Thursday, 21 June 2007
Families, Community Services and Indigenous Affairs Legislation Amendment (Child Care and Other 2007 Budget Measures) Bill 2007
Debate resumed from 14 June, on motion by Senator Brandis:
That this bill be now read a second time.
The incorporated speech read as follows—
This Bill relates to a number of the Government’s recent Budget measures including those relating to child care—the one-off increase in the child care benefit and the change of the child care rebate from a tax offset into a direct payment. Labor supports these initiatives in as far as they go to helping families with the spiralling costs of child care, and we support this Bill.
Labor welcomes this extra support for Australian families, and we also welcome the Government finally acknowledging that there is a crisis in the affordability of child care in Australia, something they have consistently denied. You’d have to say this is more a pre-election fix than any real understanding of the many difficult issues families face.
Australian families are right to be sceptical of the Government’s genuine understanding of the cost pressures they face. For too long the Government has insisted that there was no problem with child care affordability in Australia.
Minister Brough has recently claimed that paying high fees wasn’t too much for families because, he claimed that “Few people have more than one child in formal care”. Yet figures from this own Department show that one third of families receiving CCB have two or more children in child care. Clearly the Minister does not understand the cost pressures on families who are juggling caring for their children and returning to work or study.
And of course we can’t forget the Prime Minister saying a few months ago that ‘working families in Australia have never been better off’. The Prime Minister is usually very careful with his words. He says things very carefully because he is a very clever politician. But he’s slipping. These comments show just how arrogant his Government has become. This Government thinks that things are so good that families should have no complaints, that they’ve never had it so good. After 11 long years in power this Government is more and more out of touch with the realities faced by thousands of working families who are struggling to keep up with their mortgage repayments, keep the car running, and keep up with the increasing costs of child care.
So after all of these statements, after months and years of families being told that there’s no problem with child care affordability, that they’ve never been better off, families are rightly sceptical that moments before an election the Government has scrambled to do something on spiralling child care costs.
I want to take a moment just to recall how much families have been paying for child care in Australia. How much their child care costs have risen, so we can put this one-off pre-election child care benefit increase in perspective.
The average cost of child care in Australia is $240 per week, with some fees as high as $350 per child, per week.
Childcare costs are rising five times faster than the average cost of all other goods and services.
According to the Australian Bureau of Statistics, out-of-pocket childcare costs for families in the last four years have increased by 12.7 per cent, 12 per cent, 12 per cent and almost 13 per cent last year.
Independent analysis by Saul Eslake of the ANZ Bank, undertaken for the Taskforce on Care Costs shows that child care affordability has declined by 50 per cent in the last 5 years.
So we have had year-on-year increases in child care costs, at over 12 per cent every year, and then moments before the election, when the Government is under political pressure from families, a pre-election 10% bonus increase appears. Parents have a right to be sceptical.
Juliet Bourke, Chair of the Taskforce on Care costs, whose own research says that costs are rising on average at 13 per cent per annum, said after the Budget “Increasing the Child Care Benefit by 10 per cent takes parents back to the position they were in a year ago.”
Let me make it clear that Labor supports the increase in the Child Care Benefit. We think that any help the Government provides for families is welcome and long overdue. We are just sceptical of their sincerity, and doubt the Government has any real understanding of the pressures on families, because the Government has spent so long denying there’s any problem at all.
Our other concern is that this one-off increase won’t make a real difference to affordability for families because it will be absorbed by increased child care fees.
There have already been reports of centres increasing their fees by 10 per cent, the same amount as the Government’s CCB bonus.
According to one report in the Courier Mail newspaper on Thursday last week, one centre in suburban Brisance wrote to parents recently to explain their 10 per cent fee increase from the first of July, and that “the Government has increased the CCB rate from $2.96 to $3.37 per hour. This will make our fee increase a lot more affordable to families.”
Already the benefit of the increase this Bill implements will be eaten up by higher fees for families at this child care centre.
The newspaper article goes on to say:
“The nation’s largest childcare provider, ABC Learning, also is set to increase fees.”
The paper does not report what these increases will be.
On Sunday, Melbourne’s Herald Sun reported that the City of Port Phillip is set to increase daily fees from $66 to $76. An increase of 15 per cent. Glen Eira Council will also increase fees for children under two from $68 to $75, and from $64 to $69 for children aged three to five. That’s up a10 per cent increase for those families.
Labor is concerned that families across the country will miss out on the benefits of this increase because childcare operators use this one off increase to net a windfall gain.
Another report in the newspaper on Thursday also puts paid to another claim from the Minister and the Government. The Minister has been very quick to claim that there is no problem with child care accessibility in Australia. But parents know the reality, and just do not believe these denials by the Minister.
The Minister said in the parliament last week: “there is no shortage of child care for the zero to two age group, preschool age or any other age.”
A very categorical statement by the Minister on vacancy rates.
Well the Minister’s claims have been shown to be completely false by another recent report in the Daily Telegraph, and the headline that pretty much speaks for itself:
‘Yes there really is a crisis—Waiting lists refute Government’s child care claim.’
The article describes the situation faced by residents in inner Sydney. The article reveals that at the Waverley Child Care Centre there are 900 children on a waiting list for fewer than 70 places, with an average waiting time of more than two years.
And it is not alone. There are two other centres in the Waverley Council which have about 50 places and waiting lists of about 700 children each.
The children’s services co-ordinator of the Council told the Daily Telegraph: “You actually have people on the phone crying,”
It was also reported that the situation for places for newborns to two year olds was desperate.
So here we have direct evidence that contradicts the Government’s claims that there is no shortage of child care, and in particularly that there is no shortage in the nought-to-two age group.
The Government makes these claims about child care shortages at their peril. This is because the claims that there are no shortages are based on analysis that disregards parental choice. The Government’s claims about no shortages refers to availability in both family day care and in long day care. So when parents are told there are vacancies, the parent’s preferences for family day care or long day care are ignored.
Unlike the Government, Labor supports parents’ choice as to the type of child care they want for their children. We believe that there should be a range of care settings available, and that all should meet the highest quality standards. Unlike the Government we are not in the business of telling parents they should take one option for their child if they prefer another. Nor are we in the business of denying the reality for many parents that they can’t find the child care they need.
That’s what Labor has committed to addressing the shortage of child care in Australia, and have committed to a $200million investment to build up to 260 new child care centres on primary school sites and other community land. We want child care to be both affordable, accessible and of the highest quality.
The other child care measure in this Budget is to change the Child Care Tax Rebate from a tax offset into a direct payment administered by Centrelink.
These amendments to the childcare rebate are simply the Government finally delivering on a promise made at the last election.
At the 2004 election, the Coalition promised the rebate would be paid from 1 July 2005. But after the election the Treasurer made families wait until 1 July 2006 to receive rebates for the 2004-05 year.
Parents have had to wait up to two years to get their rebate.
Government should also be more honest with families accessing the rebate about the number likely to receive a payment of $8,000. In the recent Senate Estimates hearing, officials from the Families Department admitted that the average rebate per family would be $813. Minister Brough admitted a few days ago that many families would only receive about $300–$500 from the rebate.
Few families are likely to receive payments of the order the Government has claimed.
Not $8000 per child, but $800 per family. That’s the reality, stripped of the spin. In fact the Government won’t even own up to how few will get the full $8000.
Labor does support the decision to pay the rebate through Centrelink to ensure low income families accessing child care benefit from this assistance.
What is clear is that the Government only ever bothers to address child-care costs in an election year.
In addition to the two child care measures I have previously mentioned, this Bill also amends the Social Security Act to allow all students who received the Carer Allowance (child) Health Care Card (HCC) at the time they turned 16 years to continue to have access to a health care card while they are full-time students until they reach 25 years of age. At present only those students who qualify for a Low Income Health Care Card or an alternative income support payment, such as Disability Support Pension, have access to a concession card after they turn 16 years of age. This measure will help approximately 25,000 full time students aged 16-25 years, who are ex-Carer Allowance (child) care recipients, and Labor supports this extension. We believe fundamentally that all Australians should be able to access an education, and this assistance will help more young Australians with a disability to remain in education beyond the age of 16. We support this measure.
One area where this Budget failed was to provide a comprehensive agenda for early childhood. Labor wants a future for our children where their care and development are matters of national importance. The value of early childhood education and development is overwhelming endorsed by volumes of well documented research.
And according to the Australian Bureau of Statistics, 100,000 four year olds in Australia do not attend preschool.
The Government’s whole approach to early childhood is a mess. No coherent policy agenda. No clear directions.
In contrast the Opposition is providing fresh policy ideas and showing a new direction for early childhood education.
Labor believes that early childhood programs are an opportunity for foundational growth that all Australian children should have, and we will provide it to them.
Labor has committed to providing all four year olds with 15 hours of early learning per week for up to 40 weeks per year. We will provide $450 million each year in new Commonwealth spending to ensure this occurs, and to make sure this service expansion does not increase fees for parents.
Labor wants a fresh agenda for early childhood. We want to see child care accessible and affordable to parents, and maintained to the highest quality standards. We want to see early learning and development integrated with high quality care, to set our children on the path to future health and prosperity.
The Families, Community Services and Indigenous Affairs Legislation Amendment (Child Care and Other 2007 Budget Measures) Bill 2007 gives effect to three key measures from the 2007 budget—two of them to boost childcare programs for Australian families, and the other to extend the benefits of the health care card to certain young people with disabilities and severe medical conditions. The childcare measures in the bill are a major element of the government’s investment of an extra $2.1 billion for families with childcare costs. With this extra investment the total projected expenditure in child care over the next four years is $11 billion. Families will have more choice about participating in the workforce and more opportunities for quality child care.
The bill delivers a 10 per cent increase in the rate of childcare benefit from 1 July 2007, over and above the normal CPI indexation increase applicable from that date—a total increase for families of more than 13 per cent of their current rate. Families could get up to an extra $20.50 per child per week towards their childcare fees, depending upon their incomes. Over 730,000 families should benefit from the increase, and the Family Assistance Office will adjust families’ entitlements automatically.
The second childcare measure in this bill will convert the childcare tax rebate to a direct payment by the Family Assistance Office, thus improving and speeding up families’ access to the payment. The childcare tax rebate allows families to claim up to 30 per cent of their out-of-pocket childcare expenses, up to $4,000 per child per year, indexed annually. However, because the rebate is currently accessible through the tax system as a reduction in a family’s tax liability, families have had to wait up to two years to claim so that payment accuracy can be assured. Also, families with low or no tax liability may not have been able to claim their full childcare tax rebate entitlement.
The improved rebate will, from July this year, be delivered to families directly by the Family Assistance Office. Payments will be made at the end of each financial year in which childcare expenses have been incurred, following the lodgement of tax returns, and to all eligible families regardless of tax liability. A family could receive two childcare tax rebate payments, potentially a total of $8,000 per child, after July this year if they paid for child care in both the 2005-06 and 2006-07 financial years: one payment through the tax system and one through the Family Assistance Office. The new childcare tax rebate will be a big step forward for families managing their childcare expenses.
Young people with disabilities and severe medical conditions will benefit from the third measure in this budget bill, which will extend to them the healthcare card. Carer allowance child currently provides a healthcare card in the name of the young care receiver. However, this healthcare card lapses when the young person turns 16, and they will no longer have a concession card unless they qualify for a low-income healthcare card or they have access to a concession card through their qualification for an income support payment such as disability support pension.
Around 25,000 full-time students aged between 16 and 25 who used to be carer allowance childcare receivers will now be able to apply for a healthcare card in their own right. The new healthcare card will be valid for 12 months, and young people will need to reapply for it each year, confirming their full-time student status. This initiative will considerably help these young people and their families with the ongoing medical costs of managing their disabilities or medical conditions. This help with those costs will hopefully encourage students to continue their education and therefore their participation in the Australian economy in the long term. I commend the bill to the Senate.
I seek leave to incorporate my speech on the Families, Community Services and Indigenous Affairs Legislation Amendment (Child Care and Other 2007 Budget Measures) Bill 2007 second reading debate.
The speech read as follows—
There is an urgent need to solve the many persistent problems that plague child care and early childhood education in Australia.
Sadly the Government’s budget measures, while they might be nice election year gimmicks, are not long term solutions.
The budget does give belated recognition to the problem that many families have with childcare costs—although the Government’s response is woefully inadequate.
But the Government’s overall approach to early childhood education and care is still a mess—a mess the Government seems content to leave to the market place.
Where were the Government’s solutions to the lack of places, particularly for the under two’s?
There were no measures to deal with the child-care hot spots—the mal-distribution of child care services.
The Government’s own figures from the Child Care Access Hotline showed that up to 140 000 child care places sit vacant around Australia every day—or at least every week day.
At the same time the figures showed that there were 35 areas that had no vacancies at all.
Where was the solution to the lack of flexibility of many services? Or to the unsuitability of the places they are offering?
And what about problems with staffing and quality of care?
The Government’s approach to child care is always focused on increasing women’s participation in the workforce.
The aim is always about families using child care so that mothers of young children can get back into the workforce.
And that is certainly an issue. Given that there are many highly educated women not in the workforce because of caring responsibilities, helping those women into the workforce—if they are ready and willing to do that—would benefit the economy.
Access Economics report to the HOR Balancing Work and Family inquiry last year stated very clearly that if we do not get more women to take up paid jobs—particularly full-time jobs—Australia will fall short of the long term economic outcomes identified in the 2002 Intergenerational report.
And we are not making much progress on this. Participation by women aged 20-54, particularly for the younger women, has reached a plateau.
The Government’s response to the intergenerational report was to encourage women to have more babies—at the same time they tried to encourage mothers to stay at home with their children.
That’s why we saw the baby bonus and Family Tax Benefit (B) squarely aimed at stay-at-home mums.
Many women—an indeed men—want to stay home with their children especially when they are small, so measures to support this choice are desirable.
But some women want to return to the paid workforce—whether in a full-time or part-time capacity.
And for some of these women, lack of child care, high costs of child care and working hours that make it too difficult to provide care for their families keeps them out of the workforce,.
And the Government has done little to help these mothers.
For all this Government’s talk about increasing choice, the reality is that the Government has done little to help those mums who make the choice to return to the paid workforce.
Of course mothers—and it is mainly mothers we are taking about—should not have to take up paid employment if that is not what they want.
But for those who do want to go back to work, we should be making it easier.
That is why the Democrats are on record countless times extolling the virtues of a national paid maternity leave scheme provided by government, not as an impost on business.
It is why we have argued for enshrining the right to family friendly work practices in legislation—practices like
- the right to part-time work in their own job at equal pay and responsibility and
- the right to request flexible work hours and have that reasonably considered , and
- the right to paid family leave to care for sick children or parents.
All of which are really important for parents who want to meet their family responsibilities
None of these are unreasonable and are in line with what is offered in other countries—countries which are doing much better than Australia is when it comes to women’s participation in the workforce.
In fact the Government’s workchoices legislation is likely to make it more difficult for many women.
We are unlikely to see any moves towards certainty of hours being included in work contracts—something that is especially important for mothers with childcare arrangements to manage.
And of course the loss of overtime rates for working excess hours means that in those families where the dads were working long hours not only to put food on the table but also so that their partners could be full-time parents if they wanted, those families may not have that choice anymore. The mums will need to go back to work so that the family income doesn’t drop.
That might increase women’s participation but it’s not increasing families choices about how they manage their caring responsibilities.
To come back to the measures in this Bill, the increase in the childcare benefit is welcome—assuming that child care operators don’t simply increase their fees to gobble up this on-off 10% election year largesse.
But a subsidy rise of $2 a day won’t make much difference to families spending $70 or $100 a day on childcare.
And if we remember that childcare costs have been going up by 12% each year for the last four years, it doesn’t go far to make child care more affordable.
Independent analysis from the ANZ Bank undertaken for the Taskforce on Care Costs shows that childcare affordability has declined by 50 per cent in the last five years.
This one-off 10% increase simply takes people back to where they were a year ago. It doesn’t address long term issues of affordability.
And this doesn’t do anything to help out with access to places for under two year olds. The Government has continually ignored calls for higher subsidies for under twos.
The Government is determined to pursue a privatised, profit driven child care system and yet it is doing nothing to encourage services to provide care for the youngest children. Higher staff to child ratios make it more expensive for centres to provide the service and eats into their profit margins, so they simply don’t do it.
A targeted increase in the Child Care Benefit for that age group may have gone some way to delivering better access to care for babies and toddlers.
The Government needs to face up to the many failures of the system it is encouraging.
The Bill also deals—at least to some degree—with one of the absurdities of the child care tax rebate.
Once this bill goes through parents can at least look forward to receiving the money more quickly.
Currently, the childcare tax rebate is delivered as a tax offset. This legislation will change that arrangement and convert the rebate to a direct payment to families, eliminating the costly delays in the current system.
The Democrats and many others argued when the rebate was first announced that making people wait for the benefit would not help most families.
The Government is finally seeing some sense on this, although parents will still have to wait up to 12 months.
Yes that’s half the time they had to wait previously but it’s still an annual lump paid after the fact. It won’t help families pay their weekly childcare bills.
And of course the change coming into effect in July means that parents will get a double payment.
A cynic might question the Government’s sudden enthusiasm for changing the system so that people get two payments in an election year.
And of course it is worth noting that despite the Government’s frequent reference to up to $8000 most families won’t get anything like that. The average payment so far has been about $813—even doubled that’s only $1600.
Perhaps the biggest disappointment of this Government’s response to child care has been its continuing failure to pay any more than lip service to the issue of quality when it comes to early childhood education and care.
The Government refuses to take seriously the issue of improving early learning and development for our children.
Yes access and affordability are important issues.
But families are also understandably concerned about whether their children will be receiving quality care—an experience that will be good for them—that will help them grow and thrive and develop.
That is what they want when they send their children off to school. Why should they expect less because their children are not school aged?
Parents want a centre with a clean and friendly environment with adequate resources, where children will be able to develop a relationship with their carer and be exposed to appropriate activities that will help them develop and learn.
But the Howard Government is ignoring this in its quasi voucher system for child care.
It is encouraging to see that at least there is now talk about providing preschool for all 4 year olds. It should be a national shame that 100, 000 Australian 4 year olds still miss out on pre-school.
But we also need to be talking about quality education and care for younger children.
We need to be talking about age-appropriate learning and development programmes provided by qualified staff for children up to 4 years old.
This means real reform of child care and it means real vision.
Of course this means tackling some issues the Government doesn’t want to know about—like improving staff-to-child ratios.
A ratio of 1 staff member to 5 babies aged up to two years is not good enough. What happens to those other 4 children if the carer is feeding or changing one of the babies?
And while we’re at it we need a plan to deal with the lack of qualified and experienced staff.
We should not be hearing stories about childcare centres using work experience students and work-for-the dole helpers to help out with children.
We need to be moving towards a system where all child care workers have at least two-year equivalent post-secondary qualifications in early childhood development.
The National Children’s Services Workforce Study in 2006 found:
Overall, there is a projected net shortfall of 7,320 staff by 2013. Long day care has an estimated shortfall of 6,490 staff by 2013, outside school hours/vacation care are projected to have a shortfall of 1,011 staff, and occasional care services have a projected shortfall of 894 staff.
The government needs to act now. It needs to develop a workforce strategy that takes into account improved staff-to-child ratios, improves training and improves the supply of staff in the short and long term.
Encouraging people into childcare and keeping them of course means we also need to improve pay and conditions. Without this we will continue to see high staff turnover which means that the relationships between carers and children will be disrupted and the children will suffer.
Children are society’s responsibility and dollars invested on care for young children are far more effective than dollars spent at any other time in a person’s life.
The OECD Starting Strong report last year put Australia second-last of the 14 countries it looked at when it comes to spending on early childhood education and care services.
Yes the Government does spend millions on child care but it is doing little to make sure that money is an investment in our children and not just more money for share holder profits.
The third measure in this Bill is not related to child care but is also worthy of comment.
This Bill lets full-time students between the ages of 16 and 25 who are ex-carer allowance recipients continue to have access to a health care card while they remain full- students..
Easing the financial burden on students is always welcome and the Democrats welcome this measure.
Question agreed to.
Bill read a second time.