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Wednesday, 26 May 2010
Page: 4136

Ms KATE ELLIS (Minister for Early Childhood Education, Childcare and Youth and Minister for Sport) (10:46 AM) —I move:

That this bill be now read a second time.

The bill will cap the childcare rebate annual limit at $7,500 for the next four years, as announced in this year’s budget.

Our government has an incredibly clear record in early childhood education and child care in supporting Australian families. We have prioritised affordable and high-quality child care for Australian families and their children, and we remain committed to this.

Evidence of our commitment is clear in our investment of $17.1 billion in early childhood education and child care over the next four years, which is around $10 billion more than that provided in the last four years of the Howard government.

In July 2008, we delivered on our election commitment to increase the childcare rebate from 30 to 50 per cent of parents’ out-of-pocket expenses. This extra support goes directly to parents to help them with the cost of their child care. We also met our election commitment to lift the maximum that families could claim from $4,354, as it was under the previous government, to $7,500 per child per year—a substantial increase of $3,146 a year, or some 72 per cent.

Last year 670,000 Australian families benefited from these significant reforms, enabling them to claim back half of their out-of-pocket childcare costs up to $15,000 a year for each child in care.

And further, as a result of the changes that our government has made, ABS statistics also show that childcare costs to parents fell by over 20 per cent.

Under the previous government families were also forced to wait until the end of each year to access their childcare rebate payment. This put pressure on family budgets throughout the year. The Rudd government committed to and changed the payment to quarterly—giving parents assistance closer to the time when they incur their childcare costs.

In addition to the childcare rebate, we also provide $8.4 billion in childcare benefit over four years for low- and middle-income earners through the childcare benefit. This means that we cover more than half of childcare costs for these families.

In total, we will provide $14.4 billion over four years for parents through childcare benefit and childcare rebate. This is $8 billion more than the Howard government provided in childcare fee assistance in their last years.

We have shown time and again that we are committed to affordable and high-quality child care, and we are putting our money where our mouth is.

In line with our commitment to deliver a responsible budget that secures our economic future and one that brings the budget back into surplus in three years, and three years early, and also as a result of our ambitious agenda for early childhood education and child care, we have made the decision to keep the childcare rebate cap at the level we committed to during the election at $7,500 a year. This is still some $3,146 higher a year than it was when we were elected to office.

It is important to note that under the adjustment to the childcare rebate featured in this bill, the vast majority of Australian families will not be affected by this change.

In fact only about three per cent of families currently receiving the rebate will be affected. The vast majority of families will not be affected.

In order to reach the cap most families would need to be placing their child in care for 10 to 12 hours a day for more than four days a week, at average fee levels.

In fact, the average use of child care in Australia is much lower with most parents using around 2½ days a week, with the average childcare rebate claim last year being less than $2,000—well below the cap of $7,500.

Overall less than one per cent, 0.67 per cent, of families using child care who earn less than $100,000 a year will be impacted by this change in 2010-11.

We also know that as a result of our childcare rebate increase, a family earning $80,000 a year with one child in full-time care receives $2,239 more a year in childcare rebate with this change than they would have under the previous government.

In addition to affordable child care, we have also prioritised improvements to the quality of child care and early education. International studies such as the Perry Preschool Project, the Chicago Parent-Child Centre, and the Effective Provision of Preschool Education have demonstrated that if you invest in high-quality services, if you invest early, children have better outcomes at school and throughout the rest of their lives.

This research has been backed up by local experts such as Fiona Stanley, Frank Oberklaid and Alison Elliot who tell us that the early years shape the future happiness, the future health and the future wellbeing of children.

That is why we took the important decision to invest in the quality of child care, and our decision regarding the childcare rebate cap will help to support this investment. Quality changes will deliver better staff-to-child ratios, so each child gets more individual care and attention, and improved qualifications so that staff can lead activities that help children to learn and develop.

In the 2010-11 budget we announced that we will provide $273.7 million to support the introduction of the government’s new National Quality Framework for early childhood education and child care and our commitment to improve the quality of child care throughout Australia. This includes funding so that we can continue to cover 50 per cent of parents’ out-of-pocket expenses.

We are also providing $59.4 million to improve the quality of 142 budget based funded early childhood services located in rural and remote Australia. This is to improve the infrastructure and staff qualifications in rural and remote services because we know that all children need to benefit from improvements to the quality of child care.

We know that there are some children in these areas who are not doing as well as those in urban areas. This was clearly detailed in the community profiles of the Australian Early Development Index that I released last week.

The AEDI measures how children are developing in their early years and provides crucial information to governments, to service providers and to communities. It shows that 23.5 per cent of all Australian children are developmentally vulnerable in one or more domains.

While many governments may run and hide from collecting and publishing this information we are embracing it. Such is our commitment to the early years that we want to know where the problems are so that we can work with local communities to fix them so that all kids right across Australia can get the best start to life.

The Rudd government is clearly prioritising high-quality, affordable and accessible child care for Australian families. We are preparing our country for the future by investing in our most important resource—our children. We are doing this because we know that if kids start right they are set for life.

Our record in this area is clear. Again, we are clearly putting our money where our mouth is by investing $17.1 billion over the next four years in this critical area—around $10 billion more than the previous government.

We are proud of these achievements, and I support this legislation.

Debate (on motion by Mrs Gash) adjourned.