Speech by Minister Kate Ellis at CEDA Women in Leadership Series Launch
Speech by THE HON KATE ELLIS MP
Minister for Employment Participation
Minister for Early Childhood and Child Care
Speech to the CEDA Women in Leadership Series Launch
Intercontinental Hotel, Adelaide
13 April 2012
Check Against Delivery.
I am delighted to be here for the launch of the CEDA 2012 Women in Leadership Series.
It is wonderful to have the opportunity to speak with some of South Australia’s most inspiring female leaders about the challenges facing women today.
I had the privilege to attend last year’s launch of your Women in Leadership report and am delighted to be back to celebrate the start of this year’s series.
On that day I spoke about a range of topics: women on boards (or rather not), gender discrimination, pay equity and our reforms to equal opportunity laws, to name a few.
Today I’m speaking on one topic more specifically and addressing the question, ‘How women’s workforce participation can be enhanced by child care measures’.
It is an issue that is very near and dear to my heart, as both the Minister for Employment Participation and the Minister for Early Childhood and Child Care, I absolutely know how critical access to affordable and quality child care is to women’s participation in paid work.
Removing barriers to women’s participation
KPMG’s 2010 Report on Australia’s Productivity Agenda showed us the unequivocal link between more women returning to the workforce after having a child and productivity.
Yet we know that while we’ve come a long way from the days when women were expected to give up working outside the home once they were married, women still continue to shoulder most of the load when it comes to unpaid domestic and caring responsibilities.
This means of course that supporting women with children to be able to participate in the paid workforce is absolutely fundamental.
I’m proud of what our Government has achieved already.
We have reformed Australia’s industrial relations system so that there are entitlements to request flexible working arrangements. We’ve provided financial support for working mothers through the Parental Leave Scheme.
We’ve increased the tax free threshold and increasing superannuation from 9 – 12 per cent, benefiting women of working age and women in their retirement.
And of course - on our topic for today - we’ve more than doubled our investment in child care affordability assistance.
Busting the child care myths
Yet, when you dropped the kids off at school this morning you wouldn’t have heard someone calling into talk back radio to say how much easier life is with a 50 per cent child care rebate, compared to 30 per cent only a few years ago.
When you’re scanning the news websites online in the office later today, you won’t read a story about the record numbers of children attending child care and the huge growth in the number of centres.
And it’s okay that you don’t - because the truth is that being a working parent is a tough gig – and our media are right to report on why it’s tough and editorialise about how it could be better.
That juggling act, that constant struggle of competing priorities and responsibilities is a very real one and of course we want hope it will become more manageable.
We debate - and at times argue - about this issue because it’s important. And women’s workforce participation so often relies on affordable, accessible and quality childcare.
As governments, it is our responsibility to listen and to spend the tax dollars that you pay, in the best way that we can – it’s our responsibility to try and ensure that making ends meet each week and balancing the demands of work and family, is just that little bit easier.
It’s our job to remove obstacles to women’s participation in the most effective way we can
We should be talking about these issues.
But when we’re listening, when we’re formulating policy and having the discussions and debates that need to be had – we should do so based on the facts.
I worry that in a world where something being repeated over and over can have the effect of making it true – the facts get lost.
And that’s not how good public policy is made.
So today let’s talk facts about child care, let’s talk about the problems and the solutions and let’s look at some of the myths, which are repeated all too often – potentially misleading the community and damaging women’s participation.
Myth #1: Child care is getting increasingly unaffordable [Slide 1A]
Just this week the Federal Opposition claimed that “Australian families are paying more for child care than ever before.”
Now, is child care an extra burden on the family budget?
Has the cost of child care been increasing over time?
The answer is, unquestionably, yes.
And that is why when Labor was elected in 2007 we increased the child care rebate from 30 to 50 per cent and increased that cap to $7500 per child per year from $4354.
There is no doubt that parents rely on this assistance but the key question is, are parents paying more or less for child care now than were 5-10 years ago, when we take into account Government assistance?
The answer is, unquestionably, less.
In fact in 2004 under the Howard Government’s 30 per cent child care rebate, a family on $75 000 with one child in full time care, spent about 13 per cent of their disposable income on child care.
In 2011 that percentage had fallen to 7.5 per cent.
Across the income scale - parents are spending less of their earnings on child care, when we take into account the Child Care Benefit and the Child Care Rebate payments.
Now I’m not claiming that it is not still another burden on often stretched family budgets.
Of course it is.
But it is a burden that has actually decreased as our Government has stepped in and taken up more of the load.
Myth #2: Making child care tax deductible would make it more affordable [Slide 2A]
In recent months we’ve seen several organisations calling for child care to be made tax deductible, rather than the Government paying a rebate.
Founder of the Make Care Fair campaign Jen Dalitz says “most women with young children can't earn assessable income without incurring childcare costs, so why shouldn't this be an allowable deduction against their taxable income?"
Jillian Broadbent, of Chief Executive Women says that making child care tax deductible “would assist the economics of childcare providers and users and ultimately contribute favourably to Australia's economic growth and productivity.''
Makes sense right? People hear these calls, think it’s a good idea and wonder why Government won’t do it to help boost women’s workforce participation.
But while this idea is appealing in theory, in practice it would actually make child care more expensive for the vast majority of Australian families.
Tax deductibility would deliver the highest levels of child care assistance to those who earn the most as opposed to those who have the biggest child care bills.
Further, the overwhelming majority of families would actually be substantially worse off and many would have to in fact re-think their participation in the workforce.
Let me explain the two systems as they apply to the average weekly child care fees in Australia at $310 with the Child Care Benefit included.
The low income family earning $35000 per annum with one child in care currently gets $12475 in child care assistance per year from the Government. Under tax deductibility this drops to $10466.
The medium income family on $75000 with one child in care currently gets $10782 in child care assistance per year. Under tax deductibility this drops to $9036.
The high income family on $155000 with one child in care currently gets $7500 in child care assistance per year. Under tax deductibility this drops to $5968.
Even the very high income family on $300 000 doesn’t see any benefit under tax deductibility, with their assistance decreasing from $7500 per year to $7208.
The only families that would benefit are those on very high incomes, using full time child care higher than the average weekly hours and paying fees that are significantly higher than average – in the order of $500 or $600 a week.
Moreover, under the tax deductibility model families would have to wait until the end of financial year to make a claim for thousands of dollars of childcare fees.
This is simply untenable for middle and low income families who rely on assistance from the Government to return to work and it would undo the benefits for managing the weekly budget that families received when we gave them the option of having their child care rebate payments made fortnightly.
Myth #3: Waiting lists are growing longer than ever [Slide 3A]
Another common community perception is that it is downright impossible to find child care places.
Now, I am well aware that it can be difficult to find the kind of care you want, where you want it and on the days you need it. Of course I am.
But often if you went by news reports alone you’d be led to believe that there are no children in child care anyway because of lack of supply.
The truth is though that more children are in care today than at any other time in our nation’s history. In the June quarter of 2011 for example, 26.1 per cent of children under 12 were in approved child care — an increase of around 10 per cent over the past year alone.
Child care accessibility is a huge factor in whether or not parents are able to return to work and I know that there are areas in this country where it can be really tough to find a place.
That’s why our Government is funding an uncapped number of child care places. Not just in long day care but also in family day care and outside of school hours care.
This means that in areas of demand new services are supported to set up and existing services are supported to expand.
And we’ve seen accessibility improved by a massive influx of new centres opening.
The number of child care services in Australia has increased by 36 per cent since 2006.
In fact, there were 500 new services established in the last 12 months alone.
And Government data shows that around 90 per cent of child care services are currently reporting vacancies
Myth #4: Quality of care is not important [Slide 4A]
No matter how long I have a career in politics for and whatever happens, I have no doubt that one of the most significant reforms I will ever be a part of is the national childcare quality reforms that came into place this year.
Let’s just be clear. One of the most common things I find - not just in my political life but in my personal life - is how many working mothers feel guilty about putting their kids in child care.
It’s not something we talk about much but all of us know so many parents – women and men – who find that morning drop off absolutely gut-wrenching.
Firstly because everyone wants to be able to spend more time with their family but secondly, it can be hard for a parent to have peace of mind that their child is safe and being well looked after when they’re being looked after by a stranger.
We now have a huge body of evidence with all of the research showing that the first five years of a child’s life are absolutely critical to shaping their future outcomes.
We know now that the early years will have a huge impact on that child’s future from health and education to social developmental outcomes - it’s no wonder parents worry so much.
Parents see firsthand the reality of the figures scientists throw at us – that a massive 90 per cent of brain development occurs in the first three years of life – so we had better be getting it right!
A 2010 Treasury working paper specifically examining the link between women’s workforce participation and child care noted that parents rarely approach the issue of finding care as a simply cost minimisation exercise – parents know quality child care is important to child development.
That’s why - starting this year, our Government – in partnership with the states and territories - have introduced a National Quality Framework for early childhood and child care.
This framework will improve staff to child ratios so that each child gets more individual care and attention, while also increasing staff qualifications, so that educators are equipped to lead the activities that help our kids learn and develop.
I’ve certainly found that when you speak to parents of young children, they absolutely recognise how important these reforms are.
In fact a 2010 United Voice survey of parents using child care showed that over 90% of parents supported child care quality reform and 84% supported a small increase in fees if it led to better education and care.
In any debates that we have about this sector, in any discussions about women’s participation we must also be very clear- we’ve moved on from thinking of child care as just pure babysitting.
It is so much more than that. It is about a professional workforce, working within educational frameworks and shaping the lives and development outcomes of our kids.
Let’s not go back to the past.
That’s not to say that there isn’t a need for babysitters to help parents out, of course there is but it is not what we fund a record $21 billion in early childhood education and care for.
Myth #5: There is only one form of Government supported child care [Slide 5A]
Now unless you’ve been living under a rock the past few weeks, you would have seen the debate raging about Tony Abbott and the Coalition’s stated intention to extend the child care rebate to subsidise nannies- don’t worry I’m going to get to that in a moment!
But the question I want to ask first is, whether or not there are flexible forms of care available that are also supported by the Government. And there are.
Our Government provides very significant subsidies for In Home Care – ensuring that the families who need it most can ensure that their children can be cared for in their own homes by a nanny or early childhood professional.
These are the children of shift workers – parents who can’t rely on the conventional model of care.
Or they are the children of parents who own homes in rural or remote parts of the country and other forms of care aren’t available.
Or they are children who are severely disabled or suffering from a long term illness that means they can’t access mainstream caring arrangements.
Only last year, our Government released a 17 per cent increase in the number of in home care places, where we will provide a subsidy to families who need to access this kind of care.
But we also fund a number of different service types. Sure there’s long day care but just today in today’s Australian there is a story about family day care which makes up over 12 per cent of our childcare sector and in the June quarter cared for around 107,000 children.
They are children whose parents preferred them to receive early childhood education and care in a home-style environment and received a Government subsidy to use family day care.
The carer in today’s Australian newspaper talks of how she stays overnight when required or over weekends. All regulated and all supported already by our Government.
Family Day Care is covered by the Government’s current subsidies. It is an alternative to long day care that a lot of parents prefer but its standards and quality are assured through regulation, so that parents have that peace of mind I spoke about earlier.
107 000 children - children who have been absent from hysterical claims about a crisis due to lack of flexibility and suggestions that there is no government support whatsoever for home based care apparently.
Which brings us to “the nanny wars” as they’ve been dubbed – let’s talk about it.
If you asked just about any woman in Australia if she wanted a nanny courtesy of the Australian Government she’d probably say yes - in fact if she’d probably say yes whether she has children or not!
But that is exactly the problem with making vague political promises and not being upfront with people about details - it sets unrealistic expectations.
If that vague political promise is one, which ensures that details won’t be added for several years until after a proposed review (another one on this topic), it means that people are mislead by those unreal expectations for a long time.
It means that debates are shallow and it means that we’re not actually focussed on what matters.
So let’s look at what extending the child care rebate to cover nannies would actually achieve.
Taking into account this funding, we could potentially reduce the annual average cost of a nanny to around $40 000 – a figure that is out of reach for most Australian families.
This cost comes before you factor in the increased costs of regulations, minimum qualifications, quality control and spot checks that all parties – including the Opposition and nanny companies – have said would be necessary.
And on top of all of that – the rebate itself would cost around $2 billion of tax payer dollars.
And this is money that has to come from somewhere.
What bothers me about Tony Abbott’s promise is that he has committed that the money for this policy would come from ‘within the existing funding envelope’.
That is the child care funding envelope, which supports existing services and hundreds of thousands of families’ assistance through the child care rebate and child care benefit.
Tony Abbott’s shadow ministers have since ruled out means testing the child care rebate to fund this promise. That leaves the child care benefit in this “existing funding envelope”.
The child care benefit is assistance that we provide to around 654, 000 low and middle income families to help them with the costs of child care.
Slashing $2 billion from this payment would mean that the 28,000 families who earn between $61,300 and $142, 426 – who currently receive extra assistance – would lose it entirely.
The 469,000 families earning less than $61 300 would have their assistance cut considerably.
These are the parents – mostly women - who are on the borderline of making a decision to return to work or staying at home to care for their children.
These are the parents whose children will benefit most from a quality early childhood education.
These are the parents who rely on these payments to make their workforce participation viable at all often.
All of this allegedly in an attempt to increase women’s participation? I don’t think so.
Let’s be very clear: we don’t divert all of our attention to those with the loudest voices rather than those who need support the most and in fact deliver the greatest returns in terms of increased workforce participation benefits.
Being upfront about the realities facing Australian working women
Child care is always going to be tricky because let’s be honest, there is no Government that can prevent it from being an added burden on the family budget.
It’s always going to be another ball for parents to juggle because balancing work and family life is tricky.
Just as there is no single model of a family, there is no one size-fits-all model for making that juggling act a success.
But it is critical for workforce participation and particularly women’s workforce participation that Governments get runs on the board for increasing affordability, accessibility and quality.
A family with a two year old in care today and a five year old that was in care three years ago –experience the struggle but don’t have the experience of having used the sector when it was less affordable, less accessible and lower quality.
That’s just an added challenge for me to highlight the massive leaps and bounds forward that have been made since we came to Government in 2007 when of course parents are still doing a highly difficult juggling act.
As I’ve already outlined - relying only on cold, hard data alone: [Slide 6]
- affordability has improved not just in real terms but in percentage terms;
- accessibility is responding to the increasing demand;
- we have entirely overhauled the system to ensure that the care and education children receive is of a higher quality; and
Conclusion [Slide 7]
I’m the first one to acknowledge that there will always be more to do when it comes to helping out working parents.
Parenting and juggling work and family is never going to be easy and you should be wary of any politician who claims that it can be.
Reform is a process that doesn’t stop – it’s something we commit and recommit ourselves to, aiming for continuous improvement in the system.
And as Minister, I’m always open to new ideas about how we can make the child care assistance we provide work better for mums and dads.
As citizens of this country each of you and indeed every working parent is entitled to demand more from governments - to ask what’s being done to make your lives just a little bit easier, to know how your tax dollars are being spent so that life is better for working people.
Moreover, the huge benefits that come with women’s increased participation in the workforce and the educational benefits of child care mean that improving child care affordability must be a priority for Government.
It has been for our Government.
We have a system that is delivering more funding than ever before, to support more families to access child care than ever before, for longer hours than ever before.
I’m proud of our achievements and am excited about where the debate goes next.
But I want that debate to be one that is fair and based on the facts.