Carol Brown (Tasmania, Australian Labor Party) Share this | Hansard source

The incorporated speech read as follows—

I rise to speak on the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008

This bill delivers on the Rudd Labor Government’s election commitment to help working families meet the costs of childcare by increasing the Childcare Tax Rebate from 30 per cent to 50 per cent of out-of-pocket childcare costs- up to $7,500 a year. The bill will also see the rebate paid quarterly rather than annually.

This initiative will to help take pressure off the household budget and childcare expenses.

The benefits to be had by working families do not stop there. This measure is part of a broader $2.4 billion investment over the next 5 years by the Rudd Labor Government in integrated early childhood initiatives, which will not only provide high-quality services for our young, but also help fight inflation and build a strong economy for our nation’s future.

Indeed, this measure complements by a number of other initiatives put in place by the Rudd Labor Government, to take care of our children and ensure that working families have access to quality, affordable childcare.

In this area, the Government has also committed to:

• Developing rigorous new quality standards and a A to E rating system to foster constant improvement in the quality of services available in the childcare sector;
• Supporting the establishment of up to 260 additional early learning and childcare centres around the country; and
• It has also committed to invest $533.5 million over the next five years to improve access to early childhood education, the provision of which is undoubtedly intrinsically linked to the provision of high quality childcare.

The measures contained in this bill reflect an acknowledgement by the Rudd Labor Government of the current strain being put on families across the country when it comes to juggling the demands of work and home.

It reflects an acknowledgement of the fact that many working families, childcare provides the important connecting link between the work- home divide.

In this sense, the measures contained in this bill, not only directly benefit, childcare users around the country, they also play an important part in facilitating greater workforce participation-and therefore also helping to tackle inflation head on.

The result is a double dividend for working families across Australia.

However, first and foremost, lifting the childcare tax rebate from 30 to 50 per cent as this bill does will directly benefit more than 700,000 families across Australia who access childcare services each year.

In my home state of Tasmania, the measures contained in this bill will directly benefit the some 20 thousand children and their families who access child care services each year.

For the average Australian family, with one child this measure will result in an additional $500 to $2,500 being available in the family budget.

When viewed in the context of the other pressures currently being placed on the household budget by growing housing, petrol and grocery costs- the extra money that families will receive as a result of lifting the childcare tax rebate to 50 per cent will be most welcome by Australian families.

The measure, which, as I said, will result in more money being returned to the back pocket of hard working Australian families, is in stark contrast to, the situation which occurred under the previous Howard Government.

During the term of the previous Howard Government childcare costs almost doubled. In fact, under the Howard Governments watch, in their last five years in Government, the cost of child care rose, on average, 12 per cent per year.

On top of this, the former Government made a further mockery of working families when it forced them to wait up to two years to receive the childcare tax rebate, when it was first introduced,

This was the actions of a Government that after eleven long years in power had gone stale and lost touch of the financial realities being faced by average working families across Australia.

When taking office in November last year, the Rudd Labor Government pledged to assist the family budget by introducing measures aimed at putting money back into the pockets of Australian families.

As I stated earlier, this bill, delivers on that commitment, by lifting the childcare tax rebate from 30 to 50 per cent and giving more money back to families.

Indeed when combined with the other measures such as:

• the $46.7 million in tax cuts for low to middle income earners,
• the introduction of the education tax refund, and;
• the Increase to the Medicare Levy Threshold;
• contained in the Rudd Labor Government’s $55 billion Working Families Support Package the measures contained in this bill reflect a genuine commitment by this Government to assist those families who are doing it tough.

As the Minister for Workplace Relations, Minister for Workplace Relations, Ms Gillard, pointed out in her second reading speech on this bill, the changes to the childcare tax rebate also creates significant flow on benefits in terms of stimulating greater workforce participation.

By easing the pressure placed on the family budget by childcare costs, the increased rebate makes the option of returning easier and more affordable. The significance of this should not be down played, as a survey conducted by the ABS found that concerns regarding the accessibility and affordability of childcare were one of the primary factors contributing to the decision of around 85,000 secondary earners to stay out of the workforce.

And from all accounts, this is the predicament that many families have found themselves in, when trying to manage the family budget and weighing up whether or not it is worthwhile for both parents to return to the workforce.

For women in particular the pressures associated with trying to juggle the costs associated with child care with those associated with rising interest rates, petrol and grocery prices, have left many in a situation where they simply could not afford to return to the workplace.

However, by increasing the childcare rebate and giving families more money in their pockets, the Rudd Labor Government has effectively removed some of the disincentive that previously prevented many secondary earners from returning to work.

The rebate not only gives working families already utilising childcare services more money in their back pocket, it encourages families, which previously might not have been able afford the cost of childcare, to consider returning to the workforce for the first time.

The rebate not only provides more freedom in the family budget, it also effectively provides more freedom of choice when it comes to option of returning to work after having a child.

These are the tough real life decisions that many families and single parents face, after having a child, and the rebate is one of a number of measures which the Rudd Labor Government intends to put in place to make this process, where possible, a little easier.

By facilitating greater workforce participation, the rebate also contributes to helping achieve one of its other primary goals- which is to fight inflation.

When the Rudd Labor Government took office last November, it, it inherited an economy crippled by inflation at its highest levels in 16 years. The Government automatically rolled up its sleeves and made fighting inflation its number one priority.

In light of this, the Government announced a five point plan to tackle inflation- of which lifting workforce participation- was one of the key ingredients.

The proposed increase to the childcare tax rebate, adds to a suite of other measures aimed squarely at achieving this goal.

The increase in the childcare tax rebate is not only good for families, its good for workforce participation and its good for the long term health of the economy. It’s a case of win, win, win for working families.

As a mother of two young children, I know just how quickly the cost of childcare can eat up a significant proportion of the family budget.

When elected, the Rudd Labor Government pledged to take action to ease the pressure on the family budget, and with this measure, it has made good on this commitment.

More than 700,000 families, who use child care services each year, will be given more money in their back pocket. Indeed for average family with one child will benefit from an additional $500 to $2,500 a year to put toward the family budget.

Through such measures the Rudd Labor Government has acknowledged the difficulties faced by working families when it comes to balancing the work-home divide.

The rebate reflects a commitment by the Government not only to help working families get on top of the family budget pressures, but also to foster greater choice when it comes to workforce participation, for second income earners.

This bill delivers on just one of the Rudd Labor Governments election commitments designed to assist working families and has my full support.

The passing of this bill, will see families childcare tax rebate increase from 30 per cent to 50 per cent as of 1 July 2008.

I commend the bill to the Chamber.