is successful, it is vitally important to see that this is delivered as two or more days in practice and we would want to see the government work with the sector and with employee representatives to do that in a way that protects the workforce and delivers the best educational outcomes for those children.

We do support this request, despite serious reservations, which I think also Senator Hanson-Young touched on, because Labor have maintained through the whole process that we are willing to compromise. This is indeed a compromise. I hope the chamber will be able to support it tonight.

Before I conclude—and I do not wish to delay the chamber unreasonably—I want to respond to the minister's comments in his second reading speech around BBFs and the commitments he gave in the second reading stage around ensuring access to the quarantined funding that will allow them to continue to provide care to the children who use that service. We welcome that commitment. It is something that the Hon. Kate Ellis has been arguing for and certainly raising as a major concern with the legislation. We are pleased that the government has come to the chamber and given that very strong commitment to ensure that those services will continue and that they will be given funding certainty and adequate funding to enable them to do their job.

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

Senator Gallagher, thank you for your acknowledgement and words in relation to BBFs. I appreciate that; and I appreciate the discussions I have had with Ms Ellis and many others in relation to that, as indicated before.

As I have said, the government agrees that we should see young children in circumstances of disadvantage being able to access two sessions of care a week under our reforms and we are confident that the reforms enable that to be the case. We do not support this amendment, though, because we do not believe that it is necessary for that to be the case.

I think the Senate should, firstly, step back from the 12 hours as opposed to 15 hours and again remember how the activity test works. The activity test necessitates only four hours of activity per week. That four hours can encompass working, studying and volunteering. It encompasses other activities such as looking for work, as I indicated before. So it is a very light-touch activity. The volunteering elements can be accessed through parents engaging in volunteer activities through their school, enhancing areas of parental engagement across the community, with the educational benefits that come from that. So it is not hard, or a high barrier, for families to meet the activity test.

Nonetheless, we have indicated that there are safety net provisions in a number of circumstances. Firstly, there is the safety net provision in terms of additional childcare support and subsidy for children who are at risk. Senator Hanson Young, in moving this amendment, said that sometimes an early education or childcare service is the safest place to be; sadly, sometimes it is. But in those cases those children can be identified by the centre and verified by the different state bodies. As I indicated before, that does not mean they have to be children who are in the formal protection or care of the state; they can be identified because of mental health circumstances—for example, in the home environment involving a parent, a sibling or the child themselves. In those circumstances, they will not be eligible for 12 or 15 hours per week; they will be eligible for 50 hours of care per week, essentially for full-time attendance in an early education or care setting. And it will not be 85 per cent of the fees that will be paid; it will be all of the fees that will be paid. So there is a strong safety net there in place for children who are identified as being at risk.

That leaves the remaining element of the safety net, which is for children who are not identified as being at risk but who are in low-income families that do not meet the activity test requirement of four hours of activity per week. Under our reforms, those families will be eligible for 24 hours a fortnight, or 12 hours a week, of care. As I indicated in my second reading contribution, the government believes that that can and should be delivered as two sessions of care by service providers who have expressed a desire and commitment to early education opportunities and facilitating those early education opportunities. At present, many service providers are providing a number of hours in a session of care that are simply not utilised. That means taxpayers and parents are making contributions that are not actually resulting in care or education benefits for the hours that are being paid for. We believe that this tighter alignment can ensure two sessions of care are provided without services being in the position of being able to take advantage of the system by charging longer hours of sessions of care for people who are not in the workforce, who are not engaged in the activity, and therefore not requiring those 10- or 12-hours sessions of care for their children.

It is for those reasons that the government does not support this amendment. As I have indicated, there will be a post-implementation review of this act and the overall changes. In that post-implementation review, we absolutely commit to ensuring that the application of these measures is considered. As Senator Gallagher acknowledged, I also commit to making sure that, as widely as possible, the 12 hours is delivered as two separate sessions of care.

The CHAIR: The question is that the request for an amendment on sheet 8109, of schedule 1, item 41, be agreed to.

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

The next amendment that I would like to move is on sheet 8110. This is in relation to the income threshold for the safety net.

We have just now seen One Nation and the Nick Xenophon political party line up with the government to cut in half the access to child care for some of the country's most vulnerable children. We have just seen the Nick Xenophon political party slash in half care to vulnerable children overnight. We have seen the Nick Xenophon political party, One Nation and the government line up and say to those low-income families: 'It doesn't matter. It doesn't matter whether you struggle or whether you live in an area where there is massive unemployment, where you have been retrenched, where Holden has closed its doors, where Hazelwood Power Station has had to close or a rural or regional area where there just isn't job security. It doesn't matter about that. Because you don't have two people working your kids don't deserve proper access to child care.'

Families have just been kicked in the guts tonight. They have lost 12 hours of care just like that, despite everything the experts have said and despite the promises that have previously been made. I do not think that the member for Mayo, Rebekha Sharkie, is going to be particularly happy when she has to go back to her electorate and explain that she was not able to keep her promise of protecting two days of child care for South Australian children. I do not think that families in Queensland, particularly those in rural and regional areas, are going to be particularly happy to hear that Pauline Hanson and One Nation have just kicked them in the guts. Their children, apparently, do not matter. Unless, as a child, your parents are both working, apparently your access to child care does not matter. You are not as valuable to this government; you are not as valuable to One Nation and you are not as valuable to the Nick Xenophon political party unless both your parents are working. Why are those children being punished? Because there is a deal that has been done here tonight.

Yesterday, they cut and slashed the family tax benefit payments and took money directly out of the pockets of families, and now, tonight, they have taken at least a day off families being able to send their kids to child care and early childhood education. It is appalling the way this government is getting these reforms through tonight by putting vulnerable children and low-income families in the dust bin. Those kids do not matter, apparently. They are not as valuable to the government, because both parents are not working or are not able to find work. It is an appalling situation to see the most vulnerable kids being hung out to dry by this government, the Xenophon political party and One Nation. They had an opportunity to fix this tonight; instead, they have rolled over, squibbed the opportunity and sunk the boot into low-income families right across the country.

We could redeem some of this in the next amendment, which would at least lift the income threshold for the safety net to $100,000 per annum per household. That would at least mean that for some families who are struggling to keep both parents in work, struggling to ensure that work is stable, and who are earning under $100,000, which, if you have kids in child care, is not an awful lot of money, because childcare fees continue to rise, this is an opportunity to at least broaden that safety net in terms of the income threshold. Kids are still going to be left in the lurch because the government and the crossbenchers have just voted to cut their access in terms of two days down to one, but at least lifting the income threshold from $65,000 up to $100,000 would ensure that a family on $75,000 a year or those on $80,000, $90,000 or up to $100,000 a year can still at least put their kids into child care with some support to pay those high childcare fees.

I appeal to the crossbench. You have just sent a pretty nasty message to families right across this country that if children come from a low-income family and if both their parents are not working then those children are worthless. You have just sent that message. You have just kicked those poor kids from vulnerable families. How about at least dealing with the income threshold level and lift it to $100,000 so that we do not see even more families left in the lurch, left out in the cold and told basically that they are not worthy to this government because they do meet the government's activity test? We have heard a lot about productivity from this government in relation to this bill. How about we hear something about the value of caring and educating our nation's children? How about we hear a little bit about understanding what it is like to have two kids or one kid in child care and a baby at home and struggling to pay the bills on one income?

Most people in this country, regardless of where they live, want to be productive members of our community, but we have a massive unemployment rate in this country. And whose fault is that? The government has done nothing to deal with unemployment in Australia. Unemployment continues to rise. The only answer the government has to that is, 'Let's give $50 billion worth of tax cuts to big corporations.' Somehow that is magically going to trickle down. Everyone knows that is bollocks. Meanwhile, here you are making it tougher and even harder for some of the lowest income families in the country, those who cannot manage to get into the workforce, to give their kids the best start in life.

Corporations can get $50 billion in taxpayer-funded tax cuts but families who have kids in child care are going to have a hard time affording the care their children need. It is money to big businesses, money to tax cuts for big businesses and less money for parents who are doing their absolute hardest to give their children the best start in life. There is money for tax cuts to big businesses and less money for parents who are doing their absolute hardest to give their children the best start in life.

This government has its priorities totally backwards. Do not give me any of this bollocks about the fact that you cannot afford a proper safety net to look after children in child care and cannot fund proper access to early childhood education. You are spending $50 billion on tax cuts. Do not come into this place and pretend that you do not have enough money to support parents who are trying to do their best.

I present the requested amendments, and I urge the Senate to support them. I seek leave to move the requests together.

Leave granted.

I move:

That the House of Representatives be requested to make the following amendments:

(1) Schedule 1, item 4, page 4 (after line 26), after the definition of extended child wellbeing period, insert:

extended low income threshold has the meaning given by subclause 13(3) of Schedule 2.

(2) Schedule 1, item 41, page 49 (line 31), omit "lower income threshold", substitute "extended low income threshold".

(3) Schedule 1, item 41, page 49 (after line 33), at the end of clause 13, add:

(3) In this Act:

extended low income threshold means $100,000.

Note: This amount is indexed under Schedule 4.

(4) Schedule 1, item 47, page 53 (after table item 18), insert:

(5) Schedule 1, item 48, page 53 (after table item 18), insert:

(6) Schedule 4, item 5, page 221 (after line 6), after paragraph (1) (a), insert:

(aa) extended low income threshold;

(7) Schedule 4, item 5, page 221 (line 20), after "items 18,", insert "18A,".

————

Statement pursuant to the order of the Senate of 26 June 2000

Amendments (2) to (6)

Amendments (2) to (6) are framed as requests because they potentially increase expenditure under the standing appropriation in section 233 of the A New Tax System (Family Assistance) (Administration) Act 1999 . These amendments will increase the income threshold for which the low income result is available, so that more people can access the higher level of hours for which child care subsidy can be paid under the low income result provisions. Thus, they may have the effect of increasing total expenditure under the standing appropriation.

Amendments (1) and (7)

These amendments are consequential on amendments (2) to (6). Amendments (1) and (7) should therefore be moved as requests.

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000

Amendments (2) to (6)

The Senate has long followed the practice that it should treat as requests amendments which would result in increased expenditure under a standing appropriation. If the effect of these amendments is to increase expenditure under the standing appropriation contained in section 233 of the A New Tax System (Family Assistance) (Administration) Act 1999 , then it is in accordance with the precedents of the Senate that these amendments be moved as requests.

Amendments (1) and (7)

These amendments are consequential on the requests. It is the practice of the Senate that amendments purely consequential on amendments framed as requests may also be framed as requests.

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

I indicate that I and my colleagues will not be supporting this, and I just want to address some of the matters raised by Senator Hanson-Young, my colleague. We made it very clear that we were particularly concerned that the Budget Based Funding program was not going to be funded and that that was going to cause serious issues, particularly as 80 per cent of services under this Budget Based Funding program supported over 19,000 Indigenous children in this country, in communities where the service could not be sustained on a market basis. As a result of the commitment from the government after we and others put that to the government, the $61.8 million under that program will be quarantined over forward estimates, and $48 million in addition to that would be an amount that these services for the most vulnerable Australians could be bid into, and in addition to that the childcare subsidies would apply. So that was a very significant concession for some of our most vulnerable Australians in remote and Indigenous communities around this country, and that is something that must be noted and put into context in relation to this.

Senator Hanson-Young raised a number of important points. She talked about people losing their jobs at Hazelwood in just over a week's time, at the power station, and people that will lose their jobs at General Motors Holden on 20 October this year; there is not that long to go. Can the minister indicate the basis on which those people who have lost their jobs will be able to access childcare services in addition to 12 hours per week. I know you have covered it, Minister, to some degree, but I think it is important to emphasise and expand on that. What are the criteria? I know there is a four-hour activity test, but could you indicate: where a parent may be suffering from depression, mental health issues, substance abuse or those sorts of issues, what assistance can be provided? Does the activity test apply? In other words, how broad is the category that people can apply for to get additional help beyond the 12 hours per week?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I thank Senator Xenophon for the question. I am disappointed in the misrepresentation by Senator Hanson-Young in her comments. I have twice already in the space of the last couple of hours informed the chamber that job seeking is an eligible activity under the activity test. An Australian who loses their job in difficult circumstances, moves onto Newstart and is simply meeting their job seeking obligations under their Newstart payments meets the activity test threshold and therefore would continue to be eligible to access childcare subsidy for 36 hours per fortnight at the minimum threshold of activity. Of course, if that individual were to undertake some form of training subsequent to losing their job and that training, over the space of a fortnight, exceeded 16 hours of activity—so more than eight hours of training per week, or more than eight hours of combined job searching and training per week, maybe with some volunteering as well—then they would be eligible for 72 hours per fortnight of childcare subsidy. This is a tiered activity test. It is an activity test that is absolutely accessible to Australians to ensure that they can continue to receive that support. Indeed, somebody who has lost their employment, if they are out there looking for a new job, will of course continue to receive eligibility without needing to fall into the safety net that we have been debating.

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

I want to follow up on that. I also asked about parents that may have a mental health issue or a substance abuse issue. Also, if there are child protection issues, my understanding is that, if a child welfare agency of a state or territory is involved, that would automatically trigger additional assistance. But, short of that, what about those broader categories, such as if there is a mental health issue? There may be a severely depressed parent that cannot meet that activity test. Also, does the activity test include, for instance, volunteering at a childcare centre? Is it as broad as that?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

To answer the last question first, yes. Again, as I have indicated to the Senate, the volunteering components of the activity test do encourage parental engagement and mean that volunteering at a school, a preschool or a childcare centre is an eligible activity. This, of course, encourages parents to, hopefully, read with children, enhance their skills, contribute and, overall, benefit from that engagement, as well as meeting the eligible activities.

In terms of children at risk, again, I outlined to the Senate before—and I will go through it in a little more detail if you like—that the government has clear policies to provide not just a 12- or 15-hour safety net for children who are at risk, as has been debated, but indeed a 50-hour safety net for children who are at risk, and not just a subsidy of 85 per cent or less for their childcare fees but a full subsidy for their childcare fees. Children in those circumstances are not just children who are in the child protection system; they are children who have been identified as being at risk before they reach such a crisis point.

The additional childcare subsidy under this safety net component is initially applied for by the childcare provider. Parents who may be in such circumstances of mental health difficulties—or others that you have identified, Senator Xenophon—do not need to be the ones making the application. The provider itself makes a certification that the child is at risk.

If we are talking about a child in the child protection system and that child is known to the child protection system, then essentially automatic eligibility is granted, and the provider need take no further action in that regard. But if the provider is identifying them for other reasons, such as family mental health difficulties, then the provider must take steps to provide that evidence over a period of the first six weeks. The proof of doing so is that a provider must be receiving a letter or statement from a state or territory body which was notified during the six-week period, or other evidence from a relevant professional, regarding the child's situation. That can include mental health services or other family welfare services and is part of the rules governing the childcare subsidy. The states and territories are working with us to identify who those relevant bodies for notification during that period are.

But it is absolutely intended as a subsidy mechanism to step in and to ensure that assistance is there for children at the earliest possible opportunity, before they reach crisis point. It is available not just if there are particular issues with their parents but also potentially if there are mental health issues impacting on siblings or others in the home environment, or other circumstances that might involve the engagement of family members in the criminal justice system or those types of threats to wellbeing that could eventuate down the track.

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

I thank the minister. In respect of mental health issues, for instance, does that mean that a letter from the treating GP of the parents to say, 'There is no reasonable way that the parent or parents would be able to comply with the activity test because of a health problem or a mental health problem,' would be sufficient for the activity test requirement to be waived and the additional childcare support to be provided?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

The short answer is yes. Obviously, circumstances have to be assessed on a case-by-case basis. The government would, in all such instances, be ensuring that proper process is being followed. We have enhanced compliance activities, as I have indicated. But, yes, for a genuine mental health circumstance where a child is potentially at risk—

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

Or general health.

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

or indeed if there are further provisions, yes, for circumstances where a parent might be, for example, undergoing extensive chemotherapy treatment or the like, then again there are provisions to ensure that they are not falling back on the safety net but in fact more extensive support is available.

Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

This is a question on Senator Hanson-Young's amendment. Labor will be supporting this amendment. Just going to some of the contributions earlier, I agree with Senator Hanson-Young that the lack of support to move from 12 to 15 hours per week is devastating for a particular group of children. I heard from Senator Xenophon about the BBF services, and I have already made a comment on that.

The point around what we have just seen happen is that 100,000 kids—Goodstart say 100,000 kids—are going to have their access to child care halved with the changes that have just been agreed, or the lack of support for the amendment. Our position would be that the government had to deal with the issue of Indigenous children in mobile services. That is not a win. It is expected that they would have to deal with that. Can you image cutting that? The government had to deal with that. They knew it was an issue, and they would have dealt with it—or I would be very surprised if they did not. In order to secure something that I think the government would have had to do, we can trade off the rights of 71,000 kids and halve their access to child care!

The point is not that your life deteriorates to the point that you get special access to additional hours. The whole point of child care and ensuring that kids get the best start to life is that there is universal access for a set period of time that allows kids to get the benefit of access to child care over two days—and the compromise position put was 15 hours. It is not that there is an inadequate amount of hours, and then there has to be a mental illness or some other catastrophe that hits the family for you to be allowed to get further access to subsidised care. That is not the point of a quality early childhood education system. What we want is for every child, regardless of their circumstances, to be able to access at least two days of full-time child care. That is what all the evidence shows makes a difference. But what the Senate has agreed to do tonight is take that away from thousands of kids and their families and then try to dress it up as though it were actually a win and that something was achieved tonight because the government has done the right thing—a must-do thing—to address a problem it had in a particular type of child care that was provided.

Labor will be supporting this amended. We are deeply disappointed with the Nick Xenophon Team, particularly, because of the position it has taken on this and for the families and the sector, who have been pleading with the Senate to reject this legislation tonight if we were unable to secure 15 hours. Each one of them explained why it will not work and how they will not be able to meet the needs of these groups of kids any longer, should these changes go through. This amendment will provide extra support to these families to some degree. It is not perfect—but then this reform package is not perfect—but it is an improvement. It is certainly not how we would design a childcare system, but it would be an improvement on what the government has currently proposed.

I would say to those who did not support the previous amendment, and this flows on from that, that I look forward to hearing your explanation to the sector and to their families who are going to be affected when they come and say to you how this will impact on them. We are strongly of the view that, yes, there should be support provided to families in crisis and children who touch on the care and protection system, but there should be reasonable and adequate safety net that meets the needs of all children, particularly those from low-income families, who are going to have their access to child care halved thanks to this Senate.

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

The government does not support this amendment. I will touch on a few of the broader comments made by Senator Gallagher and Senator Hanson-Young in their contributions on this before I respond specifically to Senator Xenophon's questions.

Firstly, Senator Gallagher indicates that there should be universality of access to early education. The government agrees. That is why we support universal access to preschool that guarantees every Australian child has access to early education opportunities. The childcare system also provides important early education opportunities, but let us not confuse the two, because the childcare system also provides important care and services that enable Australian families to juggle their work and family responsibilities. Preschool is targeted, of course, at preschool age children. The childcare system applies from birth, and all the amendments we are discussing here about whether we have 12 hours or 15 hours—the safety net for the very small margin of families who cannot or do not meet the activity test—or whether you apply it from $65,000 to $100,000 are not targeted specifically at preschool age children. They are at all children from birth till they start school. In fact, they also apply equally to children in outside-school-hours-care circumstances or even of school-age arrangements. So we have universal access. The government is committed to supporting universal access. We have extended universal access agreements to the states and we are working through processes to ensure universal access continues at a preschool level into the future.

We heard Senator Hanson-Young talking about stories of unemployed people. As I indicated to Senator Xenophon before, it is completely misleading to suggest that Australians who are in receipt of unemployment benefits and Newstart payments, if they are meeting their obligations under those payments, would in any way see themselves fall onto the safety net. If they are meeting their obligations to look for work then they are meeting the requirements of the activity test under these reforms.

Senator Hanson-Young went on quite a little rant in saying that this was a kick in the guts to Australian families. Actually, hardworking Australian families should be swinging from the rafters tonight when these measures pass the parliament, because hardworking Australian families will be substantially better off as a result of these reforms. Let me give you some examples. Let us take a family earning $50,000 with two children in long day care for two days a week at $100 a day. That family will be $2,197 better off as a result of these changes. Another family on $50,000, who might have their children in care for three days a week, will be $3,295 a year better off under the Turnbull government's changes. The same family with school-age children in after school care for two days a week will be $426 a year better off. Or take a slightly higher income family earning $80,000 a year: with two children in long day care, again at $100 a week, they will be $3,424 a year better off. The same $80,000 family will be even better off if their children are in care for more than three days a week, getting into many thousands of dollars. Whilst the subsidy rate tapers off from the 85 per cent high that it is for families earning less than $65,000, which means that some of the benefits diminish, you still see significant benefits for families earning around $94,000. With two children under six at long day care those families will be around $1,771 a year better off as a result of these reforms, or if their children are in long day care for three days a week they will be $2,657 a year better off. These are significant benefits that are helping families who are working, who are studying, who are volunteering in their community. They are helping the lowest income families the most and they will help the hardest working families the most.

The Turnbull government does not shy away from the fact that we want to give the greatest support we possibly can to the lowest income, hardest working Australian families to enable them to work more if they choose to; to enable them to participate in the workforce, where they choose to; to enable them to volunteer in their community, where they choose to; to enable them to up skill through education or training, where they choose to. These are the types of reforms that can help people to participate, to better their lives, to meet their demands. That is exactly what we are backing them to do.

We are backing hardworking Australian families.

I have expressed and detailed tonight all of the different safety net aspects of this to provide important early education opportunities to families. But I will not accept this idea that somehow this package is anything but a net good for the Australian population. Australian families overwhelmingly will be better off—one million Australian families will find themselves benefiting as a result of our reforms that we are voting on tonight.

I cannot believe the idea that somehow the Labor Party and the Australian Greens are going to sit here tonight and vote against providing greater childcare support to the lowest-income hardest-working Australian families. This should have been core territory for the Labor Party. This is the type of reform the Labor Party should have been champing at the bit to support, and yet here we are tonight with them desperately trying to pick holes in it and to create political problems rather than recognising that this is fundamental reform of a broken childcare system that needs to be delivered, and that we trust will be delivered, tonight. We thank those crossbenchers who have worked constructively with us, because clearly they are putting the best interests of the hardest-working Australian families first. They are demonstrating their commitment to help those families juggle their childcare costs and to support us in implementing a system that can keep costs down, and future cost rises down, but which also of course delivers important assistance to those families who need it most.

Senator Hanson-Young spoke about unemployment. Of course, under our government around 534,000 jobs have been created, and we will keep pursuing policies that do that. And these reforms, again, will help. They will help workforce participation. An estimated 230,000 Australian families will choose to work or to engage more in the labour force or, indeed, to re-enter the labour force as a result of the extra support we are providing. Why will they do that? They will do that because they know that they will not get to February, March or April during the course of a year and find that their $7½ thousand cap has been hit, that they no longer get any support and that they end up working for the last two, three or four months of the financial year for no financial reward because of their childcare fees. That problem will no longer exist for those families.

Why will they increase their workforce participation? They might be entering the workforce in a lower-paid job, but rather than facing higher childcare fees they will do so now knowing that 85 per cent of those fees will be paid for.

We have gone through every single element of that the rewards that will flow to the people who deserve them most. We are proud of this package. We believe these reforms will help Australian families who need them most. They deliver the greatest help to the hardest-working Australian families, and that is not something that we will shy away from celebrating at all.

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

I must say that I am extremely disappointed to hear again from the minister an absolute lack of acceptance of what the experts have said. The minister has spent months in consultation and talk with representatives and experts from the childcare and early childhood sector. For months they have appealed to the minister about the current restrictions on access to the safety net, which are not broad enough. This is going to leave the most vulnerable children out in the cold.

The minister went so far as telling Patricia Karvelas on ABC RN Drive, 'We are committed to doing what the sector and the experts advise us is optimal.' Well, he is doing exactly the opposite tonight—exactly the opposite! He is turning a blind eye to the evidence put before him and rejecting the advice that has been put to him over and over again, that there are going to be vulnerable children and low-income families who lose out.

The minister has spoken a lot tonight about working families. And, yes, if you have a job and if both parents are working then this package is going to be pretty good for you. We all accept that. But for the most vulnerable people in our communities, for those who do not have both parents working for a variety of reasons, those children will suffer. It is the hardest-working first and the most vulnerable last for this government. The hardest-working first and the very vulnerable and the most vulnerable last. That is what we have got from the minister tonight—reject the expert advice, throw low-income families under a bus and put vulnerable children last. It is pathetic.

The CHAIR: The question is that Australian Greens requests for amendments (1) to (7) on sheet 8110 be agreed to.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

by leave—I move Liberal Democratic Party amendments (1) to (5) on sheet 8103:

(1) Schedule 1, item 41, page 36, (lines 26 and 27), omit step 4 of the method statement, substitute:

Step 4. Work out the hourly rate of CCS for the individual for each of those sessions of care (see clause 2).

If the applicable percentage is 0% for each of those sessions of care, the amount of child care subsidy for the individual for the week, for those sessions, is nil.

Otherwise, go to step 5.

(2) Schedule 1, item 41, page 38 (after line 8), at the end of subclause 2(1), add:

Note: If the applicable percentage for a session of care is 0% (see table item 5 of subclause 3(1)), the hourly rate of CCS for the individual for the session of care is nil.

(3) Schedule 1, item 41, page 39 (table item 5), omit "20%", substitute "0%".

(4) Schedule 1, item 41, page 40 (line 16), omit "$184,290", substitute "$134,290".

(5) Schedule 1, item 41, page 40 (line 18), omit "$274,290", substitute "$284,290".

I did not give a speech during the second reading debate on the bill, so I have a few remarks to make now. I do not like this bill. Putting more money into child care is a bad idea, and $1.6 billion is a lot of money. Childcare subsidies take money from taxpayers and give it to people who have children and choose to send those children to child care or family day care. The taxpayers who pay this money are both rich and poor. Some have children and some do not. Many of them enjoyed no subsidised child care when they were a child. They might have been raised by a stay-at-home parent, a relative or a neighbour, or their parents may have paid for their child care without a subsidy. So why do we subsidise child care?

It is true that childcare subsidies go to disadvantaged families, for whom child care represents an important complement to their personal efforts to raise their own children. But childcare subsidies also go to families that are not disadvantaged, for whom child care is no better than their personal efforts to raise their own children. The only argument for providing childcare subsidies to families that are not disadvantaged is that the subsidies might prompt parents to return to the workplace, where they pay tax. But this argument has nothing to do with the welfare of the child.

Getting a parent back to work paying tax helps the government and the economy. It might help the parent in the long run too because they are less likely to lose their job skills. But we should not pretend that it is for the benefit of the children.

We should also admit that the argument about childcare subsidies prompting parents to return to the workforce does not apply to parents in high-income families. For these families, the decision about whether to stay at home or go back to work depends on nonfinancial motivations. The idea of someone deciding whether or not to return to work based on a childcare subsidy of a few thousand dollars a year while earning several hundred thousand dollars a year cannot be taken seriously.

So, while a case can be made for childcare subsidies for disadvantaged and low-income families, there is no reason whatsoever to provide childcare subsidies to high-income families. In fact, it is immoral to force low-income couples, some of whom have tried and failed to have children, to fund the childcare subsidies of high-income couples who have won the jackpot by having children but do not wish to stay at home to look after them. It is like forcing those in wheelchairs to pay for the running shoes of the able-bodied. My amendment is a measured attempt to confront this immorality.

The government's bill sets childcare subsidies as a percentage of the lesser of the actual childcare fee and a fee cap. The government intends this percentage to drop below 50 per cent once family income exceeds $250,000. The government's bill outlines how the subsidy would then fall on a sliding scale until family income reaches $340,000, where it would remain at 20 per cent of the actual fee or fee cap, up to a maximum of $10,000 a year.

My amendment would commence that reduction in the subsidy below 50 per cent at incomes over $200,000, not $250,000. It would apply the same gradual rate of subsidy withdrawal as in the government's bill, but the withdrawal would not stop at $340,000. It would continue so that, once income reached $350,000, the subsidy would drop to zero.

The government has agreed, in negotiations with me and Senator Hinch, to cease childcare subsidies at $350,000. I commend it for that. However, the government has so far only committed to support Senator Hinch's amendment, which calls for a sudden cessation rather than a sliding decline. A family on an income of $349,000 would go from receiving 20 per cent of the actual fee or fee cap to nothing, simply by receiving a $1,000 bonus. It is not the best way to do it. Unlike this alternative amendment, my approach would reduce the subsidy for high-income families in the range of $200,000 to $350,000.

Paying money to people with incomes of that kind cannot be defended. It is classic middle-class welfare. In many cases, the money is coming from the taxes of people who are earning far less than that. It leaves less money in the budget to help people who genuinely need help. Back-of-the-envelope calculations suggest that my amendments could affect around 100,000 high-income households and reduce government spending by around half a billion dollars over the forward estimates period. This is important because continuing deficits and growing debt represent a grave disservice to the next generation. My amendment is an opportunity to go some way to reducing this disservice. I commend these amendments to the Senate.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Senator Bernardi, do you want the call?

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

I do want to address a matter with the minister, but it is not related to these amendments, so I thought it would be more appropriate to deal with the amendments and seek the call afresh. It will only take a few moments.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Yes, that is good advice, Senator Bernardi.

Derryn Hinch (Victoria, Derryn Hinch's Justice Party) Share this | Link to this | Hansard source

I am standing to support Senator Leyonhjelm's amendment. I preferred my own, but in negotiations I can see where he is coming from. I think that anybody earning more than $250,000 a year should not be getting childcare money. I had my say about how I felt about these issues at the second reading ,so I will not say any more, but I stand to say that I support Senator Leyonhjelm.

Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Labor will not be supporting Senator Leyonhjelm's amendment. I disagreed with so many aspects of his contribution tonight that I think the answer is just no.

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

The coalition government will not be supporting Senator Leyonhjelm's amendment either. We understand the arguments behind it. In framing these proposals we have sought to be judicious, as best we can, with taxpayers' money whilst not undermining the intent of the childcare system to provide support to families to maximise workforce participation, to enable choice about working and, of course, to support early education opportunities. That is why the government presented a package of reforms that for high-income earners does reduce their current level of eligibility. When those opposite talk about people who might lose under the government's reforms, they are always counting people on very high incomes who lose under the government's reforms. At present somebody on, for example, a cabinet minister's salary can receive 50 per cent of their childcare costs paid under the childcare rebate. We proposed reducing that to 20 per cent.

I note that Senator Hinch has an amendment that will make a change that does not go quite as far as Senator Leyonhjelm's. I can indicate that the government will support Senator Hinch's amendment in terms of saying that there is a point at which support can end. Senator Hinch has proposed that at $350,000. The government believes that Senator Leyonhjelm's amendment is well intentioned in terms of trying to save money. We absolutely acknowledge that and acknowledge that the amendments that were just defeated during various debates have avoided costs of around $260 million—or in excess of that—being added to the cost of the proposals.

Senator Leyonhjelm, your votes and actions to date have already helped to ensure a reduction in the cost of this proposal. Your support for Senator Hinch's amendment, if that occurs, may see further cost reductions. But we do not support yours, as we believe that it starts to enter a territory that could have notable negative implications for workforce participation and the benefits that flow from that, particularly given the research and work that has been undertaken by the Productivity Commission in terms of the design of the proposals.

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

The Australian Greens will not be supporting Senator Leyonhjelm's amendment. We reject the premise that Senator Leyonhjelm has put forward that support for families who are working to help pay for their child care is not a legitimate need and service. I must say, as a mother who has relied my entire parenthood on paid childcare in order to be able to do my job, as many other working mothers around this country do, I find it galling to be told by a middle-aged bloke in this place that it is not a legitimate service to offer support for working mums in terms of paying for child care. It is pathetic.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Parasites.

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

We know that the educational outcomes for children are an important investment for any government. We know that, for working families—particularly with professional women—allowing them to have support to go back to work, to participate in the workforce, to pay taxes and have childcare funding to help them do that is significant to the productivity of this nation. We had an entire Productivity Commission report into how we could lift the level of workforce participation of women in this country, and they said that, overwhelmingly, proper funding for child care is what is needed.

We have one of the lowest participation rates of university educated women in the OECD. We send a lot of women to university. We help pay for their university degrees, but, once they have children, we do not give them the support that they need. Here we have a middle-aged bloke in this place telling professional working mothers that they do not deserve support in child care. Women across this country—working mothers across this country—would be appalled to hear that we have a senator in this place who thinks that they do not deserve assistance in being able to go back to work, to pay taxes and to contribute to this country, having a bit of support along the way in terms of child care.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Rich parasites.

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

Senator Leyonhjelm calls these working mothers across the country 'rich parasites'. That is what Senator Leyonhjelm thinks of working mothers in this country.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Senator Hanson-Young, try to ignore the interjections.

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

Senator Leyonhjelm has just referred to working mothers across this country as parasites. Rise up, I say. Women across this country will tell you directly to your face, through their letters, through their phone calls, in the street that the only parasite in this place is a middle-aged white guy drawing a huge wage from the taxpayer.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

I would like to put on the record that I think it is inappropriate to be describing senators according to the colour of their skin, their age or their gender, quite frankly. I think that, if the boot were on the other foot and I started talking in those sorts of terms about Senator Hanson-Young or anyone else, that would be truly inappropriate. We would not accept that in relation to child care. I raised before with the minister the point that referring access to child care or replacing people because their skin colour is wrong or their age is wrong—not in this case but in other circumstances in those sorts of descriptive terms—is false and wrong.

So I stand in this place and I say that the descriptions and emotional assessments that have been taken by Senator Hanson-Young in relation to Senator Leyonhjelm's skin colour or melanin content, his age and his gender do not have any real place in this discussion.

Whilst I am on my feet with 13 minutes and 37 seconds to go and we are discussing the idea of race and the idea of preferential treatment and things of that nature, I would like to thank the minister for responding very promptly to my earlier concerns. To remind the Senate: I was concerned—and I made this point during my speech on the second reading—that during Senate estimates I discovered that someone who had a place in child care for their child could be replaced at 14 days notice because someone deemed more worthy was going to access that place. Those more worthy characteristics related to the language one's parents spoke at home. If you were from a non-English-speaking family background, you could boot out the English-speaking, Australian-born child that had already got a place in child care. I thought that was wrong. Similarly, if you are from a low-socioeconomic background, your child can take the place—and I mean replace at 14 days notice—a child from a non-low-socioeconomic background. I think that is wrong.

It is the same in relation to skin colour. If you are in Aboriginal child, you can take precedence and replace a child who is non-Aboriginal who has an existing place in child care. They are wrong. I think it is prejudiced and bigoted and racist, you can say whatever you like. Senator Birmingham, to his credit—I know he is under the pump—has written me this letter, which I would like to include in Hansard.

It says, 'Dear Senator Bernardi, further to your questions regarding the priority of access guidelines at additional estimates on 1 March'—which was really prompted by today, Senator Birmingham, let's be frank—'I write to clarify the future arrangements regarding the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. As discussed, under these guidelines, which if used have been used to a very limited extent'—I will have some comments on that shortly—'priority is given to children in Aboriginal and Torres Strait Islander families, children in families which include a disabled person, children in families which include an individual whose taxable income is less than $44,457 in 2016-17, children in families with a non-English-speaking background, children in socially isolated families and children of single parents. These guidelines were reviewed in conjunction with the developments of the child-care package. The draft of the new guidelines, which have already been subject to consultation, will include two priorities which apply to vacant places only as follows:'—that is very pertinent—'the first priority is a child at risk of serious abuse or neglect i.e, a child receiving Additional Child Care Subsidy (Child Wellbeing). The second priority is the child of a single parent who satisfies or of parents who both satisfy the activity tests and are undertaking paid work, whether or not as an employee.'

In respect to what the minister has written there, I make the point that during estimates it seemed the minister and the department were unaware that someone with an existing place could be required to vacate that place with 14-days notice. Then, when they were made aware of it, the department in particular said they were unaware if it had ever been used. I asked them if they are required to be notified if it has ever been used, and they, of course, said no. I asked them how they would know, and they said, 'People talk.' This has been in place for 10 years, apparently, and no-one has bothered to talk about it. But they bothered to talk to me about it. I just find that extraordinary. The department has a tin ear to these things, perhaps. Anyway, they promised to review it and they have reviewed it.

I have also raised with the minister the issue of the activity test, because I had some concerns there. The minister has assured me that the activity test applies not to someone based on their means but on their actions and activities. It is not discriminatory and not prejudicing those people who work more hours or less hours. In fact, it is quite the opposite. It applies to anyone seeking work and it means that people who are actually working will receive priority placements for vacancies, above those who are not working, subject to priority 1.

Minister, I am seeking a confirmation that my understanding of your unsigned letter—you can sign it here in Hansard, virtually—is correct and that there will be no prejudicial placements. I am seeking confirmation that people will not be removed from existing placements under any circumstances, because they speak the wrong language, have the wrong colour skin or come from functional families, rather than your previously preferred priority guidelines.

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

Senator Bernardi, yes, you raised with me today some issues that we had some questions asked of us at additional estimates, earlier this year on 1 March, as the letter notes. You correctly identified at additional estimates some guidelines which you then identified were used during the enrolment practices of at least a centre, where a constituent had come to you. That centre had advised your constituent that they could lose their place, essentially, if somebody higher on the priority order came along, even after their child had already been enrolled in that childcare centre. You are correct. That exchange at additional estimates was the first I had ever heard of those guidelines in that form, and officials did work out which guidelines you were referring to and that the centre was accurately reflecting the guidelines that had been in existence since 2000.

As we indicated at additional estimates, but did not have all the information in front of us at the time, the department was already out, as they have been across a range of different rules and guidelines, consulting on new guidelines to apply under this package. Officials did indicate at additional estimates that the provisions of concern you had identified were not part of those new drafts that had been out for consultation and discussions.

I can confirm that those new drafts simplify the priority provisions, as you have read out, to a first priority being a child at risk of serious abuse or neglect and a second priority being a child of a single parent who satisfies or parents who both satisfy the activity test through undertaking paid work, whether or not as an employee. They are simple, straightforward priorities. I also note and emphasise that the guidelines apply to vacant places only. In that instance, centres will not be under the guidelines asking anybody to vacate a place that their child is already settled into, to create room for anybody else, even with these much streamlined and simplified guidelines.

These guidelines have been the subject of consultations, and this simplified approach was supported in the sector, which is no doubt happy to be removed of that responsibility of possibly having to ask somebody to move on and take their child out of a place in which they have been enrolled. With that in mind, I am very happy to give you and the chamber an undertaking and confirmation that the government is happy with the draft guidelines that have been consulted on. And we will not be reinserting any of the previous provisions or anything like it.

Senator Bernardi asked about the activity test as well. Yes, absolutely, the activity test applies to everybody. In meeting that, it is about the hours of activity, as defined, regardless of any circumstance that you may face meeting that minimum entry point of four hours of working, studying or volunteering with the various other factors I have addressed tonight, including job searching and the like, and of course noting some of the other safety net elements that have been the subject of debate tonight as well.

The CHAIR: The question is that amendments (1) to (5) on sheet 8103 moved by Senator Leyonhjelm be agreed to.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Madam Chair, I will not be moving the remainder of my amendments. They are picked up in Senator Hinch's amendment.

The TEMPORARY CHAIR: Thank you very much, Senator Leyonhjelm. Senator Hinch.

Derryn Hinch (Victoria, Derryn Hinch's Justice Party) Share this | Link to this | Hansard source

by leave—I move amendments (1) to (14) on sheet 8108:

(1) Schedule 1, page 5 (after line 2), after item 5, insert:

5A Subsection 3(1)

Insert:

fourth income threshold has the meaning given by subclause 3(4) of Schedule 2.

(2) Schedule 1, item 41, page 36, (lines 26 and 27), omit step 4 of the method statement, substitute:

Step 4. Work out the hourly rate of CCS for the individual for each of those sessions of care (see clause 2).

If the applicable percentage is 0% for each of those sessions of care, the amount of child care subsidy for the individual for the week, for those sessions, is nil.

Otherwise, go to step 5.

(3) Schedule 1, item 41, page 38 (after line 8), at the end of subclause 2(1), add:

Note: If the applicable percentage for a session of care is 0% (see table item 6 of subclause 3(1)), the hourly rate of CCS for the individual for the session of care is nil.

(4) Schedule 1, item 41, page 39 (table item 4), omit "upper income threshold", substitute "fourth income threshold".

(5) Schedule 1, item 41, page 39 (after table item 4), insert:

(6) Schedule 1, item 41, page 39 (table item 5), omit "5", substitute "6".

(7) Schedule 1, item 41, page 39 (table item 5), omit "20%", substitute "0%".

(8) Schedule 1, item 41, page 40 (after line 16), after the definition of third income threshold, insert:

fourth income threshold means the lower income threshold plus $274,290.

(9) Schedule 1, item 41, page 40 (line 18), omit "$274,290", substitute "$284,290".

(10) Schedule 1, item 92, page 82 (lines 13 to 15), omit all the words from "Or, the individual" to and including "the year.".

(11) Schedule 1, item 92, page 83 (line 8), omit "passed;", substitute "passed.".

(12) Schedule 1, item 92, page 83 (lines 9 to 11), omit paragraph 67DB(2) (d).

(13) Schedule 1, item 92, page 83 (lines 12 to 26), omit subsections 67DB(3) and (4).

(14) Schedule 1, item 92, page 83 (line 28), omit "(5)", substitute "(3)".

To save time, and because I did have something to say during the second reading debate, all I will say is that if this bill went through without this amendment you would have taxpayers getting 20 per cent of the cost of their child care paid for families earning $350,000 to $500,000 a year. I think that is a disgrace. If you pass this amendment, it will save the government $100 million over a three-year period if families on $350,000 to $500,000 have to pay their own childcare costs. I was amazed when I discovered that, even now, people earning half a million dollars a year get 50 per cent of their childcare costs paid by taxpayers. The Labor Party and the Greens have been talking all night about hard-up people. I am not anti child care, I do not follow Senator Leyonhjelm all the way, but I cannot see how you can justify voting against this. Are you now going to vote in favour of 20 per cent of childcare fees being paid for people whose family income is half a million a year? By cutting this, we are saving $100 million. In the big picture it is not much, but it is a start. I do not want to take up any more time. I commend the amendment to the Senate.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

I rise to indicate that I will be supporting this. This $350,000 cut-off level was negotiated jointly by me and Senator Hinch with the minister and with the Minister for Finance, Senator Cormann. All I want to do is highlight the fact that anyone who opposes this amendment will basically be saying to the Australian public: 'Even though you are earning $350,000 a year or more, you are still entitled to hold your hand out for a childcare subsidy; even though you are earning $350,000 a year or more, you can hold your hand out for other people's money for a childcare subsidy.' And the people who are paying that subsidy do not earn anything like $350,000 or more—not a fraction of it. It is just something to think about. It will be on the record.

Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

As we understand from previous speakers, this amendment has the support of the Senate. As such, we are not going to stand in the way of it. It is not Labor's focus as part of this childcare reform package. We do have concerns, though, that this undermines the universal nature of access to early education. All children, regardless of their parents' income, have access to government subsidised school, including public schools. And up to this point all children have also received some universal subsidised early childhood education. This amendment would end that. It will certainly be taking a different approach in one part of our education system from that taken in the other. I think it also risks early childhood education being viewed through the lens of being a babysitting service and welfare rather than part of the education system. As said, that is not Labor's focus and we understand it has the support of the majority of the Senate.

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

I will just add my comments to this discussion. I am concerned about the trend that this amendment is taking. The Australian Greens believe that access to early childhood education should be universal, and this goes directly against that. I understand the arguments put forward by Senator Hinch about the level of public funding going towards people on the upper income levels. But I think that is why we means test things. To cut it off at zero really does send a message that early childhood education in care is a luxury or about babysitting, not education. I fundamentally believe that education is the best way of giving our children a good start in life. If we want to have productive members of our community we have to be investing in their education early. All of the expert advice tells us that the real work and effort is put in before a child turns five. We have universal access for kindergarten. I would argue that we need to have universal access in the years below kindergarten as well. It is a matter of principle for the Australian Greens. Having said that, we are not going to stand in the way of your amendment tonight. But just note that we are very worried about the trend and the principle that this sets.

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

As I indicated earlier, the government supports and accepts the amendment from Senator Hinch, which, as Senator Hinch and Senator Leyonhjelm indicated, has been the subject of discussions. In introducing these reforms, the government had sought to calibrate the rate of childcare subsidy to more closely align with a fair and equitable means testing regime. That is why it goes up for low- and middle-income families under our reforms and goes down for higher income families.

We have accepted the argument that at some point it should cut out, and putting that close to the point where it was going to taper down to 20 per cent in any event seems to be a reasonable point at which we do not believe there would be profound impacts in terms of workforce participation or the benefits we seek to realise through child care. I note, as I have said before in terms of early education, that universality is provided via universal access to preschool. Of course, we have discussed quite a bit tonight all the other opportunities and support to access early education through the childcare service for families, including families with children at risk and low-income families. Of course, these arrangements will not prevent other families from choosing to continue to do so.

Question agreed to.

Bill, as amended, agreed to.

Bill reported with an amendment; report adopted.