Senate debates

Monday, 23 June 2014


Family Assistance Legislation Amendment (Child Care Measures) Bill 2014; Second Reading

10:38 am

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

I move:

At the end of the motion, add: but the Senate notes that:

(a) the Government has failed to provide sufficient information about the impact on families of the changes to the Child Care Benefit;

(b) the Government has not completed an assessment of impacts on workforce participation of the changes to the Child Care Benefit;

(c) the changes to the Child Care Benefit should not be legislated just weeks before the Productivity Commission inquiry into Childcare and Early Childhood Learning provides its interim report; and

(d) families have not had a chance to have their say on these changes.

Before the 2013 federal election, we heard time and time again from the Leader of the Opposition, as he was then, that there would be no cuts to education by a Liberal government. We know now that such a promise, like so many others, was pure hypocrisy. After cutting funding to schools and universities and failing to guarantee the future funding for preschools, Mr Abbott has now added cuts to early childhood education to his long list of broken promises.

This bill amends the A New Tax System (Family Assistance) Act 1999, limiting the childcare rebate at $7,500 for three income years starting from 1 July 2014. It also seeks to maintain the childcare benefit income thresholds at the amounts applicable as of 30 June 2014 for three income years starting from 1 July 2014. Families around Australia must be shocked at the duplicity of this bill. Before the election, the Prime Minister personally wrote to all childcare centres about what he saw as the impact of capping the childcare rebate, saying it would mean 'increasing out-of-pocket costs for families'. Yet today he is moving to do exactly that.

Over the weekend we saw some publicity about the great disincentives that there are for women returning to the workforce and having to make that very difficult choice as to whether they keep looking after their kids full time or working for what is, on an hourly rate, a minimal amount. I saw last night on the TV the assistant minister explaining that this was all down to the Labor Party, that it was a problem created by the Labor Party. People have to make that choice often in the starkest of economic circumstances. It was partisan political pointscoring.

It strikes me as extraordinary that we are today debating these measures. The government campaigned on making child care more affordable, and yet in this very act are seeking to do exactly the opposite by stripping $1 billion from early childhood education and child care. We did not hear any of that in the news last night from the assistant minister. We were not told that $450 million would be taken away from the out-of-school program. We were not told about the $157 million being taken from family day care services. We were not told about the actions of this government to strip out support to help parents complete study to get back to work. We were not told about the reduction in funding for Indigenous child care and family centres. We certainly were not told about the $300 million in funding for educator wages.

So this is a government, frankly, that has more front than Myer when it comes to the issue of arguing its case. It is more audacious a government than you are ever likely to see when it comes to misrepresenting the facts on these issues. It is a government, as I say, with more front than Myer when it comes to telling the truth. We have a flagrant attack on the backbone of our childcare centres by this government, and yet the government in the same breath says, 'Of course, this is all down to the Labor government defeated at the last election.'

We have a situation where hundreds of millions of dollars are being cut from the childcare rebate and the childcare benefit. It is being taken out of the system by this government. Never before have we seen moves to cap the childcare rebate come before parliament without those savings being redirected back into early education and child care. That is essentially the fundamental difference here.

In the 2012-13 budget, Labor did propose to maintain the same $7,500 per child per year cap on childcare rebate, as found in this budget. However, we did so under the provision that there was to be a reinvestment of the savings to offset the cost of other programs that directly improved childcare benefits available to families, like contributing towards Labor's $274 million national quality education and the $300 million to increase the wages of low-paid childcare workers to reduce the turnover in that sector.

As a consequence of the duplicity presented by this government, the Labor opposition will be moving an amendment that removes references to the childcare benefit in schedule 1 of the legislation, which effectively will split the bill. This will allow the Senate—I will make no bones about this—to consider the change to the childcare rebate as a separate issue. It will force the government to provide evidence to support its claims, to refute the allegations that I am putting in regard to the damaging cuts to childcare benefit, and will allow fuller and more informed debate in this chamber as to the consequences of that government policy. I put it to the Senate quite plainly: if this amendment does not find favour with the Senate, Labor will not be supporting this bill.

Labor's record is one that we are very proud of. One of the first actions of the new Labor government following its election in 2007 was to increase the childcare rebate from 30 per cent to 50 per cent of out-of-pocket expenses and to increase the cap from $4,354 to $7,500 per child. We also gave families the option of claiming their childcare rebate payments fortnightly, halving up-front childcare costs at the times that they were being billed. According to the ABS childcare consumer price index, childcare fees went up at more than twice the rate under the Howard government compared to what occurred under Labor. That is because government assistance was properly targeted. We saw 5.3 per cent per year under Howard and a 2.4 per cent increase per year under Labor. The modelling showed that the out-of-pocket costs for a family earning some $75,000 a year were reduced from 13 per cent of their disposable income in 2004 to 8.4 per cent in 2013. This is a direct result of Labor's policy initiative. Because of Labor, the number of children in child care at any one time has grown to over one million, an increase of nearly 30 per cent since 2007.

This bill will rip $230 million from the means-tested childcare benefit assistance to over 889,000 families. The education department, through the officers who were looking after this bill, has told Senate estimates that over 500,000 families will receive less support as a result of these changes—but that is essentially where the information stops. It is an extraordinary proposition that the government would propose to make cuts to a payment for which the eligibility starts to taper off when families earn just $41,000, while the Prime Minister pushes ahead with his paid paternity leave scheme that would deliver $50,000 to millionaires. He is attacking the existing childcare support that people can get when they just earn some $41,000—and of course they rely upon the benefit to a much higher degree than any proposal that I have seen in regard to the paid paternity leave scheme.

As if that were not good enough—and it is not the only broken promise from the government, which, I repeat, promised no cuts to education—it is utterly illogical. The government's own Productivity Commission inquiry into child care and early childhood learning is due to provide us with an interim report in July. Making changes to the childcare benefit at this time clearly pre-empts what the government has indicated that it regarded as an important Productivity Commission inquiry. We may well ask: why is the government proposing such significant changes to the scheme just weeks before the Productivity Commission's report is provided?

This is rushed legislation by a government that is trying to make changes before the community even has an opportunity to understand their impact—and, worryingly, before the government has understood the impact of its own policies. It shows arrogance that the government would press ahead with these changes without understanding or providing a proper assessment of the financial impact such changes will have on Australian families. This is an arrogance which was on blatant display when the government gave stakeholders just five days to comment on this bill when it was referred to a committee.

Through the Prime Minister, we have declared attacking parents and children to be some kind of budget emergency. Remember all that mantra. It simply defies logic for the government to be making changes to the childcare benefit, when their own Productivity Commission did an inquiry into child care and early childhood learning and the final report is to be provided in October this year. This attack on childcare benefits and families who are reliant on this measure is being undertaken without any proper analysis having been done to identify exactly who it is going to hurt and how much they will pay. The government is rushing these changes through the parliament in a sneaky and underhanded way—changes that will have a negative impact on 500,000 low- and middle-income families. And the minister went on TV last night and said: 'This is all down to the Labor Party.'

The government has promised the Productivity Commission review would at least maintain the same funding envelope that is currently dedicated to child care. We understand what is going on here, don't we? They are saying on the one hand, 'It is the same envelope,' and on the other hand, 'We are going to reduce the size of the envelope.' Of course, it will be easy to be consistent with the smaller amount, won't it? One can only suspect that that is the real motive behind these actions. The government is desperately seeking to find a way to justify the $1 billion of cuts to childcare support since coming to office.

Of course, there are other measures in the budget which impact on childcare support as well. The budget cut $157 million from assistance to family day care centres, which will be passed on to parents through higher fees and will lead to family day care education centres closing down. Family Day Care Australia has estimated that they will drive up fees by $35 per child per week and have a direct impact on more than 400 family day care services and 140,000 children in family day care across Australia. Family day care services are crucial to ensuring a quality and safe childcare system.

For many, this will simply mean that they cannot afford to go to work. Yesterday in the press we saw the figures and we saw the impact. We are talking about people going back to work for a few dollars an hour. In the situation where support through the childcare system is being withdrawn, it makes it extremely difficult for people to make the decision to go back to work. We have also seen cuts to the Community Support Program, which provides grants to the family day care service to support professional development and operation and administrative support for individual family day care educators. Family day care is the cheapest and the most flexible form of child care. It is absolutely vital for shift workers and is often the only form of care available in regional and remote areas.

The government is also cutting the assistance available under the Jobs, Education and Training Child Care Fee Assistance scheme—a further step which will disadvantage people on low incomes. This scheme is available to parents on income support payments to assist them to access child care for the purposes of completing study and returning to the workforce. The government is capping the assistance at $8 per hour and will cut the maximum accessible hours from 50 to 36 hours per week. Many parents, particularly in the inner city areas, who have work and study commitments that span more than three days a week will be hit by this cap on hours and will face higher childcare fees. Because child care is paid for on a daily basis, this change will effectively limit parents to just three days care a week, even if they need care over more days to meet their work and study requirements.

There are 35,000 parents who are assisted by the Jobs, Education and Training Child Care Fee Assistance each year. The government's own budget papers show that fewer people will receive this support next year, despite what is acknowledged across the board as increasing demand. This very short-sighted and unfair policy being pursued by this government will hit hard for parents who are seeking to move out of the social security system and are trying to get better qualifications and to secure a better job.

Adding insult to injury, the government is also cutting $450 million from outside-school-hours care. This is money that has been used to fund better services; to extend hours; and to deliver better programs, such as homework clubs, music lessons, sports and drama, in 500 schools across the country. The challenges of balancing work and family do not stop when a child enters school.

After stagnating under the Howard government, outside-school-hours places increased by 100,000 under Labor, with over 335,000 children currently in care, with the Outside School Hours Care Council delivering some 55 per cent of all childcare services. There is in fact a shortage of outside-school-hours care places in many areas across the country. This savage cut will make it harder for parents, with school-age kids, to be able to return to work. This comes on top of a $5 million cut from the accessibility fund, which will be used to expand childcare centres, cut planning and development red tape, free up vacant land for childcare centres, or incorporate child care into schools and TAFEs. And so the list goes on and on and on.

And the government minister stood there last night on TV, and said, 'This is all down to the Labor Party.' What an incredible proposition! As I say, more front than bias, more audacity than I have ever seen in a minister responsible for the welfare of young children. They are cutting wages to early childhood educators and, just before Christmas, they cancelled the Early Years Quality Fund contracts. That is despite the fact that they promised to honour the contracts before the election—another broken promise! This minister even asked educators to do the right thing and hand back their wage increases. Can you believe that?

If this government were at all serious about recognising the importance of working early-childhood educators, then it would pledge to support an equal pay case for them. It is quite clear to everybody in this chamber that has a real interest in these issues that the Abbott government has declared war on family day care services. So Labor will not be supporting these attacks. Labor will be doing all that it can to highlight the extraordinary hypocrisy and duplicity of this government. We will be explaining to communities across this country what impact these changes will have on them and we will be talking to parents who want to go back to work.

When the government say, 'We want to end the age of entitlement,' what they really mean is to justify cuts—cuts that undermine living standards, the ability of families to actually get a fair go in this country and their capacity to participate in this society. We all understand what the relationship is between childcare affordability and a woman's right to participate in the workforce. A one per cent increase in the gross childcare prices results in a decrease in women's employment rate by 0.7 per cent.

Lower income families are the ones who bear the burden of this assault. Tony Abbott has clearly got his priorities all wrong. His priorities are to help out millionaires but attack people on low- and middle-incomes. He wants to undermine people's capacity to return to work and he is doing so in the most vicious of ways. This is a measure that the opposition will not have a bar of.


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