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Monday, 13 May 1985
Page: 1792


Senator SIBRAA —Is the Minister for Community Services able to indicate whether the subject of tax deductions for child care will be discussed at the forthcoming tax summit? Does he believe that tax deductibility would be of major assistance to present users of child care services?


Senator GRIMES —I would imagine that the question of tax deductions is very likely to come up at the tax summit, although I cannot anticipate it or predict it because there are organisations-particularly professional organisations, and organisations representing those who are better off in the community-who are advocating tax deductibility or, at the very least, tax rebates for child care costs in the community. I do not favour this proposal for several reasons. The problem in regard to tax deductions or tax rebates of this type is that they do nothing or very little to create new child care places in the community. They certainly do nothing for low income families and very little, or nothing at all, for single parent pensioners with children who cannot take advantage of this. They do not increase the quality of child care available in the community. Finally, and I suppose in the view of my colleague on my right, such a proposal would cost about $400m a year, which is in excess of what we spend on child care at the moment.

I acknowledge that such tax deductions would provide assistance to people on high incomes and particularly to people on high incomes who at the moment do not have access to Commonwealth-funded child care facilities. However, I do not want to see in this community a situation in which there are two sets of child care services-one standard for the wealthy who can afford high quality child care and pay for it in full and a second standard for those who are not so wealthy and who have low quality child care. I do not believe that that would assist the community at all. I think that the way in which we have proceeded in the past, whereby we provide operational assistance for child care centres for all people in the community, is the best way in which to proceed. We provide fee relief on an income-tested basis for others in the community, and we develop child care facilities on a planning model rather than a submission model so that we can concentrate on both individuals and districts in greatest need. That is the way in which we intend to proceed. I dare say that deductions and tax expenditures like this will be discussed at the tax summit. I do not anticipate that their introduction will be supported by the Government. They are certainly not supported by me.