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Tuesday, 23 November 2010
Ms LIVERMORE (6:22 PM) —I am pleased to have the opportunity to support the Family Assistance Legislation Amendment (Child Care Budget Measures) Bill 2010 and to talk about the achievements of this Labor government in the area of child care and early childhood development and education more broadly. They are achievements that we are very proud of and they are built on an unprecedented level of investment by any federal government in child care and early childhood education. Overall, the Labor government is providing more than $17.1 billion over the next four years for early childhood development and support for child care.
Ensuring that children and their families have access to high-quality, affordable child care is a key part of the government’s objective of building a stronger, fairer and more productive Australia. Access to affordable child care is important so that families can maximise their employment and training opportunities. And the national focus on early childhood development and education in all settings, including childcare centres, family day care, kindergartens and schools, is vital if our children are to get the start in life they deserve and a chance to participate fully in the future success of Australia.
So first to the bill, which makes some changes to the childcare rebate. It is important to note, after listening to the previous speech, by the member for Canning, the great improvement that this government made to the affordability of child care for working families across Australia. The previous government gave families a childcare rebate equal to 30 per cent of their out-of-pocket childcare expenses. Families could claim that rebate up to an amount of $4,354 per year. In 2007 Labor promised, and introduced on coming to government, a substantial increase in the childcare rebate. Families using child care are now able to claim a childcare rebate of 50 per cent of their out-of-pocket childcare expenses. Consequently, we increased the maximum amount of rebate claimable for each child in care to $7,500 a year. That is a big jump in assistance to families for a vital service that can really put pressure on their budget. In fact the maximum limit is 72 per cent higher than it was under the Howard government.
The Labor government also took steps early in its term to make the payment of the childcare rebate to families more frequent than had been the case under the Howard government. In our first budget, in 2008, we honoured our election commitment to increasing the childcare rebate and also made it possible for families to receive the rebate payment quarterly rather than annually, as it had been under the previous government.
Those of us who were in the parliament during the Howard government remember when the rebate was introduced by the Treasurer at the time, Peter Costello, and families were told that they would be waiting 18 months to receive their first payment from the government. When we came to government we acted quickly to address that, and the rebate is now more generous and paid to families when they need it, every quarter. That is a big jump in the assistance the government gives to families to help them meet the costs of the child care that they rely on so much to make their family life and their family finances work. We understand the pressures that families are under and have acted to make child care more affordable for them through these measures: the increase in the childcare rebate and the move to pay the rebate quarterly. Of course, we went to the last election with a further commitment to paying the rebate to families on a fortnightly basis, and that will be implemented in time for it to take effect midway through 2011. We are obviously very mindful of making the rebate work for families to help them meet the costs of child care.
It was good to see those changes in the 2008 budget—the increase in the rebate and the change to quarterly payments—reflected in the most recent data on childcare availability and affordability. The report State of child care in Australia, released on 22 April this year, showed that out-of-pocket costs to families have fallen across all income levels. For example, in 2004 families earning $55,000 spent 13 per cent of their disposable income on child care. This fell to seven per cent in 2009.
The bill we are debating this evening implements a budget measure that will make a change to the childcare rebate affecting a small number of families. From 1 July this year the childcare rebate annual cap will be set at $7,500 per child per year. It is important to note that there is no change to that cap but there is a change to the indexation arrangements. Indexation of the maximum rate of childcare rebate will not occur for four years and therefore the annual cap of $7,500 will continue unchanged until 30 June 2014.
The change in this bill needs to be understood in the context of our overall approach to the budget this year and going forward. This measure to keep the childcare rebate annual cap at $7,500 for the next four years delivers $86.3 million in savings. At the time the government put in place the package of stimulus spending and projects to protect our economy from recession in 2009, we made a commitment to fiscal discipline and a budget framework to ensure a return to surplus when normal growth recovered. The 2010 budget required the government to stick to those rules we set for ourselves and that meant finding savings to offset new spending measures. In this instance, the projected savings of $86 million from this measure will go towards some important new initiatives that were also announced in the budget. First of all, there is $59.4 million to improve the quality of 142 budget-based funded early childhood services in rural and remote Australia. This funding will help those centres to improve infrastructure and staff qualifications and will benefit some of our most isolated and disadvantaged children.
In addition we have announced $81.9 million to implement the new national quality standards. This includes the first national ratings system for child care and early education services so parents have the information they need to make those important decisions about the best care for their child. There is also $1.9 million to support new regulatory measures to help achieve ongoing stability in the childcare sector in the wake of the ABC Learning crisis. This includes developing measures that require large childcare providers in the market to prove their financial viability—something that no-one would argue against after what we saw happen with ABC Learning. Since taking government we have taken steps to improve the affordability of child care through assistance to families. Now we also need to continue our work with the sector on standards and quality. These three budget initiatives progress that quality agenda.
It is fair to ask what effect the change in this bill to hold the annual cap to $7,500 until 2014 will have on the affordability of child care. The vast majority of families receiving childcare rebate—an estimated 760,000, or around 97 per cent of families—will not be impacted by this change in the year following its introduction. On average, families use only 26 hours of care per child per week. This measure will mostly impact on the small number of families who use care for much longer periods, such as 50 hours per week, or those who use more expensive child care. Those families who are affected by this change will on average have a reduction in childcare benefit of an estimated $5 per week, or $266 per year. Compared to that very small proportion of families who will be minimally affected by this change all families are benefiting, and will continue to benefit, from the significant lift in the childcare rebate cap introduced by the government. As an example, a family earning $80,000 with one child in full-time care would have received a childcare rebate of $3,359 under the Howard government. Under this government that same family receives $5,598 in childcare rebate. They are better off by $2,239 under our more generous system.
We came to government with substantial commitments to improve the affordability of child care and we have delivered on that commitment. Not long after coming into government we were also faced with a crisis of viability in the sector. The collapse of ABC Learning at the end of 2008 threatened the closure of hundreds of centres across Australia. There was a very real prospect of families losing access to care for their children and thousands of childcare workers losing their jobs and entitlements. The collapse of ABC Learning was very much a product of the company’s unsustainable business model, but it can also be attributed to the Howard government’s hands-off, let-the-market-rip approach to the childcare sector.
The Howard government did not care that child care was effectively an essential service for the families that relied on their local childcare centre. It did nothing to ensure the ongoing viability of the whole sector, preferring to leave it to the market and those who sought to exploit opportunities while the going was good. It was left to the Labor government to clean up the mess when ABC Learning fell over. We worked with the receivers and provided funding to ensure that the doors of ABC Learning centres stayed open, giving families assurance that their children could continue to receive care. Had we not acted quickly, over 62,000 families would have had to find alternative care or potentially give up work. I am pleased that the government has been able to play such a positive role in steering the potentially disastrous collapse of ABC Learning to a conclusion that has been able to give assurance to parents and strengthens the sector by creating a better balance between private and not-for-profit providers.
The recent report about the state of child care in Australia shows that, since we came to office, child care has been more accessible and affordable. The other aspect of child care that is just as important, and which this Labor government has really put on the agenda, is quality. Quality in child care—whether that is achieved through better staff to child ratios, improved staff qualifications or the early years learning framework—is part of our drive for improved developmental and educational outcomes for children.
Despite all the evidence that tells us how important the first five years of a child’s life are in their overall development, for many years the federal government has not been seriously involved in policy or funding in this crucial area. This neglect was showing up in all kinds of indicators telling us that young children in Australia were being short-changed: not enough attention was being given to their needs and there was not enough investment in quality childcare and educational opportunities for children under the age of five. Too many children were starting school, and are still starting school, without having a chance to participate in activities that promote their development and get them ready to learn. We want to turn that around and the government has put massive funding towards improving the opportunities for children and in turn their educational and developmental outcomes. Our total investment in early childhood education and child care will be $17 billion over the next four years.
One of our priorities has been to work with the states and territories to achieve universal access to early childhood education. Our commitment is that by 2013 every child will be able to access a quality early childhood education program in the year before they begin formal schooling. This will be a play based learning and development program for 15 hours a week, taught by four-year-degree university qualified early childhood teachers. It will be available across a range of settings, including childcare centres and family day care, so that it fits in with parents’ arrangements. I am pleased to say that the Queensland government has already responded by promising to build over 200 new kindergartens across the state, because we have a lot of catching up to do in this area of early childhood education.
For too long the federal government has had a ‘don’t ask, don’t tell’ attitude to early childhood education and development. The previous government did not see it as their responsibility at all. They were content to just take pot shots at the states whenever it suited them to blame the states for any perceived shortcomings. We have a different approach: we want to know exactly what is going on with our children—the good and the bad—so that we know where extra support and investment is needed. We are doing that through the Australian Early Development Index, which asks teachers to answer a series of questions about the children in their class in their first year of school. The data that is compiled is broken down region by region and will help communities to better understand how their children are doing by the time they start formal schooling. The data shows that there is a lot of work to do in my electorate to bridge the gap that exists in children’s experience of preschool education. While children in Central Queensland scored around the average for things like their wellbeing and readiness to be at school, the measures that rely on some formal educational experience showed the lack of access to preschool education for many children in the area. I am pleased that during this year there have been a number of announcements by the state government that they will be opening kindergartens in conjunction with many of the schools in my area.
In the context of early childhood development, cost-of-living pressures for families and the way that the government is supporting working families with their cost of living, I want to mention paid parental leave. This is a very important initiative, which we have waited far too long for in this country and which comes into effect from the start of next year. Parents will be able to be paid for 18 weeks at the minimum wage on the birth of their child. I am very proud to be associated with this initiative through this government.
These investments in child care and early childhood education and development are necessary and urgent if we are to achieve our goals of a fair and prosperous country. They increase the value of investments in other parts of our education and training system, because we know that every dollar spent on a child before the age of five has a cascading effect throughout the rest of their education and beyond. I am proud to be part of a government that places such value on children through these measures. We also realise that valuing children means supporting their parents. Our time in government has seen child care become more affordable and accessible, and we will continue to support families by giving them this support through the childcare rebate and these other measures on quality.