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

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016 introduces major reforms under the government's Jobs for Families Child Care Package.

This package will deliver genuine, much-needed reform for a simpler, more affordable, more accessible and more flexible early education and childcare system.

Almost one million Australian families will benefit as a result of this childcare assistance package. Low- and middle-income families will be the greatest beneficiaries.

The measures contained in this bill represent an important investment in Australia's future, and they will deliver genuine reform.

The child care package contained in this bill has been before three Senate Inquiries. I thank the Senate Education and Employment Legislation Committee, the Senate Community Affairs Legislation Committee, as well as all those individuals and organisations who contributed to these inquiries. The government welcomes and accepts the recommendation from each of the committee's majority reports that the childcare bills be passed.

The government's Jobs for Families Child Care Package strikes the right balance between targeted childcare support for hardworking families who depend upon it, a generous safety net to protect those most vulnerable in our community, and ongoing support for high-quality early learning. This is further boosted through our $840 million in federal support in 2016 and 2017 for 600 hours of universal preschool access for each child in the year before school.

The key elements of the Child Care Reform Package are:

o the Additional Child Care Subsidy

o the Community Child Care Fund

o the Inclusion Support Program

This bill makes significant amendments to the current A New Tax System (Family Assistance) Act 1999 and A New Tax System (Family Assistance) (Administration) Act 1999 in order to introduce the Child Care Subsidy, Additional Child Care Subsidy, and new approved provider and service requirements from July 2018. The bill provides for a number of transitional provisions that will commence in July 2017 and for the fast-tracked introduction of some enhanced compliance measures from royal assent.

Together these will give effect to the majority of the government's response to the recommendations from the Productivity Commission Inquiry into Childcare and Early Childhood Learning

Our objective is to help parents who want to work, or who want to work more, while still focusing on early childhood education.

Having two parents in paid employment has become the preferred choice for most families because of the changes in our society and economy over many years. Access to more affordable, quality child care puts the opportunity of work within far better reach of more families.

The Jobs for Families Child Care Package is designed to support more families, including jobless families, to increase their participation in work, training, study or volunteering. The Government's significant investment is targeted to those who need it most—low- and middle-income families who are juggling work and parenting responsibilities.

We want families to choose their child care around their work, rather than limit their work hours to suit their child care. It is estimated that the package will encourage more than 230,000 families to increase their involvement in paid employment.

Child Care Subsidy

The centrepiece of the Jobs for Families Child Care Package is the new Child Care Subsidy. From July 2018, the Child Care Subsidy will replace the current Child Care Benefit and Child Care Rebate with a single, means-tested subsidy.

The Child Care Subsidy will be better targeted than current childcare payments, providing more assistance for low- and middle-income families.

This reform is fundamentally fair. Low-income families will receive a Child Care Subsidy rate of 85 per cent of the actual fee charged (up from 72 per cent). That decreases to a 20 per cent subsidy for very high income families who are currently receiving a 50 per cent rebate on their out of pocket costs. The Child Care Subsidy rate tapers from 85 per cent to 20 per cent to ensure the package is most generous to those who earn the least. A family on $60,000 a year [whose child care centre charges $100 per day] would pay around $15 a day per child for care.

To make child care fairer, the coalition's reforms include abolishing the $7,500 Child Care Rebate annual cap that currently applies to all families. This will ensure that low- and middle- income families are not limited by a cap on the amount of child care they can access. Families earning more than around $185,000 will also benefit from an increased annual cap of $10,000 per child.

The new Child Care Subsidy will be paid directly to childcare service providers to make the system simpler for families.

An activity test will ensure that taxpayers' support for child care is targeted to those who depend on child care to work or work additional hours. The three-step activity test will align the hours of subsidised care more closely with the combined hours of work, training, study or other recognised activity undertaken, and provide for up to 100 hours of subsidy per fortnight. The bill provides that at least eight hours of activity a fortnight results in access to 36 hours of subsidised child care a fortnight; more than 16 hours of activity a fortnight results in access to 72 hours of subsidised care a fortnight; and more than 48 hours of activity a fortnight results in the maximum amount of subsidised care of 100 hours a fortnight.

These reforms are fundamentally fair—they provide the greatest hours of support in child care to the families who work the most hours, and the greatest subsidy and financial support to the families who earn the least.

The Package is also designed to place downward pressure on childcare costs for families and to ensure the government's significant investment in child care is more sustainable into the future.

New data released earlier this week showed that there are nearly 18,000 approved child care services nation-wide, caring for roughly 1.25 million children.

But the data also illustrates a broken early education and care system that is not working for Australian families. The data for the June 2016 quarter shows families faced a fee spike of almost eight per cent since the June 2015 quarter. While the Turnbull Government has done everything it can to reduce fee increases in the current system, this latest 7.6 per cent increase in child care fees – including a 6.3 per cent increase in Long Day Care fees – demonstrates that Australia's child care system needs to be reformed.

We need to fix this broken system with a complete overhaul.

The reforms will place downward pressure on what have been incessant child care fee increases through an hourly rate cap.

Additional Child Care Subsidy

We know children from disadvantaged backgrounds benefit most from quality early childhood education and care, and that is why we are providing additional support to those who need it most. The Child Care Subsidy I have just spoken of will be supplemented by an Additional Child Care Subsidy to provide extra childcare support for disadvantaged and vulnerable children, whether they be children at risk of serious abuse or neglect, families experiencing temporary financial hardship, grandparents on income support with primary carer responsibilities for their grandchildren, or parents on income support seeking to return to work, study or training.

The Child Care Safety Net aims to work alongside other state, territory and federal government payments and programs that are designed to give our most vulnerable children the additional support they need. Amongst other measures, it will provide low-income families who do not meet the activity test up to 24 hours per fortnight of subsidised care—this is equivalent to two weekly six-hour sessions. These 24 hours will be provided at the highest 85 per cent rate of subsidy, which is an increase on the current rate of about 72 per cent.

Getting children into quality child care maximises the early learning opportunities for children who may not be getting all the support they need at home. It also improves a family's ability to break a cycle of poverty and intergenerational welfare dependence by minimising barriers to workforce participation and providing access to early learning.

The Productivity Commission's report identified that existing programs that support disadvantaged and vulnerable families are complex, inefficient, poorly targeted and open to abuse. This is particularly the case in relation to the Community Support Program, special childcare benefit and the jobs, education and training childcare fee assistance payment.

These payments and programs, along with the current Budget Based Funded Program and grandparent childcare benefit, will be replaced by the Additional Child Care Subsidy and other elements of the Child Care Safety Net. Together, these will comprise a more integrated and targeted set of funding programs that leverage the increased Commonwealth investment in child care to provide the best early learning outcomes, particularly for those who need it most.

The new payments will remain linked to immunisation requirements that were strengthened under the very successful No Jab, No Pay policy from 1 January 2016.

Elements of the Jobs for Families Child Care Package outside the legislation

The Jobs for Families Child Care Package also includes a number of other important measures that are not formally part of the legislation. This includes the Community Child Care Fund which will help new and existing services, particularly in rural, regional or vulnerable communities, increase the supply of places in areas of high, unmet demand.

Much has been said, in both the House of Representatives debate and in the Senate Inquiry, about the transition of Budget Based Funded services under this package, otherwise known as BBFs, and the support they will receive from the Community Child Care Fund.

There are 300 BBF services nationwide, caring for around 22,000 children, amongst those are around 5,000 children in 45 mobile services.

In order to address concerns with the current block-funded program, which is capped and closed, this Package brings BBFs that are delivering child care into the broader funding model. For the first time, families using these services will receive direct support from the Government through the Child Care Subsidy and, for those requiring extra support, through the Additional Child Care Subsidy.

Recognising that many of these services go to great – and costly – lengths to travel to small communities with limited numbers of children, our third funding source for BBFs, including mobiles, is the Community Child Care Fund, which is an ongoing program with funding of $110 million a year. A significant portion of that fund will be provided as a supplementary funding stream to BBFs that need extra support in order to remain viable. As is the case for the BBF program, Community Child Care fund guidelines will not be legislated – this has the benefit of flexibility and the ability to tailor the program to meet emerging needs into the future.

However, having listened to the need for certainty going forward, I can assure the Senate that these BBFs will benefit from longer term grants of between 3 and 5 years. Great care has been taken to support BBFs in the Jobs for Families Child Care Package, including service based reports developed by Pricewaterhouse Coopers for each and every BBF. This careful work will continue after the bill has been passed, particularly with regard to further consultation on the Guidelines governing the Community Child Care Fund, which will be published by July 2017. We will also examine this program, along with every other provision of the bill, as part of the Post Implementation Review scheduled to commence within one year of implementation.

Strengthened compliance arrangements

Unfortunately, there are those who seek to use Government support to the childcare system for personal gain. This Government is determined to ensure that taxpayer support for early childhood education and care is used for fee relief for families, as intended.

We know that compliance measures are effective. Last year, we introduced new rules to eliminate the costly abuse of payments through a process known as 'child swapping' in the family day care sector. The Australian Government's focus on noncompliance (mainly but not solely focussed on family day care) is showing very clear results. The Government's action has resulted in a significant reduction of fraud in the child care system. While still growing the number of child care places available to hard working families, we have also managed to spare taxpayers nearly $1 billion in waste and driven dozens of rorters out business.

By contrast, under the previous Labor Government in the two years to June 2013, there were no cancelations, no suspensions and only two fines issued. In 2012-13 the Labor Government carried out only 523 compliance checks, while in the past financial year the Coalition Government carried out 3,100.

This Government will continue its tough stance on compliance and it is fast-tracking some of the strengthened compliance arrangements in this legislation to ensure they take effect from Royal Assent.

Currently, once a child care provider is approved by a state or territory regulator, the Commonwealth has limited grounds for not approving fee assistance for parents using that service. Compliance measures being brought forward in this legislation will include the power for the minister to make legislative instruments to place a pause on child care service applications for fee assistance. Such a pause may be made in relation to a particular service type for a defined period.

This measure will help us to address excessive growth within a particular child care service type, specifically where there are concerns about proven or alleged noncompliance with family assistance law.

Closure and transitional arrangements for child care payments

The bill includes consequential amendments and will provide transitional provisions to support the replacement of existing child care payments with the Child Care Subsidy and Additional Child Care Subsidy.

Conclusion

By way of conclusion, this bill, and the Jobs for Families Child Care Package more generally, will deliver significant and greatly needed reform through a simpler, more affordable, more flexible and more accessible childcare system. I commend the bill to the Senate.

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

I rise to speak on the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. I would like to begin by saying that Labor supports more investment in child care and we have long been calling for that. But Labor does not support the government's cruel and crafty way of making important and necessary investments in child care on the one hand whilst cutting family payments on the other hand. That is why this bill was so unpopular with the Australian community. Whilst Australians understand and support the need for and value of more investment in child care, they will not support that when it comes at the cost of making life harder for families with the passage of the other related but separate bill late last night. That is unfair and it is bad legislation.

Labor is pleased that the government finally saw sense and bowed to overwhelming community pressure to split the bill so that we can deal with these important childcare measures on their own. For years, the government has been warned about the serious problems with their childcare changes but, in typical style, this government has arrogantly ignored stakeholders and stubbornly refused to fix the monumental flaws. Analysis by ANU reveals that these childcare changes will leave one in three families worse off. A total of 330,000 Australian families will be worse off and 126,000 families will be no better off. That means almost half of all families—555,000 families—will be either worse off or no better off.

Of particular concern is that more than 71,000 families on incomes of less than $65,000 will be worse off. The harsh activity test will leave children in 150,000 families across the country worse off. For those vulnerable families on incomes less than $65,000 access to early education could effectively be cut in half from two days a week to one. We are talking about the most vulnerable and most disadvantaged children in our community—the very children who most need access to early education to help equip them with social, emotional and cognitive skills to prepare them for preschool and school. Cutting access to early childhood education for these families will only make problems worse. All children should receive quality early childhood education which should be recognised and used for its powerful ability to address social problems and to address disadvantage in the longer term.

Labor is particularly concerned about the effect of these changes on Indigenous children who already have low early education enrolment rates than the average. The Secretariat of National Aboriginal and Islander Child Care has warned:

These changes will diminish our kids' potential to make a smooth transition to school, compounding the likelihood of intergenerational disempowerment and unemployment. Children will fall behind before they have even started school and suffer greater risks of removal into out-of-home care.

The government's package will scrap the Budget Based Funded Program that provide subsidies to services. The government has been unable to explain how pushing 300 Indigenous and mobile providers into mainstream funding arrangements will work. The government has also been unable to guarantee that these services will not be forced to close. The uncertainty is impacting on these services and these families now. Budget Based Funded Program services provide early education to about 20,000 children who are, yet again, amongst the most vulnerable and disadvantaged in our community. It beggars belief why the government would take the axe to programs that provide such benefits to children who desperately need guidance, support and education.

The government has also taken the decision to introduce a new complicated activity test which would remove the current entitlement of all children to receive two days of early education. This would see about 150,000 families worse off. As I mentioned earlier, the new test effectively slashes this subsidised access in half for families and it removes eligibility completely for some children in families with non-working parents. Families earning over $65,000 that do not meet the activity test will not be eligible for any subsidised care at all. The most common characterisation of families in this situation would be two-parent families where one parent—usually Mum—stays home. Currently, these families have access to at least 24 hours of subsidised care a week, with the hourly rate adjusted down as the family income rises. What these harsh changes mean is that, if a child's parents work casually or part time, which is increasingly the norm, their likelihood of accessing stable, subsidised early education is seriously compromised. The Social Policy Research Centre at the University of New South Wales has said, 'the new, three-tiered activity test introduces a level of complexity never seen before in the Australian childcare system.' They note, 'the Bill introduces provisions that will increase the complexity and reduce accessibility and affordability for some of the most vulnerable children and families.'

There should not be any need to make a case for the importance of investing in early childhood education, but sadly, with this government, there is a need. Labour will continue to make the case over and over again for early childhood education, as we have seen so capably delivered by the advocacy and representations made by the shadow minister for early education, the Hon. Kate Ellis, from the other place. We know what a strong advocate she is for ensuring that families and children, particularly those from low-income households and those who suffer from disadvantage, get access to high quality child care close to where they live to provide them with the best start in life. This is a core Labor value. How do we support those families? We know the evidence is so clear that children who get access to high quality early education, professional attention of the early childhood educators in a childcare setting, are much more likely to make the transition to formal preschool and school more easily and have better outcomes in the long run, not just through school but also in later life. That is how essential it is that we get the policy settings for child care right. We know that those policy settings outlined in this bill have some major deficiencies that will prohibit Labor supporting this bill, unless those issues are addressed.

I would say, again, that this legislation goes to the chaos and dysfunction of this government that we have seen on display this week in the shambolic way that they deal with their legislation program. We have bills coming in here introduced the moment before I stand on my feet to speak, through a motion supported by the crossbench, enabled by the Nick Xenophon Team, One Nation and Senator Hinch—all voting to ram through legislation without proper process. Whilst the government and the crossbench might be having all these negotiations and are able to elicit information about what potential amendments might look like and how they might impact on families, the Senate as a whole is being denied that. It is a major problem that I would urge crossbenchers to think about, particularly those who have stood in this place and argued for transparency, proper scrutiny and proper process. We have seen this week at every step and on every major piece of legislation that matters to the government that the crossbench have enabled due process and the proper role of the Senate to be absolutely abused.

Regardless of whether there have been previous inquiries and analysis, on the legislation that has been tabled in this place on the social security amendments, the minister introducing it in this place did not even know what was in it when he was asked, let alone anybody else knowing what was in it. We have the same problem here with the childcare bill. Even though those changes have been contained in other bills, we are unaware of the government's position on some of those fundamental issues around the activity test, support for the Indigenous mobile services and also the budget-based funded program. How is the government going to deal with that? That is critical to the support that Labor can provide.

We want to see improvements for child care. We get that people are finding it hard to make ends meet with childcare costs growing rapidly. We get that rising inequality is putting real pressure on those families that need access to high quality child care the most. We understand all that, but we need some assurance from the government that they are going to fix the major problems with the legislation that has been introduced into this place this morning. Again, we say that the process around this has been absolutely shambolic, to say the least. One of the most fundamental tests for any government is its ability to handle its legislation program in a way that is coherent and allows the normal and proper processes of the parliament to execute its responsibilities. And I am afraid to say that this week we have not seen any of it, and it looks like next week may be going down the same path, with deals around ramming through legislation around section 18C. That is a real disappointment.

Through the Hon. Kate Ellis, Labor has been arguing for improvements to early education from this government for the last three years, and it is one of the achievements of the government that they have managed to do nothing for all that time. They make promises and constantly talk about pressures but actually deliver nothing. Labor on the other hand have been out consulting with the sector, ensuring that we are able to understand what the needs of families are, where the pressure points are and, as always, standing up in support of those families who we know would be benefit the most from access to early childhood education.

This legislation is important because it goes to those issues around access to child care. I know from my own experience here in the ACT just how much of a transformative experience it can be for some families to have access to child care, particularly subsidised access or, where they cannot afford it, secure places in both long day care and occasional care settings. As I outlined prior, there are some issues that we see around the activity test. We have been very clear on that. I think the Hon. Kate Ellis has written to the minister in the last couple of days outlining Labor's position in relation to the bill and the concerns that we have. I am unware that the minister has responded to that letter at this point in time, which, again, goes to the completely inadequate arrangements in place to deal with this legislation in such a hurried way. To have a motion pass this chamber that supports dealing with these bills earlier this week, without the legislation even being made available, is setting a new low for this chamber, I think, and one that we cannot allow. I would again urge the crossbench not to consider each one of these deals in isolation but to consider the bigger picture, the role that the Senate was established to play and the role we are being asked to play now. Instead of being the house of review, the check on executive power—with significant powers to inquire into legislation, call for documents, understand the issues and question public servants with responsibility for designing these laws—all of that, seemingly, for the next two weeks does not matter, because we can just pass a motion on a Wednesday morning and have all the legislation the government wants dealt with, because we have a compliant, enabling crossbench that either wants this legislation to go away or does not want to have to do the work that is required to understand all of the issues and how they interrelate to everything else. For example, how does this relate to the changes that passed the Senate last night? We will have no opportunity to discuss that.

We are certainly hearing rumours that deals have been done yet again. I am sure at some point in this debate today we will find out who has done what deals. I doubt we will get to understand what the pay-off for those deals has been, but I would certainly encourage the government to come clean on what those deals are so that we can have an informed debate during the committee stage and have the opportunity to examine whatever deals have been done. But Labor remains concerned about those fundamental aspects of the bill, and we will not be in a position to support this bill, despite our desire to address the problems in child care and to see improvements, particularly for low- and middle-income earners, in how child care fits in and enables them to live their lives, and despite our driving the agenda on improvements in child care and child care reform through the work that the Hon. Kate Ellis has been leading for the government. We have issues around the activity test and the fact that we absolutely want to make sure that children have access to hours of care and that that is spread over two days, not over one. We think that fundamentally that is a problem that needs to be addressed through this legislation. We cannot deny those children the care that they need simply because the government have not understood the full implications of the changes they have made. We will have to examine that more closely throughout the course of this debate this afternoon.

This is a very unsatisfactory process. Our shadow minister has not had the courtesy of the minister replying. The minister has not engaged with the opposition, despite attempts to engage and to understand what the government's thinking is. Despite our objections to the way that this is being pushed through, we have sought that engagement, and the government seemingly, because they have been doing their deals with everybody else, have not had the courtesy to address the concerns that Labor has raised. We will continue to raise them, and we will wait and see what the arrangements have been with others.

We hope that others, in signing up to whatever deal they have, have not sold out children, particularly those from the most vulnerable backgrounds, who need this Senate to stand up for them and make sure that we are putting in place a framework that will provide them with the best access to child care and therefore the best start to their lives. We hope that has not been sold down the river just as 1.5 million families were yesterday because the crossbench got into some cosy arrangement with the government to sweep that through in one day of sitting without the proper scrutiny. I hope this childcare bill does not follow the same path because the interests of the crossbench are treated as greater than those of the community as a whole. That is who we will stand up for: we will stand up for the families of young children who need the Senate and the parliament to stand up and make sure that whatever arrangements, changes or reforms get through are in the long-term best interests of those families, their kids and the kids that come after them, but also the sector so that they are able to manage these changes and to deliver the high-quality care that so many families rely on.

We are not convinced that that is going to be the case today. We remain to be convinced. We know the sector has concerns. We know the sector is hearing rumours about what arrangements the government has made with the crossbench. Again I would just reaffirm how completely disrespectful that is to the childcare sector who deliver the care. They are also sitting around listening to rumours about what arrangements have been stitched up, seemingly in the dark of night, to get these changes through. It is not adequate. We should not be pushing this through, and the government should be engaging with everyone in the Senate in the interests of children in this country.

Skye Kakoschke-Moore (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

I rise to speak in support of the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. The bill seeks to amend various acts in relation to family assistance for child care. Key measures in this bill centre on the introduction of the streamlined childcare subsidy, replacing the childcare benefit and childcare rebate, and the introduction of the new supplementary payment, the additional childcare subsidy, which provides additional financial assistance for children at risk of abuse or neglect, families experiencing temporary financial hardship, families transitioning to work from income support, grandparent carers on income support, and low-income families in certain circumstances. The bill also sets out new approved provider service requirements due to come into effect next July. These requirements provide for an enhanced compliance network. As a result of these reforms, more than 815,000 families will receive a higher level of fee assistance than they are currently able to access. In short, millions of Australians will be better off because of these reforms.

Debating this bill is long overdue. It was hampered by the government's decision to package up the bill with welfare savings measures in the original Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017. This has delayed providing families with much-needed relief for rising childcare costs. Thankfully, the government made the sensible decision to decouple the reforms from billions of dollars of deep cuts to payments received by families, young people, pensioners and working parents.

Data from the Department of Education and Training has revealed that the average hourly fee for all childcare services rose by almost eight per cent in the year to June. The average cost of long-day care services, which are used by 540,000 families, jumped to $8.90 per hour, up 6.3 per cent, in the year to June. These families are now paying $740 per child more a year, based on the national average of 21.8 hours per week for 48 weeks of the year. For many families the costs result in many parents, predominantly women, regretfully leaving the workforce. The department's long-term forecast predicts childcare costs hitting $233 a day in Sydney, $175 a day in Melbourne, $157 a day in Brisbane, $152 a day in Canberra and $138 a day in Adelaide. The measures contained in the bill will provide much-needed relief to working families that rely on child care.

Australia has one of the lowest levels of female participation in the developed world, which acts as a handbrake on workforce productivity and economic growth. The Grattan Institute estimates that, if Australia could increase our female workforce participation rate to that of Canada, our economy would be $25 billion better off. This bill represents a substantial investment by the government of approximately $40 billion in childcare support over the forward estimates, supporting working mothers and working families. Modelling by PricewaterhouseCoopers shows that the childcare package will deliver significant benefits to the economy by helping more women to participate in the workforce. These women will pay an estimated additional $850 million in tax, which will serve to benefit our economy.

There is no doubt that early childhood education and care are integral to the health and wellbeing of Australian children and play a vital role in their development and preparation for school and in enabling parents to work. The Nick Xenophon Team supports the delivery of a genuine, much-needed reform for a simpler, more affordable, more accessible and more flexible early education system.

In relation to the activity test, the bill provides for 12 hours of subsidised care for families on incomes of less than $65,000 a year, without the need for them to meet an activity test. If a parent studies, works or volunteers for just four hours a week—that is less than an hour a day—they are able to access additional hours of subsidised care. The Nick Xenophon Team is aware that there was a push by some to raise the subsidised care from 12 to 15 hours per week. However, in order to secure these additional hours, many families may have had to endure deeper cuts to their family support payments. We were not prepared to ask families to suffer those cuts. As a result, we have agreed to the government's proposal of 12 hours of subsidised care for low-income families without the need for those families to meet an activity test.

In relation to the consultation process in the development of the childcare package, I provide the following comments in a very constructive sense. There are important stakeholders such as SNAICC, the national non-government peak body in Australia involved in promotion of the rights, needs and aspirations of Aboriginal and Torres Strait Islander children and families. SNAICC was not invited to be part of the initial reference group during the consultation period on the design of this package. When I questioned the department of education during the Senate inquiry into this bill late last year about the number of Indigenous organisations involved in the consultation process, the department was unable to name a single organisation.

If they had consulted with Indigenous organisations in the childcare space, the government would have more properly understood the importance of early childhood education and care in Indigenous communities. It is imperative that the department reviews its consultation procedures to ensure that all appropriate stakeholder groups are comprehensively consulted with when reform packages are being developed. Consultation during the early stages would ensure that what is proposed meets the needs of the most vulnerable and the most marginalised.

During the Senate inquiry into the bill, I raised concerns about the bill's apparent silence on the future of budget based funding. Budget based funding was introduced with the intention to allow early childhood education and care to be conducted in regional and remote areas in which a market would not otherwise sustain them. Budget based funding is vital in supporting approximately 19,000 children, with nearly 80 per cent of budget based funding going to early childhood education and care in Indigenous communities.

In their submission to the committee regarding the effect of the cessation of BBF, SNAICC stated:

… engagement in early childhood education reduces risk of harm to a child, and subsequent involvement with statutory child protection authorities, as well as reductions in remedial services and criminal behaviour in the longer term. Holistic community based Indigenous services are a central preventative measure to strengthen families and prevent child abuse and neglect.

That is why the Nick Xenophon Team is pleased to hear that concerns about the impact that the cessation of budget based funding would have on Indigenous communities and the resulting effect on efforts to close the gap have been listened to. We have worked with the government to ensure that Indigenous children and children in rural and remote communities continue to have access to early childhood education and care, just as any other child in Australia does.

We understand the government has committed to protecting existing childcare funding for remote and Indigenous communities by maintaining the $61.8 million in funding for these services. We also understand that an additional $49 million for services in remote communities or highly disadvantaged communities to commence or expand their services has also been committed. This will ensure that budget based funding programs continue and support the most vulnerable children in our community. That announcement, along with the suite of measures in this bill, will make a significant difference to the lives of Australia's most precious resource: our children.

Louise Pratt (WA, Australian Labor Party, Shadow Parliamentary Secretary for the Environment, Climate Change and Water) Share this | Link to this | Hansard source

As Senator Gallagher outlined to the chamber, Labor has significant concerns about the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016, the legislation that is before us today. In insisting that the only way to pay for childcare changes was through cutting family payments, the government has agreed to remove the changes from the omnibus cuts, and here we are today. I think that, while this might be a step forward, there are significant problems with the package that is before us. It is interesting to hear Senator Kakoschke-Moore's remarks about some of the compromises they may have made.

I have serious concerns about the package, and I am particularly worried about its impact on vulnerable children. We have not had the opportunity to see what deals the crossbench has done purportedly to fix this problem. There are serious flaws in the government's proposed changes to child care. We have made it clear that we will support the government's proposed changes if it fixes its package. So far it has refused to do so. It clearly has some negotiation going on, but not with us.

We have a very clear benchmark for what we would consider, to make sure that this package does not take services away from the most vulnerable in our community. The government has not addressed workforce participation concerns for parents to bring greater confidence and certainty to our sector, nor has it addressed the high-churn, low-pay conditions for many early educators. They are a professional work force and they deserve professional pay for the education and care they provide to our children—indeed, to my own son. The government has not addressed waiting lists. Parents are still waiting for too long for child care, which means children are being denied access to crucial early childhood education. We need to consider capping fees that providers can charge parents. That is not the same as capping the assistance that is available to parents. Labor has been working on and pointing out these problems for a long time; they are not new. We would have expected more from the government in bringing forward this package. Most fundamentally, we should not have to accept and will not accept child care changes that will disadvantage those who are already disadvantaged. The changes that are in the legislation before us do just that.

The bill cuts in half access to early childhood education for many vulnerable and disadvantaged children. What we have in this bill effectively cuts access from two days a week to just one day for families earning less than $65,000 per year. The ANU, in research, has shown that these changes will leave one in three families worse off. It has shown that 330,000 families will be worse off and 126,000 will be no better off—that is, almost half of all families, half a million families, will be worse off or no better off. Most importantly, low-income families with earned income of less than $65,000—there are 71,000 of those families—will be worse off. What is attached to these changes is a harsh activity test that will leave children in 150,000 families worse off. We are talking about access to just two days care and the need to maintain that. This is a change which particularly impacts the most vulnerable children in our community. We have been working with many stakeholder organisations to identify these problems for more than 18 months.

It is clear that the government has shifted around the edges of admitting that there is a significant problem at the heart of these changes, but it has papered over them. Perhaps it has been dragged kicking and screaming by the crossbench to do something about it, but we need to make sure that whatever is on the table fundamentally does not disadvantage these children. It seems as if Malcolm Turnbull does not care about the families that need this benefit the most, those with our most vulnerable children, because they are not adequately included in the package that is before us. Indeed, the government sought to make savings at their expense.

Community groups, service providers and advocates for vulnerable children have all come out against changes, to make sure that vulnerable and disadvantaged children continue to have access to at least two days of early education a week. They include organisations like Australian Childcare Alliance, Early Childhood Australia, Family Day Care Australia, UnitingCare, Anglicare, the Brotherhood of St Laurence, United Voice and more. These are organisations that understand what children, particularly vulnerable children, need in order to grow up safe and happy. At times, while a family may be suffering some complexities or dysfunction, access to those two days of care a week is what might enable a mother to go to drug and alcohol rehabilitation counselling, to go and sort out other issues in life, so we should not be depriving children for whom sometimes that time a child care is the most stable and nurturing time in their week.

So it is of significant concern to me that what the government proposed was to reduce their access from two days of care a week to one day. That is not meaningful when you are trying to create a nurturing, stable environment, particularly one where carers—early childhood educators—within a childcare centre are able to form a relationship with a child and monitor their learning and development. You cannot do that in one day a week, and you certainly cannot do that for the most vulnerable children, who may have more complex needs.

Quality early childhood education is really important for all families. We cannot underestimate how important are those early years, from zero to three, when a child's brain develops and their wiring is laid down. It is particularly why I am very grateful for the quality early childhood education that my son has received. He has been accessing child care since he was seven months old, and he is now 2½. Evidence tells us that a person's life successes, health and emotional wellbeing have their roots in early childhood. We know that if we get it right in those early years we can expect children to thrive and to succeed throughout school and their adult lives.

On that note, I really want to express my own personal gratitude to the early childhood educators at my son's childcare centre at Marjorie Mann Lawley in Mount Lawley in Western Australia. I can see the importance of his carers having had time to attach to him. I cannot help but think of what a dreadful situation it is to have children who need that attachment and time with their early childhood educators but who are not able to get that successfully. They are not able to get anything meaningful out of their early childhood education because they are there for just one day a week. Essentially, it becomes a babysitting service for that day, because you cannot do the things you need to do with that child in monitoring their wellbeing over time, as early childhood educators are well positioned to do.

We need caring and supportive environments that promote optimal early childhood development and which increase a child's chances of successful transition to school. We know that this promotes children's chances of achieving better learning outcomes while at school, and better education, employment and health after they leave school. This starts in those very early years.

We know that seriously negative experiences, such as neglect and abuse, on the other hand, affect brain development in significant ways and contribute to emotional and behavioural problems later in life. Indeed, I have been discussing these issues as part of Mental Health Week with people who are here with the Mental Health Advocacy Service today. It is really about how we do need to support infants and young children in their attachment to family, because that is where episodes of anxiety and depression can in fact come from later in life. These experiences that a child has in its early years can support learning and positive development, or badly interfere with it.

As the shadow minister for families and communities, I know that the government's proposed childcare changes will impact most on the most vulnerable children and the most disadvantaged people in our society. They impact negatively on Indigenous children, children who already have lower early education enrolment rates than the average child in every single state and territory across the country. I have spoken to stakeholders and providers, who have been alarmed and who have expressed their serious concerns. They have pleaded directly to me about the uncertainty for their services that this package has caused. In fact we need to be doing more, not less, for these services.

So we have seen a package that would scrap the Budget Based Funded Program that provides subsidies to services. We are yet to have the explanation about how pushing 300 Indigenous and mobile providers into so-called 'mainstream' funding arrangements will work. We are seeking a guarantee that those services will not be affected and will not close. These services impact on and provide services to about 20,000 children. These are children who need more from the government, not less.

Deloitte Access Economics has found that the changes to the Budget Based Funded Program will disadvantage Indigenous children, and that 54 per cent of families will face an average fee increase of $4.40 an hour. Forty per cent of families will have their access to early education reduced and over two-thirds of Indigenous early childhood education services will have their funding cut. I cannot begin to speak of a $4.40 an hour cut: when you are already on a low income that is simply not sustainable for households.

On placing Aboriginal and Torres Strait Islander services in competition for funding with mainstream providers under the Community Child Care Fund: in doing so, the Commonwealth is generating a system that has the potential to marginalise small-scale community organisations and to support larger established organisations to secure more funding, actually eroding the local community cultural leadership in service delivery. That is what is working in these communities; they have to have childcare services and early education and care services that are connected to communities. Otherwise, families will not come near them—they do not trust them. I have confidence in my son's childcare centre because I feel culturally connected to it at a community level. I cannot imagine what it would be like to send your child into one of these services if it is a cultural unknown to you.

While alternative funding arrangements have been proposed for these services, we do not have firm guarantees. As it stands they may cease to exist, leading to an increased service gap for vulnerable Aboriginal and Torres Strait Islander children. I am particularly concerned about children in remote areas.

The current government has made a commitment to increase places for Aboriginal and Torres Strait Islander children by 5,000 over the first three years of the package, to redress the current 15,000-place early learning gap. I note that when he was minister, Scott Morrison stated in relation to the package:

The Government is committed to Indigenous children having the same opportunities as other children to access child care and early learning.

But again, the bill before us is contrary to this statement. Independent analysis of the changes by the ANU shows that vulnerable and disadvantaged children will have their access cut in half, and that many others will be pushed out of the system altogether. Indigenous and country services will also face closure.

We know that SNAICC, the Secretariat of National and Islander Child Care has been working hard to get these issues brought to the government's attention. Indeed, it has taken the government a long time to listen. This is unacceptable, and we on this side of the chamber will not allow that to happen.

Instead of having this bill as a driver for the positive change that ATSI children need, we need a government that is prepared to commit to addressing the 15,000-place gap in early learning. We need more places and more access. Malcolm Turnbull and the government have glossed over the effect that these 'reforms' will have on vulnerable children.

We will always stand up and fight for our most vulnerable children, including fighting for access for our Indigenous children. We will stand up and say we cannot support a package which would see more money going to middle-class families and less money going to the most disadvantaged and vulnerable children in Australia. It is, in my view and in Labor's view, immoral to turn our focus away from the children who most need our care and protection and who most need us to stand up and fight for them.

In that sense it is extraordinary that, after all this, it is rumoured that the Turnbull government has set aside $16 million to run an advertising campaign to promote this revised package. If that is the case, I am appalled.

I want to make some brief remarks about the activity test, because I do believe that there are great flaws in the activity test that has been put forward. The 12-hour safety net for single-income families is not equal to two days care, as the minister has claimed. Labor and stakeholders across the sector are calling for an increase in the available hours so that children can continue to access at least two days care. As I highlighted before, we are talking about Indigenous children and other vulnerable children. This is a fundamental test. Your access to care for those two days should not depend at all on your workforce activity.

This is another example of a government that, sadly, has all of its priorities wrong. As we have said time and time again, you are focused completely on giving more to those in our society who already have the most and taking from those who already have the least.

Removing access to child care increases the chances of our most vulnerable children falling through the cracks. We know it is a sad reality that child care provides some children with the safest environment they are ever in. Child care can play a really important role in the early detection of an abusive or neglectful family environment, and a child's time at child care may be the only time they escape such an environment. Child care plays a very important role in assisting and supporting all families that access it—in particular, disadvantaged families—and in protecting vulnerable children.

I worry that the changes in this bill will bring disadvantaged families to breaking point and will cause lifelong harm to vulnerable children. I urge the government to fix the flaws in this bill. We cannot and should not punish the most disadvantaged in our society, especially not our children. I really want to thank all those that are involved in the early childhood education and care sector for the love, care and development they provide to our children.

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

Jacki Weaver, when she was a struggling young actress, long before she became a doyenne in Hollywood, admitted in later years that she once stole a bottle of milk off her neighbour's veranda. She did it because she was a single mum with a young son, Dylan. She would haul him around with her to auditions and to the theatre, and he would be babysat by people in the orchestra pit, because back then there was no single mother's pension and there were no childcare benefits at all.

I thought, when I read the omnibus bill: how things have changed. Don't get me wrong—because I have supported and I will support most of the changes to the childcare subsidies, especially for the lowest wage earners, including many single mums, who now will be getting 86 per cent of their childcare subsidised—but, not having any young children, I was shocked when I saw a graph produced by the government, a very impressive looking graph, that showed that wealthy Australian families earning between $350,000 and $500,000 had been getting a 50 per cent rebate subsidy on their child care. Now, that is mad, that is crazy, and I will be moving an amendment to make that go to zero. When you get $350,000 a year, you will get zero taxpayer dollars in childcare subsidies.

Having listened to Senator Pratt just a few minutes ago, when she said the opposition will not support giving more aid to middle-class families at the expense of other people, I hope that she and Senator Cameron will vote in favour of my amendment to take all taxpayer-funded child care away from people earning between $350,000 and $500,000 a year. I cannot see parties with a proud history of protecting workers, and working for the people, voting against an amendment which would stop people who earn half million bucks a year from getting taxpayer dollars from an increasingly bare larder.

I do support Senator Kakoschke-Moore's comments, the Xenophon team's comments, on the government's assurances about the importance of early education for Indigenous children. So go and have a look at this graph. Gloom and doom have been coming from the Labor Party and from the Greens, but what is going to happen when this bill passes is that nearly a million families, on average, will receive more. Nearly a million families will be better off. Just under 200,000 families, 180,000, will receive the same level of subsidy as they get now. Just under 50,000 families, on average, will receive less. About 23,000 families, who are earning $350,000 or more, will receive nothing, and I believe that is the way it should be. So I will be putting up that amendment, which I believe the government support, and I hope that Labor and the Greens will also back it.

I know that Senator Leyonhjelm has an amendment which he is putting up in which he wants the phasing out, the tapering, of these benefits to be even harsher, and I agree with him that $350,000 is too high. I hope that he will get some support for his idea that the taper should come in from about $200,000 and go down to $350,000, when you get nothing. He will be putting that amendment up. I will support that. Then I will have my own amendment, and then I will support the government.

Jenny McAllister (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Here we are for the second day running, debating legislation where it seems that the government is in fact proposing something different to the conversation that is being had in the chamber. As we heard from Senator Kakoschke-Moore, she is anticipating a change in the government position on a number of key issues, but no-one in this chamber has been informed about what is actually going on. What piece of legislation is it that we will be asked to vote upon later today? I think it is absolutely appalling that, where all of the evidence says that we need action on child care, action to support women's participation in the workforce and action to support the development of children, our most important asset, it has taken three years for a package to be brought into this chamber, and we do not even know what it is. We have not heard from the minister about what his intentions are. We know nothing except from the little crumbs let loose earlier in her remarks by Senator Kakoschke-Moore.

What we do know of course is that the premise for this entire package is that, if you want any changes at all to the childcare arrangements, you are going to have to pay for it by cuts to families. So the whole structure of the package that is being put before the Senate, the legislation that was considered last night in combination with the legislation today, is that you rob Peter to pay Paul; you take money away from families with one hand, and perhaps you give it back to those same families, or perhaps you give it to different families, with the other. There is no consideration of how we might appropriately fund families and particularly women, who bear the bulk of the burden in relation to child care in this country. There is no consideration of ways to do that except by means that hurt working-class and middle-class families. It is a hallmark of this government's approach to policymaking and the budget that it has chosen to link these two bills together.

I want to say, though, that we seek to be a constructive player in this process. We have made clear the changes that we think are necessary to bring this part of this package up to a level that is acceptable. I am going to say that we do not think it is good—there is so much that we need to do in relation to early childhood in this country—but there are some threshold issues in the package that the Senate is required to consider today. The first of those is that we seek changes to the activity test. As you have heard from our earlier speakers, we are deeply concerned that in the arrangements presented in the legislation as it stands at the moment—the information that we have about it—the changes to the activity test will halve access to early childhood education for disadvantaged children. We are similarly concerned that the lack of funding guarantees for Indigenous and mobile budget based funded services means that those services are in jeopardy, and the families who rely on them will also have their access to early childhood services reduced.

I want to talk a little bit about what the stakeholders had to say in this process. These questions have been considered for some time, and it has taken a very long time for the government to bring a package into the chamber. What did the stakeholders say? They were particularly concerned about the linking of cuts to family payments with these changes to child care. Investment in early education should not be held hostage to family tax benefit cuts, and yet that is exactly what we have seen in this chamber.

The Australian Childcare Alliance recommended that the implementation of this support not be delayed by any other legislation. The Early Learning and Care Council of Australia recommended that we:

Decouple funding for the Jobs for Families Package from cuts to Family Tax Benefit payments.

That was when we were considering another version of the legislation. They said that child care was an initiative that should stand on its own merits. The Parenthood said:

The link to Family Tax Benefits looks more like a political link rather than a budgetary one.

It is a political strategy which will adversely impact the same families the government argues its new childcare reforms will especially benefit.

Goodstart Early Learning also made a submission, and they said:

As families are struggling with cost of living pressures across the board, we strongly urge the Government and the Parliament to proceed—

around reform of childcare—

… without any further cuts to family payments.

That is not what happened last night. Last night, certain parties sitting on the crossbench fell over themselves to rush over to the government's side and vote for a series of cuts to family payments that will impact greatly on families. These are not wealthy families. These are families for whom family tax benefit makes a great deal of difference. It makes a difference in their ability to pay for school excursions. It makes a difference in just going down and getting those school shoes at the beginning of the school term. In some instances, it makes a difference in whether or not they are putting groceries in the cupboard.

There are many ways that we can go about budget repair, and no-one in this chamber says that this ought not to be a priority for government or for the parliament. But the priority ought to be proceeding with budget repair that is fair, not budget repair that targets—as it so often does with this government—the poorest people, working families and people who struggle to make ends meet from week to week. Unfortunately, the entire structure of this package is predicated on exactly this approach.

In relation to the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016, which is before us now, we have called for changes to the activity test. Under the new activity test, families will receive 36 hours per fortnight when both parents undertake activities for eight to 16 hours per fortnight, 72 hours per fortnight when both parents undertake activities for 16 to 48 hours per fortnight and 100 hours per fortnight when both parents undertake activities for 48 hours-plus per fortnight. It is pretty complicated.

I think most people understand that contemporary workplaces are not quite as orderly as they might once have been. Many Australians, particularly Australian women, work in workplaces where their hours are highly variable, but that is not how child care works. Childcare businesses require you to take a place and pay for it every week whether you need it or not, so there is a mismatch between the kinds of activities that the parents in need of child care might be undertaking and the kinds of services that are conventionally provided by long day care. Many of the submitters to the various Senate inquiries into this matter have called upon the government to consider a more flexible arrangement, in terms of the activity test, that responds to the realities of work for Australians and, in particular, work for Australian women.

Of course, the other component of this is that the practical effect of the changes to the activity test is to halve access for disadvantaged children. That is completely unacceptable, and we stand alongside those stakeholders—those practitioners, those childcare providers—who have pointed out to the government that this is completely unacceptable.

It is no exaggeration to say that access to early childhood education delivers a benefit for the whole society. This is not, as some people would have you believe, a benefit to middle-class families. I heard Senator Hinch's remarks before. This is an investment in the productivity of Australian workplaces, the productivity of Australian women and the education of Australian children. These are benefits that flow right across the society, and the productivity commission, when it looked at this question, was able to conclude that investments of these kinds yield enormous benefits to the Australian economy.

I want to talk in particular about what one important stakeholder has said today about this particular question of availability. Early Childhood Australia issued a media statement today begging the crossbench to stand firm on the childcare bill amendments to make sure that the bill that is passed in this chamber is in the best interests of children. In particular they said, 'We are calling on the Xenophon team and other crossbench senators to at least support an increase to 15 hours of care as a baseline to allow the most vulnerable children consistent access to two days of care a week.'

Unfortunately, that is not the advice that Senator Kakoschke-Moore has just provided to this chamber. Senator Kakoschke-Moore has indicated that they are happy to settle at 12 hours. They think it is too expensive and too difficult to pursue the baseline test that has been set by all of the stakeholders—all of those who actually work with children. As negotiators, it is pretty poor, because these guys have settled for something which is completely inadequate and which the sector is saying should not proceed. The sector and Early Childhood Australia calls on the Senate to block the bill today unless there is an amendment to increase the base entitlement to 15 hours a week. It could not be clearer. The early childhood educators have got a very clear message for senators here today. Unfortunately, we have already heard from Senator Kakoschke-Moore that they are not interested in pursuing that.

I say to the Nick Xenophon Team—to Senator Xenophon, to Senator Kakoschke-Moore, to Senator Griff—that they need to reconsider this, that it is not good enough to go to an election as they did, promising to do all the right things on child care, promising that they will represent the people of South Australia, promising that they will represent their interests in this parliament and then to come into this chamber and say: 'Oh, we thought it was all too hard. The government told us they couldn't do it, and so we decided not to press for it in our negotiations. We've settled for something completely inadequate, something that the sector says they don't want. We settled anyway.'

The sector has also indicated that they need to make the income threshold for the base level of care increase and they want changes to the activity test to make it more flexible for families who are in casual or unpredictable work situations.

I think it is time for government senators—for the minister or the minister representing the minister—to come in here and tell us what is proposed. We hear rumours that an agreement has been reached, that something different is going to be presented to this chamber, but of course we have no detail. Opposition senators find themselves presenting their thoughts about the bill and about the future of early childhood education without the benefit of any understanding whatsoever about the secret deal that has been agreed between the Nick Xenophon Team, as alluded to very directly by Senator Kakoschke-Moore, and the government. But I can say this: if it is, as Senator Kakoschke-Moore indicated, failing to deliver on the 15 hours which the industry has indicated is the benchmark for support for this bill then the Senate ought not pass the legislation. This is a problem, and Early Childhood Australia has put a very clear marker in the ground for all crossbench senators to consider. It is extraordinary that the Nick Xenophon Team has come in here today and explained that they do not intend to heed that advice.

Of course, the other area where Labor seeks action is around Indigenous children's services. Thus far—and who knows if something is about to change—the government has not guaranteed ongoing direct subsidies to around 300 Indigenous and mobile services that are accessed by 20,000 children mostly in rural and remote communities. I would be interested in understanding what the National Party think about this, because we hear a lot from the National Party about their role in supporting rural and remote communities but do not hear very much from them at times like this. We hear almost nothing. We hear a lot about their support for Indigenous Australians, but we hear nothing from the National Party about the shortcomings in this bill. Deloitte found that these changes will seriously disadvantage Indigenous children. They found that 40 per cent of families—

Debate interrupted.

Stephen Parry (President) Share this | Link to this | Hansard source

It being 2 pm, we move to questions without notice.