I rise today to speak on the Family Assistance Legislation Amendment (Building on the Child Care Package) Bill 2019. I'm glad the Morrison government are building on their current childcare policy, because the childcare funding system that they introduced in July 2018 needs some work.
Poor social policy design is becoming a hallmark of the Morrison government. We have robodebt, a system, now thankfully on hold, that has caused untold anxiety and suffering to thousands of Australians who have done nothing wrong. The implementation of the NDIS raises significant questions, and we've been hearing shocking evidence in Joint Standing Committee on the National Disability Insurance Scheme hearings over recent weeks. We have Newstart, a system that everyone but the Prime Minister admits is too poorly funded to enable people to support themselves while finding work—the key intent of this payment. And we have youth allowance, which is designed to support students to complete their education but sees them struggling to complete their studies while they try to support themselves with work. And now we have the childcare subsidy, a system that sends incorrect and punitive debts to parents of young children; a system that kicks recipients off at the earliest opportunity, creating an absurd administrative burden for parents; and a system that the government knew, from its own data, would leave one in four families worse off but decided to implement anyway.
The Australian government will spend $8.6 billion on child care this year. It is a good thing for government to invest in as there is strong evidence to support the benefits of early-childhood education and care, including improvements to a child's education, social outcomes, gender equality and the economy. But when you are making an investment as significant as this—$8.6 billion—you need to make sure that the system is working and that everyone, including low-income Australians, is able to utilise the full potential of the system. Most importantly, you need to make sure that disadvantaged kids are getting an early-childhood education, because it has the potential to set them up for a better life.
In spite of the federal government's sizeable investment in early-childhood education and care, it remains expensive and difficult to access for many families. This means the benefits are not being maximised for Australian children or the Australian economy. Furthermore, our early-childhood educators and workers are poorly paid despite the vital work they are doing shaping the young minds of our children. As the mother of a 21-month-old who spends time in early-childhood education and care, I have seen firsthand their wonderful work, their dedication to the children and how quickly these young minds are learning at that age. The reality for single parents, low-income parents and parents who do shiftwork or any hours outside the normal nine to five can find this a difficult system to navigate. The system created by the Morrison government clearly isn't designed for these people.
Families and providers have experienced significant delays, confusion and additional paperwork to register for the childcare subsidy. This has often resulted in families' entitlements being overestimated or underestimated, resulting in overpayments and debts for affected families. Providers have been forced by the government to act as debt collectors, commencing data matching with the Australian tax office as families are being issued with unexpected debt notices. As confirmed in Senate estimates, 91,840 families, or 16 per cent of families who access the childcare subsidy, have received debt notices. When 16 per cent of users have accrued a debt, you know the system isn't working properly. And, like other Australians hit with a debt notice, parents are often unable to verify the debt and end up eating into their household budgets to pay it back, whether the debt is legitimate or not.
You would think the government would have learnt from their robodebt disaster, but they are too out of touch with the average Australian family and how they go about managing their budgets. The average Australian household isn't well placed to cover an unexpected debt like the ones being sent out by the childcare system. Furthermore, our childcare providers shouldn't be forced into acting as debt collectors; they are educators. After months of refusing to act, the government tabled this bill without warning or consultation. So now, through a process of amendment, the Labor Party, through our shadow minister for early-childhood education, Amanda Rishworth, is pursuing changes to the bill that the sector and Australian parents are calling for.
The government's childcare subsidy system wasn't designed for the realities of Australian families. This bill increases the number of weeks at which enrolments automatically cease due to non-attendance from eight to 14 weeks. Currently, parents across the country have to re-enrol their child following breaks in attendance at child care, especially families using vacation care during school holidays. Re-enrolment requires again engaging with Centrelink, and it is well known how much of a struggle engaging with Centrelink can be. The sector has long been calling for this change, and this change will reduce the administrative burden for parents and reduce the administrative burden for Centrelink. Any reduction in the workload of Centrelink is a good thing at the moment and will certainly benefit other recipients of social security and the wait times they currently endure.
The bill will remove the 50 per cent limit on the number of children that a provider can self-certify for the additional childcare subsidy child wellbeing payment. This is a positive change that resolves issues for services that enrol significant numbers of children at risk. The sector is pleased with this change. It is my view that we must do everything we can to ensure that disadvantaged kids get an early childhood education because early childhood education is transformative. The benefits of an early childhood education are well known, particularly for disadvantaged children. James Heckman, a noble laureate in economics, found that investment in early childhood education for disadvantaged children improves their economic and health outcomes throughout their lives. It also delivers a seven to 10 per cent return on government investment every year for the rest of that person's life. In Australia, PricewaterhouseCoopers has estimated that investing in child care for disadvantaged children could boost the Australian economy by $10.3 billion per year.
However, the government's own data shows that the childcare system introduced last year has reduced the number of vulnerable and at-risk children accessing early childhood education. The number of children accessing the child wellbeing payment fell by over 20 per cent in the first months of the new system. Thankfully, these figures have corrected to an extent in the latest data from March, but there are still six per cent fewer children approved for this payment compared to the same time last year, prior to the Morrison government's changes to the system. The system was supposed to make child care more accessible. It is clear this hasn't been achieved.
Unfortunately, as someone who has observed the work of conservative governments on social security systems, I am unsurprised. Conservatives always degrade the equality-boosting elements of public policy. For those on the other side who criticise this statement, I'll point to your government's claim that the new childcare system would put downward pressure on childcare fees. The latest CPI figures show childcare fees increased by 2.5 per cent in the September quarter, the fourth successive increase, and have gone up by seven per cent since last September. Fees have increased by 30 per cent since the Liberal government was first elected. Where is the money for this massive increase supposed to come from? Wages have stagnated. How does the government expect Australian families to cover this gap? We need to be helping Australians to build their families, not penalising them.
Many of the states and territories have identified that targeted spending on early childhood education is an investment in the future of their jurisdiction and the people who live within it. In a competitive global economy, it is crucial that our children receive a world-class education. Ultimately, educating our kids from earlier in their lives will help us achieve this and help Australia to develop the workforce of the future. As such, this bill will improve the application of third party contributions to fees, such as state and territory payments. Currently, the Commonwealth requires state and territory assistance to be applied to fees before the childcare subsidy is calculated, thus reducing the CCS entitlement and potentially leaving families with out-of-pocket costs. The change will allow state and territory fee assistance to apply after the CCS calculation and allow the state to effectively eliminate out-of-pocket costs for vulnerable families as per the policy intent.
Parents who utilise the childcare system know the process for registering for the childcare subsidy and making a claim is more difficult than it should be. However, one element of the system acknowledged these realities. Currently, applicants are able to register for the CCS without providing their tax file number and/or bank account details, and they have 28 days to provide this information to Centrelink. For families experiencing difficult circumstances—circumstances which mean that this information isn't readily at hand, such as families fleeing domestic violence or families wanting to retain some normality like child care whilst in the midst of a natural disaster—this leeway enables them to get their kids into child care while they sort out their lives and find the necessary documentation. However, this bill wants to remove the 28-day period in which applicants may provide these details. The government argues that this will simplify the system for families and providers; however, the sector is extremely concerned about this change, and I am extremely concerned about the families who need this provision. Furthermore, the government's own majority report from the inquiry of the Senate Education and Employment Legislation Committee expressed concern about the impact of these changes.
The government believes that this change will simplify the system for families and providers and prevent families from accruing debt, but there needs to be a better way of ensuring this. We should be putting the needs of parents above the administrative ease of government departments. I'm concerned about the children who will miss a month of child care, or perhaps never get enrolled, because this leeway has been taken away for the convenience of administrators. Removing the 28-day period and blocking families from registering for the childcare subsidy without this information will reduce access to early learning and is unreasonable and lacking in compassion. I'm also concerned for the providers who are trying to manage this situation. Labor notes that the government is proposing to amend the bill in the other place to provide exemptions from the new rules for families in crisis. Labor will not oppose the government's amendment, but I believe our amendment is a simpler, less complex solution.
The government could have done so much more with this bill. There are so many more things we could do in our childcare system with the $8.6 billion we invest every year. For one, the activity test is not right. Parents must predict their hours of work within the reporting system. Parents who work casual or irregular hours or parents who are self-employed can struggle to do this accurately and can receive debt notices if their work doesn't take place as anticipated. Further, parents with a disability or who are suffering from serious illness must be constantly vigilant and adapt to an unforgiving system. You'd think that the Liberals would at least be in touch with small business, as they so often claim to be, but small-business owners are reporting that they find it very difficult to receive the childcare subsidy they are eligible for. The government needs to do better to create a more user-friendly system for all of these groups of people.
In my view, Australia still hasn't found the right solution for child care. It doesn't work for families, it doesn't work for parents, it doesn't give children the best start in life and it doesn't provide stable and well-paying work for childcare workers. This morning we saw the launch of the report State of early learning in Australia 2019 from Early Childhood Australia. This is a fantastic report that lays out the evidence of the need for quality childhood education and care and what it contributes to our youngest Australians. But what has raised a lot of concern among those speaking this morning was that becoming an early childhood educator—such an important job—is not an attractive option for people who want to be involved in educating our children, because the pay and conditions are inadequate and it is not something that presents a future progression. We need to find a way to better recognise this very important contribution to our society, which, as I said before, I've seen firsthand in the education and care of my young son—including his being taught to have his naps, which I've not managed at home.
We can do better than the Morrison government's childcare subsidy. We can actually achieve the outcomes that the Morrison government promised but failed to achieve within this program. Early childhood education is going to change the lives of Australians and it is going to push back against the creep of inequality in this country. Unfortunately, it's not yet doing this to the extent that it could. The Morrison government's childcare subsidy needs to be better than it currently is and better than this amendment is going to make it.