Parliament Updates

Zali Steggall speaks in support of cheaper childcare

25 October

I rise to speak in support of the Family Assistance Legislation Amendment (Cheaper Child Care) Bill 2022. Affordable, high-quality child care has many benefits to our society, to children, to their parents and to the economy. So what does this bill do? The government claims that around 96 per cent of families with children in early education and care will be better off and that none will be worse off, that families with a combined income of up to $80,000 will receive 90 per cent of childcare support for their first child in care, while families with a combined income of up to $530,000 will receive childcare support increase with the rate of subsidy tapering one per cent for every $5,000 earnt above $80,000. Currently, subsidy caps cap out, or stop, at $356,756, so it's a big increase to go up to that $530,000 cap. Second and subsequent children five and under will retain the higher childcare support, recognising the increased financial burden of multiple children attending child care. There are also targeted measures to improve access for First Nations families and staff of the childcare sector. Finally, there are amendments to increase the integrity, transparency and reporting requirements for childcare providers, including greater transparency of gap fees. This will assist parents enormously.

So why is this bill so important? For children, we know high-quality early childhood education and care is robustly associated with positive outcomes at school entry and improvements in social development. This is an investment into our future as a nation.

Affordable child care is important for gender equity and the economy. As the minister has noted, families with two or more children in day care are finding substantial financial disincentives for one parent to work more than three days a week. Overwhelmingly, the mother is the one who works part time. This has a significant effect on career progression and women's superannuation.

I, like many in this place, can speak from experience of the juggle of child care. I used everything available, from my years studying to my years practising as a barrister, from public child care to family day care to long day care centres and, of course, to that group that we often don't acknowledge enough: the grandparents who are often filling the gaps in our society—unpaid and unrecognised, but doing so much to assist in actually keeping most families afloat.

There's something that we haven't talked about much in this discussion: how difficult it is sometimes, with the pressure and inflexibility within our childcare systems. Take the pick-up time: I don't think there is a parent out there in Australia that has not been stressed at the idea of the deadline for pick-ups. I just don't know who came up with the hours in the first place of what a traditional day of child care should be, because very few workplaces actually have similar work hours. So that gap between long day care centres and other childcare centres, and just being able to cover that full day, is so incredibly difficult. And what about weekends for people that are rostered on or working on weekends? There is very little that I'm aware of in the way of childcare availability when it comes to weekends. And that's where you fall back on grandparents. So I think that, in looking at how this area needs to be further developed and strengthened, there should be consideration of people who work hours other than the traditional nine to five—noting that child care often caps out at three, so I don't know what was intended about the nine to five!—and recognition of that assistance from our community, from grandparents, and of what they do, and of that carers' time that so many older Australians put in to our economy.

The Business Council of Australia recognises this aspect of child care when it comes to women's participation in the workforce. They noted in their submission to the Senate inquiry:

Increasing the workforce participation of women is one of our nation's biggest economic and social opportunities.

The provision of an affordable and accessible and quality child care system is fundamental to that goal.

If parents are supported with access to quality child care in order to participate in work, education or training, the broader benefits to the economy are manifest.

And it is so incredibly tough. I remember taking my son to university on the weekend because there was no child care available and I had to go to university lectures. I remember doing the juggle, which can be incredibly difficult when starting out in a profession. I think we really need to think about this system, this area of work, which absolutely underpins so many others.

So I welcome the government's initiative and the budget commitment of $4.5 billion over the forward estimates, but I'd like to make some more observations. The maximum childcare subsidy of 90 per cent of the fee cap begins to taper after a combined family income of $80,000—just that. The latest earnings report from the Australian Bureau of Statistics revealed that average full-time workers make $92,029 per year. Even with two parents on an average wage, the childcare subsidy benefit begins to erode. With childcare costs rising 41 per cent over the past eight years, and Australia's inflation rate predicted to be more than seven per cent this year, any benefits of this legislation may quickly vanish. I note that, prior to COVID, childcare costs absorbed some 18 per cent of household income for an average-earning Australian couple with two children, compared to the OECD average of 10 per cent.

One of my constituents recently wrote to me about how she will be choosing to leave her job as a physiotherapist in an oncology ward simply due to the cost of child care. She's been working for $55 a day, pre tax. Her departure will not only remove her tax contributions from the government's revenue but also remove a valuable worker from an already strained health system. The government has indicated that it will commission the Australian Competition and Consumer Commission to examine why childcare costs and out-of-pocket expenses are rising so much, together with a comprehensive review of the early education and care sector by the Productivity Commission. I welcome this review and I encourage it to also look at the flexibility and availability of hours and the issue of weekend care.

I also welcome the transparency and reporting reforms contained in the bill. In terms of how information provided is reported, I would like to see a standard report, so that parents can make a direct comparison between providers and to make sure that the information is meaningful. I also encourage the government to ensure that exceptional circumstances exceptions for payments by electronic transfer or absences are not too onerous.

We know COVID had a huge impact on the sector. During COVID childcare centres struggled to survive. One issue was the number of absent days a parent was able to claim while keeping their child enrolled. Flexibility on absent days is so incredibly important. We are now living with the pandemic but still being encouraged to stay home if people are unwell. Similarly, a number of childcare advocates made the observation about the activity test linked to childcare benefits. Again, I would encourage flexibility on the activity test application, particularly in relation to First Nations and vulnerable families. Making workplace participation a prerequisite for childcare subsidy makes it harder for those already doing it tough to begin training or looking at work.

Labour shortages: we know, in so many industries, that Australia is facing shortages in many areas. Child care is no different, but it is unique in that it is an enabler for many sectors, by enabling parents to work in a range of sectors. Availability as well as affordability is vital. While Warringah is not alone in facing issues with accessibility, I do know that in recent times the Mosman Council has closed its occasional care centre, and Brookvale out-of-hours care and long day care have advised that they are also closing. This creates a huge issue for parents who rely on such services to be able to work—in particular, as I've already mentioned, that discrepancy between the expectation of hours of work and the opening times of centres.

Last week was Early Learning Matters Week. I visited the Manly Community Pre-school. They're struggling to attract sufficient certificate III qualified staff, as the low pay rate means that cert III staff are simply going into other sectors that are more attractive, like aged care. They told me there is a shortage of about 7,000 workers in this area. The Parenthood group estimates that to realise the full benefit of this bill an additional 9,650 full-time educators will be needed by next year to absorb the additional demand.

My constituents tell me that educators are leaving the sector in record numbers. They're burnt out. Their pay is so low. Family day care centres in New South Wales, for example, have continued to contract since 2016, and in the six-month reporting period to December 2021 they have reduced by some 7.6 per cent. Over the past four years there has been a 25.5 per cent decrease in the number of family day care approved services, and a 33 per cent decrease in the number of educators. This is incredibly concerning. As I've already said, the sector underpins and enables all other sectors, all parents, to go to work. So it is incredibly important that the sector be given the priority it needs.

We know the decrease in the number of educators has a really negative impact on the diversity in childcare needs and the access to flexible and non-standard hours. Centres across the country are having to limit enrolments due to staffing issues. Northern Beaches Council staff have told me that, while the bill is a great step forward, staffing shortages are a significant barrier to enabling the bill to be sufficiently implemented. So I encourage the government to focus on the issue of attracting and keeping quality educators for all age groups. We need to be working with the education sector, with the TAFE sector, to ensure that those educators are coming down the line. It is no small task as it's a very large workforce, predominantly run and staffed by women. Family day care educators, for example, comprise one of Australia's largest network of women in small business. Electorates like Warringah are struggling to retain staff when the cost of living is so high and the pay for early childcare workers is so low. We need, as a society, to value the work these early educators are doing.

I would also like to draw attention to the government in relation to the funding support for children with additional needs. I've been speaking with the Northern Beaches Council about the current inclusion development fund subsidy, which is currently $23 an hour, by the Department of Education. It has been this rate since 2017 with no CPI increase. The gap between funding and the amount paid to staff is simply growing. Currently, at the Northern Beaches Council the rate variation is $13 per hour for a casual staff member and $6 per hour for an entry-level cert. III. The annual funding gap this year is $202,000 for public centres in that council alone. The council is currently budgeting for 2023 and 2024. There is a significant increase with a growing number of children with learning support needs, likely increasing from 269 to 332 hours per week across northern beaches services. The annual funding gap will increase and this cost will be passed on, increasing our fees to all families.

The government needs to recognise that there are more and more children with those additional needs. So programs like this need to be better adapted and the funding gap needs to be adjusted to CPI. Increased funding for supporting children with additional needs is important for avoiding seeing more children starting school developmentally vulnerable. It's well documented that early intervention and assistance is of huge benefit to children with additional needs and alleviates the costs incurred in the system later in the child's life. As we come to discussions around the costs—the blowing out costs—of the NDIS, the government needs to remember this. This early investment in the early stages makes a huge difference to costs incurred or needs later.

I welcome the government's investment in early childhood education and care and the improvement in the integrity measures, but we need to urgently work on staffing for the sector in order to meet this demand. We need to value early childhood educators and make sure we tell our young people, as they are looking at their careers of choice, that this is a career that will be worthwhile, that you will be appreciated and valued by our society. I will continue to push for the changes to be expedited and work with the government to improve access and flexibilities to the system for the families and the children of Warringah.