Parliament – Family Assistance Legislation Amendment Bill 2021 – Second Reading

Wednesday, 17 March 2021

I rise to speak on the Family Assistance Legislation Amendment (Early Childhood Education and Care Coronavirus Response and Other Measures) Bill 2021, and I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House notes that:

(1) after two and a half years, the benefits of the new child care system have been entirely eroded for many families;

(2) child care fees are projected to grow by four per cent per year for the next four years;

(3) Australia has one of the highest rates of female involuntary part time employment in the OECD; and

(4) the current system does not support second income earners, usually women, working more than three days a week”.

I welcome the opportunity to speak on early education and care in this place, because this portfolio impacts over a million Australian families, and we should take every opportunity we can to improve the system. I’m pleased that we have this bill before the House, because it’s unlikely that this government will want to speak much about early education and care as this year goes on, because the problems in the government’s system are just becoming evident.

The changes before us today are sensible and mostly technical in nature and are supported by stakeholders in the sector. It’s not surprising that there were some drafting errors and ambiguities when the COVID-19 response legislation was drafted and passed last year. Schedule 1 of the bill retrospectively clarifies and states the circumstances where the secretary can declare emergency or disaster events and make business continuity payments, thereby providing legal certainty for actions taken last year and retaining business continuity payments as an ongoing policy response available to government. Labor had some issues with the business continuity payments last year, but they were entirely based on the amount of funding provided to services, not the mechanism. Of course, we had many early learning centres being given a 50 per cent continuity payment—well, it wasn’t a continuity payment; there were some other continuity payments. There were obviously some issues and problems with that, but as a whole the mechanism is the right mechanism. It is a prudent change, and it always pays to plan ahead. This payment mechanism, as a mechanism, worked well last year. Of course, the government wasn’t very generous in this mechanism, and there were issues with the eligibility criteria and the quantum of payments last year. But, while the government did get the detail wrong, the mechanism is worth keeping, and therefore we will support this.

Part 6 of schedule 1 removes the legal requirement for services to send weekly sessional reports to the department during declared emergency and disaster events, reducing the red tape burden on services during these unsettling events. Of course, data gathering is very important. Many services did not have to provide their attendance data and other data during the free child care, or the so-called free child care, and it is disappointing that we don’t have that information to get a sense of who was utilising the free child care and why demand went up when it came to the free child care. But, of course, during a disaster it is very important that that flexibility be there, so we certainly support that part of the legislation. But it should be used sparingly, because data on who is using early education and care is critically important.

The bill also extends the tax return deadlines for the 2018-19 financial year to 31 March 2021 to provide more time for people who have not managed to lodge their returns during the stress of the pandemic. This is important because there have been many people whose lives have been thrown up and whose businesses have been completely disrupted. It also removes the two-year cut-off point for people to lodge their tax returns to be eligible for childcare subsidy. We certainly support this. This provision is surprising, given that this is the same government that prides itself on making it harder to claim benefits and chases vulnerable people for illegal robodebts. I have to say I was surprised, but I welcome the government taking a more practical and compassionate response to qualifying for CCS.

An important provision in the bill also ensures that declared emergency and disaster events do not count towards the 14-week period of non-attendance, after which a child’s enrolment is cancelled. This is particularly important for families from Victoria, who had a second quite long lockdown last year, but I’ve heard from early learning centres that this is also affecting a number of families in my electorate and other electorates. So this is quite important and will help ensure that families in future events won’t accidentally be removed from the system. The bill also contains some other minor tidy-ups and corrections which have no adverse impact on families, and therefore Labor will support these changes.

Labor will always support commonsense changes that reduce red tape on services and families and clarify the legal position of the secretary of the department and other public servants acting in goodwill. Labor will support the bill but we will be moving a substantive amendment to give further protection to families in the system. Labor is pleased that the government is acting to improve some of the rough edges of its COVID-19 response, because the government certainly did not get everything right with its pandemic response in the early learning sector last year.

Of course, the Prime Minister’s free child care for everyone with a job was like most announcements from the Prime Minister: not quite what it seemed. The main feature of the Prime Minister’s free childcare system was that there were many families locked out of free child care because the funding wasn’t there. Of course, many of these families were not told they couldn’t access the child care by the government. Indeed, that burden was placed on the centres themselves. Labor heard from early learning services around the country that were struggling to keep their doors open as the funding had been slashed, and, of course, many workers were not eligible for JobKeeper. Services had to cut their opening hours, they had to cut staff and they had to stand down staff. Many early educators lost jobs and cut places to try to balance their books. Family day-care educators in particular did not suffer a drop in enrolments but were expected by the government to work for half the pay, because many could not access the JobKeeper program. That was part of the design. Families were denied places, including many healthcare workers who had been asked to come back from maternity leave or were naturally returning to work. This is very distressing.

Another key feature of the pandemic response was the government’s exceptional circumstances fund, which they set up to try to cover the one-third of early educators not covered by JobKeeper. This fund was very, very good at one thing: refusing funding applications. Department data showed that only 39 per cent of applications were approved. The government likes to boast that 98 per cent of early learning centres stayed open during the COVID shutdown crisis, but this is a very superficial KPI. The government’s own limited survey found that one-quarter of services were not financially viable or were losing money every day. They stayed open during that time, losing money, to look after children so that we could get through the pandemic. Services were ordered to deliver the Prime Minister’s underfunded commitment and struggled to provide places to meet demand.

The government’s response was naturally to blame the providers. They sent strongly worded communication to providers, threatening their funding if they did not provide enough places and hours, when they knew the services were not funded to do so. Incredibly, they set up a new hotline to encourage families to dob in early learning providers. This was at the height of the pandemic, and these were families and services trying to work together, trying to muddle their way through. Anxiety was high on the families’ side and on the educators’ side. This was a very difficult time. And instead of supporting, of course the government wanted to pit early learning providers and families against each other.

Unfortunately, this bill does not undo some of the damage that has been caused. While the government often likes to brag about their JobKeeper program, we are hearing, on the ground, that many educators that were forced to leave the industry have not come back. So what we are seeing now is staff shortages. As a direct result of the government not properly covering these educators and not properly ensuring that their connection to their workplace continued, they have now left the sector. What we are seeing as a result is more and more applications for waivers of ratio numbers. That is what we’re seeing. So what we are seeing is a sector that has not recovered, because the workforce was disengaged. The workforce was disengaged because this government could not design JobKeeper to ensure that the early learning sector had that connection to their workforce. This is a problem, and we have heard nothing from the government on this.

Now, as we come out of the pandemic, we are facing a different problem in addition to the workforce shortage. We are now seeing the government snap back from their free childcare system to one where fees are now soaring. If we have a look at this system, we are only 2½ years in. The Prime Minister personally designed this childcare system. From time to time they’d brag about the benefit of this system—though a little less, lately, because that benefit has been completely eroded for many Australian families. The Prime Minister himself dubbed these changes, when he introduced them, a ‘once-in-a-generation reform’, and promised that they would make child care more affordable. Yet we are now seeing ABS data that has shown that, for parents in Brisbane, Sydney and Darwin, child care is now more expensive than when the system was first introduced in mid-2018. That’s not just fees—we’re not talking about the overall fees. It’s the out-of-pocket expenses. And any out-of-pocket benefit has been completely eroded in those places. The benefit has been almost entirely eroded nationally, showing that this system failed—absolutely, comprehensively failed—on what it was meant to deliver. The education department itself predicts that childcare fees will increase by an average of 4.1 per cent for the next four years—substantially outstripping inflation, which the childcare subsidy is pegged to. So that means that out-of-pocket costs will continue to increase and increase and increase and will be higher in the years to come. On average, parents will soon be no better off under the Prime Minister’s once-in-a-generation set of reforms than they were under the previous system. Overall, childcare fees have now soared 35.9 per cent since the election of this Liberal government in 2013.

The Productivity Commission’s report on government services in 2021 showed that childcare costs are actually locking parents out of the workforce. So now, when so many parents around Australia who had lost their jobs through being stood down want to get back into the workforce and take those opportunities—since the government keeps bragging that those jobs are coming back—they can’t, because childcare costs are locking them out. The data reveals that almost 300,000 Australians are not in the labour force due to caring for their children. Notably, the number of parents saying they are not working, and that’s mainly to do with the cost of child care, has skyrocketed by 23 per cent to 91,000 parents. This confirms that the cost of child care is prohibiting Australian parents from working the hours they want. The data also shows that the median cost of child care soared by 5.6 per cent to $523 a week from 2019 to 2020.

With the Morrison government itself predicting that fee increases will well outstrip CPI for years to come, the hits will keep on coming for the Australian family. And there is now mounting evidence and data proving that the coalition’s childcare system has failed to keep a lid on childcare costs. So the Prime Minister and the minister for education need to stop burying their heads in the sand. We keep hearing from the government that child care doesn’t cost very much. They are failing to listen to Australian families right across this country. I tell you that Australian families are crying out to me. They are saying that it’s too expensive, they are saying it’s too difficult, and they are saying the cost does prohibit them from entering the workforce or taking more hours. But the government has its hands over its ears. Instead, their response is: ‘Families have never had it better.’ That’s what I keep hearing from the minister for education, and that’s what I keep hearing from the Prime Minister.

Parents need a real plan to tackle skyrocketing out-of-pocket childcare costs. And, of course, it’s not just parents that need this. If we are going to have the type of economic recovery we need, we need everyone with the skills and everyone with the abilities—everyone who can get a job—to get a job. We hear this a lot from this government, but, of course, the handbrake on our economy for women with skills, particularly, is actually the cost of child care. So, while they are encouraging everyone and while their rhetoric is, ‘Go and get a job; if there’s a job go and get it,’ they fail to acknowledge that one of the most significant barriers to taking up those jobs and to using those skills in the economy is the cost of child care.

It’s not just workers and parents that want to get back in that are affected by the economic drag that the cost of child care is having. We’re hearing it from business groups right across this country. Big business and small business recognise that this is a problem. They continue to call for action from the government, because if a small business has got a great worker and if that worker has time off to have a child and start a family, and have a second child or a third child, they want to ensure that cost is not a barrier to that worker coming back to work. But what we know from the current system is that there is a workforce disincentive. If a second income-earner—and that is usually a woman—works the fourth or fifth day, they are either working for free or actually losing money, when you factor in the cost of child care. They’re losing money by going to work; that is how perverse the system is.

Labor has a plan. Labor has announced a plan that will bring down the cost of child care and keep it down. An Albanese Labor government will introduce cheaper child care for working families, which will scrap the childcare subsidy cap which sees women losing money for working extra days of work. We will lift the maximum childcare subsidy rate to 90 per cent and increase the childcare subsidy rates and taper them for every family earning less than $530,000. We often hear the government criticism of this policy. They are saying that we want to help rich families. Can you believe it? That’s what we hear from the government. What we know is that what the government is calling ‘rich families’ is a police officer and a high school principal working full-time. That’s who this government thinks are the rich families. Isn’t this perverse? When it comes to so many other things, they are happy to say, ‘We don’t play class warfare,’ but, when it comes to support for child care, they are straight in with class warfare, demonising these women who want cheaper child care.

Importantly, under Labor, the ACCC will be tasked with designing a price regulation mechanism to shed light on costs and fees and to drive them down for good. Also, if we are elected, the Productivity Commission will conduct a comprehensive review of the sector with the aim of implementing a universal 90 per cent subsidy for all families, because the truth of the matter is that supporting children in early education and care is not welfare. It is not welfare, despite what those on the other side say. They try and make out that it’s welfare. This is a productivity measure, and we know that, as we come out of COVID, productivity is going to be key. But it’s also a workforce participation measure. It’s about getting more women back to work and working the hours they want to. And, of course, it is also a population measure because, when they are looking at how many kids they are going to have, many families look at these types of costs. They look at four years or five years of childcare fees, and that is a long time and a lot of money.

These measures that Labor is putting forward are really, really critical. They have been widely welcomed by business groups, by economists, and by parents and families. There is only one group, really, that has been negative about this and has continued to talk this down, and that group is the Liberal and National parties. So I would urge them, with the budget coming up, to steal our ideas. I would be happy for you to steal our ideas, but stop putting your head in the sand when it comes to the cost of child care in this country. Acknowledge that this is a real issue for families.

Labor, if we are elected, will fix the coalition’s broken childcare system, but, in the meantime, we’re happy to talk about child care anytime. We will support this bill, but, as I noted, we will be moving a substantive amendment that provides extra protection for families during COVID-19 lockdowns. We have not seen the government act on this, especially during these short lockdowns that we’ve seen in Brisbane, in Adelaide, in Victoria and in New South Wales. We want to see more protection for families when they are told not to turn up to child care yet are still being slugged with gap fees. The government has not responded to that in this bill, and we will be moving an amendment that will help them do just that.

Labor will support the bill, and I look forward to moving our substantive amendment in consideration in detail.

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