Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016 Submission to the Senate Education and Employment Legislation Committee inquiry into the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016, and the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2016 By email: firstname.lastname@example.org 22 September 2016
Australian Community Children’s Services (ACCS) is the peak body representing Australia's not-for-profit community children's services and those who support the right of children to access these services. ACCS has branches in each state and territory throughout Australia.
ACCS is committed to:
- children, families and communities;
- children’s entitlements for the best care, education and health services;
- community ownership;
- connected services for children, families and local communities;
- cost effective services - not for profit; and
- cultural diversity and respect for Aboriginal and Torres Strait Islander people as custodians of the land.
ACCS calls on the Senate to vote against the Jobs for Families Child Care Package legislation in its current form. The Bill needs significant amendments to protect the interests of the tens of thousands of families and children using community owned and not-for-profit children’s services.
Children’s best interests must be the first principle and underpinning rationale for all deliberations, recommendations to the Australian Government and government policies.
The focus of government support must be on the rights of the child to access high quality education and care. ACCS urges Senators to recommend redrafting of the legislation to ensure:
We achieve a less complex system of funding education and care in Australia
all children have subsidised access to education and care, up to 2 full days per week, regardless of whether their family meets any activity test
there are no barriers to participation in education and care for children and families experiencing vulnerability and disadvantage.
Child Care Subsidy
The proposal to streamline Child Care Benefit and Child Care Rebate into one single subsidy paid directly to services is sensible and welcome. ACCS believes that the provision of this subsidy is an important and effective workforce participation strategy and it is also important to acknowledge the role it plays in early (and middle) childhood education.
Activity Test - Removal of universal access to two days per week of subsidised education and care
Currently all children can access two full days per week (up to 24 hours) of subsidised education and care regardless of whether their family meets an activity test. The proposed changes remove this universal access to education and care and take Australia backwards in the early (and middle) childhood policy arena.
Families with an income over $65,710 where one parent does not meet an activity test will no longer receive any subsidy.
Families with an income of less than $65,710 will have their access cut in half from 2 days (around 18-24 hours) per week to one full day or two half days (12 hours) per week.
This will mean some children will be excluded from early learning environments before they start school and children experiencing vulnerability could have their access halved. This is despite evidence that:
the period from birth to 3 years is the most significant for brain development and lays down lifelong foundations for children’s wellbeing, learning and development across all domains
all children benefit from quality early learning environments
participation in quality early learning environments is a significant protective factor for at risk children and children from vulnerable backgrounds
universal provision of education and care is by far the most effective way to ensure participation of children experiencing vulnerability
investment in early education also provides long term economic benefits not just for families but for communities and nations.
The impact of these change on the wellbeing of many children and their learning and developmental outcomes must not be ignored. It is of great concern that a ‘No Change’ option for this was not presented as part of the June 2015 Child Care Assistance Package Regulation Impact Statement, and that the impact of these changes has not been fully investigated or costed by the government.
Currently long day care services usually offer families a daily booking, with children able to attend any hours that suit the family within the opening hours of the centre. This booking and charging structure allows the service to provide maximum flexibility for all families and ensures that operating costs are covered to enable the service to open for extended hours.
It has been suggested that children could still attend services on two days per week if services adjust their booking practices and charge for two 6 hour sessions instead of whole days. This is not likely to happen as services still have to cover the same operational costs and will need to continue to charge a full day rate to remain viable. Families who are only eligible for 12 hours of subsidy per week will either not attend services because they are unaffordable or they will reduce their bookings to one day per week, which is clearly not in the best interests of the child and family.
If services were to change their booking practice to allow for 6 hour sessions, they may need to increase fees significantly to cover their budget shortfall. This would make child care less affordable for all families, exclude those who could not afford the increase completely and potentially lead to closures for services in some areas. It would create a two tier system that stigmatises low income families and does not allow them the same level of flexibility and family support that other families can access.
Activity Test – Stepped Approach
ACCS believes the three step activity test in this legislation is problematic. It will add complexity for families, services and government – the exact opposite of what the government intended when children’s services funding was referred to the Productivity Commission in 2013.
This stepped approach will make it very challenging for families whose activity varies from week to week. It is essential that casual employees and people who juggle a mix of part time and other work are able to maintain their child care bookings and that their subsidy does not vary from week to week.
Provide all families with access to 2 full days (up to 18- 24 hours per week) subsidy regardless of whether they meet an activity test.
Simplify the stepped activity test. Provide all families with access to 4 full days (up to 48 hours) subsidy per fortnight and provide families that are engaged in more than 16 ‘hours of activity’ with access to a maximum of 100 hours of subsidy per fortnight. The reality is families only use the child care they need; the 3 step activity test just adds unnecessary complexity.
If the government progresses the 3 step activity test
o Set Step 1 minimum hours at up to 4 full days (or 48 hours) per fortnight
o For families with variable hours of work, base hours of activity on number of hours available for work and approve for blocks of 6 months (with provision for an increase in eligible hours to be approved upon request of the family during this period)
Aboriginal and Torres Strait Islander Services
The measures proposed in the package under the Child Care Safety Net, in particular the Community Child Care Fund do not adequately mediate the challenges Aboriginal and Torres Strait Islander early childhood services will face under the package because:
the Community Child Care Fund is grossly inadequate to meet the needs of the most vulnerable, making up under 1% of the $10.5 billion investment in the mainstream child care subsidy
Aboriginal and Torres Strait Islander community services will struggle to compete with strongly resourced mainstream providers in the competitive grants process for the Community Child Care Fund
Community Child Care Fund grants seek short-term sustainability and fail to recognize the entrenched poverty, long-term unemployment and disadvantage that make sustainability without additional government funding impossible in many communities.
There are a number of savings Government could consider to support increasing the maximum hours of subsidised care a child can receive from 12 hours per week to up to 18-24 hours per week (as is currently available) if their parents do not meet the work activity test including:
reducing the subsidy high income families receive from the current proposed $9,500 per annum to $9,000 per annum or
increasing the tapering rate at the top end so a greater proportion of high income earning families receive less Child Care Subsidy
The Minister for Social Services, the Hon. Christian Porter MP, has recently flagged significant changes to the welfare system in Australia that include strategic measures to reduce the likelihood of young parents becoming welfare dependent. ACCS would also like to draw Senators’ attention to the fact that these very same young parents that Minister Porter talks about are amongst those most likely to be disadvantaged by the reductions to the minimum subsidized hours and the tightened activity test measures being proposed in this BiIl. The best way to deal with inequality and address the cycle of disadvantage is the provision of subsidized means tested universal access of at least 2 full days to quality early childhood education and care for all families and ensure simple access to increased hours to support workforce participation.
Please contact Prue Warrilow, National Convenor on ph: 02 9261 1855 or mob: 0408 020 904. Further details of our proposals and other concerns about this Bill, including research evidence, is available at:
Provision of on-going funding for Budget Based Funded services and further investment in Aboriginal and Torres Strait Islander services to enable flexible service provision to the most disadvantaged children within their communities