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Wednesday, 23 February 2011
Page: 1091

Mr GARRETT (Minister for School Education, Early Childhood and Youth) (9:10 AM) —I move:

That this bill be now read a second time.

Today I am introducing a bill that will, for the first time, enable families to access the childcare rebate at least on a fortnightly basis. As a result around 700,000 Australian families will now be able to receive this crucial assistance at the time their childcare fees are due.

Importantly, many families will be able to receive this payment weekly as the majority of childcare services submit attendance information weekly.

Families will also be able to choose to have their childcare rebate paid directly to their childcare service to receive an immediate fee reduction, or directly into their bank accounts.

From July this year families will have the choice of four options for receiving the childcare rebate. They may:

  • Elect to have their childcare rebate payment made to their childcare service on an up to fortnightly basis on their behalf as way of a fee reduction;
  • Elect to receive their childcare rebate payments direct to their bank account on an up to fortnightly basis;
  • Have their childcare rebate made to their bank account quarterly;
  • Have their childcare rebate payment made annually as a lump sum payment.

This will ensure families have the maximum flexibility to manage their childcare costs within the family budget.

For the first time childcare services will be able to receive the rebate on behalf of families—delivering a direct fee reduction for those families that elect this method of payment. We know that families will welcome this option—98 per cent of families currently choose to receive childcare benefit this way.

To ensure that families do not accumulate any unforeseen debts as a result of overestimating their income, this bill also contains amendments to temporarily withhold 15 per cent of each rebate payment for families receiving a higher than zero rate of childcare benefit. This is consistent with current arrangements for quarterly childcare rebate payments, where the final quarterly payment may be used to offset any childcare payment debts incurred by a family.

This measure builds on the Australian government’s massive investment in improving the affordability of early education and care.

Overall, we are providing $14.9 billion to help 800,000 Australian families annually with the cost of child care, through the childcare benefit and the childcare rebate. This includes $8.7 billion over four years to 2013-14, to reduce childcare fees for low- and middle-income earners under the childcare benefit and $6.2 billion to assist working families with out-of-pocket childcare expenses under the childcare rebate.

In 2008, we delivered on our election commitment to increase the childcare rebate from 30 to 50 per cent of out-of-pocket costs, from a maximum of $4,354 to $7,500 per child per year. Members of this House would recall that under the Howard government families could only claim a maximum of $4,354 per child per year—some 72 per cent less than under the Gillard Labor government.

We also know that as a result of this measure, out-of-pocket costs, after subsidies, for a family with one child in long day care and earning $55,000 a year, have fallen from 13 per cent of their disposable income in 2004 to seven per cent in 2010.

We also increased the frequency of childcare rebate payments to families from yearly to quarterly, so families would not have to wait until the end of each year to receive assistance with their childcare fees.

Under the Howard government, families had to wait until the end of the year to receive this important assistance.

When it comes to improving the affordability of child care our record stands head and shoulders above those opposite. Overall we have committed more than $18 billion over four years in funding for early childhood education and child care—more than twice the amount provided in the last four years of the Howard government.

The Australian government has an unapologetically ambitious agenda to improve access to affordable, quality early education and care for Australian families. This measure will ensure that families are able to receive their childcare rebate payment at the time they incur their childcare fees and help manage their family budget.

Debate (on motion by Mr Andrews) adjourned.