CHAPTER 2
Key issues
2.1
The committee received submissions from organisations expressing a range
of views, including welcoming the government's investment of $28.5 billion over
four years in child care fee assistance, despite a 'difficult fiscal
environment'.[1]
2.2
Submitters voiced concerns that the bill would not achieve the aims of
the policy behind the Child Care Benefit (CCB) and Child Care Rebate (CCR) to
provide financial assistance to families to help support access to child care
and to increase workforce participation, and social and educational development
for children.
2.3
Specifically, submitters expressed concerns that the bill would affect
affordability and therefore accessibility for some families, and that some families
would be hit with unexpected fees once the threshold for CCR had been reached. Some
submitters also expressed a view that these changes should not be made ahead of
the release of the Productivity Commission Inquiry into Child Care and Early
Childhood Learning. Further, submitters argued the changes are merely
cost-cutting measures without consideration of the broader issues.
Affordability and accessibility
2.4
Some submitters expressed concern that the measures proposed by the bill
will mean that more families receive less, and that some may lose the CCB
altogether. In particular, that as the benefits reduce, out of pocket costs
rise and families will reach the $7500 CCR cap earlier.[2]
This may reduce accessibility to quality child care for some families.
2.5
In its submission, the Department of Education (the department)
emphasised that the CCR is a non means-tested payment, and in relation to the
CCB it explained:
The Child Care Benefit is a means-tested payment that
provides financial assistance to help families with child care costs. The Child
Care Benefit upper and lower income thresholds are used to calculate the rate
of a family's Child Care Benefit. The lower and upper Child Care Benefit income
thresholds are currently $41,902 and $97,632 respectively and are indexed each
year on 1 July in line with Consumer Price Index (CPI) increases...
The Child Care Benefit standard hourly rate, the minimum
hourly amount and the multiple child loadings related to the Child Care Benefit
will continue to be indexed by the CPI on 1 July each year. These amounts are
not affected by either of the measures in the Bill.[3]
2.6
Submitters welcomed the government's commitment to continuing Consumer
Price Indexing of the CCB standard hourly rate, the minimum hourly amount and
the multiple child loadings.[4]
Further, the AI Group argued the bill would not have significant impact on
productivity or workforce participation.[5]
Productivity Commission inquiry and cost cutting measures
2.7
In respect of concerns about the measures being purely cost cutting
measures that should be postponed until after the Productivity Commission's
inquiry has finished, the committee notes the Department's submission that explains
the measures are:
...limited and targeted savings measures that will achieve
savings to help address short term fiscal concerns. In particular these measures
do not pre-empt the outcomes of the Productivity Commission Inquiry into Child
Care and Early Childhood Learning, which is a once in a generation opportunity
to reform child care and early learning. The Government will use the
Productivity Commission Inquiry process and outcomes to ensure better child
care policies into the future.[6]
2.8
This explanation addresses concerns that the measures should not be
taken ahead of the Productivity Commission's report, because they are both
limited and targeted and will not prevent the Government taking on board any
recommendations the Productivity Commission may make about Australia's broader
child care and early childhood learning needs.
Committee view
2.9
The committee notes the Australian Government's ongoing commitment to providing
affordable and accessible child care options for Australian working families,
through the provision of financial assistance under the CCR and CCB. In
particular, the committee is persuaded of this commitment by the Department's
submission that:
Child care fee subsidies are one of the fastest growing areas
of Australian Government outlay, driven principally by increased numbers of
children in care, increased hours in care and rises in fees. Overall the
Government will increase child care fee assistance to $28.5 billion over the
next four years. This includes $13.6 billion to reduce child care fees under
the Child Care Benefit, and $14.9 billion to assist working families with
out-of-pocket child care expenses under the Child Care Rebate.[7]
2.10
While the committee notes concerns about maintaining the current CCR
limit and CCB income thresholds, it is not persuaded that childcare will become
unaffordable or inaccessible as a result of these measures. Further, it notes
the Productivity Commission is conducting an in depth inquiry into child care
and early childhood learning that is likely to influence future government
policy in this area.
2.11
Finally, the committee is persuaded that these measures are limited,
well targeted and for a finite period of time, and are a necessary part of the
broader government agenda of repairing the budget and strengthening the economy.
Recommendation 1
2.12
The committee recommends that the bill be passed.
Senator Chris Back
Chair, Legislation
Navigation: Previous Page | Contents | Next Page