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

I rise tonight to speak on the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016 as put forward by the government. This, of course, is a bill that has been on the table for quite some time. It deals with the issue of overhaul and reform of the current childcare funding system. It is something that has been promised to be dealt with for a number of years now in this place.

Just to be absolutely up-front with everybody here tonight: I do not think there would be many people in this place who would argue that the current funding model for the way our childcare system runs is adequate. We know that it needs to be streamlined and we know that it needs to be fixed substantially. We know that every week, every fortnight and every month, month-in month-out, parents continue to struggle with the rising costs of child care. But we also know that the importance of early childhood education and care in relation to our youngest citizens becomes more and more crucial.

The current situation, where we have two separate funding models—two funding streams—with the child care rebate and the child care benefit has been a confusing and ineffective way of funding child care for some time. We do need to have that fixed and to have it streamlined. The Greens support the principle in this bill that allows for both of those payments to be streamlined into one single payment. We also agree that we need a significant injection into our childcare funding bucket. We know that parents have been crying out for relief and support in funding and paying for childcare fees for an awfully long time.

We also know, of course, that in some places even if people could afford the childcare fees, or find some way of affording the childcare fees, they would struggle even to get their children or child into a childcare centre that is close to them in terms of where they work or where, perhaps they may live. The issue of vacancies and access is another topic—one that is not dealt with through this legislation, but one that I hope we can have another conversation about in the months to come. In some places the waiting lists for getting children into care remain very tight.

In some other places, particularly in rural and regional areas, there just simply is not the child care available on a consistent basis because of the lack of support and funding that make it hard for centres to operate under a viable business model. We need to go some way to dealing with that.

This bill, as outlined by the government and put forward by the minister, is something that has been looked at several times through a number of Senate inquiries, and it has had much community consultation. However, it seems that the feedback that has been given to the government in relation to this bill has fallen upon deaf ears. We know that there are fundamental flaws within this piece of legislation. Yes, an extra $1.6 billion is slated to be injected into child care, but that comes at the cost of funding being halved for access to care for some of the country's most vulnerable children.

It is astounding that we could have a package where more money is being put into the bucket and yet some people—the most vulnerable people, the most vulnerable children in our community—will get less. Why is that? It is because the government is cutting and reducing the base level amount of access. At the moment a family can access 24 hours of care per week for their child. The government wants to slash that to 12 hours. Of course, they also want to put a very low bar there in terms of where the safety net comes in relation to where one or both parents would have to participate in work activity. That bar is set at $65,000, which is not a very high bar for many families.

Maybe your family is one that is struggling to find work because of the high unemployment rate in this country, or your family is one, let's say, where one of the parents works at the Hazelwood power station in rural Victoria—that power station is closing tomorrow. If you are a dad working in that power station and tomorrow you do not have a job, then under this legislation, under this package, your child will have their child care slashed in half because their dad is not working anymore. How is that fair, that we punish the child because a parent is not able to secure work or has lost their job? We know that in these rural and regional areas the unemployment rate is increasingly difficult to manage and it is getting worse and worse every quarter.

Of course, it is not just in rural and regional areas. In my home state of South Australia, in the northern suburbs of Adelaide unemployment is at record highs, and, come October, the Holden plant is going to be shut down. Holden are leaving. They are buggering off back overseas and they are going to leave hundreds of workers without a job. Under this package, the children of those mums and dads who worked at Holden will lose their access to child care. They will not be able to get their 24 hours of care. In fact, they will not even be able to get two days of care. They will be punished if their mum or dad has not been able to find work.

We know that investing in early childhood education and care is one of the most important things that any government can do if it wants growth in productivity, and if it wants to futureproof in relation to educational and health outcomes. Investing in early childhood education and care is the best bang for any government's buck. The World Bank suggests that you get a $17 return for every dollar you spend making sure that a child has access to good early childhood education and care, and we know that means education for children under the age of five. It is absolutely essential for the social, educational and health development of our nation's next generation. So why on earth would the government want to reduce the amount of child care for some of our country's most vulnerable children? It is beyond me.

If this bill, and this package as outlined in the bill, is not fixed, if we do not put in place a proper safety net for families on some of the lowest incomes and for some of the most disadvantaged children in this country, we are going to see tens of thousands of children affected. Tens of thousands of children will suffer because their hours of child care are going to be reduced and their access to safe, essential care and education is going to be reduced. The government's own figures—their own figures—say that over 52,000 families who earn under $65,000 a year will be worse off under this package. We know that families with an income between $65,000 and under $170,000 are going to be worse off; that is another 55,000 families. And we are not sure what this will do to another 25,000 families. They will not be better off. They might not be worse off, but they might be. Tens of thousands of children in this country, about 100,000 altogether, will be worse off, with less access to care, if the government's package goes through as it is.

If you go out to childcare centres and talk to some of the early education teachers, and talk to parents, it is clear that the people working in these centres and the relationship that they have with the children that they care for is so important. It is one of the key reasons why all the evidence points over and over again to the essential nature of allowing children to have consistency in care, so that they are not being pulled in and out of care. We the Australian Greens are extremely worried that, under this bill as outlined by the government, if we cannot fix it, children are going to be negatively impacted upon because they are going to be pulled in and out of care based on whether their parents are working or not. That is just unacceptable.

We also know from talking to carers and educators in some of the country's hardest working childcare centres, in communities where there is high disadvantage and low socioeconomic status, that sometimes the childcare centre that a little girl or boy gets sent to is the only safe place that child has each week. And here we have a bill put forward by the government that is going to reduce that child's ability to access that safe space every week. I would not want to be the minister, standing there tonight and saying that a child who needs that consistent care, love, education and nurturing week in, week out is about to have that cut.

We know that the minister has all this information. The experts have put it to him. We have heard for a number of years now, over and over again, from the childcare sector, from education experts and from parents themselves that, yes, parents want more relief when it comes to paying their childcare fees. But, most importantly, we need to make sure we put the needs of the child at the centre of any reform. I can tell you that the needs of the child are not slashing their ability to access child care each week by half, from two days down to one day.

The Australian Greens will be moving amendments to this piece of legislation tonight, to fix the flaws in this bill. We will move an amendment that increases from 12 to 15 the minimum number of hours available to low-income and vulnerable families. That would allow children to go to a childcare centre for two days a week, giving them that essential learning and nurturing environment, and ensuring that we do not take that away from those children for whom it is their only safe place.

We will also move an amendment to lift the safety-net income threshold to $100,000 because we know that many families struggle to pay for their child care in a household with one income of under $100,000. It is not cheap to put a child into child care when there is only one parent working and perhaps the other parent is in and out of jobs, works casually, works on a seasonal basis or does not have job security—or indeed, like the parents at the Hazelwood power plant or the parents at the Holden plant, is about to lose their job. Why should their children be punished because job security is at an all-time low in this country?

We will move these amendments, and I appeal to all of the members of the crossbench to think very hard about what they are about to do in relation to this piece of legislation. Yes, we all want more money injected into the childcare system, but we do not want the people who suffer the most to be the most vulnerable and disadvantaged children in the country. Those children deserve the ability to get the best out of life, and that means the best opportunity in those early years. Do not condemn a little three-year-old girl from Salisbury, in South Australia, to being behind in her educational development for the rest of her life because the government decides to cut her access to child care. Do not condemn the little boy who lives in regional Victoria to being unable to access the only safe place he has each week, because his family situation at home is deeply dysfunctional. That is not that little boy's fault.

We know that unemployment in this country is getting worse. We know that job security in this country is getting worse, and we know that the pressure that that puts on families is immense. Do not condemn the children from these low-income and disadvantaged families to the dustbin just because they do not fit the profile. They currently access two days of care a week. Why would we rip that away from them? It is one of the only things they have going for them to get them out of that situation and to make sure that, when they get to school, they can read and write, that they do not think that they are behind the rest of the class and that there are people who believe in them. Do not make it harder for childcare and early-education workers in these centres, who would have to look parents in the eyes after these laws pass through and say: 'Sorry, but you just can't bring your child here for another day each week. The government has cut your funding.'

There is consensus across most parties around this chamber that we need to be funding child care more, and I think that is fantastic. There is a consensus that the funding model needs to be streamlined. Tick that—that is great. Let us make it work best. This is an opportunity for this chamber and this parliament to, for the first time in a very long time, get the system right. But condemning the children from the most vulnerable families in the country to less care than kids whose parents are lucky enough to both have a job is only going to continue to widen the gap of disadvantage and inequality.

When we look around at what is going on in Australia and we look at what has happened in the United States and we look at what has happened in many other countries, particularly in the United Kingdom, members of the community are getting sick and tired of the growing gap between the rich and everybody else. Let us try and make sure that we do not condemn these children to being considered less important in our education and care system because their parents cannot both get a job. These children deserve better than that. They deserve a government and they deserve members of parliament who are prepared to have their back, to help them up, to look after them and to protect them, because we know they are coming from families who cannot necessarily do that themselves. I appeal to the crossbenchers tonight: let us put the 15 hours in to protect those children, because the government is not doing it.

Lisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Link to this | Hansard source

I rise to contribute to the debate on the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016, a bill that unfortunately falls very far short of what is needed in relation to addressing serious concerns about child care in our country. Labor has serious concerns indeed about this childcare package. These serious concerns not only have been raised by Labor but have been raised by experts, academics, workers and so many stakeholders that it is not funny. I am sure the minister has had so much correspondence and contact in relation to those in the early childhood sector that he knows very well why his package falls short.

That is why again, unfortunately, like my Labor Senate colleagues, I have to highlight some of the areas where this package falls short. But in doing so I make the invitation open to the government that Labor is still willing and waiting to work with the government to try and make this childcare package what it should be, which is a package that is the best for our young Australian children, who need our protection and our care.

We know that these current changes will halve the access that children from vulnerable and disadvantaged families get from two days to one day. That is a 50 per cent reduction. It will halve the current arrangements that are in place, making it a very flawed package indeed. It will have a devastating effect on the youngest and the most vulnerable Australians. We know very much from all of the research that the early years of a child's life are the most critical. Those years from zero to seven are critical for their educational development, for their intellect and for their wellbeing, and yet this is the very area that this government wishes to halve.

Of course, there is nothing new about the problems in this package that the government brings forward. Firstly, we have had two years or even more of total inaction from this coalition government—two years, of course, that have also let down families and let down the system. But now the government has decided to quickly bring this package forward, and in doing so we have ended up with the same old problems that the government brought forward all of those years earlier.

Labor has been pointing out these flaws for years now, and yet the government does not seem to have listened not only to the opposition but also to its own stakeholders in this field. I understand there have been something like three Senate inquiries into this very issue, and Labor has repeatedly pointed out flaws that need addressing raised by early childhood experts themselves.

One of the areas we are incredibly concerned about, though, is the threats to Indigenous and remote childcare services. The other area, of course, is the unfair activity test. I would like to go to the heart of those two issues particularly, but before I do that I want to highlight the fact that today, Thursday, 23 March, we have here an opportunity to actually get something right, to have an outcome in this Senate that is not for this generation but the next generation, to set them up in life to have the best opportunity that they can get. Halving the access that children from vulnerable and disadvantaged families will have from two days a week to one day is not going to help them. That is not going to help them in 15 years time when they are in a position in life where they are ready to enter the workforce and become young adults. It is these early years that are so crucial. If the government would listen to its own stakeholders, it would know very clearly about that.

Those Senate inquiries themselves reported on the fundamental flaws which were in this bill, seeing those children going backwards in terms of access to critically important early childhood education in this country. I remember when under the Gillard government there was an incredible amount of investment in the early years. It was actually first the Rudd government, in fact, and I was then in the state parliament in Tasmania. I remember being part of that very inaugural moment of early childhood ministers all over the country joining with then Deputy Prime Minister Julia Gillard for the launch of a new early years strategy. That was an incredible moment because there were state, territory and federal governments all working together, all with the commitment for this next generation, to set them up in life to ensure that they had the best opportunities possible in life, that there was an investment in these early years because so much research and advice was provided to show that, if you can invest in those early years, it will make such a difference to that child's life as they move forward.

Reflecting on that and reflecting on where we find ourselves on this day, I have to say, makes me feel a little bit sad that we are having to defend some of our own legacy and having to fight as well for the government to realise its own flaws and shortcomings when it comes to this bill. At the same time, we are also here to lobby the crossbench, because this is an opportunity for you tonight to listen to some of the outcomes of those Senate inquiries from the experts that provided advice. I wanted to highlight who some of those advocates were that made very clear why this package is flawed and why we need to do something about it: Australian Childcare Alliance, Early Childhood Australia, Early Learning and Care Council of Australia, Family Day Care Australia, Early Learning Association Australia, the Creche & Kindergarten Association, Uniting Church in Australia, Mission Australia, Anglicare Australia, the Benevolent Society, Social Ventures Australia, United Voice, The Parenthood, Affinity Education Group, Goodstart Early Learning, KU Children's Services, Early Childhood Management Services, SDN Children's Services, bestchance Family Child Care—and the list goes on and on.

That is just a small snapshot of some of the stakeholders that I am sure Senator Birmingham is all too familiar with. If he was all too familiar with them, he would know the kind of advice that they have been providing him, as have some of the academics such as the Social Policy Research Centre from the University of New South Wales. I highlight them because I want to talk about the flawed activity test in this particular bill. It is flawed because it is unfair. Professor Deborah Brennan and Dr Elizabeth Adamson provided in their submission to the previous Senate inquiry into this bill that the new, three-tier activity test introduces a level of complexity never seen before in the Australian childcare system. They said that this bill introduces provisions that will increase complexity and reduce accessibility and affordability for some of the most vulnerable children and families.

I am sure Senator Birmingham has read their submission and I am sure he is aware of their input. But for me, reading over their submission, this part was the most compelling:

The activity test … is also out of touch with international best practice, which has seen many countries expand universal provision for preschool aged children.

They have expanded. They have not gone backwards or halved; they have actually expanded because they recognise the importance of investing in the early years. I really wish that Senator Birmingham would see the error in his ways in some of this package, because reading some of this expert advice provided into these three Senate inquiries really made me realise how flawed this package is before us.

Labor stands firmly for improving our Australian childcare system. We have said again and again, so many times, that we are up for the job of sitting down and working with the government to fix some of the flaws in this package. We want to see a package go through the Senate that can offer some of the best assistance, the greatest assistance, to Australian families. We want Australian children to be better supported, not not supported or half supported. Surely Senator Birmingham wants the same thing, and, if he does, why doesn't he work with Labor?

I know that our shadow minister, Kate Ellis, has been so vigilant in explaining and highlighting, time and time again, how willing Labor is to work with the government to fix some of these issues and flaws. I do not understand why the government has ignored that collaborative approach, which I know so many Australians would prefer our parliament to work in. We should not end up having to fight in this place to ensure that we are protecting those families and children, when instead we could have just had a really good package before us in the first place. What Labor wants to see is the childcare sector and the childcare workforce supported by this parliament. But this bill in its current form falls short, and the government knows that it does. All of the advice that has been provided through the submissions and the Senate inquiries and through all its stakeholders, including academics, shows that it does.

We hope that, in the passage of this bill, the amendments that have been put forward, along with some amendments Labor will put forward as well, will be considered. We also hope that through that process the government considers and supports Labor's amendments. But we also hope that the crossbench, particularly Senator Kakoschke-Moore, realises the fact that there is a chance here for the crossbench to help fix this flawed package with Labor. The Xenophon team and other crossbench senators—and I acknowledge that Senator Bernardi is going to make a contribution after me—have an opportunity to join with Labor in helping to fix this package, ensuring we stand up for children. At least in doing so they can support the increase to 15 hours of care as a baseline, to allow the most vulnerable children to get access to two days per week rather than one. Early Childhood Australia have made it very clear and consistently argued that a minimum of 15 hours of early childhood education per week is in the best interests of children. And if that were included we would be more on the right path here—including, of course, the changes to the activity test that I highlighted earlier as well.

I am also very concerned about the effects of this package on Indigenous children. I am really worried about what these changes will mean for Indigenous children, who, in every state and territory, already have lower childhood enrolment rates than average. We already know that they are below the average in that sense. This childcare package ends that current, budget-based funded program that provides direct subsidies to 300 mostly Indigenous services that reach 20,000 children. These are the services that are often in the most remote parts of our country. They are simply not financially viable, without ongoing support from government. The government knows that. It has to be a basic government provision in this package that they need to look at. These are our Indigenous children, who are already below the national average, who are now potentially going to be even worse off if the government does not provide that support for that program.

Deloitte Access Economics has found that the changes to the budget-based funded program that I just mentioned will disadvantage Indigenous children through 54 per cent of families facing an average fee increase of $4.40 per hour. Also, 40 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. That is absolutely devastating. There is no way that a fair country does something like that. There is no way that Labor, nor the crossbench, should dare support such measures that send our young Indigenous children backwards. How does that fit in with closing the gap? Each year we all make contributions in this place on how far we have moved on closing the gap. It certainly does not help when a minister comes in this place with a child-care package that has that effect on some of our most vulnerable children in this country—our Indigenous children, who, as I said, are already behind in that sense.

Finally, as I made clear, we have really serious concerns—not small concerns but big concerns—with this proposed child-care package. This is the same package they brought forward some two or more years ago. You would think in all of that time with all of those inquiries they would have educated themselves and learnt from the errors of their past package and presented to the parliament today an improved package because listened to the experts in the field and the stakeholders who made it very clear that there are terrible flaws that need to be addressed. Instead, we are back here where we started. It is like a revolving wheel with this government.

The same thing seems to be happening with the racial discrimination changes. In 2014 we were debating the government wanting to change section 18C. Then it was off the table and now it is on the table again. It is the same with this child-care package. It was on the table, then it was off the table and now it is on the table again. It is the same package. I do not understand why this government cannot move forward and have some kind of strategy and understanding of what it is doing. Today is the opportunity. Today this government can learn from all of those in this sector and learn from Labor—and I would really love to say learn from the crossbench coming on board—and support what is right for children and what is right for families.

I do not have young children anymore, but I really relied on child care and family day care when I was a young university student with my first child. I know the importance of child care and I know a lot of people in this place and those who have young children as well know the importance of child care. Wouldn't you want for some of the most vulnerable children in this country the same level of care and the same important level of input in those early years that you want for your own children? If you do, support Labor's amendments and get this package changed.

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

Not for the first time and I suspect not for the last time, on behalf of the Australians Conservatives I am going to take the path less travelled, if I may put it like that. I may be the only person in this place who thinks that $8.5 billion per annum spent on child care in the last 12 months, rising to $12 billion by 2020, for the government to pay service providers to look after families' children, is more than enough. As I said, already the figure is scheduled to rise to in excess of $12 billion in the next three years. That is $12,000 million that is being given to parents effectively to pay other people to look after their children.

It is another significant cost to the budget. It is absolutely created and sustained by delivering more debt that those very children, who all of us in this place want to help and bequeath a good, positive, healthy country to, are going to be forced to repay. Once again I come back to it. Our debt in this country is spiralling out of control and there does not seem to be any real determination to redress it. That is a moral obligation we owe to our children. So throwing another couple of billion dollars into child care here and there is not going to solve the problem, but it will indeed create greater problems, which will be magnified by the effect of interest and growth over time. Every child who is purported to benefit from this package will actually end up paying a very hefty price for it from the multibillion-dollar largess that is starting today, and I can promise you the demands will increase in the future for it to continue.

Australian Conservatives know that there is a better way. There are three key areas in which I can believe that this can be more effectively addressed. Firstly, we have to break this nexus between a government subsidy and a rise in the price of child care. It seems to be a catch 22 where every time the government puts more money into the system it creates more demands for the child-care operators and the prices go up and there does not seem to be that greater benefit for the Australian families under the current guise. Secondly—and I congratulate the government for its endeavours in this regard—there needs to be a determined effort to stamp out the significant rorts that are in this space. Thirdly—and this is very important to me and I have communicated it to the minister—we need to remove the mandated prejudicial policies that disadvantage so many families and effectively establish a pecking order of who is allowed into the child-care system first.

Let me deal with the subsidies and costs. From a person who seeks less involvement in government it is far better for us to stretch every government dollar by streamlining processes and deregulating the sector. Every time we add additional compliance, additional requirements, additional reporting or any other additional regulation the cost of administering and providing child care escalates, sometimes exponentially, and I will detail some of those figures in a moment.

We need to end the 'money shuffle', if you will, where we collect taxes from people, throw it through the bureaucracy where sometimes it returns 50 or 60 cents in the dollar—sometimes less, sometimes more—and then give it back to those we deem worthy of it to subsidise the care of their children. I think that is inefficient. It would be far more efficient for the government to allow tax deductibility, up to a maximum threshold, for childcare services. It would enable families to take responsibility for administering those costs themselves. It would allow families to claim it on a weekly or monthly basis with the ATO, as they do with other tax concessions, or on an annual basis. It would make child care more affordable. With no guaranteed government funding, people could distinguish for themselves the service they want and the hours they want. That would create a much more competitive environment.

You mentioned the link between subsidies and costs. I want to take you back briefly to some research by the Australian National University which demonstrates the runaway price rises attached to child care in recent years. Starting with March 2000 as our baseline, there was effectively parity between the market price of childcare services and the subsidy; in medical parlance, there was 'no gap'. Soon afterwards, a couple of years later, there was a modest gap, which parents were expected to meet, but there was virtually no difference between the subsidy rate and the market rate. But then between July 2002 and July 2007 the gap expanded. By July 2007 the subsidy rate was 175 per cent of the March 2000 price. Not surprisingly, because of the additional onerous burdens on the childcare sector and the increase in subsidies, the cost of child care had risen by about 225 per cent. So there was about a 50 basis point difference between the subsidy rising and the cost of child care. So no matter what levels of money were thrown into it, families will pay more.

What happened then was that there were cuts in 2007 and 2008 but the regulations continued to load up on the childcare service providers and there became a huge gap between the subsidy rate and the market price. The market price has continued to track upwards. It has been higher than inflation ever since 2002, when, dare I say it, the sector recognised that by putting their prices up they could prompt demands in this place for more subsidies to be thrown at them and those demands would inevitably be met—just as we are discussing today. You cannot blame the sector for doing that. If they can get away with it, they will continue to do it. We have to consider not capping it or putting any other forces on them but putting market forces on them. We need to allow parents to make determinations about where they send their children so that the market itself will put pressure on the costs and prices.

So the gap—or gulf as it was then—went from about 50 basis points to about 150 points. It tripled in real terms. And then the subsidy rate returned to the March 2000 rate but child care prices keep going up and up and up. At last check, that gulf is still widening. The market rate is about 460 per cent of the March 2000 price. In 17 years it has gone up 4½ half times, well in excess of inflation, and it has been fuelled by the money that has been thrown at it from this place.

And it is because of compliance. Since 2008, compliance has become so burdensome that the gap between the subsidy and the cost has risen from 50 basis points then to 300 basis points now. That has a deleterious effect for every family and it is not going to be fixed by us throwing more money into the system. We have to take pressure out of the system. If we can reduce compliance, if we can reduce bureaucracy, if we can reduce regulations and red tape, child care will be more affordable and parents will have more choices. And that will be sustainable because it means we will not have to throw more than $12 billion a year into the system; every dollar will go a lot further.

The second area in which Australian Conservatives believes there can still be significant improvement is in the area of rorting. Lest anyone think I be uncomplimentary, I do want to congratulate the government and the minister for making significant efforts in this regard but, dare I say it, they are not enough. I think there needs to be more diligence and more application to stamp out the rorts that are ripping off the taxpayer. I want to give you a few examples. In 2015, an investigation in Albury in New South Wales revealed a $4 million family day care fraud. in August 2016, authorities swooped on an operation in Lakemba in Sydney. One of the accused was actually someone with alleged links to Islamic State. That did not stop them from profiting from and ripping off the childcare system. They stood accused of collecting over $27 million since 2012. A known Islamic State sympathiser has been involved in an operation that has gathered $27 million of taxpayer funds, rorted within the childcare sector since 2012, and there are suggestions that some of that money has found its way to funding Australia's enemies abroad.

The information I have is that in New South Wales, where these rort occurred, there are 324 services in operation but only 19 of them have been audited. If the other 305 underwent an audit, imagine how much more of this rip-off money they might find. In 2016, at Point Cook in Victoria, authorities raided families in the Somali community who in 18 months had claimed almost $16 million in grandparent childcare benefits. Remember, these were additional payments brought in to assist grandparents who were looking after their grandchildren. But the $16 million worth of care was never provided— just the money was delivered.

Then the coalition government, to their credit, made the child swapping rort illegal on 12 October—bravo! Child swapping was where a childcare worker put their child in the care of another childcare worker and vice versa. Before that, an estimated 11,000 parents were receiving $8.2 million per week, swapping over 31,000 children. That is $8.2 million per week of people just saying, 'You take my child and I'll take yours, and we'll both make money out of the operation.' It is wrong, and congratulations to the government for stopping it.

In 2016 a Melbourne woman of Sudanese origin was accused of claiming $800,000 a fortnight in a western Melbourne system that allegedly took $15.8 million in false payments. That $800,000 a fortnight is not a bad gig if you can get it, unless you are the taxpayer having to fund it. That is what is going on in our current childcare system.

A woman running Aussie Giggles, a family day care centre, was found guilty in 2016 in the New South Wales District Court of 81 fraud and forgery offences designed to defraud childcare benefits to the tune of $3.6 million in special childcare subsidies for children from disadvantaged backgrounds. She claimed that as many as 14 of these children from disadvantaged backgrounds were in her care when they were not. And yet this was never picked up in an audit.

In 2016 the Queensland Labor government confirmed a trend in childcare rorting and noncompliance in ethnic communities. Nationwide, almost all the family day care services hit with restrictions or closure were run by Somali, Sudanese or other African migrants. One Sudanese migrant received $1.6 million in 16 months to run a family day care network which authorities could not confirm involved people he claimed were employed by him.

There is a problem here. The minimal audits that have taken place and the maximum exposure of rorts—I have highlighted just some of them today—says we can do much, much better and stretch every one of those $12 billion much, much further.

The final aspect of where my concerns lie I raised during estimates. It is that there is a priority list for allocating places in childcare. Some may defend that. I may describe it as prejudice. It was news to the minister and to the department when in estimates I quoted to them words from their own guidelines:

A child care service may require a Priority 3 child to vacate a place to make room for a child with a higher priority.

In simple terms, if you are a white, middle-class person and your child is in child care, and if the government says there is someone more needy—I will get to what neediness is—your child can be removed with 14 days notice to be replaced by that child they think is more needy.

In some of these areas there is genuine need. The first priority for allocating places is 'a child at risk of serious abuse or neglect'. Instinctively, a child at serious risk of abuse or neglect needs much more than child care. They should not be put into child care for the day—the eight or 10 hours or whatever it is—and then returned to an environment where they are at serious risk of abuse or neglect. It needs to be dealt with at the very root cause of it. If they are not safe with their own parents they need to be taken out of that environment permanently.

The second priority is 'a child of a single parent who satisfies, or of parents who both satisfy, the work/training/study test under Section 14 of the A New Tax System (Family Assistance) Act 1999'. To be honest, I do not get that. I do not understand why one parent working is more important or less important than another parent working or another parent choosing to study or undergo training. The idea is to provide this resource to Australians so that they can further their careers, their education or whatever the circumstances may be. I just do not buy it that we should all be paying and prioritising one person over another because of the job they are doing.

The third priority, of course, is 'any other child'.

Within these categories there is even more entrenched prejudice. There is a priority list within the first priority group, the second priority group and the third priority group. If you are a child in an Aboriginal or Torres Strait Islander family, you get priority. A white kid can be removed from a childcare operation with 14 days notice to be replaced by an Aboriginal kid. I think that is wrong.

A child in a family which includes a disabled person gets priority. I am not making light of the difficulties that disabled people and their carers undergo, but I cannot come to terms with the fact that because you have a disabled sibling or a disabled parent you should have priority and someone should be removed from an existing childcare place because they deem you to be more worthy. I am not underselling the difficulties of it, but who are we to say: 'I'm sorry, bad luck. Out you go and in you come.' It is wrong. Even the department eventually admitted it was wrong.

Then, of course, we discriminate on the basis of income. Apparently, if you do not earn enough money or if you do not have a job you are actually a greater priority for child care than the person who is actually out there earning money, paying more taxes and maybe employing other people—I do not know. They can lose their place because they are earning above a threshold or they actually have a job—God forbid! Isn't child care meant to be for getting people back into the workforce?

Finally, this is the one that really strikes me as odd, considering all the rorts I outlined before: children in families from a non-English speaking background get priority. I am not sure where they rank in the list, actually. I am not sure whether coming from a non-English speaking background trumps being a low-income earner, having a disabled or less abled sibling or parent or having an Aboriginal or Torres Strait Islander family. I do not know whether it is the colour of your skin or the language your parents speak. I cannot determine this. What I know is that any critical or reasonable assessment of it says it is wrong to remove someone in an existing place because of the colour of their skin, the language their parents speak or the income their parents have in favour of someone that a government of any stripe or persuasion deems more worthy.

Earlier, Senator Gallagher asked about deals that are done and things, and I have my doubts. I think that is very clear about the wisdom of throwing more money into this sector until other aspects of it are absolutely cleaned up. I made it very clear to the minister that I have an open mind with respect to this package, but there are some things I would like addressed. I really believe that if you are going to make child care available to every family, you are going to subsidise it to the cost of $12 billon-plus per year and more on the horizon, then it has to be available equally to every single family. There should not be a priority allocation. You should not be able to kick a child out because their parents happen to be the wrong colour, speak the wrong language or happen to be able-bodied and earn money. I think that is wrong.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) 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. Before the 2013 election, the Liberals promised more affordable and accessible child care, but this government has been an absolute failure. From day dot, when it comes to dealing with child care, they are left wanting. They have wasted the last two years arguing that there could not be any change to child care unless it was linked to the cruel omnibus cuts. While we are pleased that child care has been separated from the omnibus bill, Labor still has serious concerns about the proposed childcare package. These are not new concerns. We have been pointing these out over a number of years. We are concerned about the unfair activity tests and threats to Indigenous and remote childcare services. We have said we will support the government's proposed changes if they fix their package, but, unfortunately, they have brought it before the Senate today and it is still not fixed. It is time for the government to listen to the experts, fix their package and stop playing political games. I know firsthand of the success of programs for access to child care for people living in regional Tasmania.

I want to remind people what happened on Mother's Day in 2015 when the government referred to new mothers as 'rorters' and 'double-dippers'. They did this in the name of calling it the 'same time' and said it would be better to focus on child care. That was back in 2015 and what has happened? Here we are, two years later in 2017, and they still have done absolutely nothing to support families struggling with the cost of child care. Mr Turnbull's government has been completely ridiculous when it comes to child care in Australia, playing games and wheeling and dealing about what they think is right for children and families. They did come to their senses and dropped the link between child care and the omnibus bill, but only because of another grubby 11th hour deal with One Nation and the Xenophon party to take money off Australian families. Thanks to this dirty deal, the government has rolled over and stopped insisting that the only way we can pay for childcare changes is by cutting family payments. But, as I said, we still have serious concerns about the proposed childcare package, which the government has dug up from the last Abbot government's budget. This package is fundamentally flawed and is entirely inadequate to deal with the challenges that the Australian childcare system faces. It has one purpose: to take away money from those who can least afford it. It attacks low-income families, single parents, Indigenous families and our most important people, our kids, the young people of this country.

Labor have written to the minister to outline the flaws that need to be fixed so that we can support the legislation. We have shown good faith and have offered to work with the government to secure a better deal for families who use child care. But, unfortunately, this has fallen on deaf ears time and time again. We are not the only ones who have repeatedly pointed out the flaws in this package. There have been three Senate inquiries and they heard evidence from early childhood experts and the sector. Despite being warned about the serious flaws in their childcare changes for years, the government have done nothing to fix them and here we are today with a flawed piece of legislation.

The government's childcare policy remains unchanged and they are trying to force it through the Senate yet again—a sign of a very dysfunctional government, who are desperate to try and get something through this chamber before they bring down their budget. They are prepared to use our kids' future. The most important time of our children in their development is those first five years. That is not just my view. You have heard it before from other contributions, but it is the expert view on this.

We will not support a package which will see some of the most disadvantaged children go backwards in life, because they have not had access to early childhood education. And we will not support a package that limits opportunity for any child. There are some measures which we would support. We would support simplifying the system. We would support measures to try and limit the inflationary nature of childcare fees. We would support ways of offering better assistance to children with disabilities. But, as it stands, the government has not been able to explain how this bill will do any of these things.

Only a few short days ago, the Prime Minister was out on the airwaves supporting a pay cut for thousands of low-paid workers, and now the government are going after funding for early childhood education. This is how out of touch and arrogant this government is. At a time of such uncertainty and inequality, the government should not be exacerbating these social problems. An analysis by the ANU shows these childcare changes will leave one in three families worse off, 330,000 families will be worse off and 126,000 will be no better off.

There are two fundamental points that Labor would not support in this bill. Firstly, the government must ensure that vulnerable and disadvantaged children are guaranteed access to at least two days of early education each week. At the moment in Australia, every child has access to two days of subsidised early childhood education. The introduction of the new, complicated activity test in this bill would remove this current entitlement. This means that children from very disadvantaged families or unsafe homes will only have access to a safe and secure environment and quality early childhood education one day per week, a child in a family earning less than $65,000 will have their subsidised access halved, and a child with a parent who stays at home in a family earning over $65,000 will be pushed out of the system altogether. This bill will deny access to early childhood education for children from dysfunctional families or disadvantaged backgrounds.

Childhood education is one of the most effective ways of breaking the cycle of disadvantage. This demonstrates again how out of touch this government is and how, as I see it, it just does not care enough. The importance of early childhood education cannot be stressed enough. Ninety per cent of a child's brain development occurs in the first five years of their life. It has been proven that children who attend quality education go on to do better in school, in employment and generally in life. Locking children out of the benefits of early education is not only unfair; it shows a lack of understanding about the enormous economic and social benefits from having children access quality early education. Access to early education, unfortunately, is not a value that this Liberal government shares with us.

The government will argue that this is about workforce participation and the decisions parents make. But not one of the three ministers who have had responsibility for developing this policy has been able to successfully explain how their proposed changes will increase workforce participation. The minister went on in Senate question time this afternoon about how their package would make child care more accessible. But, in reality, the government's child care changes create an unfair catch 22: parents will not be able to work because they cannot get child care, but they are unable to get child care because they do not have work.

There is a very long list of experts, including care providers, early childhood experts, academics, Australian charities and parents, who have been absolutely unanimous in their opposition to the proposed activity test. There is absolutely nothing innovative or agile about this agenda—just cuts to programs designed for people who need them the most. The minister must for once put his money where his mouth is and amend this bill to allow its flaws to be fixed. Then we can support it. Then we will support it.

The harsh activity test is not the only flaw in this bill. Labor is also concerned about the future funding of Australia's Indigenous Budget Based Funded services and mobile services. I spoke earlier about those and about the benefits from the mobile services in my home state of Tasmania. As part of this package, the government is proposing to end and cut back the funding for both of these services. The BBFs are services which were set up decades ago in communities where children would not have had access to child care unless the government stepped in and funded them directly. Some of these services are quite advanced and some operate out of tin sheds, but they provide a safe place for children where they have access to healthy food and early childhood education.

As part of this proposal the government has said, 'Let's cut the funding for these services and transition them into the mainstream and deal with the consequences later.' But we know that this is just not going to work. You cannot put your head in the sand and say, 'This is all too hard.' The BBFs and mobile services cannot be funded in the same way that early childhood centres are funded. That is the reality, and any government worth its salt would know that, when it comes to providing health services or aged care into remote and regional areas and to our Indigenous brothers and sisters, there are real challenges, and those challenges are already there as far as education is concerned, so there is no reason why it would be any different for early childhood education. The rationale for setting up these services was to help families and children who live in places where the mainstream system simply will not work, where the market was not viable and where parents just were not able to pay fees. These changes are not viable, and these services will close down as a result. But as usual the government insists on turning a blind eye. But I say that is not good enough.

There are just weeks and weeks of debate in this place about a range of issues, but there is nothing more important than the future of our children. We talk in this place, and people get up and beat their chests about wanting to be the government that is going to close the gap for our Indigenous brothers, and what do they do in this very piece of legislation? They are enshrining the fact that there is still going to be this gap. It really is shameless. Access to quality early childhood education is one of the most important investments that we can make to close the gap. The most important investment any government can make is in our children, because they are our future. The Secretariat of National and Islander Child Care has warned:

These changes will diminish our kids' potential to make a smooth transition to school … Children will fall behind before they have even started school …

I plead with the government: do not turn your back on these services. I plead with the crossbench: do not let the government turn their back on these important services. Do not allow them to turn their back on those families from very disadvantaged backgrounds and dysfunctional families, on our Indigenous brothers and sisters and on those people who live in regional areas. Do not allow the government to turn their back on them.

There are things in this bill that we said we could support. One of the areas that very few people have made a contribution on is in relation to the early childhood educators themselves. We do not do enough to support them. They are highly professional, highly skilled people. I speak from experience, because our youngest daughter was an early childhood educator before she became a mother and chose to stay at home to raise her children. The reality is that we know the demand that is placed on those early childhood educators every single day that they have our children in their care. We know that they have been fighting for recognition. We know that they have been fighting to ensure that they get remunerated to the extent that they should be, with the respect that goes with that. We know that earlier this month they walked out of their childcare centres, not because they wanted to but because they need to have a voice. They need to be heard. They need the government to listen to them.

And what do the government do when they have the opportunity to show some respect and give some support back to these early childhood educators? They want to turn their back on them. They want to turn their back on the families. It is becoming almost routine for the government that, whatever legislation they bring into this place, they attack the most vulnerable and they attack families. They talk about being a family government, wanting to ensure that people have equal opportunities and being all about jobs. The reality is that they have failed on that. They have failed on the account of giving the support to these very families that I have just been speaking about. They are turning their back on giving them the same opportunities as those people living in urban cities. They are turning their back on those who live in regional and remote areas. They are turning their back on families who need support from the government. They have turned their back on the lowest paid workers in our community. They are putting under threat other people's penalty rates in other sectors.

We know that, in the early childhood education area and child care in general, it is hard to attract and keep good staff because they do not get remunerated to the level that they should. We know that they have been fighting for a stronger voice, and I think that they have achieved respect from the community. They are not seen as 'just babysitters', as they have been referred to by others on the other side of this place. With all of these cuts that the government continue to make, it is those who need their support the most that they are turning their back on.

I say and Labor say to the crossbench: look at our amendments. Join with us to ensure that the government can no longer attack another group in our community—some of the most vulnerable young kids who need this support. They need this opportunity to have the doors open to be properly prepared to go on to primary education. Do not allow the government to do this. We owe it to the Australian kids. I owe it to the kids of the families in my state of Tasmania—and Senator Bilyk is here. Senator Dastyari is here supporting New South Wales.

We have to be serious about this. There are other ways of meeting budget demands. Using young people and the most vulnerable families in our community has to stop. It has to stop. I am sure you will hear from Senator Bilyk in her contribution. She worked in this sector. I have a daughter who worked in it. I used both home day care and centres when my children were growing up. I know the value of it. I also know that it is not just the education of learning their ABC and learning to read and write; it is about learning to socialise. It is about building the self-esteem and the confidence of these children.

That is why we were elected in this place: to make tough decisions. We owe it to these children to ensure that they get the opportunities that we have all had. Some of us have not had the same opportunities as each other, but what we have been able to do is make our way in life to end up here. I want to ensure that the crossbench think about these things. I know they are all—or at least most of them are—good people. I want them to put the kids of our country and their families first and to think about these early childhood educators when they come to vote for amendments and the passage of this bill.

Catryna Bilyk (Tasmania, 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. We all know that prior to the 2013 election the Liberals promised more affordable and accessible child care, but what has happened? They went the whole last term of parliament without doing anything at all about childcare costs for ordinary Australian families. A child born when the Liberals first promised more affordable child care will be in school by the time the government deliver. Early education and care are an investment in our future. The government need to listen to the experts, fix their package and just stop playing silly political games.

Labor still has some quite serious concerns about the childcare package. It is interesting that after two years the government are insisting that the only way we can pay for childcare changes is by cutting family payments. They will argue that they are freezing the family tax benefit. But, if freezing that is not cutting it, I am not quite sure what is, because, unfortunately, the cost of living will still keep going up every year, and the family tax benefit will not. It was quite encouraging yesterday to see them finally cave in after I do not know how long—months and months—and remove the link to the omnibus cuts. I still have not worked out what deal was done—I am sure eventually we will find out—but they at least separated them.

There is nothing new about the problems with this bill. We have been pointing out the flaws to the government for years. As Senator Polley said, there have been no fewer than three Senate inquiries where concerns have been raised. Concerns have been repeatedly pointed out by us, over many months and years, and they have been raised frequently by early childhood experts and the sector. So it is not just Labor that has these concerns. Today I read a media statement by Early Childhood Australia. I will read it into Hansard, because I think it is a very sensible media release. It is headed 'Crossbench must stand firm on childcare bill amendments in best interest of children,' and reads:

Early Childhood Australia calls on the cross bench to stand firm in negations with the Government around the child care package or block the bill in the Senate if key amendments are not made.

"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 2 days of care a week,” CEO Sam Page said.

"Early Childhood Australia has consistently argued that a minimum of 15 hours early childhood education per week is in the best interests of children and that we only supported the Bill if this was included.

"We call on the Senate to block the Bill today, unless there is an amendment to increase the base entitlement to 15 hours a week.

"We also need the income threshold for a base level of care increase to $100,000 and make changes to the activity test to make it more flexible for families who are in casual or unpredictable work situations.

"Without these amendments families with only one partner working and earning more than $65,000 per year would receive ZERO child care subsidies and face the full cost of child care fees. They are unlikely to be able to afford this on such a low wage and their children risk missing out on the benefits of quality early learning.

"The Bill also needs to lift the support to Indigenous children who are twice as like to enter school developmentally vulnerable, and who need guaranteed support to at least 3 days of care under the new package. Then we may actually start to see the gap actually closing on early learning indicators.

"We are concerned at reports that the Government has stepped away from their commitment to increase the hours for the most vulnerable children in the community," …

That was put out by Early Childhood Australia, which is the peak advocacy body for children under eight and their families and early childhood professionals.

It is not only Early Childhood Australia and the Labor Party that have concerns. Twenty-one experts and early childhood stakeholders signed a letter saying they did not support the changes in their current form and that they wanted to see an increase in the proposed level of base entitlement for subsidised care to a minimum of two days, not the twelve hours proposed in this bill. These stakeholders and organisations are Australian Childcare Alliance, Early Childhood Australia, Early Learning and Care Council of Australia, Family Day Care Australia, Goodstart Early Learning, Early Learning Association Australia, Early Childhood Management Services, KU Children's Services, The Creche and Kindergarten Association, UnitingCare Australia, Mission Australia, Anglicare Australia, SDN Children's Services, Gowrie Australia, Bestchance Child Family Care, The Benevolent Society, Social Ventures Australia, Brotherhood of St Laurence, United Voice, The Parenthood and Affinity Education Group. These are the people who work in the childcare industry. They do not sit behind a desk all day, every day. They understand the industry. They know what they are talking about. They know what is required for the children of Australia. It is high time that the government started to listen to people. We know it does not in other areas and has had to do numerous backflips in a range of portfolio areas, but this sector is the future of Australia.

We have said we would support the government's proposed changes if it fixed its package. Unfortunately, it has brought it into the Senate today, and it is still not fixed. Analysis by the ANU shows that these childcare changes will leave 330,000, or one in three, families worse off and 126,000 no better off. That is almost half of all families—555,000 families—that will be worse off or no better off. Over 71,000 families with an income below $65,000 will be worse off. The harsh activity test will leave children in 150,000 families worse off.

Experts and people in the industry have been calling on the government—it seems like forever—to drop its cynical political link between family tax benefit cuts and childcare changes; fix its harsh activity test, which will hurt vulnerable children; and better protect Indigenous children and services, but the government has not been listening. Many of these organisations have called on the government, as I said, to make sure vulnerable and disadvantaged children continue to have access to at least two days early education a week. The international best practice benchmark is 15 hours. But the bill before the Senate will cut in half access to early education for many vulnerable and disadvantaged children. As someone who worked in the childcare industry as an early childhood educator for nearly 12 years, can I say that cutting access to early education will only exacerbate the problems of these children.

Early education should be recognised for its powerful ability to solve social problems and to address disadvantage in the long term. I have heard things about this in this chamber before. I doubt that anyone else in this chamber has worked in this industry but me; I am pretty sure that none of the men on the other side have worked in the childcare industry. In fact, I am pretty sure that none of the men on this side have either! But let me just say that when I hear a senator come into this place—this happened a few weeks ago—and talk about early childhood educators, that all they do is wipe snotty noses and stop fighting between the kids, I am gobsmacked. Am I allowed to say 'gobsmacked', Mr Acting Deputy President?

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

You certainly are, Senator Bilyk.

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

I am gobsmacked! To me, that shows the absolute ignorance of that senator, that he knows nothing about the childcare industry and yet he deigns to get up and make those ridiculously stupid comments.

Just to get back on track a bit: as I said, we are worried about the impact that the government's changes will have on Indigenous children, who in every state and territory already have lower early childhood enrolment rates than average. The childcare package will end the current Budget Based Funded Program that provides direct subsidies to 300 mostly Indigenous services that reach 20,000 children. These services are often small and in remote locations, and a lot of them are not financially viable without ongoing support. A lot of them need that ongoing support. They will probably never be able to be financially viable without ongoing support, but that does not mean they are not important. Trust me, they are very important.

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. The government must ensure that children can access two days of care, not just 12 hours.

I am concerned. I think that the introduction of the new complicated test would remove the current entitlement of all children to have that two days of early education. And of course if a child's parents work casually or part-time we have more concerns. Their likelihood of being able to access stable, subsidised early education is seriously compromised under the changes. We know, as Senator Polley mentioned, that 90 per cent of a child's brain development occurs in the first five years of life. I am glad that people are actually taking in some of the things that I have been saying for the nine years I have been in this place. Children who attend quality early education go on to do better in school, better in employment and better in life. Early education has to be recognised, as I said, for its ability to assist in solving social problems and in addressing disadvantage.

When I was an early childhood educator, the Tasmanian state government actually allocated me a special licence. I worked predominantly with children from disadvantaged backgrounds. I had care of children who had been treated so appallingly that people would cry if they saw it. I worked with these children for five days a week to try to improve the outcomes of their future lives. I think this is important, and I do not want to misquote Senator Bernardi, but what I think Senator Bernardi said, as I understand it, when he was talking about children at risk of abuse and neglect, was that they should not be given priority of care for two days and then be returned to their families. I am sorry, Senator Bernardi, they should. They should be given priority. They need every bit of help they can get from those fantastic early childhood educators.

Most of them, in fact, probably do not go back to their families. If it has been proven that they have actually suffered from child abuse or neglect—if there have been charges and things—then they will have been removed from their parents or whoever did the abuse. They may well be with other family members. They may be living with grandparents. I have had situations like that. I worked with two young brothers, one just over three years old and the other just under 12 months old. These children had been removed from their mother and were living with their father and his mother, who was 64 years old, in Hobart. Of course, this was back in the eighties, so listeners would have to take this in that context.

She had very severe health issues, but she had taken them in. The only work the dad could get was on the west coast of Tasmania, so rather than go on unemployment, or family support or whatever was around in those days he would go to work, when he could get work, on the west coast of Tasmania and these children would be left with a very loving, but not necessarily very capable, grandmother. She was not capable of chasing around after these two children so they came to early childhood education. They came into care. In those days they had access to four days a week, I think it was, of care. With the childcare workers putting in all that special effort and special programs, and with the childcare workers being professionals and knowing what these children needed, we did turn those two little boys' lives around.

I will never forget the day I resigned and left childcare work. This specific dad was standing there with a little posy of flowers he had picked from his mother's garden, embarrassed and apologising to me because that was all he could afford, because he would have liked to have given me the biggest bouquet of flowers he could find in the whole of Hobart because my colleagues and I had managed to get his three-year-old to talk, to finally have some language skills, and we had managed to toilet-train his three-year-old. For those of you who have never toilet-trained a child, let me tell you it is not particularly easy, especially when they have a whole lot of other problems. And in the next year or so his child would be able, with the extra-special care he was still going to receive, to be enrolled in a normal school, with normal kids, with the neighbours who lived around his mother's. This father was just so grateful.

People know I have a bit of a bad memory—I have had brain tumours, so people work with me on that—but I think I will remember till the day I die that father's sadness at me leaving, which was quite complimentary, and also his gratitude that someone had been able to help his child. I think every child in a situation like that deserves to be helped. I think it is our job as legislators to make sure that no child gets left at a stage where they cannot reach the best that they can be. But, if we leave it to this government, that is not going to happen. That is not going to happen.

There is clear and longstanding research to show that vulnerable and disadvantaged children have the most to gain from early education. As I said, I do not want to see any child not reach its full potential, and I know that my colleagues on this side certainly do not want that. Yet we have independent research by the ANU that shows that the government's proposed changes will leave over 71,000 families with an income below $65,000 worse off. Do you know what that says to me? That says to me: 'If you are maybe not as well off as other people, then bugger off; you do not deserve anything extra-special. You could all pull yourself up by your bootstraps and get on with it.' Well, that is not how it works. If you lock a child out of the benefits of early childhood education and care—the education component, the socialisation, the learning to get on with people, the ability to develop their minds—then not only is it unfair but it shows a complete lack of understanding of the absolutely enormous economic and social benefits of those children having access to quality early education.

In the few seconds I have left to speak, I note that none of the three ministers who at various times have had responsibility for developing this policy has ever been able to successfully explain how these proposed changes will increase workforce participation. I would love another 20 minutes—but it is not going to happen, is it! (Time expired)

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

I thank all contributors to the debate on the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. I am particularly honoured to be able to close this second reading debate on what is a very important and significant piece of policy reform that will make childcare and early education services in Australia more affordable for the vast majority of Australian families, and certainly for low-income, hardworking Australian families; and for middle-income families. It is a substantial reform that will improve their ability to juggle work and family responsibilities, and choose to work the hours that best suit them in the circumstances that best suit them.

This bill brings on major reforms. The childcare package contained in this bill has been before not one or two but three Senate inquiries, as well as of course a comprehensive Productivity Commission analysis that preceded it. I thank the Senate Education and Employment Legislation Committee and the Senate Community Affairs Legislation Committee, as well as all those who contributed to those inquiries. The government welcomes and accepts the recommendation from each of the majority reports that the bill be passed. I would also like to particularly thank Senators McKenzie and Duniam for so ably chairing successive inquiries on this bill.

We are committed to investing in child care to provide parents with more choice and opportunity to work, and to provide children with high-quality early education. That is why these measures come with an additional cost to the budget in excess of $1½ billion. That is a significant cost, and the government has worked hard to ensure that it is fully funded within the budget so that it is achieved without needing to drive up taxes or debt for future generations.

This bill delivers genuine, much-needed reforms for a simpler, more affordable, more accessible and more flexible early education and childcare system. Around one million Australian families who are balancing work and parental responsibilities will find this package to be fairer and beneficial to them, providing the greatest hours of support to the families who are working the longest hours, and the greatest financial support to the families who are earning the least.

Our reforms give hardworking lower income families an increase in their effective rate of subsidy on their childcare costs from around 72 per cent to 85 per cent. This tapers down to 80 per cent for higher income families. A family earning only around $60,000 a year whose childcare centre charges around $100 a day would pay just $15 per day for the care of their child, and with just one child in child care would be around $2,000 per annum better off as a result of the proposals the Turnbull government is putting forward. Families earning $60,000, $70,000 or $80,000 per annum, hardworking families, will find they are all significant beneficiaries of these changes.

Family eligibility for the childcare subsidy is determined by a three-step activity test that more closely aligns hours of subsidised care with the combined amounts of work, training, study, volunteering or other recognised activity undertaken. This is an important part of the reform that was recommended through the Productivity Commission process, and it ensures that the greatest number of hours of support go to those families who are working, studying or volunteering the longest number of hours in their lives. It is estimated that our reforms will encourage more than 230,000 families to increase their involvement in paid employment. 'Why is that?' I heard Senator Bilyk ask before. It is because, importantly, either they will find that they have less out-of-pocket costs when it comes to meeting their childcare bills, or they will find that they no longer hit a $7½ thousand cap in terms of their annual support—or indeed they may well benefit in many cases from both of those reforms. It means that childcare costs for low-income, hard-working families are no longer a barrier to their employment participation or a limit on the number of hours that they work.

New data released earlier this week show that there are nearly 18,000 approved childcare services nationwide caring for roughly 1.25 million children. But the data also illustrate significant flaws in the system. We saw in June 2016 an annual quarter fee spike of almost eight per cent. While the Turnbull government have done much to try to reduce fees in the current system and have succeeded in keeping fee increases lower than they were during the previous government's time in office, it is clear that we need changes to address these fee increases.

Our reforms will place downward pressure on what have been incessant childcare fee increases through an hourly rate cap, as well as abolishing the current childcare rebate cap for most families and increasing it from $7½ thousand to $10,000 for higher income families above $185,000. We will introduce new compliance powers to further strengthen the government's efforts to clamp down on fraud—which I note Senator Bernardi acknowledged in his contribution—provide a childcare safety net for the most vulnerable children and slash red tape so that services can offer more flexible hours.

Our 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, to increase the supply of places in areas of high or unmet demand. Much has been said in the House of Representatives debate and in the Senate inquiry and debate about budget based funded services, otherwise known as BBFs, under this package. There are 300 BBF services nationwide caring for about 22,000 children. Amongst those are around 5,000 children in about 45 mobile services. It is very important to stress that the BBF Program is not a legislated program. It is a budget measure. Each of these services operates under vastly different arrangements at present in terms of the way in which subsidies are paid to it. That is one of the reasons why it is not a legislated program—because of course each of those payments has been structured over a historical period to reflect the different natures of those very different services.

In order to address concerns with the current block funded program, which is capped and closed and has been a problem for some time, this package will bring those budget based funded services that are delivering child care into the broader funding model for the first time. That means that, for the first time ever, families using these services will receive direct support from the Australian government through the new childcare subsidy or, for those requiring extra support, through the additional childcare subsidy. I again stress that those families at present are not eligible, as BBF families, for the childcare benefit or the childcare rebate. They will be eligible for the first time ever for the new childcare subsidy and the additional childcare subsidy.

Recognising that many of these services go to great and costly lengths to operate in isolated communities and to travel to small communities with limited numbers of children, our third funding source for BBFs, including mobile and Indigenous services, is the Community Child Care Fund, which is an annual fund of $110 million. However, we acknowledge that there have been concerns about accessing this fund from BBFs, whose current budget funding is $61.8 million. As a result of representations made by many—Senator Nick Xenophon and his team, Senator Hanson and her team, Senator Hinch and my own colleagues the member for Farrer, Ms Ley, Senator McKenzie and many others—I acknowledge indeed that during this debate and other previous discussions, as I said before, these issues have been raised comprehensively. They have been raised by the Greens and by Labor. They have been mentioned in many different quarters.

As a result of those representations from many different places, the government is committing that $61.8 million of that fund—exactly the same amount of funding as is currently provided to BBFs—will be quarantined as a supplementary funding stream to BBFs that can receive that support in order to remain viable without it being contestable funding as the CCCF had originally been intended. This provides a guaranteed level of funding equal to—and indexed into the future—existing funding to BBFs. That means that the BBFs will attract—guaranteed—more funding under this package because, in addition to that stream of funding under the Community Child Care Fund, they will still have the new eligibility for the childcare subsidy and for the additional childcare subsidy. Put together, this guarantees nothing but being better off for those BBF services into the future.

I thank those who have made arguments in favour of taking action in this place. The government has listened to the need to provide certainty. To provide further certainty, I can assure the Senate that BBFs will benefit not from annual arrangements under this but from longer term grants of between three and five years which will be renewable. Great care has been taken to ensure that we can ensure accurate support to each of them under the childcare reforms, including service based reports for each individual service that have been developed by PwC. 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.

I stress that the remaining funds in relation to the Community Child Care Fund will be able to be used to see expansion in terms of new services. So BBFs will no longer find themselves capped in terms of their numbers, places or dollars, as those will increase under the childcare subsidy and additional childcare subsidy with each new young Indigenous child, remote or regional child or other eligible child they have in their service. Their funds will go up, unlike the current capped arrangement, and of course they can choose to expand their services. The Community Child Care Fund will provide opportunity for expansion of similar services in localities that have not been able to access such support because of the closed and capped nature of the BBF Program previously. These are changes that I hope will be welcomed by all senators and will allay fears in relation to the future of those BBF services.

Much has also been said about the provision of minimum hours under the Child Care Safety Net. As noted earlier, an activity test has been incorporated into this package in order to ensure childcare subsidies are targeted to those who work the hardest and depend upon child care in order to work, train, study or volunteer. The activity test is light touch. It starts at requiring just four hours of activity a week and scales up from there, as I said before, in order to ensure that those working the longest hours are able to access the greatest hours of subsidised care.

We know children from disadvantaged backgrounds benefit most from quality early childhood education and care, which is why we are providing additional support to those who need it most. The Child Care Safety Net will support families earning around $65,000 or less who do not meet the light-touch activity test, by providing up to 24 hours per fortnight of subsidised care. This is equivalent to two weekly six-hour sessions and will be provided at the highest rate of subsidy for these families, which I again note increases from the 72 per cent support that they would receive at present to 85 per cent support under our reforms.

I say it provides two sessions per week because, remember, these are families who are not working, not studying, not volunteering, not meeting the activity test. They do not need day-long sessions of care like those who might be engaged in the workforce. They need sessions of care to meet early education opportunities, and early education opportunities should be provided within a reasonable window of time. The government believes that six hours provides that capacity. It is consistent with the type of timelines that preschool services provide in terms of opportunities for early education. It is broadly consistent with the length of time that children spend at school during a school day, so it is not unreasonable to believe that early educational opportunities can and should be provided to these children for six hours a day, guaranteeing two sessions of care.

I have heard a range of different examples from others talking about the activity test and I want to touch on a couple of those quickly. Senator Hanson-Young spoke about jobseekers—people who lose a job—and whether that means they will lose access to childcare services. People who go onto Newstart, of course, have mutual service obligations in terms of looking for work. Looking for work is an eligible activity under the activity test. Those people will not lose their eligibility for childcare services. They will continue to be eligible because they will be meeting the activity test in the future.

I have heard much said about children who are at risk. The additional childcare subsidy component we are providing guarantees access for children at risk, not just people identified in a child protection service at a state level but, indeed, for interventions before children enter such higher levels of risk. There are clear processes there which services themselves can identify and commence to guarantee that those children receive access to 50 hours per week of childcare support and that that 50 hours per week is paid not at a proportion but, indeed, at the full cost of delivery for that childcare support. Again, it is a clear, careful thought from the government to make sure the disadvantage has been carefully considered and acknowledged through this process.

The government does encourage and expect services to provide flexibility for families. The Jobs for Families Child Care Package does not include any requirements for services to alter their charging practices or how they deliver their sessions of care, but we do and we are lifting a number of requirements from them. Services are currently required to operate a set number of hours per day and a set number of days per week. Those regulations will be lifted, which will enable in regional or rural communities more services to operate in a flexible way that meets the demand in those communities. It will also enable services to tailor specific packages for people to access early education services under the safety net if they have the entitlement to those two six-hour sessions per week. These services and this access, of course, comes in addition to access to preschool services that the government supports with the states and territories and ensures universality of early education access at that level.

Some services, to their credit, already offer shorter sessions of care or casual places, and the changes we are making will make it even easier for more services to follow suit in that regard. Offering more flexible options is especially important for those vulnerable families, and I urge services to do so and note that there are a range of different provisions within the minister's rules that can be applicable to make sure that that is the case if necessary in the future.

I want to thank those who have preceded me in responsibilities in the childcare portfolio for their contributions to the development of this work. The members for Farrer and Cook, of course, oversaw different stages of the development of this policy work, but I am very pleased to bring to the chamber tonight and to bring to a vote tonight reforms that will provide enormous benefits to around one million Australian families—families who will see greater support in terms of their childcare costs in the future. They will no longer be crippled by an annual cap or cliff that they fall off of each year. They will see a new mechanism in place to constrain incessant fee growth. They will be empowered to make choices about how and when they work and the hours they work without fear of crippling childcare costs.

These are important reforms. They are going to make a very big difference to help hardworking Australian families. They are going to make our system of childcare payments and benefits far more effective in future. I endorse them to the Senate and hope that all senators can see the merit in the overwhelming elements of this package that benefit hardworking low- and middle-income Australian families.

Question agreed to.

Bill read a second time.