Alan Tudge (Aston, Liberal Party, Shadow Minister for Education) Share this | Hansard source

I will start my speech today by pointing out that the Prime Minister misled this parliament in his remarks in relation to this childcare bill, the Family Assistance Legislation Amendment (Cheaper Child Care) Bill 2022. He came into this place and said that we were opposing this bill, when the member for Moncrieff, our spokesperson on this issue, categorically said in her speech on the second reading that we would not be opposing this bill. If the Prime Minister had any decency, he would come into this place and correct the record, because he was indeed misleading this parliament.

We are not opposing this bill, because we do not want to stand in the way of families getting access to higher subsidies, but we do have concerns with this bill, and this is why we have moved the amendment which the member for Moncrieff put forward. Our concerns are fourfold. We have concerns that this will add to childcare inflation. We have concerns that this doesn't add to any supply of childcare places despite spending $4.5 billion. We've got concerns about workforce shortages which already exist and will just be exacerbated by this bill, and we've got concerns about this bill adding to the structural deficit of the budget when we know the budget is in serious deficit already and is going to get worse under this government, according to its own budget papers.

I'll go through each of those in turn, but before doing so let me just say that the coalition has a very proud record in relation to child care. We doubled the spending when we were in office, to over $10 billion per annum. We supported 280,000 more children in the childcare system than there were when we first came to office. Women's workforce participation in this country hit record levels under our government, in part because of the childcare policies which we put in place. We gave access to child care, through various programs which we instituted, to dozens of locations which otherwise would not have had any access at all to childcare services.

Most importantly, though, we did all these things and achieved all of these outcomes without adding to inflationary pressure. Indeed, in the last 12 months, as a result of our childcare policies, out-of-pocket expenses for child care came down by 4.6 per cent. Inflation was going up in almost every other category, according to the ABS, but in child care in the last financial year it came down by 4.6 per cent, a remarkable achievement. That will be the benchmark upon which we now measure the inflationary impacts of this policy that the Labor Party has introduced.

This brings me to my first concern about Labor's new policy, and that is that it will indeed add to inflationary pressure. Inflation is arguably the most pressing economic challenge facing the country at the moment. It has risen to over seven per cent, according to the budget papers' own figures, and so a responsible government should be doing everything it possibly could to remove those inflationary pressures, because inflation just means that what people earn does less—doesn't purchase as much as it used to be able to purchase. In other words, people are poorer in real terms. That's what inflation does, and we've got inflation of seven per cent. But, instead of the government taking all possible means to reduce inflation, they're actually adding to inflationary pressures, in part through this bill, because it's putting $4.5 billion more into childcare demand, when there are already massive supply constraints in place, which I'll outline in a minute. And, as any person who has studied any basic economics knows, if you add to demand but you don't increase supply, prices go up. Even the Treasurer should know that, even though he's only got a PhD in studying Paul Keating. He should understand that basic concept—that, if you increase demand without increasing supply, prices will go up. This is exactly what is happening with this childcare bill—$4.5 billion of extra demand will be put on the system, and we're already seeing prices go up. Fees started to go up as soon as the Labor government was elected, on the basis that people knew that this would be coming. So we're seeing this across the board already.

These fee increases will continue. I think that they will eat up much of the $4.5 billion in additional subsidy which this bill puts in. So, over time, parents actually aren't going to be much better off, despite a $4.5 billion slug on taxpayers, because fees will just rise and gobble up the benefit that they otherwise would have got from this additional childcare subsidy. This happened when the Labor Party were in office last time. When you look back at the figures, fees went up 53 per cent in just the six years that they were in office. It's just going to happen once again. The Minister for Education, in his second reading speech on this bill, promised this place that fees would not go up. He actually said that this is 'a multibillion dollar boost to productivity and participation—without adding to inflation.' Well, I tell you what: we will be watching. Parents will be watching very closely, and we will be holding him accountable, because basic economics says that he is wrong.

Our next concern is that this package does not add a single childcare place in the country—not a single place—despite spending $4.5 billion of taxpayers' money. And we have many areas in the country where affordability is not the issue; it is access overall which is the issue. In fact, as the Leader of the National Party just mentioned, in the previous address, the Mitchell institute did a study on this, and it found that 35 per cent of the population live in an area described as a childcare desert, and those are regions where there are three children for every one available place. So 35 per cent of the population live in such a childcare desert. Many of those are in the regional areas. Anybody who has been to the regional areas knows exactly this problem. Almost every regional town has this problem, where it's the supply at all of childcare places, as opposed to the affordability, that is the issue. This bill expends $4.5 billion but does not add a single childcare place—not a single one. This is in comparison to the initiatives which we put in place when we were in government, which were specific programs of funding to enable new facilities to be built in regional areas, in particular, to add to the supply.

Our third concern is what this does to workforce shortages. This bill, again, does nothing in relation to the shortage of educators working in childcare centres. Labor has no plan to address this. We know that there is already a shortage of 7,200 early childhood educators right now. Goodstart, which is the largest provider in the country, told the Senate inquiry last week that we're going to need another 9,000 workers to deal with the demand which this bill creates. We are already short 7,200 workers and this bill will create a further demand for 9,000 workers. So 16,200 workers are somehow magically going to appear to work in these childcare centres. It's simply not going to happen. The Labor Party says, 'We're putting more money into the universities for more early childhood training places.' I'll tell you what, their plan is for only 14,069 places. There's a 16,200 shortfall. This is basic maths, which that side of the chamber have real problems with. They have problems with economics and with mathematics, because they can't understand that we have massive workforce shortages. They are doing so little to address this. What happens when you have workforce shortages and supply constraints? You add to demand and prices go up. That's what happens.

I'll take interjections from those opposite who say, 'It's all our fault because we didn't process the visas.' I thought those opposite were about training people in-house, training people in the country.

Finally, I point out the budgetary impact of this decision. It's $4.5 billion over the forward estimates. It's structural expenditure as opposed to temporary expenditure. We have a significant deficit already. This budget that was delivered last night bakes in additional structural expenditure to the budget at a time when we need to actually be curbing expenditure. This is also a considerable concern we have in relation to this.

We want to be assured that the stage 3 tax cuts, which we promised and which Labor promised, actually get delivered. They can be delivered while maintaining sensible budgetary settings. If they keep adding to the structural deficit, they won't be able to deliver those tax cuts. Adding to the structural deficit, they won't be able to maintain sensible budgetary settings. It simply doesn't work. They have to get control of the budget. Adding structural expenditure—almost unlimited structural expenditure—doesn't do that. We have these concerns and we point them out in this chamber, but we won't be opposing the bill for the reasons I articulated at the start and for the reasons which the member for Moncrieff articulated in her second reading speech contribution.

The bill does provide $4.5 billion in additional expenditure for the childcare system, but there are concerns and that is why we are moving this amendment. We have concerns about the inflationary pressure, about workforce shortages, that it doesn't add a single childcare place, despite spending $4. 5 billion, and that it adds to the structural deficit of the budget.

I commend the amendment. I hope the parliament support this amendment but we won't be opposing the bill in its substantive form.

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