Wednesday, 21 October 2020
Matters of Public Importance
I have received a letter from the honourable member for Kingston proposing that a definite matter of public importance be submitted to the House for discussion, namely:
How the current child care system is failing to ease financial pressures on families and is not supporting families who want to work more.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places—
It's often said budgets are a statement of a political party's values. Two weeks ago the Morrison government delivered a budget that left too many people behind and held too many people back. In fact, after $1 trillion worth of debt, there was nothing in it to help families struggling with the cost of child care, nothing to provide structural reform for our economy and nothing that would provide a long-lasting legacy for this country. It's been described as 'a blokey budget from a blokey government'. It's not me saying that. In fact, it's not women saying that. It was actually Ross Gittins, the economist, who said that today. The government tried to spin, in the usual way, that this budget was for women because 'it helped women drive on roads', because they were investing in infrastructure. I guess that is a little bit better than arguing that women would benefit from an extra lane because they could give birth in it—anyway!
This Liberal budget and the budgets before it have done nothing to fix our broken childcare system, which, under this third-term government, now has some of the highest costs in the world. Their budget has done nothing to fix how expensive this is for so many families. Many families are now choosing between working for nothing or staying home. The most recent evidence is that 100,000 families are locked out of the system because they just can't afford it. This year, the fees have been jacked up by 4.5 per cent, pushing up out-of-pocket costs again, and they have now gone up by almost 36 per cent since this government was elected. It's a system that is so expensive that more than half of families say it impacts on their weekly grocery budget. It's a system that has built-in design faults that are a barrier for the second income earner to work more. These barriers are caused mainly by the current subsidy and taper rates and cliffs—and that dreaded annual cap.
This has resulted in the birth of a new term: 'the workforce disincentive rate'. It is this government that has caused this new term. This workforce disincentive rate measures how little financial return the second income earner gets if they increase their days of work from perhaps three days to four or five days. Let's be clear here, the second income earner is usually a woman. We had a government senator saying yesterday that this is an insulting term, that in this day and age we shouldn't be talking about the second income earner usually being a woman. But he acknowledged afterwards that it usually is a woman. Of course it is!
This government needs to live in the real world.
Modelling by the Grattan Institute has shown that a father earning $100,000 a year working full-time and a professionally trained mother with a salary of $70,000 full-time working three days faces a workforce disincentive rate of 91 per cent if she wants to work five days. That is, she will only get nine cents in every dollar she earns. The Prime Minister's childcare system, which he designs, penalises women who want to work full-time.
This week we've heard from families struggling under the current system. Bec from Perth is a solicitor and a mum of two who only works three days a week because she says working four days left her worse off under the Prime Minister's childcare scheme. Bec's family has a combined income of $193,000. The government's budget did nothing to help women like Bec get ahead by taking extra work during this recession.
Liz works as a software professional. She and her partner together earn $200,000 and are paying $25,000 a year in out-of-pocket costs for childcare. Liz says she can't go for promotions at work because she would be expected to work more hours and would lose money paying for child care. Why is this government holding back women like Liz from taking on extra duties and responsibility at work? The Prime Minister likes to say, 'If you have a go, you get a go,' but not if you're Liz. Not if you're one of the many women actually wanting to go back to work but facing this expensive childcare system.
Two weeks ago Labor delivered a reform plan to better support working families, smash down barriers for the second income earner and supercharge Australia's economic recovery. Our plan will increase the subsidy rate and tapers, and will mean that 97 per cent of families in our childcare system will be better off. The same family who gets nine cents in the dollar under the Prime Minister's system will get 32 per cent better under our plan. Overall, the Grattan Institute has found that Labor's policy will lead to an 11 per cent increase in hours worked by the second income earner with young children. This will increase our productivity and will deliver a sustained boost to economic growth.
Economic modelling by the Grattan Institute and KPMG has estimated that policies similar to Labor's would increase the GDP annually in the range of $4 billion to $11 billion. This is a strong return on investment. Australia will only pay off the trillion dollars of Liberal debt by growing the economy. That might be news to the Liberal Party, but Labor, on this side, understands. Our policy will help to do that. The government has been tying itself in knots over the week trying to work out how to attack Labor's plan. First, the minister, or someone from the minister's office, said, 'We've got to lay the groundwork. We've got to do better. There'll be something one day.' Then the Prime Minister attacked the cost and said that it would just cost too much—that was the day after, or a couple of days after, he announced a trillion dollars of debt. Then they spruiked how much they already spend on child care, which does nothing for families doing it tough. Then they talk about how much child care costs per hour. Do they seriously think they can pull the wool over families' eyes? When they talk about $5 an hour you've got to times it by 12. Then you've got to times it by five, because that is what families are paying. When you hear the government say $5 an hour what they're talking about is $300 of out-of-pocket costs every single week for Australian families. That's what they're trying to do. Of course, it's the normal spin by this government, but families are not fooled.
What we need to do is seriously have a conversation about making it easy for families to participate. We need to have a serious conversation about economic recovery. But, as usual with this government, they continually try and spruik that women's workforce participation has increased on their watch. Of course, what they never tell you is Australia has one of the highest part-time-employment shares in the OECD. Australian women are working part-time because, in most cases, they are working in a system that this government has designed that makes it economically disadvantageous for them to work full-time. This is the system that the Prime Minister has designed.
Of course, in question time this week, we had the government attack Labor's policy because it says it's for the 'top end of town'. This is an extraordinary comment from senior Liberals to make, and shows what a tin ear they have when it comes to Australian families. This system punishes many families with a range of combined incomes, but, particularly, as we've highlighted through the annual cap, punishes families with a combined family income of over $189,000—$189,000 is a police officer and a teacher working full-time. Does the government seriously think these families are rich? Does the government seriously think that these families should have a workforce disincentive built into their take-home pay?
It's also worth remembering that the Prime Minister's original 2015 budget marketing brochure for his new system included a 20 per cent subsidy for all families over $200,000. But he's abandoned this now. He's abandoned this, saying that these families don't deserve extra funding and these families don't deserve extra support. Why? Because this Prime Minister is just too proud. He cannot bring himself to support Labor's good policy, but this policy is the right policy for the country. Labor's policy is good for families, good for children, good for business and good for the economy.
It's quite extraordinary. Two weeks ago, here in this place, in his budget-in-reply speech, the Leader of the Opposition said:
So our long term goal, and the mission we will set for the Productivity Commission, which will be asked to report in the first term of a Labor government, is to investigate moving to a 90 per cent subsidy for child care for every Australian family.
That was said in the budget reply speech two weeks ago. Yet now we have the shadow minister up here not even mentioning that mission. Why would that have disappeared from the rhetoric of those opposite? Why would that disappear? Do you know what that means? That means that a family that earns $1 million and has two children in centre based day care for 30 hours a week, who currently receive nothing in childcare subsidy, will receive a taxpayer subsidy of $561 a week. That's over $28,000 a year for not one extra minute of work. So I'm wondering: why didn't the shadow minister mention this? Why has this mission—this mission!—just disappeared from their rhetoric? Why has it? Because the penny's dropped, after two weeks, that it is a policy which has no friends.
It reminds me of that other policy that we never hear about anymore—the one about offering a wage subsidy. When we had an MPI a couple of weeks ago, I think it was on the day of the Leader of the Opposition's budget-in-reply speech, I asked: could we please find out what is happening to that policy? Because we know the shadow minister, when it came out, was sort of like, 'Where does this come from?' The shadow minister for employment wasn't quite sure where it came from. But Bob Carr was fairly clear about what he thought of it:
One policy was simply bad: a government subsidy for the wages of childcare workers. The idea that taxpayers should subsidise wages in one sector has no precedent in the programs of state Labor governments, and it shouldn’t. The notion is open-ended: it could be pressed for workers in other community services.
He finishes by saying:
It was expensive: $10 billion over a decade.
We haven't heard from those opposite. Is that still your policy or not? We're waiting to hear. That one's worth $10 billion. The other one is worth $6 billion baked in, and of course—
Ms Rowland interjecting—
we've heard nothing on how we're going to pay for it. It's $16 billion just in those two policies. If Labor are spending, what does it mean? They're going to tax. If they're going to spend, we all know they're going to tax. With those two policies alone we're looking at about $16 billion of extra funding.
What have we been doing? The coalition is providing record funding for child care: $9.2 billion in 2020-21, growing to over $10 billion in the coming years. That's nearly double what Labor was spending when they were last in office.
Opposition members interjecting—
Our once-in-a-generation reforms—and I hear the shout from those opposite—have delivered a 3.2 per cent reduction in out-of-pocket costs to parents since our package was introduced. That is a decrease. That's two years after they were introduced. Around one million Australian families who are balancing work and parental responsibilities are benefiting from the package. 71.4 per cent pay no more than $5 per hour in day-care centres, and within that subset 24 per cent pay no more than $2 per hour. Ninety per cent of families using approved child care were entitled to a subsidy rate between 50 per cent and 85 per cent. Our childcare subsidy supported families during all-time high women's workforce participation. I'll just repeat that for the shadow minister because she doesn't seem to be able to hear this message: our childcare subsidy supported families during all-time-high women's workforce participation. It was 61.5 per cent in January 2020, up from 58.7 per cent in September 2013.
A recent parents survey suggests the subsidy has increased female activity levels. The proportion of female parents reporting more than 48 hours of activity per fortnight rose from 56 per cent prior to the introduction of the package to 63 per cent in November 2019. And, of course, what have we seen as we've come out of this COVID-19-induced recession? 61.8 per cent of the jobs created since May have been filled by women.
What else have we seen? Sadly, we don't see the recognition given to the sector that we should from those opposite. The sector worked and was supported right through this pandemic. There was $900 million of extra assistance given to the sector. And you know what that led to? It meant 99 per cent of providers were open and ready to go as we came out of this pandemic. And that is what's helped that 61.8 per cent of the jobs created being filled by women. We worked with the sector and those magnificent educators who were in there day-in, day-out, providing that care, to make sure that 99 per cent of the sector was open.
Now, it is worth stopping and examining what happened in other countries. Member for Corangamite, when you're finished here, go and Google it to see what happened to the sector in other countries. Rather than scoffing, you might actually learn something. What happened is that, because they didn't get the support and they didn't get the assistance they were provided here, those sectors were decimated in other countries. Yet here we made sure we worked with them to support them and protect them, and 99 per cent of providers remained open because of that support, because we worked cooperatively with them. They were ready to step in and help and assist as we came out of this. So we will continue to work with the sector. We will continue to support the sector. We've already seen record demand come back into the sector everywhere except Victoria. We're now seeing better demand than was there when we entered the pandemic in every state and territory other than Victoria. So we will continue to work with them and provide that support.
I'll finish on this point, because it is very important and it compares and contrasts what happens under our system to what would happen under a Labor system. A single parent working part time as a nurse or retail worker and earning $30,000 a year receives a taxpayer funded subsidy of 85 per cent of the cost of child care under our childcare subsidy. With average fees for centre based day care at $10.40 an hour based on the March 2020 data, that single parent would pay $1.56 per hour per care and the taxpayer the rest. If that single parent wanted to take on more shifts and double their income to $60,000 per year, they would still pay $1.56 per hour and the taxpayer would pay the rest. The Labor contrast, however, is that a family with a combined income of $360,000 with two children in centre based day care for 30 hours a week who currently receive no subsidy in our childcare package would receive an additional taxpayer subsidy of $212 a week, or $10,608 a year, under Labor's policy and not need to work any extra hours. Our policy is targeted; it's means tested. Those opposite have a dog's breakfast of a policy.
We all know that there can be no more important task than that of raising children. I don't think we'll get any argument about that point from anybody here in this House. We all know that those early years in a child's life are the most formative and are the foundation for a child's brain and emotional development. But let's be very clear: those who choose a career in early childhood education and child care don't do it because they want to help women get into the workforce. That's not front of mind when they graduate with their university degree or start their first job in a childcare centre. We talk about women's workforce participation and the contribution to the economy here, but they do it because of their love for children. They do it because of their dedication to their work. I personally am forever and eternally grateful to those who looked after my children so that I could return to work.
But, on women's workforce participation, the government have let women down. It's that simple. There is nothing in their budget to help women participate in the economic reconstruction of our nation. Yet women have been the hardest hit by COVID, and we know that women bear the brunt of child care. Under this third-term Liberal government, childcare fees have gone up 35 per cent. They have no plan to reform a childcare system that has some of the highest childcare costs in the world right here in this country. Under this government's childcare system—the one that was designed by the Prime Minister—for a family with two children in child care and a primary earner making $100,000 a year the gain to disposable income for the secondary earner, who is usually the woman in the partnership, in working more than three days a week is zero. In other words, under this government's plan, there is no incentive for a woman who is a secondary income earner in a family to return to work more than three days a week, because her salary, her contribution to the family budget, gets eaten up by child care.
Today in The West Australian, Lanai Scarr, who is The West Australian's federal political editor, writes about the Labor day-care plan. She writes, 'The ALP day-care plan works for parents.' She should know. She's a mother of four children. I don't think there is anybody in this press gallery who is more qualified and has more knowledge about child care and the childcare sector than Lanai Scarr. In this article, she clearly outlines the benefits that our childcare sector reform brings to families.
A few weeks ago I spoke to Matt and Sandra, who live in Landsdale in my electorate. Sandra is about to give birth to their second child. Matt and Sandra are seriously considering whether it's worthwhile for Sandra to go back to work after she gives birth, with two children in child care. Matt's a good bloke. He really wants to support his wife to ensure that she doesn't have career interruption, to ensure that she achieves her dreams within her chosen field and to ensure that she can go back to work not just for the benefit of the family budget but for her own fulfilment as well. I understand the kinds of decisions they're having to make, because I had to make those decisions too. I know families all around Australia are making those decisions every day about the value of putting one or two children into child care when they are getting zero return because the secondary income—which is usually the wife's income—is going entirely to child care.
Only Labor has a vision and a plan to enact the real and necessary reform of our childcare system. This government is happy to sit back and tell women that they should be grateful that they're able to drive on a road. That's what this government wants. We say we want more for women. We want women to participate in the economy as they wish, and we will deliver the reform to be able to let them do that.
This is such an important MPI, because we want to put the facts on the table. The other side is putting out trumped-up misrepresentations and suggesting major reforms when there's just a shallow commitment to maybe do another Productivity Commission or consumer competition inquiry if they get into government. It's all hollow words. Since 2018, we have had the runs on the board, because we did get the Productivity Commission to look at the cost of child care and early education, and we reformed the system so that the subsidy goes straight to the childcare provider. The more you work or the more you're training or studying, up to a certain limit, you will get more assistance—up to $10½ thousand, which is really significant. As the minister said, it is means tested, but there are not many people in my electorate that earn over $189,390. And there are certainly not many people that earn $353,680, where it stops. If you're earning under roughly $189,000, the more you work or study, the more assistance you get direct to your childcare provider. And the proof of the pudding is in the eating, because there are more women working more than 48 hours than there were before these reforms came in. Workforce participation figures for women are also going up.
I know I've got one of the oldest demographics in the country, but we still have lots and lots of young children. From the figures that I've seen, we have almost 2,000 children. I have the oldest demographic in the nation, but, from the banks of the Hastings River down to the Hunter River, there are also 2,000 children in preschool or long day care or out-of-school-hours care, and they all get great treatment. During the COVID pandemic, when the whole Australian economy was collapsing, we kept child care afloat. The subsidy was continued so that people could have their children in day care if they so wished. Ninety-nine per cent of childcare businesses continued. None of them went to the wall, which is really good, because lots of other businesses unfortunately did go to the wall in the course of the pandemic.
We're spending $9.2 billion on early childhood education and child care. That's record funding, and it's going to go up to $10.7 billion. That is a massive amount of money. I have three children, who were in family day care, centre based day care and individual home care for short periods of time, but mainly in the centres. It's a great system here in Australia. There is a paradox that it costs money, because parents have some responsibility. We're trying to support the children and the parents that need it most. That's why you get more assistance if you work more or if you are in a situation such as trying to get back into the workforce or having family disruption or you're a grandparent looking after a child. Those people get more assistance—the lower your income, the greater the proportionate amount. It's fair and it's equitable, but you have to set a limit somewhere.
I think the other side are just hypothesising that they'll get a miraculously different result out of the Productivity Commission. That's why the Productivity Commission exists. It is a great system. It's better than that of many other countries and it's really delivering. Just about anywhere you live in Australia you will have access to some sort of child care for your children. Even in the most remote areas in the Northern Territory that I've been to, some of them have childcare systems supported by the state and/or the Commonwealth. Really, when you travel around the world, I don't know what country gets even more child care than we do in Australia, except maybe for some of the Scandinavian countries, but they have tax rates far, far, far higher and they have a socialist sort of system
We really have got the runs on the board. We have reformed the system. Workforce participation is the proof of the pudding that it's working.
There is no more appropriate day for me to be speaking on this MPI about child care than my son's third birthday. Today Leo turned three. Happy birthday, Leo! I'm not going to sing, but I will say that it's an exciting day for him and a very proud day for me and Jess.
Leo has benefited, like millions of Australian children, from a quality early childhood education, and Jess and I have benefited from the support that you receive from early childhood educators who allow you to follow your passions in life and your vocations and careers. I want to make sure that every Australian family can have access to quality early childhood education. Working families get the importance of this. The member for Kingston gets the importance of this. But it is amazing to hear in the arguments against this that there is no passion. It comes down to a dollars-and-cents approach from the government that has created a trillion dollars of debt, but all of a sudden it can't afford to support families or working parents. Working parents understand the childcare cap. They get it. They now the cost of the fourth or the fifth day. If people do not understand how this system works, they should go and ask someone who has kids in child care. They understand it and they'll explain to you exactly how they make the calculations of whether they will work the fourth or fifth day.
The system that this government is trying to defend right now is bracket creep on steroids. It proves just how out of touch they are with working Australian families. What they've decided to do instead of saying that child care is too expensive is try to increase the cost of everything else. They increased the cost of university degrees to try to bring them closer to the high childcare fees that they seem to be entirely comfortable with. Labor's plan is clear: a more-productive workforce, more early childhood education, more money in the pockets of working families and, of course, respecting the choice that parents should have as to whether they choose to look after their children at home, choose to go into the workforce or, indeed, how much they choose to participate in the workforce. All of these things are possible only because of the quality early childhood educators and childcare centres in our country. In my electorate of Perth alone there are 62 centres. We add another two or three every single year because there is increasing demand despite the financial disincentives for many thousands of parents. I do want to say a huge thank you to the early childhood educators—161,000 of them in Australia. This is a huge sector. It is a huge workforce. Those opposite should remember that when they talk about this sector they are also talking about thousands of people in their electorates who work in the sector doing incredibly difficult work day in and day out.
The member for Kingston referenced Bec, who is in Perth. I asked the Prime Minister about Bec, who has two children and a household income of $193,000. She is one of the thousands of Australian families who lose money if they work a fourth or a fifth day, even though it would be good for her career as a solicitor if she could work those extra days. When you ask the Prime Minister about something he doesn't like he just throws insult after insult at the Labor Party. We didn't get a serious answer. We still don't have a serious answer as to why the Liberal Party thinks this is not a good idea. I think the only reason they think it's not a good idea is that they didn't come up with it. This is a serious issue for so many families in Perth.
I posted the Prime Minister's response from question time to my Facebook page, and the responses were not happy ones. Lana said, 'Please push this. My young family with two kids can't afford to go to work either.' Nicole said, 'He totally just avoided your question and went to justifying Liberal debts.' The Liberals' one trillion dollars of debt and nothing for child care: a trillion dollars, that is a lot of 'dollarbucks' when you don't find a single cent for child care.
The Prime Minister says that he's pleased with the system. Remember he told us he was proud of it. He said, 'I am so pleased having been directly involved in structuring these reforms'. So for every working parent, where this system doesn't work just know that the Prime Minister's hand was on every single error in the current system. He does sometimes admit his mistakes. It has been a while since we talked about his much promised nannies program, where he was going to fund nannies in the home. Apparently they had enough money for that but not enough money to make the childcare system more affordable. The Productivity Commission we've heard about—good enough to look at the Liberal Party's plans but not good enough to look at others. Who knows the truth? The West Australian newspaper knows the truth: 'ALP day care plan works.' (Time expired)
Thank you, Mr Deputy Speaker. I am delighted to rise to speak about this MPI, because it's clear that the Morrison government continues to invest record amounts in child care, with another $9.2 billion in this financial year that will grow to $10.7 billion in the coming years. Labor is just good at talking down good investment. We are supporting around one million families with access to affordable childcare services. On top of this, the investment the Morrison government has provided through the COVID pandemic shows how much we care about the childcare sector. We invested $900 million to help this important sector ride the bumpy wave that has been COVID.
Our childcare sector is working and that's because we introduced a very important new set of childcare packages into 2018, which was a once-in-a generation set of reforms. This saw out-of-pocket costs absolutely plummet. Even two years later, thanks to our reforms, the cost of child care has plummeted by 3.2 per cent. This is in contrast to what happened with Labor where we saw a massive increase in childcare cost and that is because the funding that they provided went to increasing the cost through childcare services rather than into the hip pocket of taxpayers.
Our childcare system is targeted, so that those who earn the least receive the highest level of subsidy of 85 per cent. Importantly over 70 per cent of families do have out-of-pocket costs of less than $5 per hour per child and nearly a quarter are paying less $2 per hour per child for centre-based child care. I do hear mutterings from the other side and that's because when you look at the numbers that the shadow minister has given us, she tells us that there's going to be a cost of 12 times five, which is 60 hours a week. We're talking about parents who mostly use child care in the way which is not 60 hours a week. They're using it in ways of 30 to 40 hours a week. To be talking about an average cost of 60 hours per week is really an extreme example, which is not very helpful to the actual argument.
What's really important about childcare support is that we want it accessible, we want it safe—
Ms Rishworth interjecting—
and we want to make sure the sector is supported to provide the best care for the special people in our lives, which are our children. I know this. I know that when mothers want to send their children to child care, they want to know they have got quality, accessible child care and safe child care. I know this because I am a paediatrician who has worked with children my entire working life. I have four children myself and I know how hard it is sometimes for parents to juggle their child care and getting ahead in their career.
But our childcare package has supported families during a period which has resulted in the highest workforce participation by women in our history. It was 61.5 per cent in January 2020, up from 58.7 per cent in 2013. This is incredibly important because, as Australian women enter the workforce, we are going to see an uplift in productivity, participation and, therefore, in our economy. It is such an important thing to invest in. Under Labor, however, there were fee increases of 53 per cent, and sharp practice was rife.
Our childcare support package provides families with that extra support they need. As a family's income decreases, the amount the government provides increases, so there is a 95 per cent subsidy available to families who are transitioning to work. There is also a subsidy of up to 120 per cent for families who are experiencing financial hardship, meaning that, in most cases, child care for these vulnerable families is free. More and more families are using child care every year, and we are now seeing one million families benefiting from this policy. I will say that, in Victoria, unfortunately, the threat of COVID has had a bigger impact on our childcare situation, and I'm very pleased that the government has been providing extra support for Victoria through this very important time.
I would like to conclude by saying that, basically, the Morrison government not only has a childcare plan but also has an economic plan to deliver workforce participation, growth and female economic empowerment. The Morrison government is committed to child care. We're committed to affordable and accessible child care, and we were providing that before COVID, we're providing that during COVID and we have a plan for after COVID. This is something that Australians, and Australian women in particular, can feel very proud of.
I think what we've been hearing this afternoon shows just how out of touch with regular families those on the government benches are. I suggest they do what I did and pop a post on Facebook and ask families directly: 'How's it going? How are you managing your childcare costs compared to your incomes?' Let me tell you some of the things women in the Hawkesbury and Blue Mountains told me. In response to the question, 'Is it tough?' Em says:
Yep, in this boat. It just doesn't make financial sense for me to work full time right now. I tried. It wasn't worth it.
Now, what does that say about women's participation? And this chamber has got a lot of women in it right at this moment—more women in it, I would guess, than men. We should be trying to make the pathway for women to get into careers easier than it currently is. Melissa said:
I choose to work part time. It wouldn't be worth increasing my days because higher income=higher daycare fees.
That's the reality that women face. Liz says:
Daycare fees is a very depressing topic in my household. With my second son I was finishing teaching pracs so had no income but had to have him in fulltime care from 5 months old to get it done. Then when I started casual teaching, I worked 5 days a week which took us over the maximum hours on the old CCR/CCB system and not much changed when it went to CCS—
that's the current childcare subsidy—
He will start school next year.
You might think that means she'll breathe that sigh of relief you breathe when your kids are about to start school and you think, 'No more childcare fees!' But, no, Liz is having another baby in December, and of course that is wonderful news. But she says she plans to go back one to two days a week simply based on the fact that she'll be paying day care fees for the baby and before- and after-school care fees for her six-year-old. That's the reality that women are facing. For years, when their children are young, they are making choices about whether to fully engage in their careers, not necessarily because they don't want to but because they can't afford child care.
Childcare is a huge challenge for families—
and it isn't just the fees when you add in all the other complications—
1. You need to be on multiple waiting lists because trying to get a spot is next to impossible.
2. When a spot comes up, you need to take whatever day(s) are offered, even if it's only one day (which is all I've been able to secure at this stage).
3. Whilst waiting for day 1 of childcare, you worry about the out of pocket expenses.
Her little one is due to start in early childhood education in a few weeks. She says, 'I have no idea about the gap amount I need to pay on the day rate of $132. It's nerve-racking for jobseekers and current employees alike as to what flexibility your employer might require of you, so trying to seek the days you can is like a chicken and egg situation.' That is what women are facing right across the country.
Alison tells me that 'the net take-home pay after day care, particularly for families with multiples, is not much until the career improves'. Again, if you've taken significant time out of your career, that is even harder to do. 'For women who don't earn good money,' she says, 'there are plenty of barriers to the workforce regarding the entry. For many, who cannot even cover day care, it takes a special partner to allow family finances to go into negative for a short period of time while you re-establish your career.'
That is reality. This is what women were telling me in the last week about how they are struggling with the choices they are having to make. That's why we desperately need changes. Laura recognised that free childcare made a huge difference to us during COVID. That was something that gave women a taste. It was tantalising, this taste of how you could actually have some freedom to make choices around the work you do—and then it was just whipped away from them within weeks. That's what we want to see changes to. We want to make it so much easier for families. Whether the secondary income earner is a woman or a man, we want their choices to be easier—by scrapping the childcare subsidy cap, by lifting the maximum childcare subsidy to 90 per cent and by making sure that we increase the subsidy rates and taper them smoothly so that every family has a chance to fulfil their career potential and their parenting duties.
I rise to indicate to the House that families in my electorate are accessing affordable childcare through the Commonwealth government's childcare package, and to demonstrate the government's commitment to supporting childcare services at this difficult time. Dramatic falls in attendance at the being of the COVID-19 pandemic threatened the viability of the sector and provided an impetus to develop a solution. The childcare sector told the government in no uncertain terms that, without government action, operators would go out of business, workers would lose their jobs and families would lose their childcare service altogether. The government acted swiftly with a $1.6 billion early childhood education and care relief package, which provided free childcare to families. As a result, 99 per cent of families' services remain open and viable despite the pandemic.
The Australian Childcare Alliance backed the relief package, describing it as an extraordinary measure that helped struggling providers keep their doors open to vulnerable children and to those parents who needed to keep working. The alliance said that 30 per cent of childcare providers face closure in the weeks leading up to the announcement of the package due to massive withdrawals and enrolments. Although the package was effective at ensuring the viability of childcare services, providers were eager to return to the government's childcare subsidy arrangements when demand for their services began to increase as parents returned to work. Again, the government responded swiftly with a $708 million support package to assist providers to transition to normal arrangements. A return to the childcare subsidy, a return to the system that the opposition is bringing into question, not only gave providers in Mallee the flexibility they needed, it gave them the confidence to grow and expand to meet rising demand in their services.
I recently heard from Rob at Little Swans Early Learning in Swan Hill. He said that, since the return of the childcare subsidy, he has been able to grow his business, taking on new enrolments and hiring several casual staff members. Thanks to the government's childcare package and the return to the childcare subsidy, he's been able to take on an additional 20 children per day. He's also confident that his services are affordable for families. Rob knows families facing genuine difficulties are able to access the support they need and can even access additional subsidies and payments, to the point where his childcare services are free.
The government's childcare system is fair and targeted. Those who earn the least need it the most, and they get the support. They receive the highest subsidy, of 85 per cent. That means a single parent earning $30,000 a year would pay less than $2 per hour, based on average fees for centre based day care. If that parent took on more shifts or found a new job and managed to double their income to $60,000 a year, they would still pay less than $2 per hour. Over 70 per cent of families accessing childcare services have out-of-pocket costs of less than $5 per hour, and nearly a quarter are paying less than $2 per hour for centre based child care. And more support is available to families who need it. A 95 per cent subsidy is available for families who are transitioning to work, and a subsidy of up to 120 per cent is available for families who are experiencing financial hardship.
The government's childcare package has supported families during a period of all-time-high workforce participation of women, which was 61.5 per cent in January 2020, up from 58.7 per cent in September 2013. Instead of sitting on our hands and commissioning a new report into the sector, the government are making a record investment of $9.2 billion in this financial year, which will grow to $10.7 billion in the coming years. This will continue the government's support of around one million families and will meet growing demand for child care, which is increasing every year. I'll continue working with childcare providers in my electorate, such as Little Swans Early Learning in Swan Hill, Montessori Beginnings and Happy Turtle Childcare in Mildura, Green Leaves Early Learning in Horsham, Little Gems Child Care and Early Learning in Maryborough and many others, to ensure their voices are heard.
Put simply, child care costs us all too much. It costs women too much, it costs families too much and it costs our nation too much. In the 12 months to March, my electorate saw childcare costs rise substantially. The increases in my electorate ranged from 4½ per cent to 21½ per cent. At a 21½ per cent yearly increase, the cost of child care would double every 3½ years. Child care costs so much that parents are forced to work less. Instead of working full time, a parent, generally the mother, will work only three days or not work at all because the cost of full-time child care is just too great.
The consequences of this are significant for our economy, for our productivity and for the health and wellbeing of families, women and children. Kids lose out on their development when their entire education is set back at the first formal step. The economy loses out because the pool of workers is reduced, driving down incomes and consumption. And women lose out. They bank less superannuation. They are more vulnerable to homelessness and insecurity in their later years. They can also lose confidence in their skills and connection with their network. This is the exact opposite of what we want for women. I've been through this myself and I understand just how frustrating it is. It's not good enough and it needs to change.
Under Labor's plan, announced by the Leader of the Opposition, more Aussie kids will be in child care, more women will choose to undertake more work, and, importantly, 97 per cent of all families will save up to $2,900 a year. No family will be worse off. This will be good news for my electorate, because when I visit childcare centres and speak to young families in Corangamite they tell me the cost of child care is exorbitant. I recently spoke to Grovedale mum Pawandeep Gill. She wants her young girl to experience the benefits of an early childhood education but, under the current model, the childcare costs that come with working another day a week greatly outweigh what she would earn working in aged care. This is the exact opposite of what we want for Pawandeep and for all women.
The Morrison government's childcare policy undervalues women. It fails to support them. Unlike those opposite, we want women to achieve their potential. Pawandeep should be allowed to choose. All families in Corangamite and Australia should be allowed to choose. So, let's be constructive. We can fix this, and Labor has the plan. Last week, Labor announced that an Albanese government would introduce the working family childcare boost to cut childcare fees and put more money in the pockets of working families straightaway. Childcare fees in Australia are some of the highest in the world. Under this plan Labor will scrap the $10,560 childcare subsidy cap, which often sees women losing money from an extra day's work, fix the maximum childcare subsidy rate to 90 per cent and increase childcare subsidy rates and taper them for every family earning less than half a million dollars a year. This means 97 per cent of all families will save between $600 and $2,900 a year. Under Labor's system, many primary carers across my electorate will choose to work more, and the local economy will benefit by tens of millions of dollars every year as a result.
Economists in Corangamite are calling for this reform. Business owners in Corangamite are calling for this reform. Women and families in Corangamite are calling for this reform. Families should be able to afford child care for their kids, and women should be given the opportunities they deserve to strive and reach their potential. It's as simple as that, so let's make it happen.
I must say it's been very frustrating to sit through this today and also over the last week, hearing about how the budget has disadvantaged women in relation to child care. I will go to the points that we've heard today about how this government is supporting affordable child care for Australian families, but I also want to talk about how important child care is as an issue, and, of course, recognise that it is important and complex for Australian families. What really disappoints me is that I'm not sure those on the other side are genuinely interested in exploring this really complex issue. They'd rather default to somewhat lazy politics—that is, big-spending ideology, which has just become their signature, and revert to, 'We'll just chuck a bit more money at it and that will fix it.'
I certainly recognise that child care does disproportionately affect women, and it's my hope that we, as elected members, can begin to frame the issue as a shared responsibility. It is one that does not lie entirely with the government, and I think it's important to recognise that as well. As someone who lives and works in a regional community, and as a mother of five children aged between five and 16, I'm well-acquainted with child care, and I've seen the cost of it across a whole range of governments of different colours. I've always been employed as a casual employee or a contract employee or, in 10 years, as a local government elected member. I've never had any maternity leave. And so I understand firsthand the struggles that families go through to find, to access and to be able to afford child care. I understand the choices that they need to make and the constant juggle and struggle that this can have on family life. Even now, as I come to this place, that is a struggle that continues, despite the cost of child care or the affordability of child care.
Some of these things are about choice, and some of these things are about cost. I'm incredulous at the tunnel vision that's shown by the other side by linking the pressures of child care to just being one that is a financial pressure. In fact I think it was only the member for Macquarie that touched on the fact that there is more to this problem than just cost.
If we want to talk about cost, let's talk about how we saw fees increase by some 53 per cent last time those on that side had their hand in it. That's some kind of financial pressure. But it's our government that's delivered on changes that target and assist those who need it most. We introduced the new child care package in 2018, which was a once-in-a-generation set of reforms that saw out-of-pocket costs fall. Two years later, it's shown that out-of-pocket costs for families remains 3.2 per cent lower than under the previous child care package. It's targeted. Those who earn the least receive the highest level of subsidy at around 85 per cent. Our childcare package has supported families during a period of all-time-high women's workforce participation, at 61.5 per cent in January, up from 58.7 per cent in September 2013. We continue to invest record amounts in child care, with another $9.2 billion in this financial year, growing to $10.7 billion in the coming years. In addition to this, the government is investing more than $900 million in extra support during the pandemic.
The childcare package is supporting families who need extra support and continue to do so. But I must reiterate that it's important to address and acknowledge that the cost of child care is not the singular issue that affects working families. What those on that side are proposing is not reform; it's just throwing a bit more money at it, and it won't address issues of accessibility, for example. You could have the cheapest childcare in the world but you'd still need to be able to access it.
It's a particular challenge for regional communities where there are no centres, or they're not set up, for example, to cater for shiftworkers. In my northern Tasmanian community, I've been contacted by parents who are interested in undertaking seasonal work, for example, but are unable to do so because they don't have the ability to get their children into care early enough or close enough to where they need to go to work, for example. I'm sure that these would be issues for regional communities across Australia and I'm committed to working towards solutions. If those opposite are interested in genuine reform that will change outcomes for families, I for one am more than happy to work with them, but if you just want to chuck a bit more money at it, you can't call it a reform.