Monday, 23 June 2014
Family Assistance Legislation Amendment (Child Care Measures) Bill 2014; Second Reading
In speaking to the Family Assistance Legislation Amendment (Child Care Measures) Bill 2014, I want to thank all of the speakers who participated in, and for their contributions to, the debate. This government is committed to making child care more affordable, flexible and accessible for Australian working families. I would like to start by making something very clear to address some of the wilful misinformation produced in the chamber during this debate. Overall, the government is increasing, not cutting, childcare assistance to $28.5 billion over the next four years—2014-15 to 2017-18—to assist around a million families each year through the childcare benefit and the childcare rebate.
The proposed amendments in the Family Assistance Legislation Amendment (Child Care Measures) Bill 2014 will do two things: maintain the childcare benefit income thresholds for three years and continue to pause the childcare rebate limit at $7,500 per child per year for a further three years. Both of those measures will apply from 1 July 2014 for three years to 30 June 2017. It is fiscally responsible for this government to maintain—not cut, as the opposition would have you believe—the current CCB income thresholds, along with the current CCR annual limit, pending the outcome of the Productivity Commission's inquiry into child care and early learning in October 2014. The terms of reference for this broad-ranging inquiry include consideration of rebates and subsidies for child care. The draft report due next month will give us the first insight into their proposed reforms.
The measures contained in this bill, however, are moderate and necessary. The Senate Education and Employment Legislation Committee noted:
… the committee is persuaded that these measures are limited, well targeted and for a finite period of time, and are a necessary part of the broader government agenda of repairing the budget and strengthening the economy.
The government is making decisions that will prepare Australia for the long-term challenges and opportunities that confront us. The childcare benefit measure in this bill is a 2014 budget measure and is one element of the government's broader measure to maintain eligibility thresholds for Australian government payments for three years. Maintaining the childcare benefit income threshold will provide an estimated saving of $230 million over the forward estimates. The childcare benefit eligibility requirements will remain unchanged. This is not a cut. The government will continue to index—that is, increase—the childcare benefit standard early rate and increase the minimum hourly amount and the multiple child loadings by the consumer price index on 1 July each year.
It is important to note that the out-of-pocket expenses incurred by most families because of the childcare benefit measure will be reduced by the childcare rebate, which is not income tested and which covers up to 50 per cent of out-of-pocket childcare costs up to $7,500 per child per year. The childcare rebate indexation pause at $7,500 was first implemented by Labor in 2011. Labor announced an extension of the measure as part of their 2013 budget. They took the $105 million in savings from the budget bottom line but never legislated for it. When this government sought to legislate the measure, Labor combined with the Greens in the Senate earlier this year to block the legislation that would have given effect to their own measure, which was then part of the Social Services and Other Legislation Amendment Bill 2013. So I welcome their apparent change of mind. It is good to see that the opposition is apparently no longer opposed to their own measure.
The CCB measure will not impact families with incomes below $41,902, which is the lower income threshold for CCB. These families will continue to receive the maximum rate of childcare benefit. Families with income above $41,902 will continue to receive CCB. The amount of CCB a family receives tapers to zero as their income increases to the relevant maximum income limit. The CCB measure in this bill ensures that the payment is fair and sustainable in the longer term for families who need it most. I want to repeat this, because families need to be aware, despite the broadbrush accusations of those opposite, that the hourly and weekly rates of childcare benefit will continue to be indexed—that is, to increase. This means that per hour the amount of childcare benefit that families receive will in fact continue to increase.
A number of speakers on the other side referred to the Productivity Commission's inquiry into child care and early childhood learning, which this government has called. In fact, one of the speakers on the other side said, somewhat bemusedly, I thought, 'Why is there no plan?' I suspect there is no plan because those opposite did nothing to create a plan themselves for the entire period of their time in government, so we have called the Productivity Commission's inquiry. The measures in today's bill do not in any way pre-empt the Productivity Commission's inquiry into child care and early childhood learning, which is a holistic review into what is needed for the next generation, not just for the next few years. We are maintaining the current CCP income thresholds, along with the current childcare rebate annual limit, pending the outcome of the Productivity Commission's inquiry into child care and early learning in October this year.
As part of its broad-ranging review the Productivity Commission is looking into 'the rebates and subsidies available for each type of care'. Its fourth term of reference in fact specifically asks the commission to look into:
Options for enhancing the choices available to Australian families as to how they receive child care support, so that this can occur in the manner most suitable to their individual family circumstances. Mechanisms to be considered include subsidies, rebates and tax deductions, to improve the accessibility, flexibility and affordability of child care for families facing diverse individual circumstances.
Thousands of submissions and comments have been received and a number of them have highlighted just how complex these payments currently are for families and service providers alike. I look forward to the Productivity Commission's draft report next month, but the childcare benefit and childcare rebate measures in this bill are moderate and necessary measures for this time.
We know that Australian families need flexibility. For example, in their submission to the Productivity Commission inquiry, the Police Federation of Australia highlighted that particular need for flexibility. They said:
Due to the dynamic nature of policing, working patterns can change at a moment’s notice. Rosters are rarely consistent over an extended period of time; the shifts an officer is working one fortnight may be completely different the next fortnight.
These concerns are also echoed by the Queensland Nurses' Union, another sector where shiftwork is required, whose submission states:
… the lack of appropriate childcare services is a major barrier to nurses returning to the workforce after having children. … With the proliferation of non-standard working hours in other areas of employment this difficulty is beginning to become a “mainstream” problem for many working families.
That is why we have asked the Productivity Commission to look into this. We want to fix the whole system and not just keep the bandaid approach of the previous government.
I would remind the Senate that the Productivity Commission inquiry is a broad-ranging inquiry. I have referred to some of the terms of reference. Another of its terms of reference is to look at the 'types of child care available including but not limited to: long day care, family day care, in home care including nannies and au pairs, mobile care, occasional care, and outside school hours care'. We are looking at flexibility for today's modern families and we are not limiting that discussion to some sort of class warfare based campaign, which those opposite are so intent on fuelling. It is really about time those opposite moved beyond class warfare on this issue and seriously acknowledged that what Australian families need in child care is flexibility and choice.
It is interesting to talk a little about Labor's legacy in this area. Frankly, many commentators would say that they have no credibility on child care. I recall vividly that before 2007 the Australian Labor Party promised Australian families that they would make child care more affordable. Instead, under six years of a Labor government childcare fees skyrocketed 53 per cent. That is around $73 extra a week in fees for a family using the average hours of child care—that is, 27.7 hours for long day care—or it is around $3,500 extra a year for the usual 48 weeks of child care. They left behind a messy concoction of red tape and bandaid solutions which cost not just childcare centres but ultimately parents more. They failed completely to deliver on their promise to build 260 new childcare centres. We all remember one of their prime ministers—Mr Rudd, I think—saying that this would end the double drop-off. Two hundred and sixty were promised, and when did they stop? They stopped after 38. In April 2010 the then minister, Kate Ellis, announced on the second page of a press release that 222 of the 260 centres would not be built—a clear broken promise to Australian families. Labor also cut $12.6 million in funding for occasional care from July 2010—a cut that hit rural and regional areas particularly hard, where occasional care is often needed due to seasonal work such as harvesting and shearing. I am very proud to say that the Abbott government has restored that funding in this budget. In fact, Labor's failure to address comprehensively and strategically the issue of child care in their six years in government was what was highlighted by yesterday's NATSEM report, which states at page 27:
Government subsidies help to keep a lid on families' out-of-pocket child care costs, but it is hard to escape the conclusion they have also helped drive up prices and the cost to government. The higher prices go, the more financial assistance families will require and so the cycle continues.
Labor, as in so many other areas, threw money at the problem on the nation's credit card and, as the NATSEM report says, helped to drive up prices and the cost to government.
The Labor Party have made it clear in their remarks that they will not support both measures of this bill, and I note that the opposition has indicated an amendment this morning to remove the childcare benefit component of this bill. We do not back down from the childcare benefit measure in this bill. We do not waver on our commitment in regard to the childcare benefit measure, because it is an important 2014-15 budget measure that aims to help fix the budget mess left by Labor. However, we do accept that, in order to secure Labor's own savings from their 2013-14 budget, we will need to separate these measures. The government will agree to remove schedule 1, item 2, page 3, lines 7 to 13. We will hold Labor to their actions in government by agreeing to this amendment and seeing Labor's CCR measure passed by this parliament. The government also gives notice that in so doing, we intend to reintroduce the CCB measures as a bill in the House of Representatives as soon as possible.
The government will oppose the opposition's second reading amendment because these are measures that the government has pursued in order to address the absolute mess in the federal budget that Labor left behind. The government will also oppose the Greens' second reading amendment.
Question agreed to.