House of Representatives

Second Reading Speech

Ms Gillard (Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion)

I move:

That this bill be now read a second time.

Lifting workforce participation is one of the key aspects of the Rudd government's five point fight against inflation.

We know that for many parents the accessibility and affordability of quality child care affects their decisions about staying in or returning to the workforce.

An ABS survey has found that concerns about the quality, accessibility and affordability of child care were important factors in the decisions of 85,000 secondary earners to stay out of the workforce.

Child care has become an integral part of modern Australian family life. More than 700,000 Australian families use child care each year. In the last five years childcare costs have grown much faster than the price of other goods and services. In the 12 months to June 2007 alone, after factoring in childcare benefit, childcare costs rose by 12.8 per cent, the fifth year in a row of double-digit increases.

That is why federal Labor developed its Affordable Child Care Plan-a $1.6 billion investment in the future of Australian families and in Australia's future economic prosperity. This commitment is part of an overall $2.4 billion investment over the next five years in integrated early childhood initiatives that will provide high-quality services for young children and help build a productive, modern economy for Australia's future

Through this bill the government is making good on its election commitments. This bill will increase the childcare tax rebate from 30 per cent to 50 per cent of out-of-pocket childcare costs-up to $7,500 per child per year. It will also allow the rebate to be paid quarterly, rather than annually, helping parents to meet the costs of child care as they arise.

The changes to childcare tax rebate will make child care much more affordable for working families, making it easier for those families who want, or need, to return to work. These changes are supported by an agenda that will deliver rigorous quality standards and expand the supply of quality child care and early learning.

This bill also contains a number of amendments which will enhance the operation of the Child Care Management System to ensure payments to families are delivered in a timely and efficient way.

The government is also making good on its commitment to responsible economic management by reducing the value of payments for those who can most afford it. From July 2008 there will no longer be a minimum rate of childcare benefit for approved care. This will only affect high-income families. This is an extension of the current system where a family's income affects the amount of CCB they receive. However, instead of the rate reducing only down to a minimum rate, it will continue to reduce until the family's rate is zero. The income levels at which the payment cuts out completely will depend on the number of children using approved child care. This means that high-income families will no longer receive any childcare benefit.

Families using approved care that were eligible for childcare tax rebate before the changes will continue to be eligible for the childcare tax rebate.

Overall families will gain more assistance through the childcare tax rebate changes than they lose in childcare benefit.

This change will not affect childcare benefit for registered care-that is, care provided by relatives, friends or nannies who have registered with the Family Assistance Office.

The bill also includes a range of measures that make improvements to childcare benefit compliance. This includes extending pecuniary penalties to service providers who contravene their obligations under the current legislation. The bill also amends powers of entry for authorised officers to improve their ability to determine if a service is complying with family assistance law. It will also introduce a number of other changes which will enhance the integrity of outlays of childcare benefit by making childcare service providers' requirements clearer.

This bill demonstrates the government's commitment to Australian families to make child care more affordable and to ensure taxpayers' money is used correctly. It is an important step in the government's plan to provide access to affordable, high-quality child care to all Australian children.

Debate (on motion by Mr Ian Macfarlane) adjourned.