Parliament – Building on the Chld Care Package Bill 2019 – Second Reading

Monday, 25 November 2019

I welcome the opportunity to debate child care in this House today. We don’t often get to discuss early education and care in this parliament, but this bill is a bill that is long overdue. The bill is officially named the Family Assistance Legislation Amendment (Building on the Child Care Package) Bill 2019 but it really should be named ‘Fixing some of the government’s childcare systems stuff-ups bill’. Rather than building on the package, what this bill actually does is fix some of the design faults that the government system missed in the original bill. Almost a year and a half on, the government is finally getting around to fixing up problems that have been evident from day one.

This bill will extend the time frame for enrolments ceasing due to nonattendance from eight to 14 weeks. Labor supports this change as it fixes one of the most ridiculous design faults with the government system. It’s almost comical that the government designed a system that kicks families out of the system after eight weeks when the school term goes for 12 weeks and the thousands of families using vacation care only access the system every 12 weeks. If you’re one of these families you’ll be kicked off every eight weeks, meaning you’ll have to go through the whole registration system all over again. The amendment before us means that families using vacation care every school holidays won’t have to reregister for the system with Centrelink every term. This is something that should have been done and foreseen at the outset of the package and is something that the sector has raised on many occasions. Anything that reduces the amount of time families have to spend trying to contact Centrelink or trying to register with Centrelink is something that Labor will support.

The bill also improves the treatment of third-party payments in calculating the childcare subsidy, and this is also welcome. The government designed a system so that a childcare subsidy would only be calculated after state, territory and third-party contributions were applied to the childcare fee, meaning that some low-income and vulnerable families were still facing out-of-pocket fees when the intent of the state and philanthropic programs was to eliminate, or significantly reduce, the cost of accessing early learning and care. State and territory governments and the sector have been lobbying this government since July 2018 to make this change. So it is definitely in this case better late than never when it comes to this government’s action.

The government has also seen common sense with the provision of this bill to remove the 50 per cent limit on the number of children that a provider can self-certify for the additional childcare subsidy for child wellbeing, although this will not come in for some time. It is a mystery why the government decided to introduce this arbitrary rule in the new system which completely ignores the reality of life for some of the most disadvantaged communities in Australia. Labor will support this change.

The additional childcare subsidy for child wellbeing is a vital program that provides a safe and nurturing learning environment for children in extremely vulnerable situations at home. For most of these children it can be the difference between being able to stay at home or having to go into the child protection system. It is critical the government treat this program with sensitivity and ensure that families and providers are not overly burdened with red tape. This Liberal-National government is doing exactly that. The introduction of a number of new requirements and rules to access the additional childcare subsidy came into force last year. The government cut the number of weeks that a provider can initially claim the subsidy on behalf of a family from 13 to six and stopped the provider from handling the application on behalf of the family. They now require the provider to work with the family to collect all the evidence that’s required in order to qualify for the payment and to notify state and territory authorities. And they require Centrelink to process and approve the application within six weeks. That’s a herculean task. When Centrelink fails to approve the paperwork within six weeks, claims are backdated only 28 days, meaning debts are accumulating.

This third-term government like to bang the drum about cutting red tape. It is a media release they put out on a regular rotation. But they go out of their way to increase red tape for vulnerable families and the early education providers that are trying to help those families. The numbers prove that the government’s new rules are failing vulnerable children and families. In the first six months of the new system, the number of children receiving the child wellbeing subsidy collapsed by 21 per cent. When asked in Senate estimates if they were concerned about the drop, the department admitted they weren’t. They also confessed that they weren’t even tracking whether families had dropped out of the system. Unfortunately, this is not surprising behaviour from a government that has not focused on vulnerable children’s access to early education. Ensuring that vulnerable and disadvantaged children access early education is of critical importance in ensuring they get the best start to life and don’t start school already behind.

Most of the other provisions in this bill are minor and technical amendments, which Labor will support; however, there is one provision in this bill that Labor will not support. In the current system, families registering for the subsidy have a 28-day grace period in which to provide their bank account and tax file numbers. Families are able to claim the subsidy and have 28 days to get those details to Centrelink. That is reasonable and rational, as it recognises that people don’t always have their personal details handy when they interact with government. Unfortunately, it seems far too sensible for the government. We now see that items 35 to 38, 41, 42, 50 and 51 in schedule 1 of the bill remove the current 28-day grace period, so families will not be approved for the subsidy unless they have their personal details on hand. Of course, the government has claimed that this will reduce complexity in the system, and it’s true that it might make it easier for Centrelink. But it won’t make it easier for families; in particular, families in stress, who may be fleeing a domestic violence situation or natural disaster and who don’t have time to grab all their paperwork as they leave the house. Families in stress still need their child to enjoy the benefits of early learning and care, as they want to maintain some kind of routine or normality for their children, but if they don’t have the details then this government will not allow them to enrol in early education.

Almost every single submission to the Senate Education and Employment Legislation Committee’s review of this bill was critical of this change. Childcare providers and their peak bodies are clear that this is a regressive change that will impact those families least able to cope. Labor does not find this provision acceptable and so will be moving an amendment to remove it from the bill. I do note that the minister has indicated the government will move an amendment in the Senate to allow families in crisis to apply for an exemption from this new policy. Labor will not oppose this amendment, and I’m pleased the minister has responded to some of the concerns of the sector. But to me it sounds like there’ll be increasing complexity in the system for families and providers, because the Secretary of the Department of Education will be required to grant the exemption. Twenty-eight days is not a significant length of time. Why burden the secretary with this type of work? Why not just let families have their grace period of 28 days to get their tax file number or bank account details, rather than have a system that requires an exemption granted by the secretary? By the time that happens, the 28-day period is probably going to be finished. Labor think that our amendment provides a better solution. Retaining the 28-day grace period is a simple and effective response to the concerns raised by both the sector and families.

The bill presents modest improvements to the government’s childcare system, but it doesn’t rectify some of the biggest problems. This is a system which leaves one in four families worse off. It’s a design feature that access to early education and care did reduce for approximately 279,000 families. It is a system that only 40 per cent of providers and only 41 per cent of families told the independent evaluation reviewers had resulted in positive change, and 83 per cent of parents told the evaluation team that the new system had made no impact on their work and study. It’s a system that has been forcing childcare providers to act as unpaid debt collectors for the government, because families are struggling to stay on top of their complicated activity and means tests. It is a system that has been riddled with software glitches, left providers and families in the dark, and left staff without pay. To claim that this bill before the House builds on the current system is stretching credibility.

Labor’s view is that this bill is only ironing out a few of the kinks in the system but doesn’t really touch the rough edges. A bill that truly built on the childcare package would include provisions that would abolish the regressive activity test. When it implemented the new system, the government acted against all evidence and advice highlighting the benefits of universal access to early education and care, and introduced a new activity test in order to qualify for 24 hours of subsidy. If this bill were to genuinely build on the childcare system, it would restore the guarantee that existed of two days a week of child care for all children and the childcare safety net that occurred under the old system. Families used to receive 24 hours a week of guaranteed access to early education in which they could access the childcare subsidy. This government cut it to 12 hours a week. A bill that truly built on the current system would fix the complete mess the government has made of the additional childcare subsidy. It would stop the government’s Centrelink robo-debt letters which are being sent out, blunt letters telling families that they owe the government money, without any explanation. So far, over 91,000 families, or 16 per cent of families audited so far, have been hit with a childcare subsidy debt notice. Many of these families are finding that, if they do pursue this debt notice, they don’t actually owe as much money as was stated in the letter. This is more evidence that the new system is too complex and is not working for families.

If the government was serious, it would do something to bring childcare fees under control, which have shot up 30 per cent under this government. The latest CPI figures show that childcare fees have increased by 2.5 per cent in the September quarter alone, the fourth successive increase, and have now gone up by seven per cent since last September. The government was very confident last year that their new system, in their words, would put downward pressure on fees and that they were driving down the cost of child care. The minister was keen to spruik the new website as a game changer for families and told families to shop around, but less than half of providers are providing accurate fee information on their website, making it incredibly hard for families to even get accurate information about fees. We don’t hear the minister make these claims anymore, which is disappointing. Unfortunately, all the spin has been blown away by the reality.

Unfortunately, like with every other portfolio, the government has provided no plan or view about how to actually bring fees under control. We’ve had a couple of thought bubbles that have been dropped previously to Sunday papers, including the naming and shaming of centres that hike their fees, but nothing has actually come of that. Families are now paying on average $3,000 a year more for early education and care under this government. A bill that improved on the current system would have, if they were serious, restored the $20 million in annual funding that the government have slashed from the National Quality Framework budget. The latest data shows that 21 per cent of services have been assessed as not meeting the national quality standards. The minister needs to restore this funding and assure families that all centres are safe and up to standard. But none of this is a surprise—after all, this is the government that has a senator who believes early education, and I quote, is not the best way to invest in our future; a Minister for Education claiming the taxpayer funding of early education and care is communism; and a Prime Minister who calls the childcare budget a money pit.

Unfortunately, this government haven’t taken the early years seriously. They see it as a burden, not as an investment. But, of course, it is an investment. Labor are always pleased to ensure we are advocating for children, as I did this morning at an event here at Parliament House. We will advocate for investment in the early years. We will support most of this bill because it does make some progress towards making the system work better for families, but we do believe the government has a long way to go.

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