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COMMUNITY AFFAIRS LEGISLATION COMMITTEE
14/05/2010
Paid Parental Leave Bill 2010; Exposure draft of legislation implementing the government's announced paid parental leave scheme

CHAIR —You have information on parliamentary privilege and the protection of witnesses. We have your submissions, thank you very much. I invite any or all of you to make an opening statement and then we will go to questions. This particular section is due to go until 3.30 pm—we will see how we go.

Mrs Harvey —We will make a joint opening statement and we will confine our opening comments to claimants under the Paid Parental Leave scheme who are mothers.

A key objective of the bill, as stated in the explanatory memorandum, is to improve the health and wellbeing of children, parents and society—and so it should be. However, the scheme outlined will undoubtedly achieve the opposite, for three reasons. I will address the first, and hand over to Mr McCormack and Mr Cannon regarding the second and third of these.

The first reason is that the scheme will fail to improve our health and wellbeing in that it discriminates unfairly against families using Australia’s most popular child care, that is, mother care. Mothers caring for their own children between pregnancies risk failing the bill’s work test and thereby missing out on parental leave pay averaging around $7,300 after tax. These mothers will instead get around $2,000 less in birth funding via the baby bonus. This amounts to childcare funding discrimination. No one will dispute that whatever other purposes may be attributed to paid parental leave, both it and the baby bonus fund a family’s childcare costs following birth.

To be precise paid parental leave under the bill is short-term government funding for maternal child care. It helps mothers afford to give up income in order to spend 18 weeks bonding with their babies aged under 12 months. However, every mother must give up income in order to bond with her baby. It is grossly unfair to deny this funding to a family simply because a mother has given up income long-term to exercise her career choice and her childcare choice, as I have done to work as a mother caring for our children.

There is a limited pot of money in the federal government’s budget for children’s care like everything else. All parents pay for child care including mother’s care by giving up income and this is a fact that is practically ignored by the federal government in the way it funds child care as though families that do their own childcare work do not pay for it. Of course they do. The parents either give up income or another family member does or else they earn it and give it away, but it comes down to the same thing. It is only fair to fund every child’s care equally.

Instead the bill’s scheme would underfund parent care families. These are families that may have chosen for that particular time in their lives to offer parent care. At other times the mother or father may choose paid work. It is only fair to fund every form of child care equally. What will happen by underfunding parent care is that more children will end up in day care centres. This is exactly what happened as a result of the paid parental leave scheme that was introduced in Sweden in the early 1970s. In that country 81.3 per cent of children were in day care centre’s in 2008. Looking at the comparable ABS figures for 2008 in Australia around 34 per cent of children aged between zero and four were in equivalent day care for the same year. So way over twice as many children in Sweden are in day care because day care and paid parental leave go hand in hand.

The Senate’s provision of child care inquiry in 2009, to which I gave evidence, considered high-quality childcare research and found that formal early childcare risks stunting—and I am quoting from the inquiry’s final report—children’s social, emotional and behavioural development. It said infants are typically best cared for at home by their parents. Far from promoting better health and wellbeing for Australians the bill institutes what amounts to a bonding time reduction scheme that will cap not expand the time that parents can afford to spend with their children and result in more babies spending more time in day care centres.

CHAIR —Thank you. Mr Cannon, do you have anything to add?

Mr Cannon —I will pass over to Mr McCormack.

Mr McCormack —I will briefly outline how the scheme under the bill would harm business productivity and be a net cost to taxpayers. The net cost of the scheme to government is estimated at $730 million over four years from 2009-10 to 2012-13. The government expects that the cost of the scheme will be offset by increases in tax revenue and by reductions in the baby bonus and FTB part B outlays and tax offsets for people receiving parental leave pay. This offsets are likely to be insufficient for the scheme to pay for itself.

Our submission refers to the 2008 economic study in Quebec which showed child care subsidies as distinct from paid parental leave were only 40 per cent recouped from the extra taxes generated by the increased maternal workforce participation attributable to the scheme. There is no evidence that taxes would actually make up the funding shortfall in the scheme. In fact, it seems highly unlikely considering the major extra costs to government that have not, as far as we are aware, been budgeted for by the government. The scheme will very likely expand over the next 10 years as the number of claimants, duration and/or scheme benefits grow as occurred in Canada and Sweden which started out with quite modest schemes.

What about the cost to government of funding the work given up by parents taking on paid work because of the scheme? The scheme sets up obviously a sort of financial pressure, if you like, or gentle coercion to be more involved in the paid workforce. What about the various unpaid work that those parents were doing when they were not in the paid workforce?

For example, my wife, Caroline, is a trained professional podiatrist. She worked in the paid workforce for some time until our first child arrived. She is now a happy mother of three and, in addition to all the work she does with the children at home, she does other things, which I am sure is quite common. For example, she assists a new mothers’ support group in a weekly playgroup where she is involved in caring for other children, all unpaid. She also does pro bono podiatry work for the elderly. If, as it would do, the scheme attracts more mothers in particular to unpaid work, the government needs to attempt to calculate the costs of providing all those services that were previously unpaid. It has not done that; therefore the costs are underestimated.

How will the scheme effect national productivity, one of the key reasons for the scheme? It would possibly add just six months to the lifetime employment rates of women, according to the Productivity Commission report on the scheme, but at what cost? Needless to say, I think that the paid parental leave scheme will most likely result in a reduction in the birth rate, as evidenced by what has happened in Sweden. If you are looking for long-term productivity and you have a falling total fertility rate, you have a serious problem. Unless you take in a considerable number of migrants or refugees or do something about getting the birth rate at least to replacement level, you are going to have a long-term, ongoing, compounding productivity problem. If you are looking for data on birth rate, it is in our submission.

The administrative costs of the completely unnecessary employer paymaster obligations are estimated by the government to be almost $200 million in the first year and about $100 million in later years. This impost on the employers would completely disappear if the government implemented our key recommendations and removed employers as paymasters for the scheme and paid equal birth support to all families.

Mr Cannon —The third point essentially looks at the question of whether the public wants this kind of scheme. Our point is that that the public does not want this kind of scheme, regardless of what is said about whether it is beneficial. Ordinary Australians place a high value on family work—on doing their own child care—which is why so many mothers decide, usually for a period of years, to do full-time family work over paid work when they have had children. Most mothers make this choice because they believe that they can provide the optimum care for their children. But most Australian families, under this scheme, would be penalised for their choice to care for their own children at home, because this bill particularly excludes them from the benefits.

We talk a lot about discrimination and, taking a general understanding of discrimination as differential treatment based on certain criteria, here we have differential treatment of mothers based on whether or not they are in the paid workforce. It is a fairly acceptable and reasonable assertion that this is a form of discrimination. The question is whether it is a justifiable form of discrimination, and our conclusion is that it is not in any way justifiable.

With regard to the attitude of the Australian population, polling shows that a majority of Australians reject paid parental leave, particularly as proposed, for two main reasons. Firstly, they reject discriminatory funding. This is borne out in three polls which have been conducted by the Australian Family Association and by Kids First.

CHAIR —Can we get a copy of those polls, Mr Cannon?

Mr Cannon —You can indeed.

CHAIR —It would be very useful to table those with information on when the polls were done, what the survey size was, where they were done and what questions were asked.

Mrs Harvey —We can also supply you with a summary which we have done of the polls.

CHAIR —That would be great, but we would like to see the original data.

Mr Cannon —These trials were conducted in the time since December 2009. There was a nationwide Galaxy poll in March 2010 that asked in 1,042 adults the following question: in your opinion, should the government’s paid parental leave plan give equal funding to both mums in the paid workforce and stay-home mums to afford bonding time with their babies? So it was a simple question: should there be equal treatment? An overwhelming majority, two in three voters, said yes to equal funding for all mothers.

For those in the 18 to 34 age bracket—and there you are looking at persons in the Australian population who are most likely to have children—the response was even more emphatic. Seventy-nine per cent of those respondents said they wanted equal funding. This is confirmed in similar early polls in two Brisbane federal seats. One was in the marginal seat of Ryan; the other was in Prime Minister Rudd’s safe Labor electorate of Griffith. The bottom line is: voters want equal funding.

In addition to concerns that the bill discriminates against stay-at-home mums, there was a  Mother’s Day Galaxy poll which established that mothers are wary of the costs of paid parental leave. The poll interviewed over 1,200 mothers who had children under the age of 18. Thirty-five per cent of those mothers did not want a paid parental leave scheme in the form that has been proposed by both the coalition and the Labor government. That is almost as many as those who support it. Thirty-seven per cent support the Rudd scheme; 35 per cent do not want either. That is quite telling as to how enthusiastically the Australian population, and mothers in particular, is likely to embrace this scheme.

The concern over the cost of a substantial paid parental leave scheme is likely to be exacerbated. We would say that any support that it has would effectively evaporate if it were more widely understood and acknowledged that modest schemes, like the one that is proposed, are in fact a rarity as far as paid parental leave schemes go and that these schemes inevitably become more costly over time. They expand in their provisions. This has been the experience certainly in Quebec and even in other OECD countries that have implemented these paid parental schemes, and it is borne out in the submissions that have been made by the Australian Council of Trade Unions, simply by virtue of the Liberal Party’s proposed scheme. These are much more generous schemes. These costs are going to blow out. They are certainly going to get bigger and bigger. To sell this scheme as a modest scheme, we feel is probably attracting even more support than it would otherwise, if the real costs and projected costs were better understood. I will hand back to Tempe to make a concluding remark.

Mrs Harvey —In conclusion to our opening remarks, we are recommending amendments to this bill or that it be withdrawn. Our recommendations are similar to the ones we just heard from FamilyVoice Australia. Firstly, we would not support the bill at all unless the expenditure under it and the baby bonus were amalgamated, so that the total of 306,000 anticipated recipients of either paid parental leave or the baby bonus were amalgamated and all mothers instead got around $6,300 each, which is $1,000 more than the current baby bonus. That is a far fairer plan than the current Paid Parental Leave Bill. The other option, which may be more politically saleable, would be that for just $300 million more funding in 2011-12 the government could afford to give all of those mothers the minimum wage for 18 weeks. However, of course that would be on the basis of the $150,000 family means test.

Here I point out just how grossly unfair the means test is in the Paid Parental Leave Bill. It treats mothers as though they are individuals and that we do not have families in our society. It is grossly unfair when compared with families who are receiving the baby bonus. The second class of families who are doing their own child-care work, who are caring for their own children, are given much less funding. The paid parental leave will average 37 per cent more funding than the baby bonus. Also, they are further insulted by having their payments means tested on their family income, whereas, for some strange reason, the federal government has proposed that paid parental leave be means tested on the mother’s income. That is absolutely ludicrous when you consider that a woman earning $150,000 who is married to a multimillionaire would receive this funding, whereas another woman, who has a very low income and may be struggling, will just receive the baby bonus. When you look at both ends of the spectrum, it is just unfair.

The only fair thing to do is to give the same funding to every single newborn and means test it on family income of $150,000. The income should be considered in the period following birth, like the baby bonus. The relevant period for considering a means test is the period when the family needs the funding, which is when they will be without the mother’s income. I reinforce here that all families give up income to provide bonding time between mothers and babies. So it is grossly unfair to say, ‘You are giving up income long term, so we are not going to give this funding to you.’

The other point I would make is that this funding should be delivered through a voucher to all families, and it should be regarded as what it is: a voucher for the cost of children’s care. It should be a childcare voucher and it should continue from birth so that we do not have further discriminatory funding down the track. The funding analysis that we submitted in attachment 1 of the submission shows that ongoing childcare funding discriminates even more and that, on average, families that outsource their childcare work will get around $6,041 per family in 2011, whereas families who do their own childcare work will receive just $3,112 through family tax benefit B. I make the point that family tax benefit B is not childcare funding anyway; it was intended to compensate families for the fact that they are unable to share their income for tax purposes. So, when you look at it that way, ongoing childcare funding is only for outsourced child care, which makes it particularly unfair.

A single childcare benefit, which is what we are recommending, would have the advantage of eliminating the inequities in the current system, which Dr Sharman Stone in the opposition has been talking about. For example, families using nanny care miss out altogether. So if you have a family with both parents in the paid workforce and they do not qualify for family tax benefit B, they do not put their child in a day-care centre and the grandmother looks after the children, they do not get childcare funding at all. That is exploiting the unwaged childcare work of that family, just as the system exploits the unwaged childcare work of mothers who care for their own children, by underfunding them.

Senator ADAMS —Thank you for your evidence. First question: should there be a paid parental scheme?

Mrs Harvey —Not if it discriminates. Definitely not.

Mr Cannon —We just reiterate the point that there is an illusion that Australia does nothing to support women in the paid workforce after childbirth. Those women are eligible to receive the baby bonus. That is a form of child support which is directed to that immediate period after birth. What we are suggesting is that any type of scheme that is introduced that is directed towards ensuring that women can bond with their babies after childbirth should be directed universally, at all mothers, and not just at mothers in the paid workforce. Certainly, it should not discriminate according to the level of funding that those mothers receive just by virtue of the fact that they are in the paid workforce.

Senator ADAMS —If there were equal funding for paid parental leave, if both lots were equal, do you think there would be a drop in productivity, with regard to women in the workforce versus women at home?

Mrs Harvey —The premise of that question is that women in paid work are more productive than women doing family work. We reject that premise. We say that adults in either workforce are equally productive. They are all doing productive work.

Senator ADAMS —That is not what I meant. Let us use a hypothetical figure. Say there is $10,000 there for everyone. Are women who are working going to stay home for a longer time because they have that $10,000, or are they going to go back to work? I am looking at productivity, if there is $10,000 for them to stay at home. As a mother, I stayed at home and looked after my children. I worked on the farm as well, so I was working but unpaid. If someone who is in the workforce gets $10,000, hypothetically, as a baby bonus and the one at home is getting exactly the same, are we going to cause mothers to stay home longer, rather than going back to work? How are we going to value that employee to get her back to work? Is she going to be away longer?

Mr Cannon —In terms of the impact on productivity, we can speculate. If this bill is aimed purely at inducing women to go into the workforce and increasing paid workforce productivity, I think that should probably be spelt out in the bill. The point that we would like to make is that, to somehow place financial pressure on women to influence their choice as to whether they stay at home or enter the paid workforce and at what point they do that following the birth of a child—to somehow influence or place pressure on them to choose one option or another—we do not think is a justifiable outcome of any piece of legislation.

CHAIR —Doesn’t that happen now? Can you describe what happens now?

Mr Cannon —At the moment, women receive the baby bonus.

CHAIR —They all do.

Mr Cannon —That is right. The choice in a sense is there to forgo work and use that money as some kind of income subsidy. Here we have got a completely different level of funding that gives a greater payment to women who are in the paid workforce, in a sense suggesting to women that, unless you are in the paid workforce, you are going to get a lesser amount. We think that that is just blatant pressure on women, especially at a time when so many working families depend on two incomes. It is just adding pressure, taking away that choice to provide child care in the home.

Mrs Harvey —Senator Adams, could I answer a question that you asked previous witnesses? You asked: what about women who have to work? I think that is a very important question. We assumed that you were talking about low-income families. Is that right?

Senator ADAMS —It is much as Mr Cannon was saying. Twenty years ago, you probably had one person working. Now it is probably far more the norm that two people are working and, if they cannot manage their finances, they have got to the stage where the second person has to go back to work. It may be the father staying home and the wife has a higher paid job so she goes back and he looks after the child.

Mrs Harvey —Our point is about helping those families. Low-income families predominantly prefer parental child care. You can tell that, because 2005 figures showed that the vast majority of families receiving family tax benefit A, which is non-discriminatory, also received family tax benefit B. That means low-income families are doing their own childcare work to a very high degree. What people are telling us, particularly struggling sole-parent families, is that the last thing those mothers want to do is lose their children or spend less time with their children. They do not want to be forced into paid work when their children are little. They want the opportunity to actually look after them, because they believe that is in the very best interests of their children.

We believe that our proposal of giving equal childcare funding—ongoing as well as ameliorating the effects of this scheme, making it equal—will actually give those families broader childcare choices because they will have more funding for parental child care and they will not be forced to place their baby in a childcare centre if that is not their childcare choice. They will have more opportunity to actually care for their own child.

The real point about this is the evidence which I quoted earlier about the long-term harm, the emotional and behavioural harm risks, associated with long early day care. Where our productivity is going to go down the drain is, if we do adopt this parental leave scheme, it will become more generous, it will conscript almost all women except the very rich and the very poor into the paid workforce and we will have what a Swedish childcare activist described—it is in our submission—as a Lord of the Flies scenario, where you have income-dependent parents unavailable for their children.

Is that really what we want for our society or do we want to give families a genuine childcare choice so that they can do what is in the very best interests of their children? We do not believe the government knows what is best for children. We believe that families do and the only way to let families have that choice is if there is funding, modest funding, it should go to the parents, not to day care centres. It should not be tied to workforce participation and it should not be tied to childcare choice. It should go to parents to let them decide and an overwhelming majority will probably choose parental child care if they have a choice. That is what the polling shows.

Senator ADAMS —You have obviously read the coalition’s guidelines on this. Do you consider that 18 weeks or 26 weeks is the optimum time if someone is going to go back to work?

Mrs Harvey —If you look at it as childcare funding, childcare funding goes on ad infinitum, doesn’t it? Childcare funding does not stop. It is just childcare funding; that is all it is. So we do not support the coalition’s scheme one iota because it is massively discriminatory. It will give very wealthy women who are earning up to $150,000 a year $75,000 when they have a baby and low-income or unwaged women will get either the minimum wage or even less than that. We do not know what they will announce for unwaged mothers, but Mr Abbott has said it will be something more generous than the $5,000 baby bonus.

When you ask when childcare funding should cut out, I answer: it does not. It is all childcare funding. You get day care centre funding until your child goes to school and then you get childcare benefits and childcare rebates for outside hours school care as well. The real issue should be the level of government funding because that is what we are talking about here. It is not an employer funded scheme. At what level should those payments be? As a society, should we agree with that taxpayer funds, consolidated revenue, should be paid to families at a slightly more generous level in the early months and then drop after that for whatever childcare choice families have, whether it is granny care, nanny care, day care or parental child care?

Mr McCormack —Effectively what this scheme promotes in the end, if you understand it all as child care, is an inefficient labour swap of labour hours and work. It is unnecessarily bureaucratic and inefficient. Because of the provisions for the employer as paymaster, it is like a multimillion-dollar fig leaf, in that you are making it look like it comes from the employer to try to create a sense of attachment to the workforce, but I do not think women—mothers in particular—are going to have a problem with being attached to the workforce. In history, they have not; everyone wants to work whether waged or unwaged. What you are creating here is an inefficient labour exchange and it was proven, when they did the studies in Quebec and in Sweden, that it did not pay for itself. You end up hiking taxes to cover it and whatever you subsidise—for example, childcare today because it is quite well subsidised—grows and expands. This will grow and expand and you will not be able to pay for it.

Senator FURNER —My questions are around the polling. You referred to the Galaxy poll, the Mothers Day poll, in your submissions. There were 1,269 respondents and you gave the percentages. I remember seeing that poll myself, but I cannot remember the numbers. There were 37 per cent of respondents in favour of Kevin Rudd’s plan. Do you remember how many respondents there were?

Mr Cannon —I have the numbers here.

CHAIR —You going to send us all that information, aren’t you, Mr Cannon?

Mr Cannon —What figures are you after? The question was: which of the two parental leave plans do you prefer?

Senator FURNER —Yes, you relied on 37 per cent.

Mr Cannon —There was 37 per cent in favour of Kevin Rudd’s plan.

Senator FURNER —How many respondents were there?

Mr Cannon —There were 1,269 mothers.

Senator FURNER —That was overall, though, wasn’t it? So what is 37 per cent of 1,269? I do not have a calculator in front of me here. Do you have that figure handy?

Mr Cannon —I am not sure. This was a poll conducted in accordance with the policies of Galaxy poll, which I think is a respected organisation.

Senator FURNER —I will go back to that polling and have a look.

Mr Cannon —I think it is as valid as any other poll you might find—

CHAIR —As valid as a poll can be.

Mr Cannon —as far as polls are a reflection of public opinion.

Senator FURNER —You have done three polls yourself as an organisation?

Mr Cannon —No, we commissioned an earlier poll regarding whether parental funding should be equal. Again, that was a Galaxy poll commissioned by the Australian Family Association, and then Kids First Australia commissioned two polls in particular Queensland electorates.

Senator FURNER —So they were all Galaxy polls, the three of them?

Mr Cannon —No, the Queensland ones were Market First, I think.

Mrs Harvey —Of the two that we did ourselves, the first one was done in the marginal electorate of Ryan. Kids First volunteers randomly called 500 adults who said that they resided in the electorate and we asked them two questions. One was about whether paid parental leave should be the same for stay-at-home and paid work mums, and the other question was about whether government funding for the cost of children’s care should be the same amount per child whether the child was cared for by a parent at home or in a day care centre.

The three polls all came up with the same result. Over 60 per cent of respondents in each case answered yes to both questions. This reflects studies that have been done overseas as well. The figure for a very big survey done in America about five years ago, which is quoted in the Day Care Deception book that we referred to in our submission, is that 71 per cent of families responded that they would rather see policies that make parental child care more affordable than improve the quality of day care. Really, what paid parental leave does is it promotes outsourced child care, because it is rewarding paid work participation by mothers.

If I can make one other comment about childcare funding, there is a misunderstanding amongst a lot of people that by pouring money into day care you will somehow improve the quality of it. You may have read in our submission that it is in fact the reverse, because what you do is you flood the system with children, as has occurred in Sweden. In fact, in the different provinces of Sweden they cannot afford to fund their day care centres properly. The Rudd government has agreed through COAG to spend a lot more money on day care as a result of the recommendation of the provision of childcare inquiry, but in order to reduce class ratios and that sort of thing we believe the evidence is that that will have the reverse effect. In Sweden they have abandoned teacher-child ratios and they have abandoned limits on children in day care centre classes because they cannot afford to fund them.

Mr Cannon —We have already seen this year the commitment to fund a certain number of childcare centres. The number of childcare centres that was initially proposed to be funded was obviously based on some analysis of the need for childcare centres. That number has been drastically reduced. Who knows what that means for the children in those childcare centres and the demand for childcare centres. Who can say what the impact is going to be on those children? We will see.

Mrs Harvey —Would I be able to ask you a question?

CHAIR —Go ahead. We will see whether we can answer it.

Mrs Harvey —Thank you. We have raised the issue that we cannot see where the explanatory memorandum or the government have actually shown that they have looked at what the true cost to government will be of subsidising mothers to exchange family work for paid work. The government has justified the scheme based on its cost estimate in the explanatory memorandum. Can you show us where that cost estimate has taken account of the extra cost of day care and the extra cost of doing the work that was formerly done by those mothers when they move into paid work?

CHAIR —We will take it to the department. These issues were raised in the Productivity Commission. They definitely were raised in the debate by the Productivity Commission. I saw information that came that way. Certainly this particular scheme that we have in front of us is looking at providing a choice for parents who are in the workforce. The key point here is that parents who are already in the workforce, who are having to make a choice about staying in the workforce or not, seems to be—

Mrs Harvey —We are questioning why it would be limited to—

CHAIR —That is the focus of this particular process that we are going through. It seems to me that a lot of the issues you are raising are about effective valuing of the work of people who stay at home and—as you have said over and over again—provide family based care. That seems to be the crux of most of your argument.

Mrs Harvey —What we are really saying is that the scheme will not pay for itself, because it will generate more costs than any productivity or increased taxes or whatever it brings in.

CHAIR —What has happened in the scheme is that the Productivity Commission has made a recommendation to government. Government have come forward with a scheme that is going to be government funded. They have listed the costings. They have listed the offsets that are going to be there. But it certainly does not seem to me that there is any commitment that any government program automatically pays for itself, whether it is this one or another one. The government have put forward the scheme for consideration. This is the paid parental scheme that we are taking forward into the parliament for consideration. The figures that we have very much based on the Productivity Commission process. You are concerned about whether it has taken into account the ongoing costs of child care—

Mrs Harvey —My concern is: if the scheme is not going to pay for itself, how can you justify a discriminatory scheme? You cannot justify a discriminatory scheme.

CHAIR —Your position of discrimination is much wider, and it is one that has come into the debate now, which is the debate about effective funding of people to stay at home and keep the children in an ongoing way. This particular scheme is looking at women who are in the workforce who take time from the workforce to have their children and have the option to return to the workforce. That is one group of women. It does not include the families about which you are speaking. I think they need to be considered, but it is not either/or.

Mrs Harvey —You are effectively agreeing that it is a scheme to fund children’s care costs. We are saying: how on earth can you—

CHAIR —I do not necessarily see it that way. The simplistic nature of the argument is not that clear. Certainly that is the position you put in your submission. That is the submission that you put in your evidence, and that will be considered in the process. You can be absolutely assured of that. It will be considered in the process. The points you have raised about the ongoing costs of the child care are aspects that need to be considered. There is no doubt about that. In the Productivity Commission papers they said that. This is one step in the overall scheme of how we are going to build families in our current society—families that are going to be caring for children and balancing work and family responsibilities. This particular payment, the paid parental scheme, does not cover the childcare costs. You have been raising those costs today in this argument, so we need to look at that, without doubt. A child is not just for the period of 18 weeks; the child does not just exist for 18 weeks. There is the whole aspect of children going into schools, school care, after-school care and all the things you mentioned in your submission. They are all part of the overall social issues, as the previous witness talked about, that surround the whole element. They are augmenting this bill, not instead of this bill.

Mrs Harvey —We want to say that, instead of all of this, the government should just be simply funding parents with a simple payment directly to them and not be enquiring as to what child care a parent is using.

CHAIR —You said that in your opening statement. It is very clear that that is your position. It is the position that you have put forward from the Kids First Parent Association of Australia and so have the Australian Family Association. They made a very similar argument. Would you agree with that?

Mrs Harvey —Yes.

Senator ADAMS —I would just like to reiterate that it is the workforce participation area; it is not the child care.

CHAIR —But they need to be considered. There is no doubt that this bill is about parents who have the choice in front of them of returning to the workplace after having had their child and a period of time away from their child. It is not the end of the need to consider children and the care of parents.

Mrs Harvey —Instead of postponing the consideration of how the majority of parents will be funded—because most parents lose out under the scheme—could you amend the scheme to give the same funding to all parents?

CHAIR —That is your recommendation?

Mrs Harvey —It is, yes.

CHAIR —We will consider that and we will put it to government. Thank you very much for your time and your submission. If there is anything that you have not had a chance to get to us, please send it to us later. Is there anything that you want to put on the record before we end the session?

Mr McCormack —I will just add one more thing. In particular, I feel for all those small businesses out there, which will have to get involved in pretending to be the paymaster for the scheme. Surely, it would look far more friendly to small business, not to mention medium or large businesses, to not try to pretend the money is coming from the employer—with pages and pages and pages devoted in the bill to make it look like it does—and just pay it directly. The Family Assistance Office already has all the data it needs. It would be a good way to save some money and it would look better. It would look cleaner and it would be more efficient. I am sure the public, as would the business community, would support that as opposed to the other option. I offer that for your consideration.

CHAIR —Thank you. You would be aware that other people have made that statement in terms of the process and you would be aware of the alternative arguments of the Productivity Commission. I will not raise that with you.

[3.31 pm]