Wednesday, 17 March 2021
Family Assistance Legislation Amendment (Early Childhood Education and Care Coronavirus Response and Other Measures) Bill 2021; Second Reading
I rise to speak on the Family Assistance Legislation Amendment (Early Childhood Education and Care Coronavirus Response and Other Measures) Bill 2021, and I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House notes that:
(1) after two and a half years, the benefits of the new child care system have been entirely eroded for many families;
(2) child care fees are projected to grow by four per cent per year for the next four years;
(3) Australia has one of the highest rates of female involuntary part time employment in the OECD; and
(4) the current system does not support second income earners, usually women, working more than three days a week".
I welcome the opportunity to speak on early education and care in this place, because this portfolio impacts over a million Australian families, and we should take every opportunity we can to improve the system. I'm pleased that we have this bill before the House, because it's unlikely that this government will want to speak much about early education and care as this year goes on, because the problems in the government's system are just becoming evident.
The changes before us today are sensible and mostly technical in nature and are supported by stakeholders in the sector. It's not surprising that there were some drafting errors and ambiguities when the COVID-19 response legislation was drafted and passed last year. Schedule 1 of the bill retrospectively clarifies and states the circumstances where the secretary can declare emergency or disaster events and make business continuity payments, thereby providing legal certainty for actions taken last year and retaining business continuity payments as an ongoing policy response available to government. Labor had some issues with the business continuity payments last year, but they were entirely based on the amount of funding provided to services, not the mechanism. Of course, we had many early learning centres being given a 50 per cent continuity payment—well, it wasn't a continuity payment; there were some other continuity payments. There were obviously some issues and problems with that, but as a whole the mechanism is the right mechanism. It is a prudent change, and it always pays to plan ahead. This payment mechanism, as a mechanism, worked well last year. Of course, the government wasn't very generous in this mechanism, and there were issues with the eligibility criteria and the quantum of payments last year. But, while the government did get the detail wrong, the mechanism is worth keeping, and therefore we will support this.
Part 6 of schedule 1 removes the legal requirement for services to send weekly sessional reports to the department during declared emergency and disaster events, reducing the red tape burden on services during these unsettling events. Of course, data gathering is very important. Many services did not have to provide their attendance data and other data during the free child care, or the so-called free child care, and it is disappointing that we don't have that information to get a sense of who was utilising the free child care and why demand went up when it came to the free child care. But, of course, during a disaster it is very important that that flexibility be there, so we certainly support that part of the legislation. But it should be used sparingly, because data on who is using early education and care is critically important.
The bill also extends the tax return deadlines for the 2018-19 financial year to 31 March 2021 to provide more time for people who have not managed to lodge their returns during the stress of the pandemic. This is important because there have been many people whose lives have been thrown up and whose businesses have been completely disrupted. It also removes the two-year cut-off point for people to lodge their tax returns to be eligible for childcare subsidy. We certainly support this. This provision is surprising, given that this is the same government that prides itself on making it harder to claim benefits and chases vulnerable people for illegal robodebts. I have to say I was surprised, but I welcome the government taking a more practical and compassionate response to qualifying for CCS.
An important provision in the bill also ensures that declared emergency and disaster events do not count towards the 14-week period of non-attendance, after which a child's enrolment is cancelled. This is particularly important for families from Victoria, who had a second quite long lockdown last year, but I've heard from early learning centres that this is also affecting a number of families in my electorate and other electorates. So this is quite important and will help ensure that families in future events won't accidentally be removed from the system. The bill also contains some other minor tidy-ups and corrections which have no adverse impact on families, and therefore Labor will support these changes.
Labor will always support commonsense changes that reduce red tape on services and families and clarify the legal position of the secretary of the department and other public servants acting in goodwill. Labor will support the bill but we will be moving a substantive amendment to give further protection to families in the system. Labor is pleased that the government is acting to improve some of the rough edges of its COVID-19 response, because the government certainly did not get everything right with its pandemic response in the early learning sector last year.
Of course, the Prime Minister's free child care for everyone with a job was like most announcements from the Prime Minister: not quite what it seemed. The main feature of the Prime Minister's free childcare system was that there were many families locked out of free child care because the funding wasn't there. Of course, many of these families were not told they couldn't access the child care by the government. Indeed, that burden was placed on the centres themselves. Labor heard from early learning services around the country that were struggling to keep their doors open as the funding had been slashed, and, of course, many workers were not eligible for JobKeeper. Services had to cut their opening hours, they had to cut staff and they had to stand down staff. Many early educators lost jobs and cut places to try to balance their books. Family day-care educators in particular did not suffer a drop in enrolments but were expected by the government to work for half the pay, because many could not access the JobKeeper program. That was part of the design. Families were denied places, including many healthcare workers who had been asked to come back from maternity leave or were naturally returning to work. This is very distressing.
Another key feature of the pandemic response was the government's exceptional circumstances fund, which they set up to try to cover the one-third of early educators not covered by JobKeeper. This fund was very, very good at one thing: refusing funding applications. Department data showed that only 39 per cent of applications were approved. The government likes to boast that 98 per cent of early learning centres stayed open during the COVID shutdown crisis, but this is a very superficial KPI. The government's own limited survey found that one-quarter of services were not financially viable or were losing money every day. They stayed open during that time, losing money, to look after children so that we could get through the pandemic. Services were ordered to deliver the Prime Minister's underfunded commitment and struggled to provide places to meet demand.
The government's response was naturally to blame the providers. They sent strongly worded communication to providers, threatening their funding if they did not provide enough places and hours, when they knew the services were not funded to do so. Incredibly, they set up a new hotline to encourage families to dob in early learning providers. This was at the height of the pandemic, and these were families and services trying to work together, trying to muddle their way through. Anxiety was high on the families' side and on the educators' side. This was a very difficult time. And instead of supporting, of course the government wanted to pit early learning providers and families against each other.
Unfortunately, this bill does not undo some of the damage that has been caused. While the government often likes to brag about their JobKeeper program, we are hearing, on the ground, that many educators that were forced to leave the industry have not come back. So what we are seeing now is staff shortages. As a direct result of the government not properly covering these educators and not properly ensuring that their connection to their workplace continued, they have now left the sector. What we are seeing as a result is more and more applications for waivers of ratio numbers. That is what we're seeing. So what we are seeing is a sector that has not recovered, because the workforce was disengaged. The workforce was disengaged because this government could not design JobKeeper to ensure that the early learning sector had that connection to their workforce. This is a problem, and we have heard nothing from the government on this.
Now, as we come out of the pandemic, we are facing a different problem in addition to the workforce shortage. We are now seeing the government snap back from their free childcare system to one where fees are now soaring. If we have a look at this system, we are only 2½ years in. The Prime Minister personally designed this childcare system. From time to time they'd brag about the benefit of this system—though a little less, lately, because that benefit has been completely eroded for many Australian families. The Prime Minister himself dubbed these changes, when he introduced them, a 'once-in-a-generation reform', and promised that they would make child care more affordable. Yet we are now seeing ABS data that has shown that, for parents in Brisbane, Sydney and Darwin, child care is now more expensive than when the system was first introduced in mid-2018. That's not just fees—we're not talking about the overall fees. It's the out-of-pocket expenses. And any out-of-pocket benefit has been completely eroded in those places. The benefit has been almost entirely eroded nationally, showing that this system failed—absolutely, comprehensively failed—on what it was meant to deliver. The education department itself predicts that childcare fees will increase by an average of 4.1 per cent for the next four years—substantially outstripping inflation, which the childcare subsidy is pegged to. So that means that out-of-pocket costs will continue to increase and increase and increase and will be higher in the years to come. On average, parents will soon be no better off under the Prime Minister's once-in-a-generation set of reforms than they were under the previous system. Overall, childcare fees have now soared 35.9 per cent since the election of this Liberal government in 2013.
The Productivity Commission's report on government services in 2021 showed that childcare costs are actually locking parents out of the workforce. So now, when so many parents around Australia who had lost their jobs through being stood down want to get back into the workforce and take those opportunities—since the government keeps bragging that those jobs are coming back—they can't, because childcare costs are locking them out. The data reveals that almost 300,000 Australians are not in the labour force due to caring for their children. Notably, the number of parents saying they are not working, and that's mainly to do with the cost of child care, has skyrocketed by 23 per cent to 91,000 parents. This confirms that the cost of child care is prohibiting Australian parents from working the hours they want. The data also shows that the median cost of child care soared by 5.6 per cent to $523 a week from 2019 to 2020.
With the Morrison government itself predicting that fee increases will well outstrip CPI for years to come, the hits will keep on coming for the Australian family. And there is now mounting evidence and data proving that the coalition's childcare system has failed to keep a lid on childcare costs. So the Prime Minister and the minister for education need to stop burying their heads in the sand. We keep hearing from the government that child care doesn't cost very much. They are failing to listen to Australian families right across this country. I tell you that Australian families are crying out to me. They are saying that it's too expensive, they are saying it's too difficult, and they are saying the cost does prohibit them from entering the workforce or taking more hours. But the government has its hands over its ears. Instead, their response is: 'Families have never had it better.' That's what I keep hearing from the minister for education, and that's what I keep hearing from the Prime Minister.
Parents need a real plan to tackle skyrocketing out-of-pocket childcare costs. And, of course, it's not just parents that need this. If we are going to have the type of economic recovery we need, we need everyone with the skills and everyone with the abilities—everyone who can get a job—to get a job. We hear this a lot from this government, but, of course, the handbrake on our economy for women with skills, particularly, is actually the cost of child care. So, while they are encouraging everyone and while their rhetoric is, 'Go and get a job; if there's a job go and get it,' they fail to acknowledge that one of the most significant barriers to taking up those jobs and to using those skills in the economy is the cost of child care.
It's not just workers and parents that want to get back in that are affected by the economic drag that the cost of child care is having. We're hearing it from business groups right across this country. Big business and small business recognise that this is a problem. They continue to call for action from the government, because if a small business has got a great worker and if that worker has time off to have a child and start a family, and have a second child or a third child, they want to ensure that cost is not a barrier to that worker coming back to work. But what we know from the current system is that there is a workforce disincentive. If a second income-earner—and that is usually a woman—works the fourth or fifth day, they are either working for free or actually losing money, when you factor in the cost of child care. They're losing money by going to work; that is how perverse the system is.
Labor has a plan. Labor has announced a plan that will bring down the cost of child care and keep it down. An Albanese Labor government will introduce cheaper child care for working families, which will scrap the childcare subsidy cap which sees women losing money for working extra days of work. We will lift the maximum childcare subsidy rate to 90 per cent and increase the childcare subsidy rates and taper them for every family earning less than $530,000. We often hear the government criticism of this policy. They are saying that we want to help rich families. Can you believe it? That's what we hear from the government. What we know is that what the government is calling 'rich families' is a police officer and a high school principal working full-time. That's who this government thinks are the rich families. Isn't this perverse? When it comes to so many other things, they are happy to say, 'We don't play class warfare,' but, when it comes to support for child care, they are straight in with class warfare, demonising these women who want cheaper child care.
Importantly, under Labor, the ACCC will be tasked with designing a price regulation mechanism to shed light on costs and fees and to drive them down for good. Also, if we are elected, the Productivity Commission will conduct a comprehensive review of the sector with the aim of implementing a universal 90 per cent subsidy for all families, because the truth of the matter is that supporting children in early education and care is not welfare. It is not welfare, despite what those on the other side say. They try and make out that it's welfare. This is a productivity measure, and we know that, as we come out of COVID, productivity is going to be key. But it's also a workforce participation measure. It's about getting more women back to work and working the hours they want to. And, of course, it is also a population measure because, when they are looking at how many kids they are going to have, many families look at these types of costs. They look at four years or five years of childcare fees, and that is a long time and a lot of money.
These measures that Labor is putting forward are really, really critical. They have been widely welcomed by business groups, by economists, and by parents and families. There is only one group, really, that has been negative about this and has continued to talk this down, and that group is the Liberal and National parties. So I would urge them, with the budget coming up, to steal our ideas. I would be happy for you to steal our ideas, but stop putting your head in the sand when it comes to the cost of child care in this country. Acknowledge that this is a real issue for families.
Labor, if we are elected, will fix the coalition's broken childcare system, but, in the meantime, we're happy to talk about child care anytime. We will support this bill, but, as I noted, we will be moving a substantive amendment that provides extra protection for families during COVID-19 lockdowns. We have not seen the government act on this, especially during these short lockdowns that we've seen in Brisbane, in Adelaide, in Victoria and in New South Wales. We want to see more protection for families when they are told not to turn up to child care yet are still being slugged with gap fees. The government has not responded to that in this bill, and we will be moving an amendment that will help them do just that.
Labor will support the bill, and I look forward to moving our substantive amendment in consideration in detail.
The original question was that this bill be now read a second time. To this the honourable member for Kingston has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the words proposed to be omitted stand part of the question.
As a working mother of four, I am acutely aware of the pressures that working families face every day. It can feel as though there isn't much time to focus on anything other than supporting our families. Child care has rightly been a chief concern for working families during the COVID-19 pandemic. At the same time, Australia's COVID-19 economic recovery depends on working families being able to return to the workforce, and our government is committed to increasing workforce participation, especially amongst women. In order to do this, we need a strong and resilient economy that works for families. That is why the Morrison government has been, and continues to be, committed to affordable and accessible child care before, during and after the COVID-19 pandemic. The Family Assistance Legislation Amendment (Early Childhood Education and Care Coronavirus Response and Other Measures) Bill 2021 is about ensuring continuity and clarity for Australian families while also futureproofing the childcare sector.
There are three aspects to this bill I would like to address. Firstly, this bill will ensure business continuity payments are payable during emergencies and disasters. Few could have predicted the worldwide upheaval of the COVID pandemic last year. Although we hope never to witness a global event of its nature again in our lifetimes, we must learn from the experience and put worst-case scenario protections in place. Indeed, we should take what we have done well in this pandemic and create a safety net in case of future disasters or emergencies.
This legislation has a view to the future and will look to safeguard the sector in the case of a future large-scale disaster or emergency. Under the Early Childhood Education and Care Relief Package announced by the Morrison government at the start of the pandemic last year, payments of the childcare subsidy and the additional childcare subsidy were suspended and, in their place, approved providers were given business continuity payments. The bill allows a secretary to make business continuity payments where a childcare service has been adversely affected by an emergency or disaster that may occur in the future. Of course, we hope, we pray, there won't be future disasters or emergencies, but this is humanity and we know that there could be another pandemic around the corner and disasters are an ever-present threat. This bill will allow business continuity payments to be paid instead of or alongside CCS payments.
Secondly, this bill will enable the extension of the first deadline for 2018-19 and will allow taxable income reconciliation to occur after the second deadline. This legislation will also ensure that families and childcare providers are not adversely affected by COVID-19 by ensuring that business continuity payments paid during the relief package period will not be offset against future childcare subsidies. This amendment will allow an extension of the first and second reconciliation deadlines. This means that the amount of the childcare subsidy that an individual was entitled to for a financial year can be reconciled against their adjusted taxable income for that year. This will assist families who are unable to meet their tax return lodgement requirements on time due to the COVID-19 pandemic. I had a number of constituents who had this very problem and who came to me seeking support with how to deal with this very issue.
Thirdly, this bill addresses the legal consequences of their relief package. The sudden onset of the COVID-19 pandemic saw legislation developed and passed at record speed. I will say that it is a sign of a competent and mature government that the changes that were required to provide support for not just the childcare sector but the full economy were on display, and I'm very proud of the Morrison government and its executive for the work that it has done. We have here, in the chamber today, the Assistant Treasurer, who was very central to that very important suite of changes that were made at record speed. Australians can feel confident and secure in the knowledge that they have a mature, dependable and reliable government at the helm during a crisis.
As we emerge from the pandemic, it is necessary to address some of the legal consequences of this legislation, as we are doing here today. For example, there is now concern that a legal challenge could result in individuals being entitled to CCS during the COVID-19 relief package period, resulting in a doubling up of government assistance. We know that it's important that taxpayers' money is properly distributed and that we don't have problems such as this. This legislation amends the Family Assistance Law to minimise the risk of legal challenge.
Another tweak we are making to the legislation is about concerns regarding the automatic cessation of enrolments. Currently a child's enrolment automatically ceases after 14 weeks of nonattendance, and absences claimed in that period may give rise to debts when the enrolment ceases. We are making amendments here to avoid the raising of debts due to a child being unable to attend care during the period of the relief package. I know this is a problem, because, in our home state of Victoria, there were lengthy lockdowns where children were unable to attend childcare providers for months at a time, so it is important that we be able to make changes to this legislation were this to happen again.
The Morrison government knows that Australian families require accessible and affordable child care that meets the needs of working families. We recognise that the three Ps—productivity, population and participation—are the keys to economic prosperity. Australia's COVID-19 economic recovery depends upon working families being able to return to the workforce, and the government is committed to increasing workforce participation. In order to do this, we need accessible and affordable child care that meets the needs of working families. We know child care is critical for lifting female workforce participation. I know this very personally, being a working mother of four, but I hear it so often from my constituents. Pre COVID, women's workforce participation had risen from 58.7 per cent in September 2013, when this government came to power, to 61.6 per cent in January 2020, which is among the best rates in the world. However, as a result of COVID-19, female participation fell to 57.5 per cent in May 2020. This is very concerning, but I'm pleased to say that there has been a recent rebound in female participation back to its record levels of 61.2 per cent in the February just past, 2021. This is an almost complete return of female participation to the workforce. It is something to be celebrated and acknowledged because it's a very important factor for our economic recovery.
As we know, economists estimate that halving the gap between male and female workforce participation could produce an additional $60 billion in GDP by 2038 and increase cumulative living standards by $140 billion. It is true that women play a very important role in the productivity of our economy, and we need to continue to support women all along the way. I'd like to make a special note of the Women's Economic Security Statement, which was inaugurated by the former Minister for Women and member for Higgins, the Hon. Kelly O'Dwyer, and acknowledge her work in supporting women in the workplace. In particular, the Morrison government is committed to seeing more women in high-skilled, high-paying jobs. That includes non-traditional industries such as modern manufacturing. We've heard from the Minister for Industry, Science and Technology, the Hon. Karen Andrews, and the work that she is doing to activate our modern manufacturing sector, which will have good jobs for women. That is why we are also investing heavily in women-in-STEM programs. That means that women can get into high-paying jobs, and that means that we can have a more productive economy.
It also means that affordable and accessible child care is more critical than ever. Indeed, childcare and workforce participation are natural complements. The Morrison government has been, and remains, committed to affordable and accessible child care. That is why the 2020-21 budget saw a record $9.2 billion in childcare subsidy payments, which will continue to grow to $10.7 billion in coming years. That is a huge investment in getting women back into the workplace. The Morrison government has also extended the relaxed activity-test requirements for all Australian families through to 4 April 2021. This means that families can continue to receive the same level of subsidised care as before the pandemic.
The Morrison government has been working hard to ensure that the sector continues to improve. The Morrison government has built on its strong record when it comes to child care, and important strides have been made over recent years. In 2018, as we heard from the previous speaker, this government introduced a suite of reforms to the childcare sector to keep a lid on out-of-pocket expenses. ABS CPI data show that the costs to families remain 2.3 per cent lower than under the previous childcare package. Under Labor, out-of-pocket costs in child care skyrocketed. It's under this government, and thanks to these reforms, that we've had a lid put on out-of-pocket costs and that we've seen an increase in women's workforce participation.
The government supports a targeted approach to child care. This means that those families who earn the least receive the highest level of subsidy, at 85 per cent. It's about supporting those who need help the most. On top of this, we provide additional support for those who are doing it particularly tough, with a 95 per cent subsidy available for families who are transitioning to work and a 120 per cent subsidy already available for families who are experiencing financial hardship. In most cases, this equates to free child care, and it's about helping those who need it the most.
The Morrison government's support for the childcare sector is critical, and it is valued by the sector and families alike. We know that the childcare sector faced decimation by COVID. I'm proud that the Morrison government gave the sector an incredible lifeline that kept families connected to their usual childcare centre. Every mother knows that children like stability and continuity of care. Quite simply put, children get attached to their caregivers, so it was incredibly important that families could continue to send their children to the same childcare centres that they had been attending pre COVID. It was with a sense of security and support that they could do that, and I'm very pleased that almost 100 per cent of childcare centres were able to stay open through COVID due to the support that the Morrison government provided. At the same time, we continue to futureproof this vitally important industry with the changes that we are making to the legislation offered on the floor of the House today. I commend this bill to the House.
If there is one thing that is certain, it is that child care costs are out of control under this Morrison government. They've been increasing, and, in many capital cities throughout the country, child care is now more expensive relative to when this government came into office. It's a handbrake on economic security for families and it's a handbrake on productivity and growth in our economy, but, more importantly, it hampers the ability of kids to get access to early childhood education.
This bill, the Family Assistance Legislation Amendment (Early Childhood Education and Care Coronavirus Response and Other Measures) Bill 2021, makes some technical amendments to the operation of the COVID related legislation that was brought in earlier last year. It clarifies the circumstances where the secretary can declare an emergency or a disaster event and make business continuity payments, therefore retaining those payments as an ongoing policy response available to the government. It also removes the legal requirement for services to send weekly session reports to the department during these emergency events and extends the tax return deadlines for 2018-19 to 31 March 2021 to provide more time for people who have not lodged their returns during the pandemic.
Of course, we're supporting sensible changes such as theses. But the Morrison government certainly didn't do everything right and didn't get everything right in the early learning sector during the COVID-19 pandemic response last year. Their 'free child care for everyone with a job' policy, like most announcements from this government, sounded good but it wasn't quite what it seemed when it came into operation. The main feature of that so-called free childcare system was that a number of people were locked out of child care and a number of services were driven to the brink of collapse. I heard from early learning centre operators in my electorate and Labor heard from operators around the country who were struggling to keep their doors open after they found out that the reality of that system was that their funding had been cut. They couldn't offer new places and they couldn't take new kids to cover that loss and that shortfall, yet they had to remain open and, of course, they had continue to provide the number of educators, keep the centre running and meet those additional costs. Services found that they were cutting hours. They had to cut staff and cut places to try and balance their books. Family day care educators didn't suffer a drop in enrolments, but they were expected by the government to work for half the pay because they couldn't access JobKeeper payments. So it wasn't just the service operators that suffered but family day care educators as well.
Families were being denied places, including healthcare workers who had been asked to come back early from maternity leave to help with the crisis but were missing out on getting places. It seemed that some Australians were more essential than others. Another key feature was the government's exceptional circumstances fund which they set up to cover the one-third of early educators not covered by JobKeeper and which was exceptionally good at refusing to approve funding applications. The latest data from the department showed that only 39 per cent of applications were approved. The government boasts that 98 per cent of early learning services stayed open during the COVID crisis, but does the government know how many of those 98 per cent of services suffered massive financial losses and have really struggled to make those losses back? The government's own limited survey found that a quarter of the services were not financially viable and were losing money every day. It's no wonder the sector seriously struggled to deliver that free childcare commitment when they were being expected to do it with a lot less funding.
Naturally, the government's response was to blame the providers. They sent strongly worded communications to providers threatening their funding if they didn't provide enough places and hours, when they knew that they weren't funding the services to do so. Incredibly they set up a new hotline and encouraged families to dob in early learning providers. What was the government's response to the mess they made with their underfunded and poorly targeted policy? It was to snap back to the old, confusing, expensive childcare subsidy system. We all know that you only need to talk to a parent, particularly in the capital cities, to find out the exorbitant cost of child care, and the fees keep rising and rising and rising. For working families, we all know that wages aren't increasing, but the one area where we know that there has been price inflation is around early childhood education expenses. In some areas, the fees are out of control. Only 2½ years into their new system, the benefit has been entirely eroded for many Australian families.
When the Prime Minister introduced this system, he dubbed this a once-in-a-generation reform and promised that it would make child care more affordable, yet ABS data shows that, for parents in Brisbane, Sydney and Darwin, child care is now more expensive than when the system was introduced in mid-2018. So that promise, that commitment, has been completely blown out of the water by the Australian Bureau of Statistics and the data that shows that it's now more expensive than under the old system. Childcare fees have soared by 36 per cent across Australia since the election of the government in 2013. We know that that is an inhibitor to families getting the support that they need to ensure that people can return to work after having a child and continue to remain in work to support their families and also to ensure that we're growing our economy and that we're more productive, particularly when it comes to women.
We know that, because of the way the system works at the moment, there's a disincentive for families, particularly women, to work a fourth or fifth day while using child care. Many mothers that I've spoken to in my electorate over the course of the last couple of years have said that, when they sit down with their partners to do the sums and work it out, that fourth and fifth day is simply not financially viable, because all of the money that they earn on the fourth and fifth days is going to pay the childcare fees because of the way the cap operates on the amount of the subsidy that can be accessed by families. That is a handbrake on productivity. That is a handbrake on growing our economy and creating more jobs, which would enable us to reduce the unemployment rate, put more people in employment and, ultimately, grow the economy so that there's a bigger pie for all to share and so that you can talk about reducing taxes and other regulatory payments and have businesses thrive. But, under this government's system, there's a built-in disincentive to that occurring, and it is harming our nation's economic growth and productivity.
The other point about this sector is that workers in the sector are undervalued by this government and have been so since they came to office. Anyone with kids knows that you'll often drop your kids off at eight o'clock in the morning when you go to work and, when you come back at 5.30, those childhood educators are still there. They're still working, looking after your kids when you come back, after hours, to pick them up, yet you can bet your life that, on average, that childcare worker is earning less than the parents that drop them off. Historically there's been an undervaluation of this profession and its value to our community and our society by this government. We haven't recognised that there's a deeply emotional element in caring for children and that there's a deeply positive element in ensuring that kids get access to education at an early age. All of the studies throughout the world—and so many have been published—indicate that the earlier you begin educating a child in a systematic way and begin that important social interaction with other children and adults in a learning environment the better the educational outcomes will be, the longer they will stay in school and the more likely they will be to take on tertiary education, get into a trade or university and, ultimately, get into a better job and earn more income and be more productive for the Australian economy. Yet we don't recognise the value of those that provide that structured education and that social interaction. The teaching that they provide to children has not been valued by our society, and that's particularly the case under this government.
That's why Labor went to the election pledging a policy that recognised the value of the work performed by childhood educators and promising to fund an increase in their wages—to basically fund from government support an increase in the wages of people working in this sector—to finally say that this parliament values the work that you do, appreciates the work you do and, importantly, understands its value to our society and economy and ensures that you are paid more for that work. Do you think the Liberal government, the Morrison government, would ever do anything like that? Certainly not. Do you think this Liberal government would ever countenance saying to the Fair Work Commission in the minimum wage case or in any other case: 'You know what? We value the work of early childhood educators. They're underpaid and we believe they should be paid more'? We've got Buckley's chance of that submission ever being put to the Fair Work Commission by the Morrison government or by any other Liberal government. In that it's deeply fair to say that this government does not value the work that early childhood educators do. If they did, they'd ensure that they're paid more, as Labor was promising at the last election to do.
Not only is this an issue that's very important for working families and individuals, particularly women—it's a key issue in income equality, it's a key issue in women's participation in the workforce and it's a key issue in ensuring women get access to the rights and opportunities that men get; it's an issue of national significance to our economy in growing productivity. We all know that the more access that working families get to work, particularly women, the more productive they are going to be. Their earning capacity increases, and the nation benefits. But there's a built-in disincentive in the system as it works at the moment, and it's specifically in the childcare subsidy cap, which, as I said, discourages work on the fourth and fifth day because it makes it financially unavailable. It means that parents cannot afford to have a child in day care or in early childhood education four or five days a week. It doesn't add up for the family, so why would you do it?
That's why Labor has announced a policy—and Anthony Albanese has been so strong on this—as a budget reply last year to scrap the $10½ thousand childcare subsidy which sees women in particular losing money for extra days worked. We're also pledging to lift the maximum childcare subsidy rate to 90 per cent so that working families get better support to ensure that they can work the hours that they need to and want to. We're also pledging to increase the childcare subsidy rates and taper them for every family earning less than $530,000. Overwhelmingly, 99 per cent of families in Australia will benefit from Labor's policy. Fees will come down, access will be increased, families will get access to the days that they need, workers will get more access to work and grow income, productivity will improve, the economy will grow, more jobs will be created. It's a simple equation. If Labor's policy is implemented, the economy and workers and families and, importantly, children, will be better off.
The ACCC will be tasked with designing a price regulation mechanism to shine light on costs and fees and drive them down for good. The Productivity Commission would also, under a Labor government, conduct a comprehensive review of the sector with the aim of implementing a universal 90 per cent subsidy for all families. That's Labor's plan for cheaper child care. It represents consultation with the industry, with early childhood educators, with families and with operators to ensure that families get access to the hours of support that they need so they can work the hours that they need for their families and, importantly, so that kids get access to that early childhood education service.
Before I address the substance of this bill, I'll address the comments by the member for Kingsford Smith, because you'd have to live in a bizarro fantasy land to accept the proposition that he has put forward. The member for Kingsford Smith said that every single proposal put forward by the Australian Labor Party is good. It can do wonderful things, there are no extra costs involved, everybody is getting paid more and getting better benefits and better outcomes, but it's not going to cost anybody more. The Labor Party's approach to child care in this country has the same perennial delusional impact. But what they've done is constantly increase obligations and regulations and costs for the sector. Make no mistake, most of it doesn't actually improve productivity or outcomes in the childcare sector. Truthfully, it barely even improves outcomes for the kids. But it does make it harder for young couples and single parents to access child care at an affordable price.
The Labor Party have never actually been interested in outcomes. Everything they focus on is inputs, with no interest in what you get as a result of what you put into a system. It's the same attitude they take to education and health care. We hear them every time complain, 'There isn't enough money.' They say, 'How much money do we tip into the system?' They never say, 'How do we improve outcomes so that kids get better educated'—not interested in that—or 'so that people on waiting lists get seen'—not interested in that—or 'so that people get higher standards of health care'—not interested in that. The same is true with aged care—not interested in how people age with dignity. No matter what the issue is, their answer is always 'What is the input?' not 'What is the outcome?' This is the absurdity and the lack of logic that sits at the heart of their policy approach. Of course we have to talk about inputs as part of an honest conversation about how we provide the sustainable public services that people need. No-one would argue with that. But it should be matched against performance and outcomes.
We see the dishonest conversation the Labor Party are having at the moment, where they're obsessed with increasing super contributions, even though the actual research shows that Australians already have enough retirement savings to live a dignified life in retirement at the international benchmark of 70 per cent of your final salary. In fact, the overwhelming majority of Australians have more than 91 per cent. So what Labor are actually trying to do is take more today to subsidise inheritances. They actually don't understand—or don't seem to understand, if they read the Callaghan review—that the system they're engineering is designed to benefit the rich.
Let's face it, their interest actually isn't even to benefit the rich. Their interest is in benefiting their constituency of organised capital through industry fund movement, where they want large capital to be at the heart of decision-making—where big business, big capital, big unions and, when they're in charge, big government come together to conspire against the people. Ultimately, these debates are about power, and what the Labor Party want to do is empower themselves, because they have always seen the success of this nation through themselves, not through the aspirations, the goals, the achievements and the dreams realised of the Australian people. It's got them into trouble a lot of times in the past. What they want to do is keep destroying sectors, step by step, including child care, so that they can realise their ambition to control and manipulate it.
We on this side of the chamber take the exact opposite approach. Everything we stand for is about how we empower Australians to live out the fullness of their lives, not just in their working lives, so they have dignity in retirement—which is why we won't hit them with a giant new retiree tax, like the Labor Party, who, before the last election, misled the public and said it wouldn't hit low-income earners. They had to come back into this chamber and outside this chamber, including the Leader of the Opposition, and accept that, yes, in fact, they were going to push people, physically push them, below the poverty line. Now, with child care, we have a similar challenge, where their solution to the problem is to make child care more unaffordable for Australians. That is not our approach. Our approach is to try and get costs down. We've implemented reforms already that have done so, but, yes, costs continue to creep up—partly because of demand, partly because of the consequences of the COVID-19 pandemic, partly as a consequence of things like rising wages and regulatory standards as they've been implemented.
But what we want to ensure is that every working parent out there who needs and relies on child care at this challenging or difficult time can get access to services. We've seen this approach continuously by this government, because we've been prudent in the good times but also built up a buffer so we can support Australians in the difficult times such as we've had over the past 12 months, providing temporary support and assistance so that we can remove the barriers for those who need it.We've done it in areas like telehealth, to make sure that people can access healthcare services, to the benefit of the patient and the doctor. And, because some people are still facing challenges, we've recently announced extensions to that service, that critically important service. This legislation fits as part of that conversation—continuing to provide business continuity payments required by the childcare sector when they need it.
We don't want that to be a permanent state of affairs. We hear the members of the Labor Party on the other side of this chamber complaining at the moment about the decision of the federal government not to continue to support JobKeeper. They ignore the facts that it has now been running for nearly nine months and, in addition to that, the longer you keep it going and you have firms and jobs that don't require it, the bigger the gap it creates and the more restructure and adjustment there is, and more people will find themselves out of work. The Labor Party would rather public policy and jobs be based on falsehoods and false foundations rather than sustainable futures. The approach we're taking with this legislation is to say that there are temporary measures that we need to implement. We need to provide discretion to the government to take action when there are temporary emergencies and disasters, to support the services when they need us and when they need taxpayer support, because they've got to support working parents across the country.
So we've looked at what we need to do to make sure that we can support child care, so that the parents of this country that need assistance to go to their jobs, their families or their work in the challenges of raising children amongst their lives can get support, and the Morrison government has their back.There'll be further reforms in this space, but this is an important one, as part of making sure that those Australians who face challenges get the help they need now, including in the childcare sector, including the providers—so they can keep supporting Australian children and Australian parents when they need it.
One of the two most shocking images as a result of COVID for Australians in Australia—aside from the terrible international images we saw of mass graves and people struggling to breathe on ventilators—was people queued up outside of Centrelinks, and the other was parents desperately seeking child care with this system on the brink of collapse. This government neglected to listen to the industry last year when the industry was crying out for solutions during the pandemic. It was only after Labor dragged the government to the table and stakeholders thumped that table loudly enough that the government—finally, begrudgingly, with the whites of their eyes showing in fear and knowing that they had to do something about child care because it was an economic fulcrum; we needed to keep people at work—came up with some sort of crazy package. Those opposite didn't understand the importance of the industry. Those opposite didn't understand how critical the educators in child care were, and they didn't understand the importance of it for our future either.
In a single month, my office had more than 50 interactions with businesses and parents who needed immediate support. Across my electorate of Paterson, centres and desperate parents contacted me with urgent questions that had not been adequately or promptly responded to by the minister or by the government. The Prime Minister's 'free child care for everyone with a job' was like most announcements from this Prime Minister—really not quite what it seemed. The main feature of the Prime Minister's free childcare system was the number of people locked out, adding pressure on the number of services already being driven to the brink of collapse. It really was a terrible, chaotic time not only for desperate parents and in some cases grandparents but also for those who worked in the sector and saw the honeycomb crumbling all around them.
Across my electorate, early learning services were struggling to keep their doors open after their funding had been slashed. Some services had to cut their opening hours, cutting staff. It was just so incongruous with the situation that was at hand. They had to cut places to try to balance their books. Family day care educators were expected by the government to work for half the pay because they couldn't access JobKeeper initially, despite pressure building on enrolments as people expected free child care, and who would blame them after their government had set them up to fail like this? Families, including healthcare workers, were denied places. If people take the time to the read the history of this pandemic, perhaps a hundred years from now, they truly will shake their head at some of the moments of incompetence demonstrated by Prime Minister Scott Morrison, his cabinet and his Liberal government, aided and abetted by the National Party. Family day care educators were expected by the government to work for this half-pay, which no-one else was expected to do, while families were being denied places, including healthcare workers. Some of those healthcare workers had been asked to come back early from maternity leave and do their duty. These people were trying to help the government. They were trying to help our country and the wider community at a terrible time, when their nursing skills and medical skills were desperately required, but their government wasn't making it easy for them.
During the pandemic the relationship between the government and the childcare industry was atrocious. I couldn't believe it as I watched the situation go from bad to worse. Professional educators, people who really understand child care and how it works—and I'm not just talking about the first thousand days of a child's life and how important it is for neuroplasticity and brain development and making these brilliant young minds the best they can be; I'm talking about the intricacies of running the business—often small business—of child care. Not all providers could access JobKeeper, because the government wanted to cherrypick the business models it supported, which was really very interesting. At first those opposite denied JobKeeper, saying the sector didn't need support. Then they gave them JobKeeper, but only after so much unnecessary anxiety and anguish. Interestingly this government seemed keen to support some in the sector more than others. If my memory serves me correctly, a few of the government's frontbench owe a great deal of their current wealth to the childcare industry, so it is flummoxing to say the least.
Then they set up the exceptional circumstance fund, which was a truly unfortunate name, to cover the one-third of early educators not covered by JobKeeper. Are you keeping up? It is confusing for those who know the industry, let alone parents who are strapped for time and trying to navigate a system like this. This fund was exceptionally good at refusing to approve applications, it would seem. It was often leaving businesses waiting months for support during the height of the pandemic. The latest data from the department showed that only 39 per cent of applications were approved. This is the exceptional circumstances fund that was supposed to help people in this exceptional circumstance that we all found ourselves in and yet only 39 per cent were approved. That is just appalling. Things were far from smooth and easy, as the government kept saying it would be. 'Free, smooth and easy'—it certainly was none of those things.
All this comes from a government that boasts that 98 per cent of early learning services stayed open during COVID. But this is a perfect example of a very superficial KPI. Those opposite really do love a bit of spin. Does the government know how many of that 98 per cent suffered from massive financial losses? Did the government bother to seek feedback about its botched measures? How many jobs did these businesses lose? How many years was the business set back? This government boasts it understands small business, but it really does little to support it, and it certainly does not appear to understand the childcare sector at all. It actively fought against a wage subsidy and then decided to compromise but offered only a half-hearted solution that left many businesses in the sector worse off.
As my colleagues have said, the government's limited survey found a quarter of services were not financially viable and were losing money every day. Is it any wonder that the sector struggled so badly to deliver the Prime Minister's free childcare commitment? How could this government honestly expect the sector to do this with a lot less funding? It really just makes no sense.
Sadly, these blokes opposite—they are mainly blokes—really like to think that they are the masters of the universe when it comes to budgeting and finance. However, these figures certainly demonstrate that they can't manage the childcare books, after eight years in power. They had tripled the national debt even before they had the cover of a pandemic to blame. COVID didn't send us backwards; we were already there. I wonder what Mr Howard, the former PM, must think. Whilst he certainly did some good things like gun reform, I think most people will attest that he was not the best Treasurer we have ever had, and Josh Frydenberg is an even bigger embarrassment.
The Treasurer is an even bigger embarrassment, with his attempts to make a scapegoat of the pandemic rather than admit the ineptitude before and during COVID. He's running the economy into the ground, as I said earlier, having tripled the debt even before we were in the situation of a pandemic.
Whilst the government's free childcare policy was failing, the government's response, rather than listening to the experts and working on fixing the policy's oversight, was naturally to blame the providers. They sent strongly worded communiques to providers, threatening their funding if they didn't provide enough places and hours. They knew that the services weren't funded to do so. The services weren't able to do that. The government bullied small business operators—and I know, because I had phone calls with people who told me what had been said to them—and they expected more of overworked staff. This government will happily throw any Australian job and any business, or even industry, under the bus if it's in the best interests of the Prime Minister and the spin the government wants to put on it.
What I find most incredible in this whole mess was the government's decision to set up a new hotline to encourage families to dob in providers. What a complete debacle! As if families are going to dob in a service they've chosen to care for their children, especially when places are impossible to get and they're absolutely desperate! The government were looking for someone to blame for their failed policy. It wasn't the fault of the providers, who do an outstanding job and are under so much pressure. It was the lack of guidance and clear direction and support from a government that was clearly flailing.
I don't think it's right, in fact. We talk about the Prime Minister being the master of spin. Well, I'm not actually sure that he is, because, the longer his term goes, the more the spin is wearing thin and the shine's wearing off. Monday was a prime example, with the women of Australia calling out the PM for his blatant disregard for consequences. I think anyone who was looking for childcare places during the pandemic would also say that there was blatant disregard for consequences. It seems no minister was held to account for the bungling of the childcare rollout or, for that matter, of grants programs or half-baked childcare policies—or worse, it would seem. It's just a culture of no accountability; of a complete lack of capacity, it would seem, on the front bench and in the cabinet; and, frankly, of moral failure right around this government.
So now what is the government's response to the mess they made with their underfunded, poorly targeted, headline-grabbing policy? They've decided to revert to the confusing and expensive Prime Minister Morrison designed childcare subsidy system. Childcare fees are out of control and providers are being dragged through a long and convoluted process to understand anything the government is trying to achieve. Why would the government snap back to its ill-designed prior policy when they already know, after 2½ years, that the childcare system they designed and any proposed benefits have been entirely eroded for many Australian families? ABS data shows that for parents in Brisbane, Sydney and Darwin, child care is now more expensive than when the system was introduced in mid-2018. The benefit has almost been entirely eroded nationally, showing the system has really been a complete failure.
The Prime Minister himself dubbed the system a once-in-a-generation reform and promised it would make child care more affordable. In fact, it has done the reverse. It has made it more expensive and harder to get. The coalition has never delivered generational reform. They don't know how to deliver generational reform. We have had a generation of entitled politicians who have delivered no reform at all. That's actually not generational reform. Superannuation, Medicare, the NBN and the NDIS are all life-changing reforms. They are the sorts of things we need. After eight years, one would think we would see some glimmer of an idea from a government of making reform. We know we need to get women back to work. We know that we need increased capacity in our workforce to grow our economy, especially after this pandemic has riven many families and made it so difficult. But it seems as though this government is absolutely determined not to deliver.
Last year the federal Labor leader, Anthony Albanese, and I attended my old preschool, the Kurri Kurri & District Preschool, which I went to from 1973. We spoke to the team there. They're a terrific group of people. Some of them have been doing this since the 1970s and beyond. They shared some of the challenges the industry is facing. They talked about the fantastic program they offer local Kurri kids. They do a magnificent job. I would love for the Prime Minister to go back to the community and, rather than offer some off-in-the-distance gas program that will never happen, talk to some of these childcare workers. Prime Minister, go and pick their brains for really good insight. They are professionals who know what they are talking about and can point you in the right direction of how to set up a decent childcare system that is fair and equitable for Australians, rather than the wasteful, convoluted system we have been landed with. Across my electorate of Paterson I have just over 10,000 children who are under four, and all their parents vote. I hope they really think about what this government has delivered for them and know that Labor will deliver.
I acknowledge the contribution this evening of the member for Paterson, an extraordinary representative for her community in country New South Wales, regional New South Wales. She's an exceptional local member of parliament who was elected on the same day as me and also the member for Burt, who is here at the desk. Like us, she has worked hard each and every day for her community, for all the educators in her community and for all the parents and families in her community. She, like me and the member for Burt, is very proud of the childcare policy that the member for Greenway has developed. We look forward to prosecuting it more and more in this place and in our electorates. I thank the member for Paterson.
Labor supports the legislation before us today, the Family Assistance Legislation Amendment (Early Childhood Education and Care Coronavirus Response and Other Measures) Bill 2021, but equally I rise in support of the amendments put forward by the member for Kingston, Ms Rishworth. These changes to the original bill are technical in nature and seek to clarify drafting errors and ambiguities in the original legislation that was passed in haste due to the pandemic. This retrospective legislation clarifies and states the circumstances where an emergency or disaster event can be declared and business continuity payments can be made, thereby providing legal certainty to actions taken last year and retaining those payments as an ongoing policy response available to government—a sensible move. It removes a legal requirement for services to send weekly session reports to departments during emergency or disaster events, reducing the red tape burden on services during these events.
Further, it extends tax return deadlines for the 2018-19 financial year to 31 March 2021. I might add that that's the member for Paterson's 25th wedding anniversary, I think, and also my birthday—but I won't tell you my age! Extending the tax return deadlines is important because, as we know, the pandemic has wrought chaos on many Australians' bookkeeping and, alongside the stresses of ongoing job insecurity and potential school closures, it's understandable that many working parents have fallen behind on things like tax.
Could I just correct myself? I said that the member for Greenway had moved the amendment; it was actually the member for Kingston. My apologies to both members. It's the member for Kingston who has developed the childcare policy for Labor and done a great deal of work in that effort, and it is she who moved this amendment, which I support.
The legislation before us today removes the two-year cut-off point for people to lodge their tax returns and be eligible for the childcare subsidy. It also ensures that emergency or disaster events do not count towards the 14-week period of nonattendance after which a child's enrolment is cancelled.
We know that the government did not get everything right with its COVID-19 pandemic response last year, particularly in the early learning sector. The Prime Minister's free child care for everyone with a job was, like most of his announcements, not quite what it seemed. The main feature of the Prime Minister's free childcare system was the number of people locked out of free child care and, in turn, the number of services being driven to the brink of collapse right around this country. In 2020, Labor heard from early learning services from around the country that struggled to keep their doors open after their funding had been slashed. Services had to cut opening hours, cut staff and cut places to try and balance their books. Family day care educators didn't suffer a drop in enrolments but were expected by the government to work for half pay, because they had been unfairly locked out of the JobKeeper payments. Families were being denied places—including healthcare workers who had been asked to come back from parental leave to help with the crisis, yet they were the ones missing out.
It's no wonder the sector seriously struggled to deliver the Prime Minister's free childcare commitment, when they were being expected to do it with less funding. And, of course, the government's response was to blame the providers. They sent strongly worded communications to providers, threatening their funding if they didn't provide enough spaces and hours, when they knew the services weren't funded to do so. Incredibly, in a dire act of cynicism, they opened up a hotline and encouraged families to dob in early learning providers. When in doubt, set up a hotline—what a palaver! We saw the government seeking to blame childcare providers themselves, and the people who work there, for the mess of its own making. So what was the government's response to the mess it had made with the underfunded and poorly targeted headline-grabbing policy? It was snapped back to the old, confusing and expensively designed childcare subsidy system.
We in Labor know that childcare fees are out of control. Since the coalition was elected in 2013, childcare fees have skyrocketed by 35.9 per cent. Australia ranks 26th of 32 countries in the OECD for net childcare costs. In 2019, families spent 18 per cent of household income on early education and care. We're only 2½ years into the coalition's childcare system, and the benefit has been entirely eroded for many Australian families. The Prime Minister himself dubbed the system a 'once-in-a-generation reform' and promised it would make child care more affordable. It's been a very short generation.
Two and a half years later, families across the nation are paying too much for child care, and this is especially the case in my home state of Western Australia. The costs of day care at one centre in Perth reached almost $150 a day in 2019. Brett Thomson, of Schools of Early Learning in WA, said at the time that childcare fees are:
… becoming unaffordable—the CCS was supposed to address that, and to some extent it has, but a lot of upper middle-income earners are finding it pretty tough.
Some of them are the professionals who we want as working parents back in the workforce.
Under the coalition's plan, childcare fees have increased by 5.4 per cent in Kwinana and 5.8 per cent in Rockingham, both suburbs in my electorate. This is an outrage. The community can barely afford what it gets already, so to have an increase in childcare fees of nearly six per cent in both Kwinana and Rockingham is a disgrace. There are too many childcare centres in Brand for me to name them all, but I would mention the Goodstart Early Learning at Baldivis, who allowed me to visit last year. The workers at these centres, as all of us know, are frankly amazing. Time and time again, when I get to visit, I am astounded by their compassion, their commitment, their work ethic and their dedication to the young people of this nation.
The benefit has been almost entirely eroded nationally, showing the system has been a complete let-down for Australian families. Documents from the Morrison government's own education department predict that childcare fees will increase by 4.1 per cent every year for the next four years, substantially outstripping inflation, which the childcare subsidy is pegged to. This is further evidence that out-of-pocket costs for families will be higher in the years to come. We know, on average, parents will soon be no better off under the Prime Minister's once-in-a-generation set of reforms than they were under the previous scheme, which ended in July 2018.
Parents need a real plan to tackle skyrocketing out-of-pocket childcare costs, not the coalition government's broken system that they continue to cling on to. The Productivity Commission's Report on Government Services 2021 has shown childcare costs are locking Australian parents out of the workforce. Fixing access to child care, and, as such, women's participation in the workforce, will be a boon for the Australian economy.
ABS data reveals almost 300,000 Australians are not in the labour force due to duties caring for children. That's 300,000 people who want to work and cannot because of the skyrocketing costs of child care. At a time when Australia has limited opportunities to grow the workforce because of COVID-19 restrictions, we need these people to be able to get back to work. The rate of parents saying they are not working mainly due to the costs of child care continues to grow each and every day.
With the Morrison government itself predicting fee increases that will outstrip CPI for years to come, the hits will keep on coming for Australian families. There is now a mountain of evidence and data proving the coalition's childcare system has failed to keep a lid on childcare costs for Australian families, particularly those in my electorate of Brand.
Experts across the country and economists around the country have been calling for investment in child care because it is a win, a win and a win—good for parents, good for children and good for our economy. Australian women are much more likely to work part time and less likely to work full time than women in comparable OECD countries. Australia's female workforce participation rate of 73 per cent is above the OECD average of 65 per cent, but it falls in the prime parenting years. Australian women are much more likely to only be able to work part time because of childcare costs. The typical Australian woman with children of early caring education age works just over two days a week, and that is a loss to the workforce of Australia. Child care is supposed to support parents to work, but instead for many parents it is acting as a financial disincentive to work more or even at all. This is a particularly harsh barrier for women's participation in the workforce, for resuming their place in the workplace or on their career paths, and, indeed, for their economic independence.
Only Labor has a plan to bring down the costs of child care and to keep them down. Labor will introduce cheaper child care for working families, which will scrap the $10,560 childcare subsidy cap which often sees women losing money from an extra day's work. We'll lift the maximum childcare subsidy rate to 90 per cent and increase childcare subsidy rates and taper them for every family earning less than $530,000. It is a universal childcare program.
Cheaper child care in this country will enable parents to work as much as they want. It will ensure all children can receive a quality early education, no matter their background. Accessible universal child care will pay dividends back to our economy by increasing the workforce participation of women. Treasury has said that the three Ps are essential to Australia's economic recovery—participation, productivity and population. Labor's childcare plan addresses all three by unleashing the power of the female workforce. As was recently stated by the Chamber of Commerce and Industry of Western Australia:
While there are many ways Governments can bolster the capacity of their workforces, the most exciting opportunity is to make it easier for women with young children to re-enter the workforce and work more hours.
The fact is women, particularly mums, could be essential to our recovery from this recession and to our long-term economic prosperity. Modelling on investing in child care from KPMG and the Grattan Institute found that the resulting growth to our economy from women working more could be worth up to $10 billion a year. That is the reason that it is not only families calling for childcare reform but also business leaders and economists right around this country. Under Labor's plan, the ACCC will be tasked with designing a price-regulation mechanism to shed light on costs and fees and drive them down for good.
Children are learning and developing from birth, and even before that. The nature of the interactions between a child, the adults around them and the environment, as well as the experiences to which a child is exposed, all contribute to a child's early learning foundations. The benefits of quality early learning for children in the year prior to starting school are largely undisputed, with evidence that immediate socialisation increases the likelihood of a successful transition into formal schooling, as children get older, and improves their performance in standardised test results in the early years of primary school. This is all as a result of participation in preschool programs. There's also evidence of the impacts on children's development of attending quality early learning from about one to three years of age.
Children's experiences in the early years of their lives can have profound impacts on their longer-term development. The environment within and outside the home is important. There has been extensive research on the impact of non-parental care on children's development. The Productivity Commission has said:
… … …
Overall, most Australian children are doing well developmentally. However, for many, it is a case of being born lucky. It is a case of being born into a family that teaches the child to read at a young age and that has the time to educate them or the money to pay for early childhood education. Those born without such resources often miss out.
Labor's plan for cheaper child care will reward all families and allow more second-income earners, who are usually women, to work more and contribute to our economic recovery. This is a win for the women of this country returning to the workforce. It's a win for the economy. But, most importantly, it's a win for the children of this country. It gives infants and toddlers the opportunity to learn more, to grow more and to have a sound start to their early childhood education. Most of the growth of a child's brain happens in these early childhood years. This country should take advantage of that and make sure it implements a system of universal child care. But only Labor has a plan for universal child care in this country, and only Labor will deliver for the women and children of this country and their education and prosperity.
I rise to speak on the Family Assistance Legislation Amendment (Early Childhood Education and Care Coronavirus Response and Other Measures) Bill 2021. COVID-19 has left few industries and workplaces unaffected, but childcare centres and the educators who work there have faced some of the most significant challenges of any workplace during this pandemic. It was not helped by the shambolic approach of this government to this essential service, which had to continue throughout lockdown.
At the beginning of the pandemic, the Morrison government refused to support this sector, despite the fact that centres saw their revenue dive overnight as national lockdowns were put in place. I saw this in my electorate, where centres were contacting me saying: 'We need to keep running, but what are we going to do? People are pulling their children out.' Meanwhile, essential workers needed to send their children to child care. It's an essential service, and it needs to be recognised as such. So, after pressure from Labor and from the sector, the previous minister announced that the government would provide free child care for all. It seemed like a fantastic announcement, except centres were not properly supported to provide this.
The truth was that childcare centres were expected to provide care for half the money and that many parents, including essential workers, were unable to access the care they needed under the Morrison government's scheme. My phone was running hot from centres in my electorate who couldn't cope with this change, where one minute families were taking their children out of child care and the next minute they wanted to expand hours, but with no support from the government. Centres were driven to the brink, with several childcare centres and providers needing my help during that. These providers know how vital their services are and that they would be required once again as restrictions eased. However, the Morrison government was missing in action.
Next the government established the exceptional circumstances fund. This was another confusing piece of policy, with only 39 per cent of applications approved. These applications were from centres in desperate need. I advocated on behalf of several centres in my electorate and then found that they received approval after I had contacted the minister, but it wasn't really clear why they had not been eligible in the first place and why they then were. Our system of government should not work like this, but often these rules under this government are so arbitrary.
So here we are today, being asked by the Morrison government to fix more mistakes. Of course, we will assist in this, because the sensible and largely technical changes in this bill are welcome. So we will support that. But this is a bigger problem. Childcare fees in Australia at the moment are out of control. In my electorate, in Canberra, we've always had high childcare fees, but they actually rose the most in the last year, to an average of $595 per week for full-time child care. That's simply unaffordable for most people who are considering whether to go back to the workforce after having a child or whether to increase their hours. I increasingly hear from women in Canberra that they can't afford to work that extra day or to return to work. It's simply not worth it. A big part of that discussion is, of course, that it is the women who tend to be the secondary earners. It is the woman who decides not to go back to work, because it's simply not affordable. This is a handbrake on our economy that we can't afford as we're trying to come out of a recession, trying to survive a global pandemic.
To make the situation even worse, the department of education predicts that childcare fees will increase by 4.1 per cent every year for the next four years. This will mean the government's childcare subsidy, which increases only at the inflation rate, will be quickly outstripped by the fee increases. The most damning figure is 35.9 per cent, the amount that childcare fees have soared since the election of the Liberal government.
Labor, on the other hand, has a plan that will make child care accessible, because we understand the juggle and the changes facing Australian families at the moment. We cannot afford an economy where many people—women in particular—are kept out of the workforce because of the cost of child care. We are also robbing our youngest Australians of an opportunity to benefit from high-quality early childhood education and care, which we know has lifelong benefits for children. I know that my son, who attends a day care centre in Canberra, learns so much. He socialises with other children, and the people there who care for him are incredibly dedicated, skilled and wonderful people. So it would be great to see the Morrison government actually show this sector the respect and the support that it needs as a vital service, as the high-quality education system that it is.
Child care is an economic driver. Research from the Australia Institute shows that making it easier for women to return to work will deliver billions in benefits for all Australians and help our economy recover faster from the economic downturn associated with the pandemic. We need to empower families to make choices that suit them. Notably, the number of parents saying they are not working mainly due to the cost of child care has skyrocketed by 23 per cent. That's an estimated 91,700 parents kept out of the workforce because they cannot afford the child care. This doesn't make economic sense, and it doesn't make sense if we want to be a country that addresses gender inequality.
We need change now, and I think that at the moment the women around Australia are feeling that they are not being listened to. They were protesting in their thousands outside this parliament on Monday, and the Prime Minister and the Minister for Women would not even come out and listen to them. Obviously, those issues were in particular around violence and sexism against women, but this is a broader issue about women needing to be supported by their government—needing to be supported to make choices about their career, how their family manages parenting and how that's shared between mums and dads—and they can't do this when the costs of child care are simply prohibitive. It's simply not worth working—end of conversation. For many women, that decision follows them into poverty in their later years because they haven't built up the superannuation and they haven't built up the income. It's even worse, obviously, if they end up single. For those years that they've taken out of the workforce raising their family, what do we give back to them? Nothing. This is yet another reason why it's so important for child care to be funded properly.
Labor's policy would actually make child care more affordable for 97 per cent of Australian families. We would scrap the $10,560 childcare subsidy cap, which is the part that often sees women losing money from an extra day's work, and we would lift the maximum childcare subsidy rate to 90 per cent. We'd also increase the childcare subsidy rates for every family earning less than $530,000, because this is an economic measure. This is a progressive policy, of course, but it is about delivering for all women the chance to return to the workforce and be supported.
Importantly, the ACCC would also be tasked with designing a price regulation mechanism to shed light on costs and fees and drive them down for good. One of the best aspects of our plan is that we would also commission the Productivity Commission to look into implementing a universal 90 per cent childcare subsidy for all families, and I think ultimately that is where we want to end up. Why do we see early childhood education—in the most important years of brain development—as different to school education, which we clearly see as important to have freely accessible for all families? Why do we see it as different? Why do we treat that workforce differently, when many of them have requirements on the training they need to do to care for our children? So that is a really important part of our policy and something that I hope we will look into further in the future. Labor really wants to get behind Australian families that are facing that juggle, that are trying to balance work and family. We want to back our economy. We don't want this handbrake on the economy that is meaning that people who want to go back to work cannot because they simply can't afford the child care.
Another important role that early childhood education and care centres provide, particularly not-for-profit centres—I think it's not talked about enough, but I certainly hear about it a lot in my electorate—is really important emergency care for children in difficult situations. I spoke to one provider in my electorate who was really concerned about the end of JobKeeper and the impact that it would have when many families simply could not continue to afford for their children to go to child care—she knew that there were families within her centre only getting regular meals while they were attending that centre.
This is such an important issue for families and for women, in my electorate and around the country. As I say, Canberra has some of the highest fees in the country, and it would be good to see families be able to make decisions free of that prohibitive cost. This is so that decisions can be made around other factors—around how much people want to work and how they want to balance parenting and engagement in the paid workforce—and also for young children to be able to experience the great benefits of early childhood education and care that are there.