Monday, 23 June 2014
Family Assistance Legislation Amendment (Child Care Measures) Bill 2014; Second Reading
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.
I rise today to speak in opposition of the Family Assistance Legislation Amendment (Child Care Measures) Bill 2014 in its totality. It is a regressive attack on Australian families. Not only is it a regressive attack; it is a sneaky attack. The government are not being up-front with Australian families about what they are doing. They are attempting to walk both sides of the fence. On one hand, they are saying that their Productivity Commission report is going to be the Holy Grail of child care. Meanwhile, in the midst of all the other nasty elements in this budget, they are about to force Australian families to pay between $3,000 and $6,000 a year by cutting the amount of support offered through the childcare benefit and the childcare rebate. It is just another step along the way of this government's attack on families, particularly those families who are struggling week in week out to meet the rising costs of living and the rising costs of child care.
The proposed changes will have a significant impact on families by making child care less affordable and therefore less accessible. We know from questioning in the Senate estimates process and the recent inquiry into the affordability of child care that over half a million families are going to cop higher fees as a result of the legislation we are debating today. Half a million families are going to cop a rise in childcare fees and be struggling to meet costs when their childcare bill comes in each week. Families with a household income of around $60,000 are going to lose $3,000 a year if this bill proceeds. Families on over $47,000—right down in the income bracket—will be hit with higher fees and less government support. For families with an income on $60,000 a year, who are going to be hit with an extra $3,000 year, that is over $50 a week. It is actually $57 a week more that families are going to have to be finding in order to cover their childcare fees. Families with household incomes of $150,000 per year will be hit with an extra bill of $6,000 a year, or $115 a week. Yet the Abbott government did not let Australian families know they were planning this before the last election. They have sneaked this trough the system, hoping Australian families would not find out that they are about to be slugged with a whole lot of extra fees—on top of the already increasing fees in this sector that families are struggling to pay every week.
We know that families are already copping the highest childcare fees in history, which have gone up by about 150 per cent in the last decade. Many families are forced to pay in the vicinity of $80 to $170 a day—and that is if you can find a childcare place. If you speak to families, you work out pretty quickly that most people have to get on the waiting list long before their baby is even born—if you are able to get into a centre that is close to your home or close to your work, that is convenient enough for the care that you need on the days that you need it.
We know that there is a struggle to find a place for children in the younger bracket—the nought- to two-year olds, the baby rooms, are where parents are struggling the most. Yet the cost of child care continues to rise day after day. In my home state of South Australia, parents are paying well over $80 a day just to put their child into a well-qualified, caring childcare centre.
We know from reports over the last few days that mothers are struggling to balance their books. Going to work and having to pay for child care, while going back into the workforce, is costing Australian mothers dearly. Mothers are only taking home a fraction of their earnings because of skyrocketing childcare fees. A mother from a low-income family who returns to work part time will lose up to 69 per cent of her income on taxes and the cost of childcare. Mothers on the minimum wage are effectively working for just $3.50 an hour, once you take into consideration the cost of child care.
This government's attempt to pass this legislation, with very little explanation and honesty with the Australian people, is nothing short of shameful. They are trying to sit on both sides of the fence. I heard the minister responsible for this area last night and over the weekend talking about the need for more support for Australian families. Meanwhile, she is ushering through massive cuts to household budgets and pushing up the cost of child care to half a million families across the country.
Let's be totally upfront about this. This is a cost-savings measure by the government. It is not about improving the quality of child care, it is not about improving accessibility and, obviously, it is not about improving affordability for families. This is about saving money for the government. Why are the government desperate to save money with their harsh cuts? Because they have not been prepared to stand up to the big miners, big banks and big business to ensure that those who can afford to pay their fair share pay up. Instead we see Australian families being slugged over and over again. We have the $7 co-payment. Every time a parent needs to take their sick child to the doctor, they are going to be taxed for it. Every time they need to buy medicine for their sick child, they are going to be taxed for it.
This attack on the affordability of child care is just another item on a long list of attacks on affordability for Australian families. I will be moving a second reading motion which will go to this exact point. Rather than the government raising revenue where they could easily find it if they had the guts—by ensuring we had a proper tax on the big miners, ensuring that banks pay their fair share in terms of a levy and ensuring that we raise money from the places that can afford it—they are attacking students, low-income families and families who have children in child care. This is an attack on the sick, the young and the working family.
The Productivity Commission is due to release its draft report only in the next couple of weeks, and yet here we have the government riding roughshod over whatever the Productivity Commission comes up with, in order to scramble back $350 million for the government coffers because they could not make the decision to tax those who could afford it the most. The government is not being upfront with Australian families about this. Where was the big announcement from Tony Abbott that he was about to cost Australian families on $60,000 a year an extra $3,000, an extra $57 a week? That is what parents who have their kids in child care are going to have to start coughing up. An extra $57 a week is a big hit on the household budget.
Where is the discussion about investing in the early childhood education of our children? Where is the big discussion and commitment to ensuring that those who care for our children and educate our children in these centres are the best qualified people they can possibly be? They deserve to be paid properly for those skills, that commitment to the sector and their ability to care for and educate the nation's youngest citizens. Rather than supporting those who care for our children, we are seeing the government take the axe straight to family budgets, putting pressure on childcare services to increase their fees further and to reduce the number of places available, making what is already a pressure cooker in terms of accessing and affording quality child care even harder for Australian families.
I asked some questions about this during the Senate estimates process. How many families were going to be impacted? Half a million. In fact, over half a million families are going to be impacted by this. What modelling did they do on what families would do if they could not afford the massive hikes in the fees that will result if this legislation is to pass the Senate? There has been very little modelling done, not much discussion, no consultation. This is all about penny-pinching by Tony Abbott, penny-pinching off Australian families who are already struggling to get their kids into good quality child care, to get to work and get back again to pick them up on time before they get charged even more. It does not take rocket science to work out that Australian families are struggling with the rising costs of child care and to find appropriate places for their children.
The Greens will be voting against this legislation in its totality and we reject the freezing of the indexation in relation to the childcare benefit, which will affect half a million families. We also reject the freezing of the childcare rebate cap, which will affect another 105,000 families. I urge the Australian Labor Party to do the same. We heard from Senator Carr that the bill will be split by the Labor Party to allow them to vote for one of the cuts but not the other. I urge the Labor Party to reconsider that. This is a bad piece of legislation that is going to hit Australian families immediately. This is a bad piece of legislation that should not pass, because all it does is allow Tony Abbott off the hook. Raising an extra $350 million by slugging parents who have their children in child care is not fair.
We heard Mr Hockey from the other place, swanning around the country only a week ago, trying to tell Australian families that the budget was fair. What is fair about forcing mums and dads to pay more when they have to go back to work five days a week, struggling to drop their kids off at child care, maybe another one at school—doing the double drop-off—and struggling to get out of work on time in order to pick the kids up at the end of the day before they start getting charged an even higher indexation of fees? What is fair about saying to those families: 'Because we don't want to make the miners pay their fair share, because the big banks continue to get left off, you are going to have to cough up an extra $3,000 a year—$57 a week'? What is fair about that? I would like Mr Hockey to explain how, if he were on $60,000 a year, he would have afforded an extra $57 a week just to ensure that his children had good quality child care.
The thing is, while we need a transformation or an overhaul of how we fund child care and early childhood education services in this country, while we need an overhaul of how we view and respect the importance of looking after our children at this most critical time, while we need an overhaul of the pitiful wages that are paid to those who care for and educate our youngest citizens, you cannot just keep cost-shifting the burden to Australian families.
Let's have a discussion about how we make the funding of early childhood education services and care more sustainable as a nation. Let's have a discussion about the fact that—and these are not my figures; these are the figures of the World Bank—for every dollar that is spent on early childhood education and care, the return is $17. For every dollar that we spend, we get an extra $17 return if we invest in early childhood education services. But we are not having that discussion, because this government just wants to sneak through a budget savings measure that is going to hit Australian families who have their kids in child care and to take the axe to the affordability of that care and education.
I think that many people out there in the Australian community, parents who dropped their children off at child care this morning and will be racing from work to pick them up at the end of the day sometime between five and six o'clock, will be really shocked to know that this government is about to hike the affordability of child care for their family. Whether it is an extra $57 a week or an extra $115 a week, it is a massive hit on their family budgets and it is going to have a devastating impact on the number of places available in childcare services.
There are some other attacks on early childhood education as announced by this government in the budget. They are not all in direct relation to this legislation, but very concerning nonetheless. There is the lack of commitment to funding preschool and kindergarten, to the universal access to kindergarten and preschool. I am very concerned that we are about to see $400 million passed up because we do not have commitment from this federal government to keep that scheme going. They are going to push it back to states and blame the states, making it even for difficult for Australia's youngest students, our preschoolers and our kindergarten kids, to access good quality early education prior to going to school. We know how important that early intervention is when it comes to the academic development and the social development of children.
We have seen this government cut the JET program, which is about supporting young mothers who need to be able to educate themselves in order to get back into the workforce or find a pathway into employment. That JET program is about to be cut as well. So while we have the government out there saying that every young person under 30 now needs to earn or learn, what they have done for those young mothers who are under 30 and who are struggling to afford the cost of child care and being able to get themselves back to TAFE or uni or to do a diploma or certificate to get themselves back into the workforce, is to cut the amount of access they have to childcare support while they are studying. So earn or learn—except if you have children. If you have children, just suck it up! That is basically the attitude of the Abbott government. It is not fair. It is not good enough. It is an attack on not just the wellbeing and social and educational development of the nation's children, but it is also an attack on Australian families who deserve better, and who thought better of the coalition prior to this budget being handed down. The Greens will vote against this legislation. I will be moving a second reading amendment as circulated in the chamber.
I rise today to speak in opposition to Abbott government's harsh and cruel cuts to the early childhood sector in this country, and I do so from the really fine record of the Labor government's achievement in this area. In fact, the Labor government has been the only government in the history of child care in this country to really look at not only access and affordability but also quality education and care for Australia's young children, one of the most vulnerable age groups in our community, those children between the ages of nought and six who attend long day care, family day care and occasional care services in our country every working day of the week.
Labor's record is a proud record. We came to government with a policy about early childhood education and care. One of the very first things the Labor government did was to increase affordability for families by taking the childcare rebate, the non-means-tested rebate, and increasing it from 30 per cent to 50 per cent. So Labor's record in terms of families using early childhood education and care is there on the record.
But we did not stop there. We went further. For the first time ever not only did we promote the workforce participation of primary carers—and in this case, usually women—we also looked at the brain development and what young children in early childhood education and care needed. The academic research is very, very clear that the optimal brain development is in the first three years. So Labor did a number of other things and, not only that, Labor did that in consultation with all of the states and territories and with the agreement of all sorts of different governments across this country, who all agreed through the COAG process that it was time to really put a focus on early childhood education and care in this country.
Not only did Labor do that in consultation with state and territory governments, but Labor also went out and had community consultations across the country. Every state and every territory had a range of consultations during the day and in the evenings so that the community both educators, those working in the early childhood education and care sector, parents, owners and operators, were able to have their say about the sorts of reforms that Labor felt were necessary for the early childhood education and care sector in this country.
We did that through phasing in those changes. One of the first things we did to take advantage of that early brain development was to introduce an Early Years Learning Framework to standardise the sorts of development opportunities for early childhood centres to participate in across the country. I would have to say that I took part in those consultations and they were really, really well received by the sector. The sector felt that the Early Years Learning Framework was something that would positively assist the development of the experiences that young children were receiving in early childhood centres.
Labor did not stop there. We then embarked on looking at the ratios. Prior to Labor coming into government, if you were a carer in Tasmania compared to, say, a carer or an educator in Western Australia and you were in the under-twos, in Tasmania you were expected to care for five babies—one educator to five babies. So one of the things Labor did very early on was to standardise those ratios—because why should children in Tasmania have poor ratios when children in Western Australia were enjoying a ratio of four babies to one educator? With the agreement of states and territories, Labor moved federally to reduce ratios and to improve them across the country. Again, there was consultation with the states and territories, consultation with the community and a phased in approach which is still going on as we speak.
Labor has a proud record when it comes to early childhood education and care in this sector. What we know about early childhood education and care in this sector is that around 70 per cent of centres are run by a single operator or operators who operate one or two centres—and these are private operators—and around 30 per cent of the long day care sector is run by community organisations. We then turned to what the Abbott government, when it was in opposition, looked to do in terms of a policy. You would have to look really hard because it does not really have a policy. In fact, what we saw was a lot of chatter and a lot of rhetoric by Mr Abbott when in opposition and, indeed, from Susan Ley when she was the opposition spokesperson on early childhood education and care. They seemed to be focused on two areas. One was cost to families, and, yes, cost to families should always be at the forefront of our considerations.
But what the Abbott government did when in opposition was simply blame Labor for increasing costs when it acknowledged that it is a market. Child care in this country is a market, and it is up to those single operators to determine the price. Interestingly, the then opposition supported private business but did not seem to understand that child care in our country is largely a private business. In opposition and in government the coalition promotes competition but does not seem to promote competition in the early childhood space. In fact, they seem to ignore it.
We saw the Abbott government do two things. It does not have a comprehensive policy on early childhood education and care. It flicked early childhood education and care off to a Productivity Commission inquiry. In doing so, it completely abrogated its responsibilities in relation to early childhood education and care in this country. It flicked a report off to the Productivity Commission and asked the Productivity Commission to look at how to make child care more accessible and more affordable. I am not quite sure why a government would abrogate its responsibilities to the Productivity Commission, but that is what it has done. A draft report is due out soon. The final report is due out sometime in October. But, as we know, it is really up to the government as to when that report sees the light of day. Given that October is getting towards the end of the year, I doubt—although I would like to be found wrong on this—that the report will see the public light of day until early next year because the government does not have to do anything at all. The release of the final report is clearly in the government's camp, so let's see how long it will take them to release the final report.
The other thing Mr Abbott did prior to the election was write to every childcare service in the country complaining about the high cost of child care. Yet what we have seen this government do in the budget, for the first time in our history and for the first time in the history of early childhood education and care in this country, is attack the childcare benefit. The childcare benefit is paid to low-income families—it is a means tested rebate—because families right across our community need child care to enable parents to go to work. But the government has chosen, for the first time ever, to cap the upper limit of the childcare benefit. That will deliver a very significant saving to the government. During Senate estimates I tried to get some response from the government about what that money—that savings measure of over $200 million—was going to be used for. All they could tell me was that it would go into general revenue into the childcare space. But they had no targeted plan about helping very low income families into child care—nothing, complete silence.
In relation to the affordability question, which for some strange reason the government has lumped on the Productivity Commission, it seems—and you hear this in their rhetoric every day—that they like the Australian community to believe that somehow Labor failed to address the increasing costs of child care and somehow it was our fault. The government is trying to paint a picture that shows it can control the costs of child care, even though child care is largely a private market in Australia. So in Senate estimates I asked Ms Wilson, one of the department officials, about this and she said:
The market is the market; we do not intervene in the market.
So here we have, seemingly, a direct contradiction from Mr Abbott, the Prime Minister, and Ms Ley, the minister for early childhood, implying that somehow they can control the market, when their very own department, in Senate estimates, says very clearly that the department does not intervene in the market. So let's see what rabbit Mr Abbott pulls out of the hat once we get the Productivity Commission inquiry report sometime in the future.
The other interesting piece about the Productivity Commission inquiry increase is that, in opposition, Mr Abbott was very, very clear that he wanted to take the envelope that is currently available for childcare benefit and childcare rebate and ask the Productivity Commission how to stretch it even further. At the time, Labor warned that doing that would mean costs would increase for parents.
We do not even have the final Productivity Commission report. We do not know what ideas the Productivity Commission report is going to include. But we already see the Abbott government increasing costs for the users of child care in our community by capping the childcare benefit. That means that as parents' income increases and they go beyond the cap they will no longer be eligible for childcare benefit. And the government has extended the cap on the childcare rebate. So there are huge savings that the Abbott government are making at the expense of working families in our country. That is absolute hypocrisy.
We have a government that has no plan for child care, despite what it said in opposition—no plan at all, except its referral of the whole matter to the Productivity Commission. You would have to ask why it didn't wait. Why did the government choose, during the budget, to really hit working families through the changes it has made to the childcare benefit scheme and to the recapping of the childcare rebate? We will see market costs continue to increase in child care. NATSEM has a report out this morning that shows it is barely affordable for low-income families to work. We had figures quoted where the primary caregiver—usually the woman—earns as little as $3.45 an hour. It demonstrates how critically important it is for both parents in a family to be working—or, indeed, to have one parent working—when women, in the main, are working for as little as $3.45 an hour and they still need that very low hourly rate to contribute, to try to balance their family budget. Mr Abbott has made it much harder for those families to make ends meet. Never mind all of the other harsh and cruel outcomes for families in the recent budget, like the $7 GP tax and all of the other imposts that families are going to suffer in our country. In the one area where we had some certainty the government has now created uncertainty. Those low-income families will be very concerned about losing their childcare benefit and the childcare rebate, that it will not be able to sustain them for the whole 12 months that they need child care.
The NATSEM report goes even further. It reports—and this has been known for a while, too—that the childcare rebate benefits those families at the top end of the income scales, those who are more able to afford care. What will this mean for families? It means they will probably cut back on using quality early childhood education and care, so vital for the development of their children. We will see cutbacks. We may see a greater use of unregulated backyard care. That is certainly not good for families. It would be a terrible decision for working families to have to make. I am sure that we will see, where grandparents are available, a greater impost on grandparents to take up the caring responsibilities.
Is it the response of the Abbott government to say to families, 'You're on your own'? Time and time again I have heard in this place the government saying that it is the responsibility of states to provide education and health, and on and on it goes. Obviously the Abbott government has taken that to a new low by saying to families, 'Actually, the responsibility for early childhood education and care is yours and yours alone, because we are interfering with the childcare benefit, and while we are at it we are going to cap the childcare rebate.' They are doing this almost on the eve that the draft report of the Productivity Commission inquiry is due out. Why would a government do that? For two reasons. One, they demonstrate very clearly their complete misunderstanding of the early childhood sector in this country. Two, they are so intent on making budget savings that they do not really care where they come from. Attacking the lowest paid in our community by this move on the childcare benefit is really a disgraceful act. It is quite disgraceful.
It is hypocritical, too, given that the Productivity Commission, as we speak, is looking at accessibility of affordable care. What a mockery that is, when the Abbott government has now made care more expensive. Do we now have an addendum to the Productivity Commission? 'Oh, by the way, can you look at what we've done in the budget and include that in your recommendations?' At the eleventh hour they are suddenly changing the whole of the Productivity Commission inquiry, because we have a whole new rule applying to childcare benefit, that the Productivity Commission may or may not have the time to take into account. But, given the draft report is out shortly, I doubt that it will be able to.
As I said, the Prime Minister personally wrote to all centres about the impact of capping the childcare rebate—that is something Labor did—saying that it would mean increasing out-of-pocket costs for families. Yet in the budget we see that the Abbott government has done just that. What hypocrisy. What hypocrisy to say on the one hand, before the election, so desperate to win votes, that somehow they could control a market which their own department says they cannot, that they could somehow try and hoodwink parents into thinking that the government could control the costs. Parents know full well, because it is parents who are fronting up to services in this country every day of the week, who are forking out greater and greater amounts of out-of-pocket expenses, thanks to the Abbott government. They know the truth. Mr Abbott and his minister, Ms Ley, will not come out and say the truth, but families experiencing those rising costs will know every day of the week—will know very clearly—who increased their out-of-pocket expenses. They will know it was the Abbott government who, before the election, in a hypocritical way, tried to pretend something quite different.
So I do not know how long Australian families are going to have to wait before we see a comprehensive, detailed plan and policy from the Abbott government, maybe never. Their record in this area is really poor. They went to the election with a promise they certainly could not keep, and we have seen an absolute breaking of that promise by this move on the childcare benefit which will impact low-income families. The Abbott government is no friend of families; that is for sure. Not only will they increase childcare costs but will also increase a whole range of things that families have taken for granted such as visits to the doctor. This is absolute hypocrisy from the government which clearly does not care about the early childhood education and care sector.
I to rise today to make a contribution on the Family Assistance Legislation Amendment (Child Care Measures) Bill 2014. I rise because, once again, those on the opposite side of this chamber are attacking families. We get a new surprise in this place every week—that is, one of broken promises, not the sort of surprise that the Australian community deserves. This government will be remembered for being a government of broken promises, a government which attacks low- and middle-income families, and a government that destroys the principal of egalitarianism—a principle that makes this country the greatest country in the world.
The Assistant Minister for Education, Sussan Ley, bragged last week that this bill would only affect families on $41,902 and above. She stated in the other place:
The CCB measure will not impact families with incomes below $41,902
According to this government, it is okay. But I say that those people on the government benches in this place and the other place should hang their heads in shame. This government's own department has admitted that over 500,000 Australian families on low incomes of just $42,000 per annum will be hit by this measure. We know that many of them will be hit the hardest because this is not the only measure in this heartless budget that will affect these low-income families.
Early Childhood Australia modelling suggests that some of the lowest-income families will need to pay between $3,000 and $5,000 extra next year because of these cuts. Those on the other side may think, 'Oh well, what is $3,000 or what is $5,000?' But, on top of the cuts that this government has made that will impact on Australian families, that is a lot of money. Let us not forget that they are going to have to pay—unless we are able to stop it in this chamber—$7 extra when they go to their family doctor. They are going to have to pay more for their medicines—that is, if they bother to go to the pharmacy to fill their prescription. That is more money they are going to have to spend when they go and have a pathology test—that is, if they bother to go. Because those on low incomes and those families with only one income or even with two low incomes will have to think twice now about whether they can afford child care, whether they can afford to go to the doctor when they are sick, whether they can fill their prescriptions at the pharmacy. These are the things that are confronting Australian families today and into the future because of this heartless budget by this government. The Abbott government continues to make attacks aimed squarely at the low- and middle-income families of this country, and this bill will do exactly that.
Senator Bilyk here in the chamber worked in this sector for 12 years. She knows that sector inside and out. She knows not only about the impost it is on Australian families to be able to afford child care, particularly when the mother of the family returns to work, but she also knows that the workers in the early childhood sector have not had the recognition in the past that they deserve.
As I said, this is an election commitment that was delivered not by just a minister but by Tony Abbott himself. He promised that there would be a fair go for families. He has not delivered that. More than 970,000 families across Australia rely on early education care and support on a daily basis. They could all stand to lose support under this bill. Before the election, this government promised more affordable child care and early education. If they were serious, they would not have cut almost a billion dollars since coming to office. What did low-income families do to deserve this? That is what people are asking themselves in the community. These are unprecedented measures. This is a vindictive government and Tony Abbott has broken his word. It is very simple; he has broken his word. Labor will not support the Abbott government's chaotic, contradictory and, frankly, warped approach to women's workforce participation put forward in this bill.
This is a government which engages in misleading and deceptive conduct, a government which strives to hurt working families. Further, in an unprecedented move, the Abbott government is seeking to freeze indexation, not just the non-means tested childcare rebate but also on the income thresholds of means tested childcare benefits. This bill cuts $336 million of childcare support from low- and middle-income families who rely heavily on this assistance. Australians across the country rely on this assistance. This government is doing this. I cannot believe that, once again, they are attacking those that need the assistance most.
At the very same time, this government is pursuing a multi-billion dollar Paid Parental Leave scheme accessible for those millionaires who do not need that support. But, no, those on the opposite side and the Prime Minister himself talk about a 'rolled gold roll out' of the Paid Parental Leave scheme. Well the Paid Parental Leave scheme that the opposition, when in government, delivered to the Australian people has been supported. It is already helping the men and women of this country to be able to take parental leave. Who is given a benefit from the government's scheme? The top end of town. That is what those on the government benches are renowned for—helping their millionaire mates. That has always been their mantra, and that is what they are still doing.
Tony Abbott's scheme is extravagant and unfair. Labor does not support providing multimillionaires with tens of thousands of dollars of taxpayers' money when families are battling to make ends meet. It is not right that when pensioners are battling to make ends meet, when families raising children with disabilities are battling to make ends meet, that $22 billion—not million, $22 billion—of taxpayers' money is being paid to millionaires. We need money to go to the right priorities—low income families and families struggling with the cost of living. This bill attacks that very notion. This government needs to scrap its Paid Parental Leave scheme; it needs to go back to cabinet and it needs to reflect on struggling families and families which are struggling to live from pay cheque to pay cheque. This bill moves to cut modest, targeted and means tested child-care support for families earning as little as $42,000 a year. It is an extraordinary demonstration of this government's wrong priorities. Are we really surprised? Unfortunately, we are not, because this government has broken promises left, right and centre since being elected to government. How out of touch those on the opposite side of this chamber are with the Australian people beggars belief.
The education department estimates the change to the CCB alone will leave over 500,000 families worse off, but that is where the information stops. We all know that this government is attempting to rush changes through this place without reflecting on how they will affect Australian families across the country. This is a policy on the run. It is a policy which does not take into account the burden imposed on families struggling to make ends meet—struggling to pay for child care in this country, when we know how expensive early childhood education and child care already is and how difficult it is to get a child-care placement. This bill is deceptive—it has been rushed through in a very sly manner. I note that this is the very first time that the means tested child-care benefit is to be frozen. This bill specifically targets those families who may otherwise leave the workforce. These cuts are aimed squarely at those who can least afford it. This government today seeks to undermine its own Productivity Commission review into child care by attempting to make these drastic cuts just weeks before parliament views a draft report on child care in Australia. This is hypocrisy by those opposite and the Prime Minister of the highest order. A responsible government would not even pursue these wide-reaching CCB changes without understanding the full impact, without receiving its own Productivity Commission's review report and without letting families have their say. This government must stop simply making up policies affecting families and recognise that these ill-conceived cuts will have a massive impact on family budgets and decisions about returning to work.
The opposition cannot support the Family Assistance Legislation Amendment (Child Care Measures) Bill 2014 because, first, the government has failed to provide sufficient information about the impact on families of the changes to the child-care benefit; second, the government has not completed an assessment of the impact on workforce participation of the changes to the child care benefit; third, the changes to the child-care benefit should not be legislated just weeks before the Productivity Commission inquiry into child care and early childhood learning provides its interim report; and, fourth, families have had no chance to have their say on these changes. For these reasons this government should hang its head in shame. It should cease this continual attack on Australian families. Never before have moves to cap the CCR come before the parliament without savings being reinvested directly into early education and care. Because of this freeze, 74,000 families will reach the CCR cap in 2014-15, and 150,000 will reach the CCR cap in 2016-17—a total of around 15 per cent of families. The government knows the impact of this cap will grow in time through bracket creep, but the savings put forward on the CCR alone, through freezing the cap until 2016-17, will see over $160 million cut from child-care assistance for Australian families.
Before the election Tony Abbott gave a commitment to the people that there would be no change to pensions. What happened there? Of course there are going to be changes. He also said there would be no changes to aged care. Once again, that is another broken promise. He also said there were no plans to change child care. In fact, he was going to put more money into child care. Clearly that is another broken promise. It is quite clear that this government has no plans when it comes to early childhood education and child care. As I said only last week when I spoke about aged-care, my area of responsibility, it is clear that this government has no plans for aged care except, once again, they are ripping $1 billion out of the aged-care budget that was going to ensure that those working in the sector would receive some further remuneration for the work that they do. As I have said from the outset, this is a heartless budget—a budget that is affecting those in our community who can least afford it. It is an attack on Australian families at a time when we should be supporting those women who want to return to the workforce. We should be supporting those women who are already on very low incomes when they do get back into the workforce. Shame on those opposite, because that is not what this government plans. The government campaigned on making childcare more affordable, yet every act they have taken will do nothing but reverse that, stripping away a billion dollars from early education and care, $450 million from out-of-school-hours care—gone; $157 million for family day care services—gone; programs to increase childcare places—gone; Indigenous child and family centres funding—gone; $300 million to support educators' wages—gone. And now an attack on the backbone of the childcare system—the CCR and the CCB cut.
This government have no vision. They have no plans in relation to health, but we do know the plans they have for education—more cuts to education. If you can afford to go to university, you will come out with a mortgage. So those young people starting out their lives in a new family will not only have a mortgage from their university studies and the opportunities they took to gain gainful employment, but if they are lucky enough to be able to buy a home, they will have a second mortgage as well. This is a government that is clearly out of touch. It is an arrogant government that will not consult with the community; it is an arrogant government that will not acknowledge that those who are on the opposite side of the chamber have something to contribute.
As a Labor government, mistakes were made. But when it came to the fundamental principle of fairness and equity, we were there as a government. We gave the Australian pensioners the biggest increase they have ever received, because we recognised how hard it is for them to make ends meet. We know that they are the people who have helped to create the Australia that we have today. We know the importance and the value of having women in the workforce, so we introduced a paid parental leave scheme. We also did the back-breaking work of introducing policy when it came to the aged care sector—we were the ones who took the challenge and created a decent aged care sector. We wanted to ensure that those who work in the sector are respected, but those opposite are about tearing it down. They are not supporting older Australians. Those on the opposite side may laugh, but I am really quite surprised that those government senators who are in the chamber today would snigger at those sorts of comments, because I thought that at least they were two women who had a heart in this country. But no; they have stood by and supported a government that is heartless, and attacking those who can least afford it in this place.
I am really disappointed to have to be here today in this chamber criticising the government for yet another attack. It is not something you naturally want to do when you come into this chamber, because I am quite happy to give credit where credit is due. I always do that. But I will always speak up for the Australian community, and it is my own state of Tasmania that is going to be hit hardest by the cruel and callous lack of proper priority from this government's budget. We also have an ageing population, and that sector is going to be hit hard by this government. I also know that when it comes to early childhood education and childcare, Tasmanian families are going to be hit very hard. I took the opportunity when I was invited to walk in the shoes of an early childhood educator—and I doubt that anyone on that side of the chamber did that. Having been a mother of two myself, I already knew what it was like to take responsibility for caring for and raising children. But I take my hat off to those men and women who work in the early childhood sector, because they do a fantastic job. The government should be putting more money into that sector, because they are shaping the adults of the future—those who are going to pick up the mantle and continue to build this great country of ours.
I am very saddened to have to speak on this bill in this chamber today, but I urge the government to change its position and to support those in our community who need it most, and to stop attacking Australian families.
I indicate that I will not be supporting this bill as the cost implications of these measures on working families are far too great. There has been a real political blame game in relation to childcare, but may I note that famous phrase from former Prime Minister John Howard, who talked about 'the barbecue stopper'. The issue of childcare is one of those barbecue stoppers, because if you do not have affordable childcare, if fees are continuing to rise, if benefits and support for people to have their kids remain in childcare is diminished, then that will have a major impact on families in this country.
We know that the purpose of this bill is to affect the current childcare rebate, the CCR, retaining its annual limit of $7,500, and the current childcare benefit, the CCB, which will have its income tax thresholds at their current levels for three years from 1 July 2014, so basically the limits will be maintained and the current benefits will be maintained. But normally the CCR limit and the CCB income tax thresholds are indexed on an annual basis in line with movements of the consumer price index, so these measures effectively constitute a freeze on the annual indexation of these amounts, and the consequence of that is to make them less affordable.
I think it is important to put this into perspective. The former government implemented the National Quality Framework, which, unambiguously, is a good thing in terms of childcare. But there are costs associated with that, and my concern is that under the NQR, additional support has not been given to the childcare sector, and that additional cost pressures have been placed on the childcare sector. That needs to be acknowledged in a bipartisan way: that the NQR, with all the benefits contained within it, is actually going to cost more, and that unless you have greater government support for the sector, such as greater rebates or improvements to the childcare benefit, it is going to make childcare less affordable. And what is the consequence of that? The Australian Childcare Alliance, in their submission to the inquiries currently before the Senate—one moved by my colleague Senator Hanson-Young and the other moved by myself—made the point that removing disincentives for women to enter the paid workforce is a very, very significant issue. In their submission they quote the Grattan Institute report which reinforces the economic imperative of improving affordability, particularly for female workforce participation. The report said:
Removing disincentives for women to enter the paid workforce would increase the size of the Australian Economy by about $25 billion per year. The most important policy change is to alter access to Family Tax Benefit, and child Care Benefit and Rebate so that the second income in a family—usually, but not always, a mother—takes home more income after tax, welfare and child care costs.
That is what the Grattan Institute says.
The risk is that, if you reduce the incentives, if you call them back, if you make it less attractive for families to have their kids in child care by making it uneconomic for them to do so, you will go backwards. Our economy would miss out on an extra $25 billion a year in GDP and we would actually go backwards. From some figures I have seen, if you had a significant reduction in the number of women in the workforce, there would be a cost to GDP in the order of $25 billion. So we are talking about a $50 billion differential here.
At this stage, I want to inject the government's proposed Paid Parental Leave scheme into this debate. I do not support it. I do not support it because I believe the policy focus ought to be on making child care more affordable. The Paid Parental Leave scheme, whether it is gold plated, platinum plated, silver plated or copper plated—it does not matter what it is plated with. Even if it is scaled back, it is something that, philosophically, does not make sense. We ought to be ensuring that we have greater participation in the workforce, particularly by women, by making child care more affordable. This bill takes us further away from that—is making us go backwards. I urge the government to reconsider its position on the Paid Parental Leave scheme. I hope that the wise heads in the coalition—those who are prepared to say that this scheme will take us backwards—prevail on this issue. It would effectively make child care less affordable.
The policy imperative, the barbecue stopper that John Howard so famously talked about, is affordable child care. Constituents stop me in the street to say, 'If childcare fees go up another $5 or $10 a day, I am going to forget about staying in the workforce, because it is just not going to be economic.' We know that this has been a political football. We know that this is an issue where it is easy to get involved in a blame game.
In The Australian on 22 June, there was an AAP story by Katina Curtis. Citing a new report, the story said:
Childcare costs have skyrocketed 150 per cent in the past decade, with only electricity and tobacco prices rising at a faster rate.
You can understand why tobacco prices have gone up. Electricity prices are another issue altogether. Ms Curtis's article continues:
Parents returning to full-time work after having a child can now expect to lose up to 60 per cent of their gross income to childcare fees, loss of benefits and higher income tax rates.
That is not the way we should be doing things. We need to look around the world to see which countries are dealing with this issue better. Some provinces of Canada have a much more comprehensive system in place and their level of female participation in the workforce is significantly greater.
The Australian Childcare Alliance made an excellent submission to the Senate inquiry into the delivery of quality and affordable early childhood education and care, or ECEC, services. Their report said:
The ACA Parent Survey 2014 and ACA What Parents Want Survey 2013 highlight that the high cost of care is a determinant of families' ability to access ECEC. More than 60 per cent of families indicated that they would increase their use of childcare if cost were not a barrier.
Respondents to the parent survey also highlight that when fees increased by 10 per cent, approximately 48 per cent of parents would decrease their usage of childcare by one or more days or withdraw completely from care. This result is exacerbated with a 20 per cent increase in fees, where more than 70 per cent of families indicated that they would reduce usage by one or more days or withdraw completely.
We need to take that into account. This is not the way to go. I believe these measures are foolish. Mr Acting Deputy President Bernardi, I know it is unfair of me to address you while you are in the chair—because you are not able to interject—but I wonder if you will be raising this at your National Press Club speech in a few weeks' time?
I cannot support this bill. I can think that this government has inherited some real problems from the former government. The former government put a framework in place—very worthy, very laudable—but there was no funding for it. That has led to an increase in childcare costs. This is not a greedy sector. This is a sector doing its very best. The for-profit, the not-for-profit and the community childcare centres are all trying to do their best to deliver quality care and education for children, but life has been made difficult for them—and this bill will make things even more difficult.
We need to address those issues as a matter of urgency. I believe that this bill will make child care much less affordable. I am grateful to the wise heads in the Australian Childcare Alliance for their submission. Indeed, all the submissions made to that inquiry—from the union movement and from the not-for-profit sector—made a lot of sense. By freezing the indexation of this support to families for child care, we will see more and more women leaving the workforce.
I want to take issue with what the assistant minister, Susan Ley, said this morning on Radio National. I acknowledge that the minister has a difficult job in grappling with the challenges of this sector, especially given the current budgetary environment. I acknowledge that and I acknowledge her genuineness in trying to deal with these issues. But I take issue with the government when they say, 'We will look at these issues once the Productivity Commission inquiry has been dealt with.' I suggest that this government is capable of walking and chewing gum at the same time. It can deal with the immediate issue of ensuring that child care is not made less affordable. This bill makes child care less affordable. I do not think we can use the Productivity Commission inquiry as a smokescreen, cover or excuse not to act now on this immediate issue.
The Productivity Commission inquiry will be important, but I believe that we need to reject this bill. The government has to go back to the drawing board and that includes having a good hard look at the Paid Parental Leave scheme—what it will cost and what the benefits would be if we scrapped that scheme and looked at making child care more affordable. That to me is the real barbecue stopper for working families out there in the suburbs.
I rise to make a contribution to the debate on the Family Assistance Legislation Amendment (Child Care Measures) Bill 2014. My children are right in the middle of this debate—my grandchildren are in child care and my children and their partners are trying to make decisions about what they can and cannot do. I think Senator Xenophon is absolutely right: this is the barbecue-stopper conversation.
I spoke to a group of young women on the weekend who were talking about their child care options and the implications of this bill, and the cuts they represent. They were actually making those kinds of decisions and choices. They were saying, 'Okay, I'm going to have to cut back my child care.' I had my daughter and son-in-law looking at me and saying, 'After 1 July perhaps you could mind the children one day a week.' These kinds of things are being suggested to me for post-retirement!
What brought it home to me was the fact that in the weekend media I saw Minister Andrews talking about the importance of productivity, and arguing for wider participation rates by women in the workforce. He talked about the fact that because we have an ageing population we need to be more productive. At the same time that I am having this conversation with young women, all of whom are young parents, I am thinking about the investment that has gone into their education, their university time, their skills and training, and the fact that they are making decisions about withdrawing from the workplace, to withdraw their productivity from working, simply because the economics of child care do not stack up for them.
It is very interesting that several people have also mentioned the NATSEM report, which was issued at the weekend. It is a fascinating report and I commend it to everybody. On the one hand we have the government spruiking workforce participation, clearly aimed at promoting the Paid Parental Leave scheme as a way of ensuring that mothers remain in the workforce. The evidence really is that child care is the issue. The impact of paid parental leave on workforce participation is actually minimal. The impact is to do with child care. The National Centre for Social and Economic Modelling report really bells the cat. Child care costs have gone up 150 per cent over the past decade, and while government subsidies for child care have risen to $5 billion, that is not actually enough.
Can I take you back to where one of the crises in childcare costs occurred, and that was with the collapse of ABC Learning. People will remember that a former minister, Larry Anthony, was a director of ABC Learning. I watched across New South Wales as ABC Learning actually consumed community based childcare centres across the board. Then, with the collapse of ABC Learning, communities were left with very few options. It actually made a significant contribution to the way in which childcare costs have increased.
So there is nobody in support of the measures we are debating today. Other than the government, not one person to whom I have spoken can see the logic of putting all of your eggs into the basket of paid parental leave and abandoning the vexed issue of a very complex childcare system, one that is also underfunded.
The major stakeholders, who have had much to say in the media and to the Senate inquiry, include people like Early Childhood Australia; Family Day Care Australia, who are very concerned about what is happening to them; the Early Learning Association; and the Australian Childcare Alliance. I recommend that latter's submission to everybody here in the chamber because it actually lays out well and truly what the impacts will be. Also there is the Goodstart Early Learning Network and the National Welfare Rights Association. Even the Australian Industry Group is arguing that the cuts would not be necessary if some of the expenditure allocated to the government's Paid Parental Leave Scheme was redirected.
So the nonsense we have before us today really is that, again, it is an ideologically driven position that the government wants to pursue in this measure. Several speakers have talked about broken promises—the promise that there will be no cuts to education, to health, to child care, to pensions and to universities. But what really gets my goat is that the Prime Minister wrote to childcare centres and promised them that he was going to address the affordability issue. He said that caps and freezes on childcare assistance would have the impact of increasing out-of-pocket costs for families. But now he is doing exactly that. He is actually driving up the cost of child care to such an extent that people are making serious decisions about the affordability of child care and what that will mean.
The report on the weekend provided some very interesting information. On the subject of affordability, page 15 of the report says:
Government subsidies, such as the Child Care Benefit and Child Care Rebate, have meant over the long term out-of-pocket child care prices have not increased much faster than the CPI, but the concern is around recent price growth and the likelihood of further rises.
That is what really has parents concerned. The report continues:
Child care prices have increased by 44.2 per cent in the past five years and, in the absence of additional Government assistance, family out-of-pocket costs have risen at the same pace.
The report shows five-year price increases of 44.2 per cent for child care, 78.9 per cent for electricity, 25.8 per cent for health, 31.9 per cent for education, 36 per cent for petrol, 6.5 per cent for food, 21.6 per cent for rent, and the CPI increased by 13.9 per cent.
All of those issues are issues that this government is targeting in one way or another. If out-of-pocket expenses were only happening for child care, perhaps parents could cope—but it is not just child care. I listened this morning to a young mother saying on the radio, 'Well, I just have to think about all of these things. I have to think about an increase in child care. I have to think about parking. I have to think about road tolls. I have to think about losing my support for study.' It gets to the stage where people are in a huge level of stress. The reason that they are in stress, it seems to me, is not just because of childcare costs; it is the cumulative impact of all of these costs. It is really very significant that the Paid Parental Leave scheme is part and parcel of the government's contribution to this debate.
The NATSEM report actually suggests that paid parental leave is a nice thing to have, but it will not impact on whether you return to the workforce. That was a discussion confirmed by the young women I spoke to on Saturday. It will not make much difference to workforce productivity and it certainly will not do much for low-income families. It is a $5.5 billion program where the more you earn, the more you get, so it is regressive. It is so logical it is regressive. It has no obvious benefit for workforce participation, whereas child care has the biggest impact in workforce participation, as well as positive outcomes for early learning among children. There is good evidence that you get better educational outcomes from investing in good-quality child care and this in turn benefits the workforce and increases government tax revenues in the long term.
There is no logic in the measures in the bills before us. It is quite illogical. There is the frustration that we have about the almost one million families—978,000 families rely on child care on a daily basis—who all stand to lose some level of support under this bill. The bill has a cumulative impact. There is $450 million that is being lost for outside school hours care. That was all part of the debate that we were having just a few years ago about the double drop-off. Now, funding to that program is going.
As I said, the Family Day Care services are very concerned that they are copping a hit of more than $150 million to those programs. That is the largest childcare service in Australia. Support to parents who are completing studying and getting back to work has been cut. The programs to increase childcare places have all been cut. Look what the government has planned for Indigenous child and family centres: that funding has disappeared. $300 billion that was to go into supporting the quality framework and educators' wages is gone.
Now, we get right to the heart of the childcare rebate and childcare benefit. It really is a disgrace, as every other speaker has said here this morning, and something that we really should be thinking about in terms of policy coherence. What are the messages that we are actually sending to our communities? What are the messages we are sending to our employers? What are the messages that we are sending to our young men and women? What are the messages that we are sending to our older folk about the way in which we value supporting families, keeping their stress levels to a minimum and understanding the value of education, the importance of the early years and the formative learning that goes on in childcare centres?
What are we forcing people to do? They are back to having conversations like, 'Grandma might be able to mind the kids while mum goes back to work,' or they are back to looking at working shift work, with some people doing nights and some people doing days, and never actually having the chance to spend time as a family with their children. It is a very, very backward step.
The notion that we wait for the Productivity Commission report is also nonsense. We have a situation where we have already had one report. We have had this significant report, which confirms the Grattan Institute report, and now we are having continuing considerations by the Productivity Commission. That draft report is coming down in July, so why are we rushing through this bill now? Why not wait for the draft report in July and the final report in October? No, instead we will just railroad through this whole process now and get it done as an ideological position.
The minister and the senior minister—the Minister for Social Services—have said that the Productivity Commission will solve those issues of affordability, availability and flexibility. Well, why are we here having this discussion if everything is going to be resolved? With the collapse of ABC Learning and the way in which that rippled across workplaces and communities, we saw that the issues of affordability, availability and flexibility are things that require long-term planning; wide consultations, which is something that this government has proven again and again that it just cannot do; and people actually being listened to, stakeholders being listened to and parents who understand the demands being listened to. They are parents who understand that they might be travelling for two hours a day to actually get to their childcare centre and who need some flexibility.
There are challenges around the workplace, which is not nine-to-five anymore. People work at all hours and 24 hours a day. How do we provide that kind of care? It is not going to come from radically cutting childcare rebates and childcare support in this haphazard way, it is going to come from a very comprehensive, well-thought-through process in which everyone is able to have a say. We are looking at solving an issue that is an issue for the nation. It is not an issue for just one part of the economy. Child care is one of the most frustrating and difficult challenges for employers. It is not just a challenge for families and employees, the unions or the childcare industry. We have a huge challenge ahead of us if we are looking to lift the nation's productivity. It is a national challenge that we should all be seeking to address in a really sensible and sensitive way.
I want to point out one more thing about the affordability issue before I conclude. The report that came out on the weekend from NATSEM followed a very significant piece of research it undertook around the issue of regional differences in costs and where the least affordable childcare, as a share of disposable income, was in Australia in 2013. What struck me was that, of the 10 locations identified in New South Wales, Queanbeyan has the second-least affordable childcare in Australia at 8.6 per cent and then Goulburn-Yass at 8.3 per cent. Here we have two regional areas in a large part of New South Wales—very close to home for me—where the childcare stress is exactly what I was talking about to the young people on the weekend. There is a lack of affordability, there is a lack of accessibility and there is a lack of flexibility. This bill does nothing to address any of those issues. I urge people to reconsider. I urge the government to hold off until the Productivity Commission brings down its report on a comprehensive way in which we can address this issue as a nation.
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.
I move the second reading amendment standing in my name:
At the end of the motion, add:
but the Senate is of the opinion that, rather than punishing families, revenue should be raised from big miners, bankers and polluters through:
(a) applying a 'public insurance' levy on the big four banks that are too big to fail;
(b) removing fossil fuel subsidised fuel for big mining companies;
(c) retaining the billions in revenue from the carbon price;
(d) implementing the original super profits mining tax;
(e) imposing a millionaires tax;
(f) taxing discretionary trusts as corporations; and
(g) imposing a levy on thermal coal imports exports.
I foreshadowed this amendment in my speech on the second reading. This amendment is due to the fact that families are being asked to pay for the budget savings of this government, rather than those who are in a better position to help raise revenue—that is, big miners, big banks and big business.