Parliament Updates

Supporting the Family Assistance Legislation Amendment

25 November, 2019


I rise to speak in support of the Family Assistance Legislation Amendment (Building on the Child Care Package) Bill. In July 2018, the government introduced its childcare package. At the time, the minister described the package as the biggest reforms of child care since the introduction of the Commonwealth Child Care Act in 1972. It goes a little way, but I call on the government to do more. The purpose of the package introduced last year was to simplify what had become a complex childcare system for both users and the sector. My children are now teenagers, but I remember the difficulty, the red tape and the complexity of the system not that long ago.

The two major reforms of the package introduce the childcare subsidy and the additional childcare subsidy, which will either fully replace or partly replace many of the previous payments. There are 1.1 million families who receive the subsidy, supporting the childcare needs of 1.6 million children. Funding allocated for 2019-20 will be $8.6 billion and this is expected to increase to $10 billion over the next few years.

There are problems with the package introduced last year. Families and providers are experiencing significant delays, confusion and additional paperwork to register for the childcare subsidy, and childcare subsidy entitlements are often being overestimated or underestimated, leading in some cases to overpayments and debts for affected families. Often providers have had to act as debt collectors and, with the government commencing data matching with the Australian Taxation Office, families are being issued with unexpected debt notices.

Providers, particularly those in my electorate, note there was much more flexibility and capability to support vulnerable and disadvantaged families prior to these changes. There is also considerable red tape in order to apply for the additional childcare subsidy. The vulnerable and disadvantaged families who most need access to a secure childcare environment—in particular, culturally and linguistically diverse Australians and families—struggle to navigate the system. The education department's March 2019 Child Care in Australia quarterly report also notes that the number of vulnerable and at-risk children who are accessing the wellbeing payment fell by over 20 per cent in the first few months of the new system, and the data shows that six per cent fewer children were approved for this payment compared to the same time last year. And despite claims that the new childcare system would put downward pressure on fees, fees actually increased by 4.9 per cent in the 12-month period to March 2019 and have increased 30 per cent since 2013. This is a huge cost and impost on working families.

This bill amends the provision relating to childcare subsidy and additional childcare subsidy in response to the feedback from families and childcare providers and early findings from the childcare package evaluation. Specifically, key changes of the measures include extending the eight-week enrolment lapse rule to 14 weeks to avoid the re-enrolment process for children returning to care after eight weeks. This will be particularly beneficial for children who attend only during school holiday care periods and is a welcome measure. In-home care will be integrated with the CCS legislation rather than being in regulations, as is currently the case, with the subsidy available to parents and providers.

The child wellbeing certificates will no longer be limited to 50 per cent of all children attending the service, with the 50 per cent rule being scrapped. This will enable providers to better meet the needs of children at risk of serious abuse and neglect. It will be a requirement that providers ensure that all educators have a current working-with-children check relevant to their state or territory, as well as their existing responsibility to inform the minister of the details of their working-with-children card and checks. Providers who made a mistake that leads to an overpayment of childcare subsidy to a family or are deemed to be responsible for an overpayment on review are liable for the debt to the Commonwealth, not the family.

Overall, the proposed changes that the amendments bring to the family assistance legislation are a step in the right direction to improving some of the issues identified and they're broadly welcomed by the sector. But there are concerns about the removal of the 28-day time period provision. This is not a change that's supported by the sector. It provides that a family's bank details and tax file number must be provided at the time that a childcare subsidy claim is made, and not within the 28 days after the claim is made as under the current rule. As the Childcare Alliance points out, this change, alarmingly, will make an application process, which is already administratively burdensome for families, even more complex and far less flexible and will unfairly impact on families experiencing difficulties, especially for applicants in circumstances of domestic violence and in emergency situations.

The minister has assured me that he's taken on board the serious concerns expressed about this measure and has tabled amendments to make an exception of this provision. I commend the minister for listening to the concerns and attempting to address the problem. However, the amendments still only provide that the secretary is to make a determination in some cases. The government's amendment are a minor remedy. I would strongly urge the minister to consider reinstating the 28-day period rule in the legislation.

Given the government is open to consultation and listening to concerns of families accessing the childcare system and of providers, it's an opportunity to examine other reforms that will improve the system. These could include providing a minimum level of subsidised access for all children. Children are missing out on a minimum level of subsidised access because their families do not meet the activity test, reducing their capacity to afford early learning services. The activity test is difficult for all families to navigate and is unnecessarily complex, particularly for those families with varying work hours per fortnight, along with those not proficient in English.

The turnaround time for families applying for a customer reference number and then the childcare subsidy can be up to two months. In addition, the current base provision of 24 hours per fortnight for low-income earners would better support the policy's objectives if increased to 36 hours. We could also ensure the currency of the childcare subsidy hourly rate. The subsidy is set at an hourly rate and is scheduled to increase annually in line with indexation. However, the indexation rate over the last two years has not kept up with the respective hourly rate increase for educators under the relevant awards, which means the scheduled childcare subsidy hourly rate increase does not necessarily keep up with the running costs for early learning service providers.

The current exemption to the activity test for children accessing a preschool program in a centre-based long day care service has been a huge success. If extended to children in their two years before school it would provide more children with access to an early learning program from the age of three.

We need to understand: where are we? Is Australia doing well in this space? The OECD have reported that Australian parents pay 31 per cent of their combined income towards child care. The average across the rest of OECD countries is 14½ per cent. Only 18 per cent of three-year-olds in Australia are in early childhood education compared to 70 per cent across the rest of the OECD. Australia's share of GDP devoted to early childhood education is 0.5 per cent and this is our future.

There are many young parents in Warringah and the issue of the cost of child care is frequently raised with me. Child care and early childhood education and care is a very real barrier to parents' capacity to work and children's opportunities in the future. If we want to boost our economy—and that is certainly very topical—let's help parents fully participate in the workforce. We still have considerable gender inequity in the workplace, where more improvements are needed to decrease the cost of child care.

Our children are our future. We need to ensure the best possible education outcomes are possible for them, and this starts from a very early age, in early childhood. Thank you.