House debates

Tuesday, 17 June 2014


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

7:31 pm

Photo of Nickolas VarvarisNickolas Varvaris (Barton, Liberal Party) Share this | Hansard source

I am pleased to be able to speak on the Family Assistance Legislation Amendment (Child Care Measures) Bill 2014, which amends the A New Tax System (Family Assistance) Act 1999. These amendments are pivotal to the coalition's promise to provide a sustainable, equitable and accessible childhood education and childcare framework. This is also crucial to our promise to restore the nation's finances and bring the budget back to surplus. As the member for Barton, an electorate that is family oriented, I am acutely aware of the impact on working families of the previous social policies surrounding child care.

Child care is one of our most fundamental social investments as a federal government. Child care which is accessible, flexible and of a high quality is indispensable for families not just in Barton but right around Australia. High-quality early childhood education and child care are in increasing demand by working Australian families. As families are increasingly forced to operate on dual incomes, there is a vital need for accessible and high-quality day care, after hours school care and long day care in our society. Some families are fortunate to have the luxury of extended family members to assist with the care of their young ones. However, many families, particularly in my electorate of Barton, rely on high-quality childcare services.

Australian governments have a history of providing funding to assist families with early childhood education and care. This commenced in 1972 and ever since then there has been a significant investment in child care. The Australian government subsidises the cost of child care for eligible families through the childcare benefit, known as CCB, and the childcare rebate, known as CCR, which were implemented in 2000 and 2004 respectively. Families receive these important subsidies because governments from both sides recognise the importance of family units, the early years of childhood education and developmental needs. The coalition understands the cost of raising children as a top priority and that, at times, financial assistance must be provided for families on lower incomes.

Currently, the CCB is a means tested payment based on a family's income. It is financial assistance with childcare costs that is indexed each year with CPI. Whilst this bill will maintain the income thresholds for the next three income years and is part of the coalition's 2014-15 budget measure, the government is still essentially increasing the CCB standard hourly rate, minimum hourly amount and multiple child loadings on 1 July each year. The amount a family receives in CCB depends on the income levels, the type of care used, the number of children and the hours of care, as well as the parents' work, training and study commitments.

These measures will not impact on families on an income below $41,902, which will see families on the lower income CCB threshold receive the maximum rate of benefit. As income increases for a family, the CCB tapers to zero. However, out-of-pocket expenses incurred by families who receive less CCB will be partially offset by the CCR. The CCR is not means tested and provides up to 50 per cent of out-of-pocket childcare costs up to $7,500 per child per income year. This maximum amount of CCR is not being reduced through this bill.

This bill will continue to maintain the CCR limit at $7,500 for the next three calendar years. The freeze was first introduced by Labor in 2011 and they extended this in their last budget of 2013-14 but did not provide the legislative requirements to do so. When the coalition decided to legislate the measure, as first intended by those opposite, Labor colluded with the Greens in the Senate to block it. In essence, Labor introduced their own measures this time last year as part of the Social Services and Other Legislation Amendment Bill 2013, then a few months later sought to oppose it. Labor claimed at the end of last year that the coalition's attempt to freeze the CCR provision was a cut of $100 million from the Early Years Quality Fund and that there was no justification for that. The coalition did freeze the fund because there was an independent review of the funding being undertaken, which concluded that the fund was flawed and inequitable, benefiting less than 30 per cent of long day care workers, and that it was a tool for union recruitment. This is not a sound business model. There is no evidence of any cost-benefit analysis having been undertaken and now the Auditor-General is conducting a performance audit of Labor's Early Years Quality Fund.

Australia taxpayers and families deserve better. This is why the coalition is following through on current measures to ensure we have a family assistance model that is sustainable now and into the future. There is much work to be done. The CCR and CCB freezes are the first steps in rectifying an untenable childcare sector. The CCR measure is expected to deliver net savings of $105.8 million over three years whilst the CCB measure is expected to deliver net savings of $230.4 million over four years, from 2014-15 to 2017-18, for a combined total of $336.2 million. Overall, this government is increasing childcare assistance to $28.5 billion over the next four years, 2015 to 2018, to assist around one million families each year through the CCB and CCR. The government's total investment between 2013-14 and 2016-17 is expected to exceed $22 billion.

I would like to note that these budget measures are necessary, because in order for families and children to thrive and to access the benefits they require we need a strong economy and a budget surplus. The government considers that maintaining the current CCR limit until 1 July 2017 is a reasonable, necessary and proportionate measure that is in the interests of Australia's current fiscal and economic position, given savings from the measure have already been taken by the previous government.

The government is absolutely committed to ensuring that Australian families have access to high-quality, flexible and affordable child care that really meets their needs—and vice versa, with service providers that are afforded the flexibility and durability to meet the needs of its families. I make no pretence that we are operating under a bleak financial landscape, one that was painted by Labor with six record deficits, meaning $123 billion in cumulative deficits ahead. The untenable position in which the system we inherited has been left means that we need to make the system sustainable into the future.

All families are unique, and no benefits paid are identical. Indeed, the CCB sounds complex because it is. The many variables which determine the monetary benefits that a family receives is an issue that has been raised by families and service providers in my electorate. It also invariably adds to the bureaucratic complexity and red tape burden that inundates childcare workers. Whilst both sides of government recognise the importance of family and how critical the early years are to a child, and that necessary assistance should be given to families, where there is not an option of a stay-at-home mum or extended family help there are ways of going about this which sustains the social policy to maintain longevity. And cost is certainly a factor in child care for many families. From the feedback I have been given in just my electorate alone, the issue is largely one of availability and accessibility.

Too many childcare facilities are burdened with administrative red tape and layers of bureaucracy as part of the National Quality Framework. Good intentions aside, the reality is that owners, operators and workers are trapped in offices inundated with paperwork instead of committing their time to the needs of children. Labor's way of ensuring childcare workers are doing their jobs properly is by proving themselves through endless piles of paperwork as part of a stringent quality process. The myriad bureaucratic complexities associated with claiming benefits due to several factors at play—family income, number of children, type of care, hours used, which I mentioned earlier—are unnecessary. Families and childcare service providers have provided their concerns on this unnecessary red tape that are getting in the way of providing the actual services that families desire. The impact of this unnecessary burden which has been placed on childcare centres via Labor's National Quality Framework includes things such as childcare centres having to employ extra staff or staff having to work longer hours to deal with additional paperwork, resulting in about $140,000 a year just to administer it. These measures by Labor do not directly impact on the positive welfare of the child and only hit the pockets of families, some of whom are already struggling. This is not conducive to actual needs of children, the parents and childcare facilities around the country. Furthermore, it does not address the issue of childcare needs, because subsidy alone does not sprout much-needed childcare workers.

In other words, the solution is not to just further increase subsidy or lower childcare costs but to actually have more childcare facilities and workers. This is the crux of the problem. As such, the coalition has asked the Productivity Commission to launch an inquiry into child care and early childhood learning as a substantial review into just what is required by the sector and to make recommendations on its sustainability. This bill does not pre-empt that inquiry but is a necessary part of the government's plan to repair the budget and to restore and strengthen the economy.

The stark reality is that childcare costs are rising, and the coalition is acutely aware of this. I suspect Labor knows this as well. Unfortunately, Labor's credibility on child care is negligible. Under Labor, childcare costs skyrocketed. Between September 2007 and September 2013, long day care fees increased from $5 an hour on average to $7.65 under Labor. Over a week, this was almost $75 extra and, over a year, $3,500. This is in spite of Labor's investment in child care fee assistance increasing by 45 per cent over the same period. This is what hurts family budgets the most. That was despite Labor promising it would make child care more affordable. Moreover, Labor created an efficient system of messy red tape burdens that was complex to monitor and administer, which ultimately meant parents and families were negatively impacted.

Labor also said it would create 260 more childcare centres; it provided only 38. Again, this is what hurts families in my electorate and across the nation. As a responsible government, we have to recognise the reality of the situation and do what we can, right now, to ease the pain of families in the long run. Australian families need a sustainable, long-term solution to high-quality childhood education and child care. They do not want increasing fees with no increase in availability of affordable care. It makes no sense to families that child care should be out of reach when governments are investing money and childcare costs are increasing. Furthermore, only through accessible and flexible child care can we improve work force participation opportunities, especially for women.

The coalition has been left with the job of cleaning up Labor's mess, from six record deficits, and in creating a system of tenable child care that can be sustained for the children of today and tomorrow. The measures put forward in this bill are vital to ensuring that we can produce the best outcomes for the deserving families across the nation and ensuring that these families have a bright future for their children who are not left to pay for Labor's debts for years to come. High-quality affordable child care is a reality that can be matched by the right mix of social policy and business practicality, but reforms must take place to achieve this. This bill is the first step in laying the path of a sustainable childcare sector. I commend this bill to the House.


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