Parliament – early education and care

Wednesday, 09 December 2020

This third-term Liberal government have quite a few blind spots: their blatant lack of regard for accountability in aged care; their lack of respect for probity when they use taxpayers’ funding, and all the rorts that go along with that; their obsession with undermining workers’ rights; and, of course, what we are here to talk about today—their blind belief that the childcare system they designed is actually delivering affordable and accessible care for families, despite evidence showing that it’s not. And it’s not just a little bit of evidence; it’s a truckload of evidence.

Fees have increased by almost 36 per cent since they were elected and by 8.3 per cent since they launched the new subsidy system just over two years ago. Families are now paying, on average, almost $4,000 more per year for child care. The minister likes to quote how much out-of-pocket costs are per hour, as if this is some sort of meaningful measure for a mythical family who needs one or two hours a week! For the rest—who need 10 to 12 hours a day, who pay daily fees, three to five days a week—his comparison is absolutely meaningless. They know they’re paying thousands more a year. We know they’re paying thousands more a year. It’s time that the Liberal Party admits that these families are paying thousands more per year.

The government, at the time of the new childcare subsidy system, called it:

… the largest reform of Australia’s child care system in a major win for Australian families.

Now that is the Liberal Party’s spin machine in overdrive, because the delivery to Australian families has been absolutely the opposite. They’ve been suffering under fee hikes, which has been noted not just by this side of the House, not just by countless reports, but, indeed, by the OECD. It has noted that Australian families contribute 37 per cent of early childhood education and care costs. This compares to the OECD average of 18 per cent.

Australian families are getting a dud deal from this government! Not only do we have Australian families paying higher out-of-pocket costs, but we have 100,000 families who are locked out of the system because they just can’t afford it. Things will not get better, with the Department of Education, Skills and Employment—the minister’s own department—predicting that fees will increase by 5.3 per cent over the next year. This will be well over double the inflation rate, if not more, and it means that the real value of the subsidy will continue to decline. This is a point that the government has refused to acknowledge: time and time again, their subsidy’s value has declined and been in freefall for the last two years.

Multiple independent reports show the workforce disincentive rate that is a design feature of this government’s childcare system. The fact is that many secondary income earners are working for free if they want to work the fourth and fifth day and pay for child care as well. It is a system designed to support part-time work for the secondary income earner and does not encourage full-time work. We know that women have been hit by the COVID-19 recession. Payroll jobs worked by women have fallen by 3.1 per cent since the beginning of the crisis. The female unemployment rate is seven per cent, and it’s eight per cent for females seeking full-time work. The female underemployment rate is 12 per cent, and 92,000 women have exited the labour force since March. They’ve just given up.

The minister responsible has already vacated this portfolio—perhaps he’s getting set up for the trade portfolio!—but I am sure that the minister at the table will brag about how much extra funding the government is providing for the childcare subsidy. But the increase reflected in the budget is due to higher childcare fees and lower wages. This is not something the government should really be bragging about. The extra spending has nothing to do with dealing with the structural problems that exist that work as a disincentive for so many women to go back to work.

Families know there is a problem and so does the IMF. It just released a report on strong, sustainable, balanced and inclusive growth, where it calls on Australia to invest in childcare spending to increase female labour participation. So it’s not just us on this side of the House, it’s not just families right around the country, it’s not just businesses and economists; the IMF has directly called on Australia to lift its game. The head of the Workplace Gender Equality Agency agrees. Last week, she said it is very clear that, if we are serious about changing the circumstances for women and men and allow them to return to the office, we must look at the issue of child care.

In the true fashion of this government, on 8 October The West Australia reported that the Prime Minister—or someone in his office or a spokesperson—said that the system needed reform, but they believed there should be a six-month marketing campaign first. Of course, this Prime Minister would put marketing before reform. I’d love to know if the minister can confirm if the government’s $15 million so-called ‘our comeback’ marketing campaign will include the Prime Minister’s desire to have a bit of spin when it comes to child care.

We’ve also heard many members of the government out in the media floating long discredited ideas about how to improve the system. In particular, they are now suggesting that tax deductibility should be available for services outside the subsidy system. Essentially, what they are saying is, ‘It’s time for tax deductibility for nannies.’ They floated this idea despite the Productivity Commission having already looked at tax deductibility and dismissing it.

This government also does not have a great track record when it comes to nannies. Their last brainwave in this space was the Prime Minister’s own nanny pilot, which was a dismal failure. There is no better example—well, there are many examples, but I would say there is no better one—of how this Prime Minister’s announcements do not match delivery than the nanny program. In 2015, the then social services minister—now the Prime Minister—announced a $246 million nanny pilot program with great fanfare and promised that 10,000 families would benefit from it. As usual with this Prime Minister, the delivery of the program was a disaster. Indeed, rather than 10,000 families, only 215 families benefitted from it. That is a success rate of 2.15 per cent! We have a very low bar in terms of success sometimes in this place, but 2.15 per cent is just a debacle. So this leftover idea shouldn’t be heated.

Of course, many government backbenchers refer to the importance of increasing workforce participation and removing workforce disincentive rates. Even backbenchers on the government side admit it’s a problem. Tax deductibility for nannies is a stinker, but this Prime Minister is so stubborn and arrogant that he just cannot bring himself to endorse Labor’s plan. Why else would he keep dismissing it time and time again? I’m sure that the government in this debate will point out that families on high incomes will benefit from Labor’s plan. The truth is that 97 per cent of families will benefit from Labor’s plan. We have a plan that will help families with the cost of living. And while this government continues to see it as some sort of privilege that women can return to the workforce, we on this side of the House see it as a right—a right to have some independence in their economic future, a right to engage and have a choice when it comes to going back to work and being able to have child care. That gets to the heart of this problem, that women and men both are unable to access affordable child care in this country.

So, Labor has a plan whereby we will remove the cap and make the tapering rate fairer. We’re going to get the ACCC to look at price regulation, to shine a light on costs and fees, and we’re going to put the Productivity Commission to work on a comprehensive review of how we implement a universal 90 per cent subsidy system. We will fix Scott Morrison’s busted childcare system for good and ensure that families in this country get a decent go. That’s one thing families can rely on: on our side of politics, we will help them. We won’t play class warfare as this government does when it comes to child care. We won’t pit one family against another. The message from Labor is clear: we want to ensure that families can get back to work in this pandemic. We want to see a system that helps grow our economy and benefits everyone. We don’t see this as a welfare measure; we see this as a productivity measure.

More News

Monday, 07 December 2020
Doorstop with Anthony Albanese and Alicia Payne – Labor’s child care calculator
Monday, 07 December 2020
Labor launches child care calculator
Monday, 16 November 2020
Government desperate for a child care policy