House debates

Tuesday, 17 June 2014


Family Assistance Legislation Amendment (Child Care Measures) Bill 2014; Second Reading

6:30 pm

Photo of Kate EllisKate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Hansard source

I rise to outline that the opposition cannot and will not support the Family Assistance Legislation Amendment (Child Care Measures) Bill 2014 in its current form. I move:

That all words after "That" be omitted with a view to substituting the following words:

"the House declines to give the Bill a second reading as:

(1) the Government has failed to provide sufficient information about the impact on families of the changes to the Child Care Benefit;

(2) the Government has not completed an assessment of impacts on workforce participation of the changes to the Child Care Benefit;

(3) the changes to the Child Care Benefit should not be legislated just weeks before the Productivity Commission inquiry into Childcare and Early Childhood Learning provides its interim report;

(4) families have not had a chance to have their say on these changes; and

(5) for these reasons, calls on the Government to remove the changes to the Child Care Benefit, set out in Item 2 of Schedule 1, from this Bill, to allow separate and fully informed consideration by the Parliament of the changes to the Child Care Rebate and the Child Care Benefit."

I move this amendment because this is a bill before the House that is built on total and utter hypocrisy. It is hypocrisy because this comes from the Prime Minister who promised 'no cuts to education' but since being elected has announced the biggest ever cuts to schools and massive cuts to universities and is now attacking the earliest part of our education system through these and other cuts to early childhood education and care.

It is a bill based on hypocrisy because the Prime Minister himself wrote to childcare centres across the country in the lead-up to the election promising to address affordability and saying that caps and freezes on childcare assistance would have the impact of 'increasing out-of-pocket costs for families'. But everything this government has done is driving up the cost of child care. Now they have the audacity to come into this parliament and introduce exactly what they were out there campaigning against in the lead-up to the last election.

Ultimately, how can those opposite come in here and push ahead with a paid parental leave scheme that will deliver $50,000 cheques to millionaires while at the same time introducing this bill attacking the existing childcare support that people who earn just $42,000 a year rely upon each and every day? Members opposite might get upset about that—that they are supporting handing out large cheques to those wealthy families who do not need them. But then they come in here and attack low- and middle-income families in this bill which those opposite have the audacity to support.

We also know that this is a government that set up a Productivity Commission inquiry to inform any changes to the childcare system but is today coming in here and proposing significant changes and drastic cuts just weeks before we will see the Productivity Commission's draft report. There is hypocrisy in this bill, because the Prime Minister says that it is a priority for this government to improve women's workforce participation but today his government has introduced a bill that cuts modest, means tested support for low- and middle-income families and women. Those are the very same women for whom the cost of child care is the biggest barrier to them returning back to work.

This Prime Minister said:

We will make child care more accessible and more affordable for Australian parents.

But in this bill he is doing exactly the opposite. He is hitting the family childcare assistance that so many thousands of Australian families rely upon. We also know that the minister at the table told this parliament in 2010 that removing indexation would:

… further increase the financial pressure on Australian families who are already struggling to meet the costs of child care.

But that is exactly what this minister and government are doing in this very bill.

We know that more than 978,000 families across Australia rely on childcare support on a daily basis, and each and every one of them could stand to lose if this bill is allowed to proceed in its current form. Before the election, the government promised more affordable child care. If they are were serious, if this were not just another one of the mistruths they peddled to the Australian public in order to get elected, they would not have cut almost $1 billion from early childhood education and care since coming to office. But that is exactly what they have done: $450 million for outside school hours care—gone; $157 million for family day care services—gone; support to help parents complete study and get back to work—cut; programs to increase the number of childcare places—gone; Indigenous child and family centre funding—gone; and support to raise the wages of educators—gone. And now we see before the parliament an attack on the very backbone of the childcare support system—the childcare rebate and the childcare benefit have been cut. They have been cut by those who hypocritically went around campaigning against measures to pause the childcare rebate.

I want to talk for a moment about the measures in this bill and the impact they will have on the childcare rebate. Never before have we seen moves to cap the childcare rebate come before this parliament without that funding being directly reinvested into early childhood education and care. Because of this freeze 74,000 families will reach the Child Care Rebate cap in 2014-15, and 150,000 families will reach the CCR cap in 2016-17—a total of around 15 per cent of families.

The government knows the impact of this cap will grow in time through bracket creep, but the savings put forward on CCR alone—freezing the cap until 2016-17—will see over $106 million cut from childcare assistance for Australian families. When we were in government we massively increased the cap on the Child Care Rebate from $4,354 to $7,500. The remarks the assistant minister made about Labor in the past freezing the cap on CCR are quite true, but it was done only temporarily and only ever to offset the cost of important investment in improving the quality and affordability of child care by contributing towards the National Quality Framework and towards wage increases for low-paid educators in order to reduce turnover in the sector.

In opposition, the now government opposed freezing the CCR cap, even when the money was to be reinvested into the childcare sector. Before the election, the now Prime Minister personally wrote to every childcare centre across Australia about the impact capping the Child Care Rebate would have on families, saying it would mean 'increasing out-of-pocket costs for families'. Yet today that is exactly what he is doing. This Prime Minister and this government are once again doing exactly the opposite after the election to what they told the Australian public they would do.

Childcare support is absolutely essential to provide a financial incentive for parents to re-enter the workforce, particularly mothers. The cuts that are before the parliament will mean that many parents will simply not be able to afford to return to work. This will have huge impacts on productivity, workforce participation and on women's superannuation savings later in life. We know that once a family reaches the cap for each child, there is no more assistance for child care and they must meet the full cost, and there will be 150,000 families in this situation as a result of this bill and this government's hypocrisy when it comes to the Child Care Rebate.

Labor does not support cuts to child care. What we see before us now are savings, plain and simple. There is no reinvestment, and there are no new programs and no improvements to services. There are just cuts, and massive cuts at that.

This is a proposal of government and they must take responsibility for it. If the government is listening, and they do respond to our call to split this bill, we will outline our opposition to these Child Care Rebate cuts and the impact they have, but we will not prevent them from progressing through the parliament.

What I want to particularly focus on is the outrageous attacks that this bill contains on our Child Care Benefit system. Never before has any government even thought about attacking the means-tested and targeted Child Care Benefit payment. To understand the impact, and just how outrageous and retrograde this measure really is, it is important that we look at the Child Care Benefit—who is receiving it and what it goes towards. This is a payment that starts to cut out when families earn just $42,000. That is who this government is attacking in this measure. It is a payment that tapers out as income rises. It is a modest, targeted and means-tested payment. For many women and families this payment means the difference between being able to afford to go to work or not. It is fair and it makes sure that the most help goes to those who need it most.

What better example of just how twisted this government's priorities are than the fact that under the Prime Ministers signature paid parental leave policy they are quite happy to send $50,000 cheques to millionaires. If you want to lift women's workforce participation, everyone knows that you target assistance to low- and middle-income earners. That is where the government can make the biggest impact. But what are they doing for low- and middle-income earners? They are cutting and attacking the modest, targeted Child Care Benefit that these families rely on.

Instead of investing where it counts, this government is attacking where it will hurt the most. Cuts to Child Care Benefit—the targeted, means-tested payment for low- and middle-income families, who all too often bear the brunt of this government's attacks—totalling $230 million will permanently decrease the affordability of child care.

The minister opposite knows this. On 11 September 2012, she said:

There are parents having to make the heartbreaking decision to leave the workforce because their wages do not cover the cost of child care.

Yet in government they introduce this never before seen attack on the Child Care Benefit.

On another occasion, the minister said:

We have no intention to make childcare less affordable and every intention to make it more affordable.

Minister, I ask what the intention is with this piece of legislation, because it will make child care less affordable, it will cripple the workforce participation of many families and many women out there, and it will mean that some of the children who have the most to benefit from critical early-childhood education are denied the opportunity to get just that.

It is not families on high incomes who will decide that the cost of child care simply makes going to work unviable. It is people who work in hospitality, in retail, in agriculture, and many of the heath sector workers. They are the ones who this measure will hit hardest. We simply do not know exactly what impact this unprecedented attack on the Child Care Benefit will have, and we do not know because the government simply did not bother to find out. The education department says that more than half a million families will have their childcare assistance cut because of these Child Care Benefit changes. But that is where the information stops. Whilst the department has said that 'around 500,000 families will receive less Child Care Benefit' as a result of this proposal, we do not know exactly who is impacted, where they live, how much they earn, what jobs they do, and what impact this will have on workforce participation. It is arrogant, it is heartless, and it is deeply irresponsible for this government to have made a decision of this scale—one that has the potential to impact up to one million families—without having any meaningful information and without bothering to do any modelling on what the impact of it will be.

Instead, this government is trying to rush changes to the Child Care Benefit past the parliament in a sneaky and underhanded way. This is not good enough. The government needs to come clean about the facts before even asking this parliament to consider this bill. As the deputy secretary of the education department told estimates, 'We have not done that level of analysis.' They do not know who it will affect, do not know how badly they will be affected and do not know what the impacts on workforce participation will be. I say it is not good enough to bring this bill to this parliament when you have not bothered to do your homework. I say that the Australian public expects better from this parliament and expects better from this government than this cruel and underhanded attack. It shows arrogance and utter disregard for Australian families that the government would press ahead with these changes without undertaking a proper assessment of the financial impact that this is going to have on Australians.

The government is trying to make changes before the community even has an opportunity to understand their impact. In the five days that stakeholders were given to comment on this bill when it was referred to committee there was an incredible response. It was as though the Prime Minister had declared war on parents and children, saying it was some kind of emergency. But so retrograde are these cuts that stakeholders have rallied in just those five days. I want to share some of the thoughts of stakeholders who have actually had the chance to be consulted, unlike the parents and families across Australia. Early Childhood Australia said:

Freezes to the Child Care Benefit thresholds will have a significant impact on low and middle income families accessing early childhood education and care services and should not be supported.

The National Welfare Rights Network's submission on the bill said:

The government has announced a budget that hits families on low to middle incomes the hardest (eg by proposing to cut family tax benefit B payments for single parents with children over 6). This Bill only adds to the financial strain on families and has the potential to undermine their ability to access child care.

Particularly telling was the business perspective, pointing out, again, the government's twisted and wrong priorities. We heard from the Australian Industry Group in its submission on this bill:

The Government's proposed 'gold plated' Paid Parental Leave (PPL) Scheme should be abandoned and the existing PPL Scheme retained. This would allow additional funding to be devoted to child care measures. If additional funding was available through the abandonment of the proposed PPL Scheme, the measures in this Bill may no longer be necessary.

So, if those opposite are looking for a solution, the Australian Industry Group has put forward one option right there—an alternative to cutting the support that is so critically important for low- and middle-income families.

It is also utterly illogical for the government to make these significant changes to the Child Care Benefit at this time, at the time when their very own Productivity Commission inquiry into child care and early childhood learning is underway. The PC inquiry is due to hand down its draft report in just weeks—in July—and its final report in October this year. The government has put in train its own process for making changes to child care that are ridiculously undermined by pursuing this bill at this time.

The minister has said countless times that the Productivity Commission review will solve issues of affordability, availability and flexibility. If she really believed that, though, she would not be undermining and pre-empting the entire inquiry with the drastic and terrible measures in this bill. There was more hypocrisy from the minister when we heard now Assistant Minister Susan Ley say in September 2012:

We have a very sensible approach to ask the Productivity Commission to examine those settings, to have a look at the entire world of female participation in the workforce—usually it is female—and at the cost and availability of child care.

These changes to the Child Care Benefit will create uncertainty for parents and for the sector. And this has not been missed. The submission to the bill by Goodstart said:

Goodstart believes that while the inquiry is underway, current policy settings and indexation should be maintained to ensure affordability for families.

And the Community Child Care Co-operative of New South Wales said:

To make such changes in the context of a wide ranging review into the provision of early education and care in Australia (Productivity Commission Inquiry) seems to be contradictory to the development of sensible, well developed policy.

Also, the government promised that the Productivity Commission review would at least maintain the same 'funding envelope' as is currently dedicated to child care. But this is a government desperately trying to reduce the size of that envelope by cutting $1 billion from childcare since coming to office. Any responsible government would not even pursue these wide-reaching Child Care Benefit changes without understanding the full impact, without receiving its own Productivity Commission review report first, and without letting families have their say on an issue that is going to be of such critical importance to their workforce participation.

Cuts to Child Care Benefit will have a huge impact on the workforce participation of parents, particularly mothers and particularly those with more than one child or those who are low- or middle-income earners. Research shows that the relationship between childcare affordability and women's workforce participation is strong—that a one per cent increase in the gross childcare price results in a decrease in a mother's employment rate of about 0.7 per cent. And lower-income families have been proven to be the first to drop out of work as childcare costs increase. This was a point the Australian Childcare Alliance made when they said:

In the 2013 ACA What Parents Want Survey 48 per cent of respondents indicated that they would decrease their usage of childcare or withdraw their child completely if out-of-pocket childcare fees increased by 10 per cent.

Now, we know that the Prime Minister has the wrong priorities. We know that attacking existing practical support for low- and middle-income families and women returning to work at the same time as continuing to argue for the $50,000 payments in paid parental leave for high-income earners is just plain wrong. We know it, the Australian public knows it, and I am sure that some of those opposite might be able to see that that is a clear indication of badly twisted priorities.

The government also looks set to provide taxpayer funding for nannies and au pairs, specifically asking the Productivity Commission to look at how it could be done, even though we know that nannies are one of the most expensive forms of care and that they are not covered by the National Quality Framework. Just like the rest of this unfair, cruel and heartless budget, these childcare cuts will hit those who can least afford it. Early Childhood Australia modelling on the combined impact of the proposed Child Care Benefit and Child Care Rebate changes indicates a family on less than $60,000 with one child in care will be out of pocket by an additional $1,800 a year, and a family on $100,000 with one child in care would be out of pocket by an extra $3,600 a year by 2016-17, taking into account these changes and the rising cost of care.

Of course, maybe we should not be surprised by the hypocrisy of the Abbott government when it comes to child care and early childhood education. We have had enough evidence to suggest that this is a very strong pattern. We have seen ongoing and constant attacks on the childcare sector. We have seen the Abbott government declare war on family day care services, with the budget cutting $157 million from assistance to family day care services, which will be passed on to parents through higher fees and will lead to family day care educators closing down. We know that there are more than 400 family day care services and 140,000 children in family day care across Australia. Family Day Care Australia has estimated this one cut, this one attack, will drive up fees by $35 per child per week.

Child care benefit, child care rebate, family day care—all of them cut, all of them attacked by this government, who said 'no cuts to education'. Sadly, it does not end there. In one of the most despicable examples of attacking those that can least afford it, of making those that are out there struggling in our community do the heavy lifting resulting from this government's unfair budget, the budget contains changes to the jobs, education and training child care fee assistance. These changes will limit the number of places for those people who are on income support, who are our there studying, trying to get back into the workforce so that they can get off the welfare payments the Treasurer claims he would like Australians to get off so quickly. They will lose access to their JET child care payment. The budget caps assistance at $8 per hour and cuts the maximum accessible hours from 50 to 36 per week. Again, this is total hypocrisy from a government who claim that they want to see people out there in the workforce yet are cutting every support to help them get there.

We saw earlier that this government will not hold back when it comes to attacking the education sector. We saw the Abbott government cut $450 million from outside school hours care. This money would have funded new places, new services and extended hours and would have delivered better programs. We know that work does not finish the moment the school bell rings at three o'clock. Outside school hours care is a necessity if people are going to be able to continue to participate in the workforce. After stagnating under the Howard government, outside school hours places increased by 100,000 under Labor, with over 335,000 children currently in care. There is a shortage of outside school hours care places in many areas across the country, and this savage cut of $450 million—from a government who said no cuts to education and who said that they would make child care more accessible and affordable—will make it harder for parents with school age children to return to work.

Continuing the pattern, the government has cut the $5 million Child Care Accessibility Fund, despite receiving grant applications from councils across Australia looking to increase childcare places in their local area, looking to tackle the waiting lists that meant that people could not take up work opportunities. This funding was to be used to create new places, expand centres, cut planning and development red tape, free up vacant land for childcare centres or incorporate child care into schools and TAFEs.

Perhaps in one of the lowest blows on limiting the access to early childhood education and care for those children who have the most to benefit from it, this government also discontinued funding for the Indigenous child and family centres which were being set up across Australia in the areas they were required in the most, making it even harder to close the gap for these children.

One thing I hope we all know in this parliament is that the first five years are critically important to a person's life outcomes. We have seen all the research. We know that 90 per cent of brain development occurs in the first three years alone. This is why early childhood education and care is so important, and why Labor worked so hard to reform the sector, to increase the funding available, to increase quality and to work to increase staff retention and ensure that we value the educators. Research also shows that early childhood education is particularly important for children from disadvantaged backgrounds. That is why the government's attack on childcare affordability—particularly on the childcare benefit and through JET child care funding, will have such incredibly damaging long-term consequences.

Australian studies show that children who attend preschool or kindergarten go on to score significantly better in their year 3 NAPLAN tests. This is also backed up by international research that shows that Australian students with one year of pre-primary education achieve more highly in year 4 reading, maths and science. We know how important this is. We know that this is one of the best investments that this country can make to ensure that children from disadvantaged backgrounds go on to have improved health outcomes, educational outcomes and social outcomes. Yet this government is intent to slam the door shut in the face of the Australian children who need them and need this support the most.

Labor will be doing what the government has not. We are demanding that this government produce detailed information about the financial impact these changes will have on Australian families, and we will be talking to communities about what impact these measures will have on them. We will be talking to parents looking to return to the workforce to find out whether these changes, these attacks on the childcare benefit, will take away the financial benefit from working—and to find out just how much extra they will be forced to pay. We will find out what stakeholders and employers think of these changes. Unlike this government—who seem intent on undermining their own childcare review by making drastic cuts to the system when the first report is due in just a few weeks—we think that the childcare review report should be available for consideration before major changes to the existing childcare system.

Now it is up to the government to do the right thing—to listen to what Australians actually have to say about these cuts to their childcare support. I challenge those members opposite—each and every one of those who will rise and speak on this bill—to justify how they are defending the Prime Minister's non-means-tested paid parental leave scheme but supporting these cuts to modest and targeted assistance for low- and middle-income families. It is a challenge they will struggle to rise to here tonight. But, even more—and even more importantly—it is a challenge few of them would be brave enough to rise to in their own communities, at their own local street corner meetings or in their own local shopping centres. How can those opposite stand up say, 'We will support $50,000 cheques to wealthy families who have a baby, but we will support cuts to the modest, targeted and means-tested childcare benefit that goes to families on as little as $42,000 per annum'?

I challenge those opposite to say how those priorities are not very twisted and wrong. Why is the coalition defending $50,000 cheques to millionaires but silently supporting these cuts to the practical, everyday support that over half a million low- and middle-income families rely on? How can those opposite defend this bill? How can they defend this cruel budget and these wrong priorities? How can they defend being part of this government at all when they introduce measures such as this unjustifiable attack on the childcare benefit?


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