Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

The Howard government has failed and is still failing hardworking families, families with children, families who work long hours to support their children and to pay their mortgages, families who are finding it harder and harder to afford the child care that is vital if they are to maintain their employment. Employment has become even more important with the ever-rising interest rates and increasing repayments that the Howard government has saddled Australian families with. Last Thursday night, I met with a group of parents at one of my local privately owned childcare centres. I would like to raise their concerns and the concerns of the centre owner in the House today. These are parents who want to contribute to Australia. They said to me, ‘The Treasurer wants us to have one child for each of us and one for the country,’ but they are finding it so hard to afford child care for the children they have at the moment that they do not see how they will be able to afford one child to replace each of them let alone one child for the country.

I would like to raise the issues that the parents raised with me and then some of the concerns raised by the owner. All the parents said that the system is not user-friendly. The childcare centre owner also pointed out that it was not user-friendly for her. So we have a system which does not work for the parents and does not work for the owner-operator of the childcare centre. Many families opt to take their 30 per cent rebate at the end of the year because they are frightened of incurring a debt. I will touch on some of the stories of the families as I make my contribution to the grievance debate. They need that rebate on a weekly basis but they are so terrified of the process that they leave it to the end of the year. Childcare fees for two days a week are $220 for one child and $600 for five days a week. One of the parents said to me, ‘It’s like paying a second mortgage.’ Here we have parents working to pay their mortgage but in doing so they are incurring a second mortgage along the way. Some of the parents modify their working hours so that they can work one day less per week and will do an overlap so they can reduce their childcare fees by a day, paying for four days instead of five, making it more affordable.

The owner-operator of a childcare centre raised with me the point that the subsidy for the under twos should be much higher because of the costs associated with the provision of care. There must be one staff member for every five children under two, whereas for the over twos it is one staff member for every 10 children. There is a much higher cost for the under twos yet the subsidy does not reflect this.

The owner also raised with me the emphasis on getting single parents back into the workforce through the government’s Welfare to Work program—but the system in place works against parents who are trying to do so. The training institutes operate over a calendar year, but Centrelink projects over a financial year. The owner raised with me the case of a parent whose children attend the centre and who incurred a debt. She was a single parent who was receiving welfare. She went to TAFE to study and get some qualifications, and after six months she managed to get a job and was earning $55,000 a year. Because of the break-up and how the calculations were done, she was awarded an annual wage of $45,000 when in fact for the first half of that year she had been receiving considerably less. What was the end result? It was a $560 debt. This caused her a lot of angst and hardship. It was very difficult for her and she had to repay that money to Centrelink.

The retrospective nature of the calculations was also raised; families need to be fortune tellers to be able to say what will happen over a 12-month period. Many centres, along with parents, do not understand the existing system. It is complex, confusing and ripe for people to make a mistake; it is ripe for the incurring of debts. The appeals process is intimidating and the burden of proof is entirely on families, even if Centrelink gets it wrong. Centrelink is very quick to issue debt collection letters, and this really causes problems for families.

I would like to raise three case studies. The first is a family with a mother who works two days a week and a father who works full time. They do not claim childcare benefit, not because they are ineligible for it but simply because they do not want to incur a debt. The second case study relates to a family in which the father worked and received a wage, but he then used his initiative and started a business. The business he owned performed better than expected and he earned more income than he had predicted. What was the result? He received a Centrelink debt notice. He agreed on a repayment plan, but throughout the whole process he felt as though he had done something illegal. He was made to feel that he was defrauding the government. I do not think that is the way we should reward a person who uses their initiative to start up their own small business, who employs other people and who creates opportunities in the community.

The third case is a family in which the mother returned to work after maternity leave. They received a Centrelink notice advising of a $90 debt. She paid the debt but was then advised by Centrelink that she had not incurred a debt and they refunded her the $90. A week or so later she received a notice from Centrelink advising her that she had a $400 debt, so she contacted Centrelink. At the same time Centrelink had withheld $400 from the childcare centre owner. They had recovered the $400 debt but they were still pursuing the mother. The childcare centre owner is a very proactive woman who cares about the parents of the children who attend her centre. She got in there and negotiated with Centrelink, and before Christmas she thought she had straightened it all out. But in January the mother received another debt collection notice from Centrelink. The matter was finally resolved after much angst suffered by all parties. And guess what? The mother owed the $90 that she had paid in the first instance. This is a system that is supposed to be working, but I do not believe that anyone in this parliament would believe that it is a system working to benefit anyone.

I would like to share with members the situation of another family. The family was earning $48,000 a year, with a 98.97 per cent childcare benefit for two days. The mum had a job that paid $34,000 and dad had a $2,000 pay increase in December, and the family ended up with a debt of $630. This system does not work.

The government is bringing in a new childcare management system, but this system will make it harder for childcare centre owners such as the person I have been talking about, who cares about her families enough to actually get in there and advocate on their behalf. This new system is supposed to reduce red tape but in fact it will be more bureaucratic. There has been little or no community consultation. What this new system will do is remove transparency from the system. It has been put to me, and I am convinced, that this is a system that will not work. (Time expired)