Wednesday, 1 March 2017
Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017; Second Reading
The Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017, as is well known, reintroduces major reforms under the government's Jobs for Families Child Care Package with a range of new and some previously introduced social services measures which have been designed to improve the sustainability of the government payment system. With respect to the significant and much-needed childcare reform set out in this bill, the government has clearly outlined a funded, long-term and very substantial reform plan which delivers support for families and for their children while maintaining sustainable supports for both working Australians and jobseekers.
I thank all of the members for their contributions during the course of the second reading debate and note a few comments with respect to those contributions, in particular a number of specific issues. Some of those indeed focused heavily on the childcare reforms in this bill. By way of overarching summary, the bill will deliver a simpler, more affordable childcare system—a system which, if reformed, will benefit close to one million Australian families. The bill would also deliver an increase in family tax benefit A fortnightly rates by $20 per child, which would help more than 1.2 million families better manage their weekly budgets. The bill will also provide an additional two weeks of government funded paid parental leave to almost 100,000 low-income mothers every year.
At the heart of this bill is the Jobs for Families Child Care Package. The Jobs for Families Child Care Package will deliver much-needed root-and-branch reform to create a simpler, more affordable, more accessible and more flexible early education and childcare system in Australia. Those reform would ensure that low- and middle-income families would be the greatest beneficiaries of much-needed changes. The reforms proposed would allow families to choose their child care around their work rather than limiting their work hours to suit their child care. It is presently estimated that the package would encourage more than 230,000 Australian families to increase their involvement in paid employment. It is worth pausing for a moment just to note that there are close to a quarter of a million Australian families who cite the fact that child care has become too expensive and too inflexible as the reason why they are not able to engage in the workforce at all or are prevented from having further and greater engagement in the workforce. That really is nothing short of a tragedy for those families. Our early education and childcare reforms have been the subject of extensive consultation conducted primarily by the Minister for Education and Training, the Hon. Simon Birmingham, and they will direct the greatest support to those families working the most hours and earning the least.
While dealing with the childcare component of this bill, it is necessary, as I foreshadowed, to address the contributions made by some members, firstly, as they relate to the budget based funding model regarding child care. A number of speakers—particularly the member for Indi—referenced the budget based funding model, including mobile services that deliver early childhood education and care in remote communities.
In the proposed new system, the reformed childcare system, budget based funding model services, or BBF services, including mobile services, would be able to access three streams of funding. Firstly, those services would be able to receive income from the childcare subsidy, which will increase as the number of eligible children in attendance increases. Secondly, the additional childcare subsidy will provide higher subsidies to support eligible families based on their individual needs. Thirdly, we recognise that BBF services, including mobile services, cannot be funded on a one-size-fits-all approach. Accordingly, those services will be able to seek supplementary, tailored sustainability funding under the Community Child Care Fund.
The Community Child Care Fund will comprise $110 million annually. It will be flexible and will respond to individual circumstances and challenges that are faced by childcare services. This will particularly help services that need additional financial support to maintain operations. Childcare services will be able to apply for funding to supplement any fee income available through the CCS and the ACCS, in order to ensure that services have as much certainty as possible. We will include capacity for three- to five-year funding agreements to assist services with long-term planning, and to provide greater security of funding.
I understand that the Minister for Education and Training has discussed with the member for Indi that the government is committed to publishing the CCCF guidelines by 1 July 2017. The Department of Education has commissioned PwC to carry out individual reports for each of the BBF services around the country. These are place based reports that reflect the BBF's current work and identify the additional funding that each BBF will need in order to maintain their current service level.
In addition, the government will commence a post-implementation review within 12 months of the package commencing, which will include a key rural and regional focus as a result of the advocacy of the member for Indi. From day 1, data will be collected to ensure that the implementation and impacts of the reforms are understood, allowing for the early identification and resolution of any emerging unintended consequences, including in respect of BBF services.
Many opposition members also made a variety of comments around the activity test, which is at the heart of the childcare reforms and which is introduced as part of the childcare reforms contained in this omnibus bill. The government has been quite clear and consistently clear on the fact that the activity test is a key part of what can be a greatly improved system of child care for Australian families. Under current arrangements, families need not demonstrate any activity at all in order to receive 24 hours of subsidised care a week. In order to deliver increased hours, availability and support to those families who are reliant on child care to work, to train, to study or to volunteer, the government considers it is necessary to establish reasonable limitations on the support to those who do not use child care to work, to train, to study or to volunteer. The Turnbull government stands by the principle that childcare support, heavily subsidised as it is by the taxpayer, must in its operation give preference to those who are working, training, studying or volunteering.
Indeed, one of the many positive components of this childcare package that was failed to be mentioned by many members opposite is that its new compliance powers further strengthen the government's efforts to clamp down on fraud. This will include the power to pause childcare service applications for fee assistance to help excessive growth within a particular childcare service type where there are concerns about proven or alleged rorting. This measure in fact builds on this government's very strong record on compliance in the childcare sector.
But, unfortunately, some members have never shown a strong interest in compliance. Under the previous government in the two years to June 2013, there were no cancellations and no suspensions, and only two relevant fines issued. In 2012-13, the Labor government carried out only 523 compliance checks; while in the last financial year the coalition government carried out 3,100 of those compliance checks. This has contributed to the cost of the government's Jobs for Families Child Care Package being revised to the $1.6 billion that we have before us today, and it has allowed the government to increase family tax benefit A fortnightly rates by $20 per child for more than 1.2 million families.
The bill also introductions a two-year trial of incentives aimed at increasing the number of eligible jobseekers who undertake horticultural seasonal work, such as fruit picking, and those incentives will help the Australian horticultural industry by increasing the number of unemployed Australians who participate in seasonal work and provide jobseekers with a practical opportunity to enter the workforce and to build work experience and skills.
And, consistently with being financially responsible, the government is of course determined to ensure that these spending measures—both those very substantial measures in childcare reform and those around the trial of incentives aimed at increasing the number of eligible jobseekers—are paid for. The Jobs for Families Child Care Package will be implemented using the savings in this bill from reforms to the family payments system. Those reforms to the family payments system will ensure that more than 1.2 million families receive an increase of $20 per fortnight per child to help with their week-to-week living expenses.
The government has been absolutely clear and consistent in outlining its fiscal strategy to strengthen the government's budget sheet and assist a return to surplus by redirecting spending to boost productivity and workforce participation. In this case, that is achieved by investing taxpayer money that would be saved inside the family tax benefit system, most notably in closing down end-of-year supplements and reinvesting that money in the significant reforms to child care that have already been highlighted and that are at the heart of this bill.
To ensure that we are managing our budget responsibly, this bill also includes a range of other savings which have been identified in the Social Services portfolio. These savings help ensure the long-term sustainability of the payments system and ensure that Australia has a targeted income support system that provides financial assistance to those most in need while encouraging workforce participation and self-reliance. Budget responsibility is a responsibility to the present generation of young Australians, who will become the next generation of Australian taxpayers.
The government's paid parental leave measures provide greater support for mothers with no access to employer parental leave schemes. They seek to balance taxpayer-paid parental leave with employer-funded leave to make the payment fairer for all mothers by ensuring that all mothers would have access to at least 20 weeks to spend time with their newborns before returning to work. That is up from 18 weeks. From 1 January 2018, the maximum number of weeks of government-provided parental leave pay would be increased from 18 to 20 weeks. This means that almost 100,000 eligible mothers each year who do not have access to employer-provided paid parental leave would receive an additional two weeks of leave or an approximate amount of $1,300. These low-income mothers have a median income of $43,000, and 91 per cent of those mothers work in the private sector.
In addition, the bill amends the work test for paid parental leave eligibility. That helps employees such as casual teachers and women in physical professions such as building, horseracing, mining and construction to join the system for the first time. In 2011, there were 1.23 million female employees in casual jobs. There were 30,798 women working in mining and 109,705 women working in construction. They all stand potentially to benefit from the government's proposed changes to the work test.
For many opposite to assert themselves as the party of low-income support and then stand in the way of increasing access and providing an additional two weeks to some of the lowest paid mothers in Australia is, I think, plain wrong. As to the argument that employers would pull back their own paid parental leave schemes, that was an argument, ironically, that was also raised before the Paid Parental Leave scheme was introduced first in 2011, and it simply never eventuated. What experience has shown is that employers retain their current paid primary carer leave arrangements or improve them. That is, naturally enough, because, unlike paid parental leave pay, most employer schemes are at replacement wage, and many employer schemes can be taken at half pay, increasing the amount of time that parents can take away from work.
In response to concerns raised with respect to the automation of the income stream review process contained in this bill: this measure is not about data matching, nor is it a compliance measure. It enables the Department of Human Services to more efficiently receive current income stream review information directly from income stream providers through reducing double handling and the need for income stream providers to provide information to recipients, which they in turn presently have to provide to the Department of Human Services.
The government will contribute more than $4 billion in savings contained in this bill to the NDIS Savings Fund Special Account, when established, to ensure that Labor's $4.1 billion NDIS funding gap, which occurs in 2019-20 and which grows to over $7 billion each and every year, will be met without increasing taxes or accumulating more debt.
Many of these savings measures have been previously presented to the parliament, and they have been supported by a number of Senate inquiries. The government certainly urges all members of parliament who have opposed some of these measures in the past to consider how these measures represent responsible government spending, how they drive sustainability into the system and how they encourage workforce participation and self-reliance. Together, the measures in this bill will assist in simplifying the payments system and support future welfare reform, and they are in the best interests of working Australians. In the current fiscal context, they represent the best possible way to reform, in a very substantial way, Australia's childcare system. I commend the bill to the House.