Mike Symon (Deakin, Australian Labor Party) Share this | Hansard source

I rise tonight to speak in support of the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008. During the 2007 election campaign, Labor committed to increasing support for childcare costs through the childcare tax rebate. The cost of child care has been an increasing burden on working families for many years. The ABS consumer price index published in June 2007 shows that childcare costs doubled under the 11½ long years of the Howard government. The ABS also revealed that childcare costs have grown much faster than the costs of other goods and services.

This bill will implement the Rudd Labor government’s election commitment to help working families meet the costs of child care by increasing the rate of childcare tax rebate from 30 per cent to 50 per cent of out-of-pocket costs up to $7,500 per child per income year. From 1 July 2008, CCTR will also be paid quarterly instead of annually, at the end of the tax year, to help families meet the regular costs of child care closer to when they arise. Indexation for the CCTR will take effect from 1 July 2009.

It took the previous government three years to realise that having families receive their 30 per cent CCTR two years after they had to fund increasing childcare costs was a luxury that many parents could not afford. This pea-and-thimble trick pulled on working families by the Howard government meant that the 30 per cent rebate figure initially sounded attractive. That was until parents realised that there would be no money, no rebate, in their hands to defray the costs of child care for two years.

Even now, under the existing system, parents are waiting too long to receive a rebate on their out-of-pocket childcare costs. Although child-minding fees are payable weekly, fortnightly or monthly, the CCTR currently is only paid annually. That means parents wait for up to a year or more just to receive the 30 per cent rebate on their out-of-pocket costs for child care. These childcare costs can be very substantial, adding up to hundreds of dollars per week in many cases and, therefore, many thousands of dollars out of the household budget when added up over a full year.

Our 50 per cent childcare tax rebate is directed at working families and those parents who are looking to get back into the workforce or undertake further training. Not just in my electorate of Deakin but right across Australia, all parents with children in approved child care or those considering approved child care will benefit. We are providing more frequent payments to help families meet the costs of child care closer to when they are incurred, to provide a positive incentive for families to participate in the workforce. The Rudd Labor government will continue to provide the highest levels of total subsidy—through CCB and CCTR—to working families on low incomes.

It is important to note that all families who are currently receiving the childcare benefit and childcare tax rebate will be better off as a result of the changes being implemented. Families with higher out-of-pocket expenses will benefit the most. All families currently receiving CCB and CCTR will continue to be eligible for CCTR, even if the changes mean that they are no longer entitled to receive a CCB payment, based on their income level. Families may still receive CCTR, regardless of their income, as long as they meet the basic eligibility criteria for CCB. These eligibility criteria are not income related.

Payments for the July to September 2008 quarter will commence from October 2008. We know that, for many parents, the accessibility and affordability of quality child care affects their decisions about staying in or returning to the workforce. Guardians, including foster parents and grandparents, responsible for the day-to-day care of children and grandchildren may be eligible for CCB and therefore may also be eligible for CCTR.

The measures outlined above are in addition to the $46.7 billion of tax relief directed at working families, the 50 per cent education tax refund and the Teen Dental Plan, which will enable eligible families to claim up to $150 per year of preventative dental costs for their teenage children. The Rudd Labor government is delivering on yet another election commitment to working families. This bill will provide parents of children in approved child care with a substantial boost to their household income. I commend the bill to the House.

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