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Thursday, 28 November 1985
Page: 2502

Senator PETER BAUME(6.05) —The Child Care Amendment Bill will have the effect of withdrawing $10m a year from subsidised child care in Australia. This was announced as part of the May mini-Budget package and, to the extent that $10m a year will be withdrawn, it is a benefit withdrawal measure. By way of background, in November 1984 there were probably just under three million children in Australia under the age of 12 years. Of these children, 358,000 used formal child care and of that 358,000 children, under half-about 40 per cent-were in child care from between 10 and 19 hours a week. A further 864,000 children used informal child care. This Bill, which concerns itself with subsidies for formal child care in long day care centres, covers only a small number of children who are qualified by age and only a small proportion of the children actually receiving child care. Only a few children will be touched by this Bill. Commonwealth funds actually provide assistance for about 63,000 effective full time places for children under five in 832 child care centres and 262 family day care schemes.

The main changes proposed by this Bill are to alter the basis of subsidy of child care centres. Up to now the subsidy has been related to staff costs and has been potentially, not actually, open-ended. Although the Government has set a level of subsidy each year, it has done so on the basis of certain agreed staff costs. The new subsidy will be more finite and will be determined by the number of approved child care places in any facility and upon the age of the children. Further the changes propose a new form of means test. It is a very complicated situation, but the means test assistance comes in three different components. First, there is a base fee to be paid, even by those of the most limited means which is to be increased by 20 per cent from $10 to $12 per week. Second, there is an element of fee relief which is tested on family income. The basis of subsidy withdrawal is to be altered so that the burden of the Government's cost saving will fall partly upon those on the middle income level. Third, there is a top fee level, which to some extent determines what the centres may charge.

I observe that the increase in the base fee to be paid even by the poorest parents for the care of their children-an increase of $2 per week if the children are in care for 40 hours-may well raise up to $3m of the $10m savings. It is hard to be exact on this because I know that 58 per cent of the children in child care are on the minimum fee. What I cannot be certain of is that they are all receiving 40 hours care per week. If we multiply it out, it could be somewhere around $3m of the $10m saving to come from the poorest, who will get the $2 per week increase in their fees.

The Bill also makes some other administrative changes. It provides a capacity to recover overpayments; it provides ministerial power to approve places for the purposes of subsidy; it provides ministerial power to set conditions for the receipt of subsidies, and it gives a ministerial discretion to approve subsidies for certain very long day care centres for hours in excess of the standard number. At this stage I interpolate to say that I wish to make a declaration of interest. A member of my family is employed in a very long day care centre. She very much values her employment and I want it to be on the record that I have that personal interest.

Senator Robertson —She does not need the money, of course.

Senator PETER BAUME —No, she does not. Finally, the Bill provides for a savings clause to protect centres offering less than the so-called minimum requirement of 48 weeks per year.

The Opposition will not oppose this legislation. We are not delighted by the Government's decision to withdraw support for child care but it is a decision taken by the Government and announced in the May mini-Budget and we see no reason to change the stand we took at that time. The Opposition, while expressing certain views, will not oppose the legislation. We understand that the net effect of the change will be to reduce the subsidy for each place from about $30 a week to either $16 or $11, depending on the age of the child-that will save the Government $10.2m in a full year-and something like $3m of that may come from people paying the basic fee; the average increase in fees for better-off people may be as high as $14 a week; it may increase costs for some of the child care centres because the subsidy level will be reduced; and it may, particularly if we can believe the input we have had in the last few days, threaten the viability of some centres which have been dependent upon government subsidy.

This legislation raises several issues. First there is the issue of child care as an essential component in the achievement of equal opportunity for women in Australia. Women have been moving increasingly to the work force; they have been moving particularly for economic reasons. A lot of women move into the work force because they have to, and they want proper arrangements available for their children. They see three main benefits from child care: The first, educational; the second, short-term relief from the double role they are playing of housemaker and as someone in remunerative employment; and thirdly, they see child care as providing them with the freedom to take up employment. Each of those three benefits is very important to the women who have come and spoken with me. There is a massive increase in the number of women wishing to enter the work force. This reflects a world-wide social revolution. It is in the end a matter for individual women to determine, but if they are to be able to exercise their choice the provision and availability of child care is essential.

At least 40 per cent of working women in Australia do have dependent children and therefore potentially require care for those children. If we go the other way, only 50 per cent of mothers with dependent children stay at home; the other 50 per cent are in the work force and therefore potentially need access to child care. But at least half of the women who stay at home would like to work if they had child care available to them. I was recently on an open line in Adelaide talking about issues relating to the status of women and when we opened up the program to calls every phone call except one was from women asking why they had no access to child care to enable them, as most of the callers said, to look for part time work. They wanted to look for that work for several reasons, including to supplement the family income and because they wished to participate in the paid work force. Against that background we would like to see adequate and high quality child care provision. As we say, access to high quality child care is one critical factor in achieving equal employment opportunity for women, especially those women who need to work because of economic pressure.

The second point that needs to be made is that the cost of high quality child care is more than most families can bear. It is higher, for example, than the cost of sending a child to an expensive independent school. The fees for one child may be pegged to $80 a week under this legislation, but if people do not have their children in a subsidised centre it may be much higher. It is very difficult for families to pay these kinds of costs, just as it is difficult for families to bear the entire cost of having older children in independent schools.

It seems to me that the actions of the Australian Labor Party in withdrawing $10m from child care are inconsistent with the proclaimed espousals of equal opportunity by the Labor Party and this Government. If equal employment opportunity is the goal, why does the Government move to take $10m out of child care, which is one of the critical factors in achieving that equal employment opportunity? Further, if it is necessary to save $10m, why choose child care as the area in which it must be saved? The Senate will have before it next week a Bill to provide $280m more for universities. It could just as easily have been $270m for the universities, and the child care provision could have been left alone. Perhaps we could have avoided embroiling ourselves in the subsidisation of the defence of the America's Cup, or we could have examined the relative priorities of child care to liberate women and the building of sports stadia. We could have looked at the relative priorities of the provision of child care to liberate women and the subsidisation of my ballet tickets. What kind of justice is this? This Bill is an expression of the priorities of a government, and this Government's priorities are that these other areas for which money has been promised rank higher.

The main issues that have been raised by the providers of child care relate to their concerns about what will happen to the parents, in terms of the extra cost; what will happen to the centres themselves in terms of their viability; and, finally, what may happen to the standard of services provided. I will deal first with what will happen to the parents. Many parents will have to pay more, and not all of them can afford it. It is very likely that some children will have to be removed from child care because the parents cannot meet the increased costs. The coalition parties have as part of their published policy a commitment to tax relief for child care expenses. The Opposition believes that the provision of such tax relief is an essential component to any provision of child care services and to government support for such provision. If in fact the Government wishes to concentrate its subsidy more on lower income earners, that is fine; it is a direct subsidy. But for those earning a taxable income the kind of tax relief laid out in the coalitions' policy is reasonable and is necessary to allow many people to exercise their choice and to exercise the rights of their children to get child care. The coalition believes that without that tax relief the Government's proposals are incomplete and inadequate.

I indicate that we will be moving an amendment to the second reading motion which, among other things, indicates our belief that such tax relief for parents is a necessary part of any child care provision. In the same way the coalition is committed to putting more money back into families by means of its family taxation proposals, giving the option of income-splitting. Of course, if that happens-if more money goes back to families as a result of that manoeuvre as well-that will provide a great capacity for families to pay for child care under the new less generous fee-relief system.

The second concern that people are expressing is that some of their centres may become less viable. This is based on several matters: First, there is no annual adjustment promised to the top end fee or to the levels of subsidy. If these are not upgraded year by year, there will be a progressive squeeze on the viability of child care centres. It may be that the Minister can give us some assurance on this matter or at least some indication. If these top end fees and levels of subsidy remain unchanged, real questions of non-viability will arise for some of the centres.

Finally there is the question of standards of provision. The fight going on at present between the Municipal Association of Victoria and the Government really highlights this problem. We referred to it last week when we were discussing the estimates for the Department of Community Services. At that stage Senator Grimes indicated his views on what that fight was about. Part of the disagreement is about the standard or provision in child care centres that should attract government subsidy. As I listened to Senator Grimes explanation, it was clear to me that the Municipal Association of Victoria and the Government have a different perception of what is a necessary or reasonable standard of provision for the purposes of a subsidy. When we talk to the providers of child care they indicate that they have looked to the Commonwealth through its subsidy arrangements to, as it were, set the standard of provision for child care. They express the concern that under the new subsidy arrangements where that nexus will be broken and where the subsidy will be for a place, depending on the age of the child, the centres may move back to a minimum standard of provision under the relevant State regulations. These people were not slow to point out to me that they have arguments with the quality of some of the State regulations; they even assert that the Northern Territory has no regulation about standards of provision. That may or may not be true--

Senator Grimes —Victoria too.

Senator PETER BAUME —Victoria does not either, as the Minister has pointed out. If in fact we cannot be certain about adequate standards of provision there will be some validity in the concerns of the providers. I ask the Minister to advise us in his summing up whether, when he makes agreements with the different providers in terms of this Bill, he will have the capacity to write in conditions and standards of provision as part of the agreement he makes with them in order to bring them into the scheme that this Bill will set in place.

The coalition's policy supports the provision of child care. We recognise that in addition to our tax relief measures there is a need for subsidised child care places. At present only about 5 per cent of Australian children, give or take a little, have access to subsidised places which are the subject of this piece of legislation. It must be quite clear in terms of the figures I gave earlier from the Australian Bureau of Statistics that a large number of Australian children have no formal long day care or child care and are making use of either backyard or other informal arrangements, some of which will be good and some of which will not. It is quite clear that large numbers of children requiring care still have no access. I do not believe that one can look simply to Senator Grimes and the Government to provide all the places that will be needed. The Government has promised an extra 20,000 places, but even that will bring the total provision to only 7 per cent of children who qualify by age. It is quite obvious that what is needed in this area in order to give the women a fair go and a choice and to give the children a fair go is not only the subsidisation of child care places but also the taxation measures, such as those we have proposed, which will put more money into families and give them more choice to afford other kinds of child care arrangements.

The Opposition will not oppose this piece of legislation. We are disappointed about the kinds of priorities that the Government has announced it will support. For example, it is giving money for the defence of the America's Cup. It is interesting to consider this against the needs of child care. I hope the Minister will tell us in his summing up about the kinds of ministerial discretions that he will be able to exercise, the extent to which he will tie those to the standards of provision and what he sees as the means of resolving the present impasse occurring in Victoria. Having said that, I shall formally move the Opposition's second reading amendment. I move:

At end of motion, add: ``, but the Senate-

(a) expresses its concern that the Bill may place at risk the standards of provision of child care; and

(b) is of the opinion that, in order to meet the child care needs of the community, complementary measures are necessary, including taxation relief for child care expenses and income splitting for families''.