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Thursday, 12 September 1996
Page: 3422


Senator CHRIS EVANS(3.19 p.m.) —I rise today to speak to my motion concerning child care. I move:

The Senate notes, with concern, that:

(a) the changes in the administration of the Australian child care system will dramatically increase the cost of child care for most Australian families;

(b) the increase in child care fees will completely erase any benefit these families may receive from the Liberal Party's family tax initiative; and

(c) the increase in fees will reduce the choices available to Australian women and are therefore anti-family.

The reason I sought to bring on this debate today was because of the great concern that exists in the community about the government's child-care changes contained in its recent budget.


Senator Panizza —You have not got a personal interest, have you?


Senator CHRIS EVANS —I was just about to declare before I started, as I have in all such debates, that my personal interest is not a pecuniary one. I am a father of two young children—at least, to the best of my knowledge only two—and both attend a child-care centre for a couple of days a week. That is to facilitate my partner also working, although unfortunately she has had to work only part-time in recent years because of my full-time employment. So that is my personal interest, if you like, in the matter. Child care is a matter that a lot of Australians have an interest in as most of us belong to families and have relationships with children in one form or another.

The motion seeks to highlight the cost to families of the changes made in the budget, the failure of the family tax initiative to compensate for those increased costs and the impact this will have on women. I am sure my fellow Labor Party speakers will concentrate on some of those issues, as I hope to.

It is important for us to realise the changing nature of our society—the number of families that have two parents working has increased and the demand for child care in our society has risen dramatically in recent years. Since 1983 the number of places for child care in Australia has risen by 500 per cent. There has been an enormous growth in child-care places. Over half a million children are in care. About 34 per cent of children under four are in some form of formal care.

This is an enormous industry. It is an industry in which the Australian community must have a close interest because it is about the care and development of our very young children. As I said, it is no longer just a small sector but a large vitally important sector.

Given that position, the Liberal Party went to the last election promising to retain and improve the child-care system that the Labor Party had built over its 13 years in government. The coalition promised that it had no plans whatever to change the operational subsidy. That promise was given by Mr Kemp—


Senator Troeth —Dr Kemp.


Senator CHRIS EVANS —Sorry. It was given by Dr Kemp, who was the then shadow spokesperson. They also promised that a coalition government would maintain the non-means tested child-care cash rebate, and they generally argued that they would broaden child-care options for the community. The Liberal Party went to the election promising to protect and improve the child-care system that had been established by the Labor government.

Quite clearly in this budget they totally reneged on those promises. Apart from the obvious breaking of their promises to maintain the operational subsidy and to not means test the child-care rebate, they have chipped away at a number of the provisions that are at the centre of child-care assistance and the child-care system in this country. They have used child care from which to drag back a massive $504 million over the next four years. They have attacked the child-care system to raise revenue for this budget.

The result of those attacks on child care is a massive dislocation to the system and an enormous increase in fees to parents. The recent EPAC report indicated that the removal of the operational subsidy from subsidised child-care centres would represent a cost of $14 per week per child over three and a cost of $21 per week per child under three. So you can see that the removal of the subsidy is going to have an enormous impact on parents through increased fees.

In the budget the government also removed $282 million from child-care assistance through a series of measures that nicked and cut to restrict child-care assistance and to restrict access to child-care assistance. They were even so mean as to provide that there would be no indexation over the next two years, so that those currently receiving child-care assistance would receive no compensation as fees increase in line with the CPI but would rather have their assistance reduced in relative terms.

The Government have also walked away from the Labor Party's commitment to build more child-care places, so the Labor program for 5,500 new places between now and the year 2000 has been abolished and those places will not be provided. The Liberal government is relying on the private centres to provide for the demand that is emerging for child-care places in this country. So the budget represents a massive attack on child care and on parents' capacity to enrol their children in good quality child care.

According to our estimates, more than 330,000 families will pay more for child care as a result of the various budget initiatives. These families will get no benefit from the family tax initiative that was also contained in the budget. Whatever small amounts those families would have received by way of taxation relief will be completely eroded by the increased child-care costs.

It also represents, in my view, a thinly disguised attempt to close community based child-care centres. The Liberal Party for a long time had difficulty accepting the role of community based centres in our system, and I think these changes are an attempt to close those centres, to drive them out of the market and to leave child care as a purely private, profit driven market with no community input into child care and child-care centres.

Quite frankly, that is a great shame because the role that community based child-care centres have played in developing quality child care and in improving the child care available to Australian children and Australian families has been excellent. I commend the community based child-care centres and their staff for the role that they have played over the years. They have provided choice, quality and leadership on a range of issues and have provided assistance to disadvantaged children. They have helped meet special needs.

An obvious area where they have been involved in which private centres have not been keen to take a role is in the area of providing places for children under the age of two. It is very hard to find places for children under two in private centres because of the higher costs required in meeting the supervision needs of those children. But the community based centres have filled that need in our community.

They have also allowed for parental input into the control of their centres and the development of their children and have been a focus for a lot of community activities. So they have played a very useful role in building community spirit, in involving parents in the care of their children and in assisting parents learn how to be good parents and how to meet the development needs of their children.

I make the point that I do not say that these needs are not met in part by private centres. My comments are not meant as an attack on private centres—I have visited a number of very good private centres. But there is a role for community based centres in our system.

I do not think that we should be moving to what is effectively a child-care system solely dominated by the private sector and market forces, because I think that we would end up with a lesser system, a system without the same quality and without the same capacity to deliver as currently is provided. The community based centres have in many ways acted as a benchmark for the private centres and have forced standards to be applied that otherwise might not have been applied.

The ALP will be opposing the child-care cutbacks that were contained in the budget. We will be looking very closely at each of the bills as they come into this place. We will be seeking to defend what we can of the community based child-care centres' role and to defend the rights of parents to good quality child care at an affordable price. We will highlight the fact that the Liberal Party promised these people that their child-care places would be safe, that the system, the assistance and the rebates they had enjoyed under the previous administration would be maintained. We will be trying to hold you to what is obviously now considered to be a non-core election promise.

I can tell you from the experience I have had of talking to families around Perth—I attended a meeting the other night of 300 or so people at the University of Western Australia—that there are a lot of very angry people out there. Many of them believed the coalition when it said that it would maintain the current child-care system, that it would maintain the community based system. They are becoming acutely aware of what Liberal Party promises mean.

In terms of the argument about increased costs, I think it is quite obvious there will be significant increased costs to parents of children who attend community based centres. As I said, the EPAC figures indicated that the costs per child were somewhere between $14 and $21 per week. The centres I have spoken to receive an operational subsidy of somewhere between $30,000 to $45,000 per annum. That is $30,000 to $45,000 per centre that will be removed from their budgets. For some of them, this represents 10 per cent or more of their total costs.

These centres do not have many options. They are not for profit. They do not have the ability to carry over losses and profits. Their only answers are to increase costs or to start doing things like cutting the amount of food or the quality of food they provide to the children, or reducing the number of staff employed to care for those children. There are not a lot of options. They run a very tight operation as it is and most of the centres I have spoken to—and I have spoken to at least a dozen so far—have indicated they will just have to pass most of the costs on to the parents. So those centres are looking at having to significantly increase the cost to the parents.

The budget, to be fair to the government, admits this is the case. The budget papers state:

There is potential for increased costs for some families using community based centres as the result of the removal of the operational subsidy.

Even the budget concedes that the subsidised centres will have to pass on these costs to families of children enrolled in these child-care centres.

But it is not just the subsidised centres that will suffer—or the families who use subsidised centres. The costs for families whose children attend private centres will also rise. The cap on assistance to a maximum of 50 hours a week, the changes to child-care assistance, and the freeze on the fee ceilings for the cash rebate and child-care assistance will all force up the costs to every parent with a child in child care.

All will have to pay more. Well over 300,000 families will be paying more. Some of those families with two or three children in child care will be paying a great deal more for their child care. My estimates are that some will be paying anywhere between $40 and $90 a week extra as these costs are passed on. These are massive cost increases. These are costs that will force life changing decisions for a lot of people in terms of whether both partners work, whether they place their children in quality care or whether they seek informal and ad hoc arrangements.

These are very important changes that the government has brought about—changes that will have a real impact on people's lives, and not just people at the top end of town. I know the government is very keen to have this sort of Robin Hood image perpetrated since the budget—how it is attacking the rich to protect the poor—but these changes will impact on ordinary working men and women in Australia. People who are earning less than $30,000 a year where both partners are working will be severely affected by these changes. Women who are studying and put their children in child care while they study will be affected. Some of them are on very low incomes. There is going to be real pain, real hurt, to low and middle income families as well as those on higher incomes who will be affected by the means testing of the cash rebate system.

The government have at the centrepiece of this budget the family tax initiative. They have heralded the family tax initiative as being their attempt to protect the family to ensure that people raising children in our society have a better deal. On the one hand they give and on the other hand they take. Many of the benefits that come from the family tax initiative will be completely erased for families in our society. Many families will be $10, $20, $30 or $40 worse off as a result of the dual impact of the family tax initiative and their increased child-care costs.

Those people will not believe you when you say that they will be better off from the family tax initiative when they get a $7, $8, $9 or $10 a week increase in their take home pay as a result of the changes to taxation, yet they will have to fork out $20, $30, $40 or $50 a week extra in increased fees for child care. They will not thank you. They are very angry about it and they are beginning to realise what it is going to mean for their budgets, for their choices.

The Liberal Party campaigned on improving and broadening choice in child care. This makes a complete lie of that claim. You are restricting people's choices. You are removing choices by forcing them to pay more for their child care. As I say, for many Australian families the tax initiative will not result in them being better off at all because the impact of the increase in child-care fees will completely erase any benefits that there would have been from the family tax initiative.

I am sure Senator Crowley and others will speak more about this aspect of the motion—that is, the aspect that refers to the reduction in choices to women and the anti-family nature of these cuts. But I think it is very clear that what has occurred here reflects the Liberal Party's bias against two-income families. It has been a cry of the Liberal Party for many years that we do not do enough to protect those who have a carer at home not in paid employment. But what we see in this budget is an attack on women who work, because it is largely women who will suffer as a result of these changes. The government has not broadened choice at all. It has reduced choices for these women. A number of women I have spoken to will have to make very hard decisions as a result of what will occur.

At a meeting I attended the other night, a young woman made a very strong speech. This young woman is studying and she said that as a result of the huge increases in HECS fees and the child-care fee increases, she will have to give up study. She has done her maths. She will not be able to afford to continue her university course because the combined effects of HECS and increases in child-care fees will mean it is just not economical for her to do it. She cannot manage, so she will have to give up her university course at the end of the year. She will not be able to continue studying next year under the new arrangements for HECS and the increased child-care fees.

This woman is not atypical. A number of women at meetings I have attended have spoken about how this is really making them have to think again about whether they can continue to stay in the work force. The increase in costs of child care may make it uneconomical for many women to continue to work. They will be driven—not through choice but through the impact of these fees and other charges, like the HECS charges—back into the home to care for their own children when they would rather be doing some part-time employment, some study or some full-time employment. You are very much reducing the choices to women.

A lot of women I have spoken to are angry. They feel let down, they feel marginalised and they very much fear that their opportunities have been reduced by these changes. They are organising themselves to campaign against these changes. When a number of these measures come before the Senate in budget bills, I hope that the Democrats, the Greens and the Independents will combine with us to defeat a number of these measures because they are anti-family and they very much restrict the opportunities and choices for women in Australian society.

Finally, I wish to make a few remarks about a letter I received from a constituent. This constituent sent me a copy of a letter she forwarded to the Hon. Judi Moylan, the Minister for Family Services, in response to the budget cuts. This constituent lives in Derby in Western Australia, in the far north-west of Western Australia. I am sure Senator Eggleston will be interested in what she has to say. She sends her only child to the one child-care centre in Derby, a subsidised centre.

This woman says that the impact of cuts in remote areas is tantamount to abolishing formal child-care arrangements in the bush. She currently pays fees of $174.50 for a child in nappies, already far greater than those paid at comparable centres in the metropolitan area. Her centre will have to find an extra $40,000 next year to continue operating. That will result in this woman paying fees in excess of $200 per week for one child—$200 per week to have her child cared for while she attempts to earn a full-time income.

She makes the point that the private sector will not step into this particular breach because they will have no interest in opening up an alternative centre in an isolated area like Derby because of the difficulties in attracting staff, higher costs, et cetera. Senators would be aware of the difficulties of operating in some of the far-flung regional areas of northern Australia.

This woman thinks that these child-care cuts will have an enormous impact on her lifestyle. She cites that the minister has accepted that some centres are likely to close as a result of the removal of the subsidy. She believes her centre may well be one of those. Fifty-five families in Derby will have to deal with the consequences of that—to face job loss or income reduction. It will have an enormous impact on their lifestyles and their ability to stay and continue to work in areas such as Derby. As Senator O'Chee and others would know, it is sometimes very hard to attract people to these sorts of regions to do valuable jobs. This is going to have an enormous impact on the whole fabric of Derby and other communities.

I am sure government speakers will say, `There is some money in the budget for adjustment,' and there is, but it is of the order of $10 million.


Senator Troeth —It is more than that.


Senator CHRIS EVANS —I will listen to your explanation, Senator Troeth, with some interest. I do not have the figure directly in front of me, but I had a look at what it would mean. I cannot see it satisfying the needs of even Western Australia, let alone the rest of Australia, because the needs in the bush are enormous. The costs are very high and I cannot see the adjustment package as contained in the budget papers doing anything to overcome the need for subsidised centres in remote and regional areas.

I think there is an enormous range of issues here that are of concern. There is a growing resistance to the government's cuts to child care. I think as families begin to analyse what it means for them in terms of costs, in terms of the closure of centres and in terms of the reduction of their choices, the government will start to feel the heat from those families that feel very much let down by the government's broken promises and its attack on working families in Australia.