Senator O'BRIEN —My question is to Senator Newman, the Minister for Family and Community Services. My question refers to the Australian Institute of Health and Welfare state of the nation report Australia's Welfare 1999 , launched by the minister last Thursday and commended by her as `the most up-to-date, comprehensive, and authoritative source of national information on welfare support across Australia'. Is the minister aware that, according to page 107 of this authoritative source, `total Commonwealth expenditure on children's services fell by 10% (in constant prices)' between the 1996-97 and the 1997-98 budgets? Does the minister also recall claiming in the Senate on 21 October that:

. . . the expenditure on child care has not been declining.

Just who is correct on child-care funding levels—the minister or this authoritative source, the Institute of Health and Welfare?

Senator NEWMAN (Family and Community Services; Minister Assisting the Prime Minister for the Status of Women) —The opposition has continued to muddy the waters about expendi ture on child care while refusing to acknowledge the fact that the figures in the report and the figures put out by my department demonstrate conclusively that the government has been increasing the appropriation for child care throughout the years that we have been in government. The first three years that we were in government saw a substantial increase over the last three years that the opposition were in government.

In the coming five years, there will be something like $5 billion appropriated. But that is appropriation; it is not expenditure. It is a demand driven program. As you would know full well, Senator, with declining fertility rates in our home state of Tasmania, there are now 2,000 fewer nought- to four-year-olds than there were in 1996. Either they are leaving the state because their parents are looking for work or people are not having babies. Those things affect the take-up rate of child care—they affect the demand. You know full well that the passenger vehicle rebate scheme across Bass Strait is also demand driven.

Senator O'Brien —Does your portfolio—

Senator NEWMAN —Yes. Well, as a matter of fact, Centrelink administer it. It is a pity: I would have thought that you, as a Tasmanian, would have known. Nevertheless, demand driven programs have appropriations made in budgets and then the demand determines how much is actually spent. You know that there are very reasonable reasons why there is less take-up of child-care costs: when the opposition was in government, they had a system whereby the taxpayer subsidised hours of child care which were not actually used by the parents—a ridiculous scheme! That was abolished when we came into government. Now, parents are being billed, and so are the taxpayers, for the hours of child care that are actually being used. It is a sensible reform that has made a substantial difference to the expenditure patterns on child care. There are a number of reasons for those things. There has been a drop in demand for the number of hours being used, but not in the appropriation of funds.

Senator O'BRIEN —I have a supplementary question. Well, Minister, a demand driven program indeed! And isn't it true that demand has fallen because the government froze child-care assistance for two years, capped work related care at 50 hours per week and threw away many of the income test concessions available to larger families? Isn't it also true that low income families have been the worst affected by the resulting rise in gap fees? Can the minister confirm that her department's May 1999 census of child care shows that low income families are indeed being driven out of regulated child care? Isn't this the real cost of the Howard government's child-care spending cuts?

Senator NEWMAN (Family and Community Services; Minister Assisting the Prime Minister for the Status of Women) —Madam President, I think we had better get this straight on the record pretty quickly: the rise in gap fees that the senator talks about was substantially at a greater rate during the opposition's years in government than since we have come into government. That rise in fees has dropped substantially.

Senator Chris Evans —That is only on your figures, not on the Health and Welfare Institute's figures.

Senator NEWMAN —Senator Evans has the same sort of innovative press releases as Mr Swan does, but I would have thought that he would try to go for greater credibility than Mr Swan's. He is trying to make a good fellow of himself. I have told you about the declining population of nought- to four-year-olds. Families are able to exercise choice as a result of more flexible working practices, and the change in industrial relations means that many parents are able to get permanent part-time work—which women have asked for forever and a day. The lowering of the preschool rate—(Time expired)