Thursday, 25 March 2021
After the mortgage, child care is often the biggest cost to family finances. If you don't have extended family to help with the care, you tend to have two choices: either one family member delays re-entering the workforce, or you try and access child care. In regional areas, finding child care is incredibly difficult, let alone the cost of it.
I'd like to step back in time and talk about my own experience. This was some time ago now—it was two decades ago. Gee, it went quickly! I first accessed child care when my eldest was a little one. I had to go back to work. I remember it was $180 a week. There was a small rebate you got back from the child-care centre. You then went to Medicare—it was a really clunky system. Thank goodness the government fixed that. Back then, in the year 2000, a family with an income of $55,000 spent around 13 per cent of their disposable income on child care. With reform over the years, that dropped to around seven per cent, but by 2016 it was back to more than 11 per cent of a family's income, and it's higher now.
There are some good points to the new childcare subsidy scheme that the government introduced in 2018 and that we passed in this place, but the devil is in the detail. I acknowledge that the government spends far more on child care now than it ever has in the past. We now spend around $8 billion annually; 20 years ago it was around $1.8 billion a year. However, when those reforms came through, in the first year of the changes one in three families reported that they were still paying the same childcare costs and one in three families were paying higher costs. Some childcare providers chose to increase their fees above what the government's recommended hourly rate was. In regional areas costs are often higher because there's such demand. One of the main objectives of the new childcare scheme was to increase workforce participation, and I just don't think it hit the mark. A year on from when it was introduced, 77 per cent of parents were saying that nothing had really changed.
I'd like to talk about some of the challenges that are faced by families in my community. There is the high cost, as I mentioned. We have one of the highest net childcare costs in the OECD. A family with two children in child care, with one parent on an average wage and one just below it, will be paying around 17 per cent of their net household income on child care. When we have a look at child care and productivity, we see that affordable child care is the key way to get women back into the workforce. But while what we spend on child care as a percentage of GDP has increased, it's still less than half a per cent of our national GDP, compared with 1.1 per cent in the UK and just under one per cent in New Zealand.
The other problem is the cap. The cap is just over $10,000 per child per financial year, and we find that around this time of year families reach their cap. Really, their world caves in around them because they have to pay the full cost. It then gets to a point where people are going to work just to pay for child care. It's an issue we seriously need to address.
When we look at the regions, including my electorate of Mayo, we see that people are driving a long way just to get their child to child care. I've been lobbying the South Australian government to assist with setting up a community childcare centre near Parndana, on Kangaroo Island, where the nearest provider is at Kingscote. That's an 80-kilometre round trip. It's just impossible for families to get there. This lack of child care in the region is making it very difficult to attract young families to Parndana. When I go back to Parndana, the families that I meet and talk to say they need to have their child in a safe place so they can go back and do the re-fencing on their farms following the fires.
It's my hope that the government will look at child care in a very earnest way in the budget that we have coming up—and the next time we come back here will be for the budget. While the reforms implemented back in 2018 were effective, covering 85 per cent of the cost for most families, there are some key bits missing. I think we can address them. We can iron out these issues and make child care more affordable and accessible for all Australian families.