Tuesday, 10 August 2021
Family Assistance Legislation Amendment (Child Care Subsidy) Bill 2021; Second Reading
This afternoon we're here to debate the Family Assistance Legislation Amendment (Child Care Subsidy) Bill 2021, and what we are seeing today is the government finally admitting that they've been keeping the foot on the neck of working families and hurting the mental state and wellbeing of Australian families as well as their economic security. Their need to bring this bill forward is an admission that their much-lauded changes of a few years ago have become a burden on Australian families, just as Labor predicted that they would. So, as we enter into this debate today, from the outset, it's timely for me to move a second reading amendment. I move:
At the end of the motion, add ", but the Senate notes that:
(a) most families receive no extra support from the government's changes to the child care subsidy;
(b) the government's changes do nothing to stop out of control child care fees;
(c) passage of the bill will allow the Minister to bring forward the commencement of the changes; and
(d) the government should deliver extra support to families as soon as possible".
Australian families have been left voiceless and disadvantaged by this government. One of the most pathetic news presences of recent times was the specimen from the coalition party room that said that women using child care were 'outsourcing parenting'. Access to affordable, quality child care is a fundamental cornerstone of economic participation in our country. It's a fundamental cornerstone of the economic wellbeing of families with children. In order to meet their family's needs, a parent needs to be working as a single parent or, in a two-parent family, often you need two parents working. This is the quality of the debate that the coalition had internally around these issues.
The government has wasted a lot of oxygen trying to deny many of the hard facts in relation to child care in our nation. Long day care fees have gone up by 2.4 per cent in 2020, and that included four months of their free childcare experiment—four months where fees couldn't go up at all. We've seen that overall fees went up by 2.4 per cent. They've hiked 9.3 per cent under Prime Minister Morrison's new childcare subsidy. Fees are now up 37.2 per cent since the election of the coalition.
But this government doesn't like to talk about this data. Their mismanagement is not only hurting the 'selfish' women who need the support of this package but also holding families back from work. There are almost 100,000 families in our nation not working due to the cost of child care. As a telling example of this, I had a senior psychiatrist in Western Australia come to me, just a couple of weeks ago, desperate that something be done about the cost and affordability of childcare because, as he said to me, the cost and affordability and inaccessibility of child care was contributing to his ability to recruit psychiatrists into the workforce, psychiatrists that support the developmental needs of children and, indeed, the mental health of Australians. The cost of child care is having an impact in so many ways. Research from the Front Project based on a survey of 1,700 families found 73 per cent of families say the cost of child care is a barrier to them having more children. What a sad and sorry state of affairs. And 52 per cent agreed that once the cost of child care is factored in it's hardly worth working.
Labor has always argued that the system is broken and that the system under this coalition government is completely busted. That's why we announced our own ambitious plan to make child care cheaper for one million families, a million families who need it most. The Morrison-Joyce government know this too. That's why they were pulled kicking and screaming into making the modest changes that we have before us in this bill today.
As we look at the bill itself, we can see that schedule 1 removes the annual childcare subsidy cap from the family assistance act so there will no longer be a limit on the amount of subsidy that families over a specified income year can receive. The annual cap was a terrible policy. It was always a terrible policy. It has served as a serious barrier to second income earners in a family, usually a woman, working the hours that they want and need and—in the kinds of skills shortages that we are facing in Australia currently, which are very evident in Western Australia—working the hours that our economy also needs them to work.It was such a bad idea. Nobody ever, ever recommended it. The Productivity Commission didn't when they were asked to design a new subsidy scheme by the government back in 2015. They certainly didn't include it in their design, so who came up with this idea? The social services minister did, and that social services minister was Mr Scott Morrison. Abolishing Mr Morrison's cap was a terrific idea, so great that it is already Labor policy and part of our plan for cheaper child care.
The amendments in schedule 2 will increase the rate of childcare subsidy by 30 percentage points but only for second and subsequent children aged under six up to a maximum rate of 95 per cent. As we know, this measure has been implemented through a two-phased approach to ensure implementation can occur as soon as possible, but allow sufficient time for the system to build support for the change in policy and to put in place integrity measures. These changes to the subsidy provide income, some extra support for some families, in a short period of time, and in that context Labor supports the bill. But it is a disgrace that there is not more help and more support.
The government's pre-budget announcement promised a lot, but, as this bill demonstrates today, it delivers very little. Like everything with this government, it is all flash and no substance, as we've seen again and again. The problem with this bill is that not many families at all will see a cent of extra help. Three-quarters of families in the system will still get nothing. The government announced a complex and restrictive policy that only benefits families with at least two children below school age in care. Families will need a mathematics degree to understand their subsidy under this new system.
Any passing analysis of the Labor and Liberal childcare policies shows unequivocally that the Labor policy provides more support to more families for longer. Eighty-six per cent of all families with children under the age of six in the system would be better off under Labor's policy. The vast majority of families with two children in child care and a combined family income of between just over $69,000 and just under $174,000 would be better off under Labor's policy. Any extra support the Liberals have in this package for families with two children is only temporary. It's ripped away when the family's older child goes to school, no matter that the older child is still likely to need after-school-hours care. What a ridiculous prospect—to give and then take it immediately away! How is a family supposed to continue to juggle participating in the workforce with two children if the extra support you put in place just suddenly disappears?
Labor's boost in support will be provided to every child for the entire time they are in child care. We will also get the ACCC to design a price regulation mechanism to shed light on costs and fees and to drive them down for good. The Productivity Commission, under Labor, will also conduct a comprehensive review of the sector with the aim of implementing a universal 90 per cent subsidy for all families. This is critical, in Labor's view, not only for working families, to get them participating, but indeed for the access of children to early childhood education and care. It's a plan that's good for families, a plan that's good for the economy and a plan that's good for children's wellbeing.
Here, today, we support this bill because something today is better than nothing. But it is little wonder to us on this side of the chamber that this government doesn't want to talk about its childcare policy. Those opposite know it is a pathetic scrap of a policy. The government's own workforce papers show that the workforce participation rate will fall even after these changes are introduced, and, with closed borders and people screaming out for jobs and skills in the economy, this is unsustainable. We need a strategy to lift participation in the workforce, and child care is key.
I have to say that only this government could design a childcare policy in the depths of Treasury that won't help working families more. We need to get Australians back working the hours they want and need and the hours our economy needs. Early learning and child care are absolutely fundamental to this. Labor knows this, but members of the Morrison-Joyce government clearly don't. Some of them clearly think that child care is just glorified, expensive babysitting. There was even talk in the coalition that aiding working families was forcing women back to work, as though respecting a woman's right to work had been a new and unexamined prospect for the coalition up until this point. I have to ask: what century are we in here? It is 2021, and we have members of the Morrison-Joyce government shaming parents for using child care and needing a reminder to respect the right of women to choose how to balance their work and family life. I know that juggling children and work can be difficult in terms of creating a balance, but how is only being able to afford two or three days of child care a week and, in order to work the other days, juggling informal care contributing to the quality of that juggle? These are not choices that the coalition is offering families and especially women. It is completely and utterly out of touch.
It is embarrassing that this government has taken this approach and has delivered to the nation this quality of debate around these issues. To make matters worse, they even called for more incentives for women to stay home. This ignores the structural incentive they've created to encourage women not to work—their record-high childcare fees. It ignores the fact that many women and families do work full time and only access child care for some of the days during that week. Sometimes they survive well with grandparental care, but sometimes informal care is an inconvenience— (Time expired)
[by video link] I speak to the Family Assistance Legislation Amendment (Child Care Subsidy) Bill 2021. The bill removes the annual cap on childcare subsidy, CCS, payments to families and increases the maximum rate of the childcare subsidy for second and subsequent children where a family has more than one child under six years of age. These are the two measures that were announced in the 2021-22 budget. The measures, once implemented, will clearly provide some amount of relief to some families from the expensive and burdensome cost of early learning and care, and for that reason the Greens will support the bill. Any funding boost for early learning is welcome, but let's be real: the proposed bill will not fix the fundamental problems with the current system of early childhood education and care, which is underfunded, with some of the highest fees in the world. The most sensible and equitable move would be to make child care universal and free. Expensive early learning has held women, children and families back for far too long. The benefits of free early learning and care for families and the whole community are beyond doubt.
While I'm talking about children, their education and their future, I can't not talk about the very dark cloud hanging over their lives—the cloud of the climate crisis. The IPCC report that came out yesterday was devastating. Science and scientists are telling us that, even under the most ambitious emissions reduction scenarios, the world is now likely to heat to 1.5 degrees or more above pre-industrial levels by 2040. The other big tragedy is that the Liberals have tied our country to the least ambitious targets, while they spruik coal and gas, and the Labor Party—
This is a bill, Madam Acting Deputy President, about our children's future and their education, and this government is burning the future of these children we are talking about today: children in Australia and across the world who are hurting and who will be hurt and harmed even more if action on climate isn't taken. But rather than safeguard and protect our children's future we have a federal environment minister arguing and appealing against a landmark court ruling and saying that she does not have a duty of care to protect Australian children.
We have a second reading amendment which Senator Faruqi will soon foreshadow that she is speaking to. I note the tradition that second reading contributions are generally fairly broad-ranging, and I am in entire agreement with Senator Faruqi that, for a bill that addresses the future of children, it is entirely appropriate to be also speaking about the climate crisis.
Thank you, Madam Acting Deputy President. There is a second reading amendment which I foreshadow. Here we are talking about children, their education and their future. There is a definite need to talk about their future under the devastation and destruction which will happen if we don't take immediate and urgent action on climate change. And kudos to the children who took the matter of the Australian government's responsibility towards them to the court. It is a pretty shameful abrogation of responsibility towards our children and the next generation by this government and the environment minister, who are appealing against that landmark court ruling—that the minister doesn't have a duty of care to protect Australian children from the climate harm caused by the potential expansion of a coalmine. It does cause harm to children and the next generation. The government, if they don't act on the climate crisis, are nothing but climate criminals and environmental vandals. My colleague Senator Waters will be moving a second reading amendment to highlight the impacts of the climate crisis on children and their future. It should be our top priority to do something about it. This bill just tinkers around the edges. It is way past the time of tinkering around the edges and procrastinating on real and lasting change.
The government loves to talk up its incremental minor changes to the childcare subsidy as a huge win for families, but, on the face of it, that is not the case. Many families with a single child in care will not receive any benefit whatsoever. Even this bill before us today is flawed by design. The government was rightly criticised in May, when the package was announced, for its measures not coming into effect until July 2022. That's 14 whole months between the announcement by the education minister and actual fee relief in family's pockets. We will have had a federal election by the time these measures come into effect. The minister may not even be the minister by the time this is all implemented, and I hope that he isn't. Come next election, I hope that the people of this country would have kicked out the Morrison government and the Greens would be in shared power so we can push for creating a fairer and more equal society. But there are a few months to go before this can become a reality. Women, children and families can get some relief from extra payments right now. From the providers that I have spoken to, there seems to be no good reason why the start date could not be brought forward. The government has pointed to the complexity of changing IT systems. I'm sorry, but, in the age of COVID-19 when we've seen how systems can be redesigned and payments can be reprioritised seemingly overnight when deemed urgent enough, that doesn't cut it at all.
In any case, I note the education minister, in his second reading speech, said:
It is anticipated we will be able commence implementation by July 2022. Should it be possible to bring the commencement of the measure forward, we will do this so that families can benefit sooner. That is why the bill makes it possible for earlier implementation, with the date to be set by proclamation.
Clearly, the minister is feeling the heat. I will be moving an amendment at the committee stage that will bring the date forward to 1 July 2021 so families can realise the benefit of the package now. I ask senators to support this amendment because it provides certainty and doesn't leave it just up to the minister and their whim to decide what the date will be and when it can be.
More generally, we need to think in much bigger and more ambitious ways about the future of our early learning and care system. The dire state of affairs for early learning and care in this country requires nothing less of us. This is the first time during the health crisis that the government has grudgingly recognised that child care is an essential service, and thousands of families have benefited from that. The pandemic has opened up a conversation about the long-term viability of our existing approach to child care. This is an opportunity too good to let slip away.
There is a compelling case for free and universally available early childhood education and care, and it would have enormous social and economic benefits for our community. Too often women have to give up work and career opportunities because child care is too expensive or just not available. Children get the enormous benefit of early education when it is accessible for all. Removing all barriers to access not only creates equity but also has a huge pay-off for the whole society. So let's stop entrenching gender inequality. Let's stop deepening intergenerational inequality. Let's make corporations pay their fair share. Let's tax the billionaires into oblivion. Let's not hand back public money to the wealthiest in society, and let's use some of these funds to invest in making child care universal and free.
We should also be expanding publicly provided services to families so families aren't reliant on for-profit centres—because education is not a business. It's time early childhood education was funded and provided as the essential service that it is. We should also be ensuring fair and decent pay for early childhood educators. Early childhood educators should receive professional pay, reflecting the skill and responsibility of the work they do every single day.
On that point, I want to make a special mention of early childhood educators following the release of a report from Big Steps and the United Workers Union this morning. This was a survey of more than 3,800 educators. It found that the sector is at breaking point, with high turnover, low pay and no plan from the federal government to fix it. The report makes for very alarming reading. It tells a story of government neglect, an undervalued workforce, privatisation and an essential service delivered on the back of burnt-out staff. Just a few statistics from this report illustrates this dire situation. Thirty-seven per cent of educators said that they do not intend to stay in the sector long term and, of this group, 74 per cent intend to leave within the next three years. Over 60 per cent of educators said that they have often come to work or stayed at work sick due to staff shortages. Seventy per cent of educators surveyed said that they always or often worry about their financial situation.
It is a national shame that early educators are taken for granted in this country. Staff are leaving in droves and, frankly, the sector is in crisis. We should not be in a situation of chronic understaffing and high turnover. The government needs to completely rethink its approach to early learning and care, and that means strong and sustained investment to make early childhood education free once more and a workforce that deals directly with issues of low pay and understaffing. I have a second reading amendment that calls for the Senate to reaffirm that child care should be free and universal for all children and that workers and educators in the sector deserve higher wages and better conditions to reflect the immense value of their massive contribution.
I also want to indicate that the Greens will be supporting Labor's second reading amendment, while acknowledging that it does not really go as far as to address the issues facing the childcare system. While this bill allows the minister to bring forward the commencement of the changes, it doesn't make sure that it actually does happen. That's why I will be moving an amendment to bring the date forward. Ultimately, while this bill does provide some relief for some families, and the Greens support that, it's still a tiny step forward in a long journey that we have to embark upon to ensure that our early learning system is equitable, universal, appropriate and there and available for all families.
I too rise to speak in support of the Family Assistance Legislation Amendment (Child Care Subsidy) Bill 2021 and I really do take great pleasure in doing so. Step by step and reform by reform we are making child care more accessible for Australian families, particularly for those families that most need it. This builds on the previous reforms that we have made to the childcare sector which have made a significant difference to families and which have also been well received by industry and childcare providers. This bill represents this next step. It gives effect to the Morrison government's commitment to make child care as accessible as possible. It is all about supporting families and backing them in the workforce safely knowing that their kids are getting the best possible care.
This bill targets additional supports to all CCS-eligible Australian families who have more than one child aged under six in child care. This is around 250,000 families, who will benefit by around $2,260 per year. That's a significant number of families, from right around the nation, and they're going to see the practical impact of what we do here in this place. That's what it's all about. While those on the other side are often hell-bent on scoring political points, using the most inappropriate topics—we've just heard contributions along those lines—we're over here plugging away, putting in place the reforms that deliver a practical outcome for Australian families. We're listening to them. We're delivering for them. We always have, and we always will.
Those on the other side often couldn't care less. They're more concerned about the things that do quite the opposite: undermining the vaccine rollout, playing politics with the pandemic. But over here we're talking about a reform that is going to impact 250,000 families across the nation, putting money back into their pocket. That's what we committed to do at the last election, and that's what we're following through with here, even with this bill.
From the middle of next year we will increase the childcare subsidy available to families who have more than one child under the age of six in child care. This means that families who have more than one child in child care will see their level of subsidy increase by 30 percentage points to a maximum subsidy of 95 per cent of fees paid for their second child and subsequent children. Around 50 per cent of families who benefit from the measure—those earning less than about $130,000—will receive the maximum 95 per cent subsidy for their second child and subsequent children. These families will pay, on average, $21 a day for two children in child care. Around 95 per cent of families who benefit from the measure—those earning about $250,000—will receive a subsidy of at least 80 per cent for their second child and subsequent children, paying, on average, $73 or less per day for two children in child care.
We'll also remove the $10,560 annual cap on the childcare subsidy for families earning over $189,390, benefiting around 18,000 families. This means that families with multiple children don't exhaust their childcare subsidy cap sooner in the year for younger children. Those families shouldn't be at a disadvantage—quite the opposite: we need more Australians to be having kids. As Peter Costello famously said, have one for mum, one for dad and one for the country.
These changes will put more money into the hands of Australian families, especially those who need it most. Those on the lowest incomes will continue to receive the highest rate of subsidy. This is a core principle of our childcare subsidy. It will ensure that families are supported to access affordable early learning and care. The activity test remains in place to ensure that families are undertaking activities such as working, training or studying in order to be eligible for childcare subsidies. This is a very sensible measure. This measure reduces workforce disincentives for families and encourages parents—especially second-income earners, who are more often women—to go back to work or to work more if they choose to do so.
What does this mean in practical terms? It means that families who have two children in care for five days a week, 50 weeks of the year, and are earning $60,000 will save $52 week, will be entitled to an 85 per cent subsidy for their first child and a 95 per cent subsidy for their second child and will receive $936 in a weekly subsidy, with an out-of-pocket cost of $104. Those earning $100,000 will save $102 a week, will be entitled to a 75.4 per cent subsidy for their first child and a 95 per cent subsidy for their second child and will receive $886 in a weekly subsidy, with out-of-pocket costs of $154. Those earning $180,000 will save $156 a week, will be entitled to a 50 per cent subsidy for their first child and an 80 per cent subsidy for their second child and will receive $676 in a weekly subsidy, with out-of-pocket costs of $364.
Across the year, the average savings for families as a result of these changes will be $783 for families earning under $70,000, noting that these families already receive a very high subsidy for all children in care; $1,650 for families earning between $70,000 and $120,000; and $2,804 for families earning between $120,000 and $150,000. This support is targeted towards those who need the most assistance. Sixty per cent of the additional investment goes to families earning under $180,000. The maximum childcare subsidy rate will increase to 95 per cent for the second and subsequent child, which means lower-income families, who already receive very high levels of childcare subsidy, will still benefit from these changes. Importantly, all types, except in home care where a family rate is paid, are covered. The measure is primarily intended to support children attending long day care and family day care as this is where most children aged under six attend child care.
It is important that the government assistance remains targeted to ensure that it is sustainable over the long term. This government believes that these settings strike the right balance between providing targeted assistance to those that need it most while maintaining fiscal responsibility. Other models recommend providing assistance to high-income families, including those earning well above $350,000. Those models go against our core principles for the childcare package.
For me, it is all about choice. I know that there are a variety of views in this place on child care. That is fair enough. But this is about giving Australian families options, letting them make the decisions that impact on them based on what works for them and what they think is in their best interests. If parents want to put their children in child care and continue to be in the workforce, pursuing a career and supporting their family, that's great. They ought to be supported to be able to make that choice. If a parent decides to remain at home then that is also good, if that is what is in their interests and what they want to do for their family. This isn't a one-size-fits-all policy for families; they need to decide what's best for them and their own families. They are in the best possible position to do that. It's not our place as legislators to be dictating to Australian families what they need to be doing. It is up to them to decide. That's what we are doing. We are backing them to do that. We are backing them. We are backing them with both of those options. We are providing that choice. These are thoroughly Liberal policies.
With that, I believe that we should keep working to make child care more accessible to those that want to take it up. This bill is just that next step, but it isn't the end. We need to keep plugging away, consulting with parents, providers and industry to continue to make reforms which make child care sustainable, accessible and of the highest possible standard.
One thing I believe that we should be looking at as part of this next step in support and in continuing with these reforms is policies such as income splitting. We know that the early years in a child's development are the most critical. Splitting income for taxation assessment purposes will provide further choice to parents. It will also simplify the options for parents, including supporting a parent that chooses to stay at home or even facilitating informal paid childcare arrangements with grandparents and the like. Income splitting will go a long way to making child care even more accessible to families and backing them as they plan for their financial future. It is something that I strongly believe we should be putting forward in the next tranche of reforms.
This bill supports choice. It backs Aussie families and it will put more money back into their pockets. I commend this bill to the Senate and I commend, indeed, the Morrison government for backing families to make the right decisions for their own circumstances.