Senator Rachel Siewert Senator for Western Australia ...

375 Wickham Tce Spring Hill Q 4000

Principal Campaign Manager Nicole Lessio M. 0416 263 239: E. [email protected]

Senator Rachel Siewert Senator for Western Australia Committee Chair Senate Standing Committee on Community Affairs PO Box 6100 Parliament House Canberra ACT 2600 Sent via email - [email protected] Friday 3 March 2017

RE: SOCIAL SERVICES LEGISLATION AMENDMENT (OMNIBUS SAVINGS AND CHILD CARE REFORM) BILL 2017

Dear Senator Siewert, The Parenthood welcomes the opportunity to provide feedback on the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017 (the Bill) and contribute to the Senate Committee’s inquiry. The Parenthood considers this inquiry a chance to demonstrate to Senators once again, and to the Parliament more broadly, the devastating consequences of this legislation if it’s passed. The Parenthood is Australia’s leading parent advocacy and campaigning organisation with more than 58,000 parent members across Australia. We seek to ensure that the voices of parents, especially those who will be directly affected by the current proposed changes, are heard. That is why we have once again asked parents to join us by becoming signatories to our submission as they did with our previous submission to the committee. You will see their details at the end of this submission. THE PARENTHOOD STRONGLY ADVISES COMMITTEE MEMBERS NOT TO SUPPORT THIS BILL AND TO REQUIRE THAT CHILD CARE REFORM BE SEPARATED FROM WELFARE CUTS AND DEBATED ON ITS OWN MERITS.

While there is a pressing need for child care reform and relief for families from the ever-increasing burden child care places on their budgets, parents do not want this relief paid for by those least able to afford it.

We urge Senators not to support the multiple cuts presented in the Bill. The Parenthood has long opposed cuts to Family Tax Benefit (FTB) and Paid Parental Leave (PPL) – these cuts will be the focus of this submission.

Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017Submission 66

mailto:[email protected]



Please refer to Appendix A for a summary of our previous submission regarding the government’s childcare reform legislation. We recommend Senator’s support most of the key elements of the reform package but seek its immediate separation from the Omnibus Bill so it can be debated and implemented (with amendments) as quickly as possible

The Parenthood also wishes to share our concern over cuts to Newstart access for young people and the cuts to energy supplements for pensioners.

Parenthood members recognise these cuts will impact the most vulnerable Australian families. These changes will hit the lowest paid the hardest and are simply unfair and wrong.

Parents are well placed to understand the importance of managing budgets. We appreciate the government’s need to explore ways to balance our nation’s budget. However, our spending priorities as parents reflect the importance we place on the things we buy. For example, parents will go without new shoes to ensure their child has the right uniform, we go without birthday presents to save the money for a school camp – and some parents go without meals to ensure their children don’t go hungry. Just as we do with our household budgets, we implore the Turnbull Government to get the priorities right. Savings that directly hit the living standards of families who can least afford it, is in our view a very misguided savings priority. We have written many submissions with facts and figures – the evidence that supports our viewpoint. You can ask the Committee Secretary for copies. However, the government keeps introducing the same Bill, with the same divisive cuts, so we’re not entirely sure the facts and figures matter in this context. We believe the Senate needs to hear from the people who would feel the pain of these cuts. Those parents whose lives will be changed and made more difficult. These are not an abstract ‘thousands of parents’ – these are real Australians with real families whose family budgets should not be used to repair the national budget. Don’t just take our word for it – below are parents in their own words.




Kirsty from Campbelltown in South Australia is a single parent to a 14-year-old boy. Her son attends a selective high school and after his father passed away, Kirsty uses the FTB supplement to pay her electricity bill. She suffers from seizures and is concerned that she won’t be able to keep her son in his school. She has made sacrifices and cut her budget to bare bones after cuts to her benefits but she has no idea how she can make this one work. Kellie from Mildura in Victoria: I am a single mother of 1, living in public housing. I DID NOT chose to be the first or wish to rely on the second, I am also on DSP which I also did not wish for. Unfortunately, circumstances have put me in this position. I am trying to better my daughter’s life and also trying to improve mine as I work toward lessening my burden on the tax payers of Australia of which I was one of from the age of 15. I and everyone else rely on the FTB EOFY Supplement as a means to catch up on bills, buy extra nonperishable foodstuffs, clothing for our child/ren who are growing up way too fast, also keeping up with school expenses ETC....... Please do not take that away from us as well. Despite what everyone thinks we are not bludgers, some of us are trying VERY hard to get out of this hole, but it is not easy when everyday living expenses cost a lot more than we get from Centrelink. We are always in debt or so far behind in payments we cannot pick ourselves up from the gutter the Government has put us in by giving us payments that are way below the poverty line. I for one am sick of being labelled something I'm not, and sick of getting nowhere Simmone lives in South Australia: “I have two children to support financially. I am a single parent - the kids are 13 and 16. We have no support financially from their father – he has a child support debt of $49,000.00. Family Tax Benefits help a lot. The supplement payments of $729.00 per child and $350.00 per family in July really helps buy necessary essentials for my children, such as winter jumpers, jackets, and socks and update tech for educational needs at school. Fix things that have broken, new shoes for sports pay bill that have amounted through year and have some nice foods instead of home brand all the time. Laura lives in Ipswich, Queensland: Our family receives Family Tax Benefit Part A it and these cuts will mean that we’re around $200-a-year-per-child worse off. We have three children. $600 in a year might not mean much to a politician on $200,000+ but it means a lot to us. We chose for me to stay home to look after our children because our second son has autism and needs a lot of support. My work with him saves the taxpayer in the long run because early intervention means he’ll need less support during the school years. And I’m rewarded with a pay cut? I’m worth so much more than the FTB I get now, don’t punish me because I’m poor. Poverty is simply a lack of money, not a character flaw.




Barbara from Tasmania: I had planned to use the government funded 18 weeks PPL and an additional 8 weeks PPL from my employer to give me 6.5 months to spend with my newborn. I may be able to extend my time using annual & long service leave entitlements. If these PPL changes were to take place I would only be able to take 4.5 months off with my newborn. This will impact not only the amount of quality time with my newborn, my ability to breastfeed bub past 4.5 months, I would also have additional stresses placed on my family including finding suitable childcare. I don't think the impact of this change is understood by our government and the stress which will be caused by pushing parents back into work faster, not to mention what our children will miss out on. Rebecca from Melbourne in Victoria: I am a degree-qualified kindergarten teacher and I am currently on parental leave with my first child, who is 4 months old. I am very concerned about the government's proposed cuts to paid parental leave. Having worked in early childhood education and care for 14 years, I have seen first-hand the impact of returning to work too soon for the parents of newborn children. I have seen how mothers do not have the time necessary to physically and emotionally heal from the process of carrying a child for 9 months and then giving birth to them. I have seen, sadly, how this can escalate into post-natal depression as mothers are forced back to work far sooner than they are ready to, and I have seen the devastating impacts this can have on mothers, on their partners and on their small children. From a logistical point of view, it is difficult to access early childhood services with a small baby- many long day care providers will not enrol children less than 3 months old, yet many parents are needing care for their babies at a younger age than this because they simply cannot afford to stay at home any longer and may not have the support of family or friends to assist them. The answer most certainly is not to enrol younger children in long day care services, it's to improve the paid parental leave offered to the families of newborns. (continued over page)




Rebecca continued: Cuts to paid parental leave means that everyone loses. The children lose out on important time they should be spending with their family. The parents lose out on important time they should be spending bonding with their child. The mothers lose out on important time they need to allow their bodies to heal from giving birth. And workplaces lose out because the parents returning to work would much rather be at home, nurturing their young babies. Like I mentioned, I'm a parent of a small baby. I want to spend as much time as possible with my newborn without worrying about financial strains and being forced back to work earlier than my body or my baby are ready for. My baby is 18 weeks old this week. I had access to 14 weeks of paid leave from my employer and 18 weeks paid leave from the government. I am not a “double dipper”, I am just fortunate to work in a profession with strong commitments to looking after the welfare of parents. When my baby was born, I had an emergency c-section. I had mastitis and extreme difficulty establishing breastfeeding. My baby needed surgery when he was a few weeks old. I have ongoing medical issues resulting from the birth which will take a significant operation and time to heal from. This is a difficult situation which is still taking a large emotional toll on my mental wellbeing. However, this is not an unusual situation and I feel would be common to many new parents. The proposed cuts to paid parental leave are going to affect nurses, teachers, ambos and cashiers at supermarkets. These are not people in well-paid jobs. These are people already possibly struggling to meet their financial needs and may not have large savings accounts to fall back onto if these cuts to paid parental leave are passed. Nurses, teachers and ambos are notoriously underpaid for the value of the work they contribute to society. Everyone in Australia benefits from the caring work of people in these occupations, so proposing cuts that will affect their time to be able to care for their own babies is a cruel irony. I spend every day of my working life caring for, nurturing and teaching young children as well as providing support and advice for their families. It is desperately unfair that the government is trying to prevent me from doing the same thing for my own baby. Experts recommend that mothers and babies need at least 26 weeks together for their health and wellbeing. If the government wants the very best for the next generation of children (and the current generation of parents) then paid parental leave must improve, not become worse. Christian Porter wants to make paid parental leave “fairer” by stripping the best conditions away. To make it “fairer”, the conditions should be improved for everyone.




CONCLUDING REMARKS The Parenthood again thanks Senate Committee members for the opportunity to provide input and feedback to contribute to your review of the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017. THE PARENTHOOD REJECTS THE GOVERNMENT’S CUTS TO AUSTRALIA’S FAMILY TAX BENEFITS, REJECT THE GOVERNMENT’S CUTS TO PAID PARENTAL LEAVE AND WHOLEHEARTEDLY REJECTS THE GOVERNMENT’S RELENTLESS ATTACK ON PARENTS (PARTICULARLY MOTHERS) AND THEIR CHILDREN. Child Care Reform is long-awaited and necessary. Delaying it further affects parents, their children and the sector more broadly. If we want to increase workforce participation, this reform must be debated separately and as a matter of urgency. We urge Committee members to listen to the parents of Australia. The powerful stories above are such a small sample of the stories that Parenthood members have told us. We especially urge Committee members to hear those sole parent families, struggling to give their kids the best they can and who simply cannot afford any more cuts to their incomes. This Bill, if passed in its current form will have devastating consequences for thousands of Australian families. The Parenthood urges you to reject this Bill and recommend to the government that they separate Child Care Reform from proposed savings. We also urge that you recommend they seek budget savings elsewhere – not by asking those who can least afford it pay for it. We should not be expecting family budgets to repair the national budget. Kind regards, Nicole Lessio Principal Campaign Manager The Parenthood


375WickhamTceSpringHillQ4000

PrincipalCampaignManagerNicoleLessioM.0416263239:[email protected]

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APPENDIX A THE PARENTHOOD’S RESPONSE TO “JOBS FOR FAMILIES” CHILDCARE REFORM PACKAGE – A SUMMARY WITH RECOMMENDATIONS FOR LEGISLATIVE AMENDMENTS

1. THE PARENTHOOD FUNDAMENTALLY REJECTS THE GOVERNMENT’S ASSERTION THAT THE ONLY WAY TO PAY FOR EARLY LEARNING REFORM IS BY MAKING SIGNIFICANT CUTS TO FAMILY PAYMENTS AND OTHER SOCIAL WELFARE MEASURES.

The Parenthood is seeking to put an end to the government’s budgetary decision that ties the additional $3.2 billion required to fund childcare reform to the passing of $4.8 billion worth of cuts to the Family Tax Benefit payment system. The Parenthood argues that when you combine both the savings that the government has already secured within the current childcare budget, coupled with the savings in lower than expected projected increase in childcare fees and use, with the FTB saving measures that have had Opposition support, the government currently has more than enough to fully fund their childcare reforms. Accordingly, they do not need to proceed with the full suite of FTB cuts or the further sweep of social welfare cuts included in the Omnibus Bill – including cuts to paid parental leave, Newstart allowance and the age pension Table 1. provides a summary of the savings already secured alongside the cost of the childcare reform package in its first year. Table 1.

Cost for 2018-19

Cost of new Childcare Subsidy $1.300m

Government Savings So Far

- Family day care child swapping savings -$473m

- New childcare compliance measures -$27m

- Cut FTB B for children >13yrs couples only -$179m

- No Jab No Pay childcare/FTB compliance -$138m

- Freeze FTB A higher income for 2 yrs -$74.0m

- Abolish FTB A large family supplement s -$60m

- Tighten FTB treatment of fringe benefits -$42m

- Not proceed with FTB B increase for 0-1 yr olds -$123m

- Cut FTB A supplements on incomes above $80k -$560m

TOTAL SAVINGS $1.676m

So in the first year of the new childcare subsidy the savings which have already been secured are enough to fund the new subsidy with $300 million extra savings. The Government will also benefit from lower than forecast increases in childcare fees, as the new subsidy will be paid as a percentage of a capped fee and not the full fee a centre charges. While the package was cast eighteen months ago on an expectation of childcare fees




increasing by 6-7% a year1, childcare fees are rising at a much slower pace closer to 5 per cent a year given tougher market conditions.2 By 2018-19, the cumulative effect of 1-2% lower childcare fee growth could reduce childcare subsidy outlays by 4-8% or around $400-800 million a year.

2. THE PARENTHOOD IS LARGELY SUPPORTIVE OF MOST ASPECTS OF THE REFORM PACKAGE AND REQUESTS THE LEGISLATION TO BE DEBATED IN THE PARLIAMENT AS SOON AS POSSIBLE.

While The Parenthood has some serious concerns with the current “Jobs for Families” legislation, The Parenthood and thousands of parents welcome the significant investment and restructure of the subsidy system. Much of this will translate to thousands of families finding it easier to afford the early learning and care they need for their children and their families Parents have been waiting years to see the government’s promise of more affordable and accessible early learning and care come to fruition. We urge Senator’s to recommend that the childcare legislation be separated and debated on its own as quickly as possible.

3. THE PARENTHOOD WANTS TO KEEP A KEEN FOCUS ON THE BENEFITS OF EARLY LEARNING AND THAT THIS SHOULD BE AVAILABLE TO ALL CHILDREN, IRRESPECTIVE OF WHAT THEIR PARENTS DO OR EARN.

The Parenthood is seeking to ensure we do not shut children out of early learning and care, that we have an early learning and care system that recognises the value of early learning as a benefit to children as well as a means and an incentive that allows parents, in particular mothers to work.

4. CONCERNS WITH THE NEW STRICT ACTIVITY TEST

This legislation attempts to more closely align government subsidised childcare hours with the hours parents need them for work related purposes. If both parents have stable, predictable jobs, this relatively rigid new activity test will not cause much concern for these parents or the early learning their child/ren receives. However, placing such a stringent workforce participation and income requirement on subsidy eligibility fails to recognise that the cost for the number childcare days you have remains a constant through the course of a year, whereas work activity and income can suddenly and significantly change. It also fails to recognise that childcare isn’t simply there to be used for when parents are working – it also delivers early learning, the benefits of which cannot be fully realised in less than two full days of participation.

1Response to Senate Community Affairs Estimates Committee Question On Notice SQ15-469 2 Dept of Education admin stats https://docs.education.gov.au/node/41151


https://docs.education.gov.au/node/41151



5. THE PARENTHOOD RECOMMENDS THAT THE LEGISLATION FOR CHILDCARE REFORM BE AMENDED TO:

i. ensure every child, irrespective of parents’ work circumstances receive access to

at least two days (24 hours) of subsidised early learning a week. This maintains continuous access to early learning and care for all children, especially those from vulnerable or disadvantaged backgrounds. It also provides certainty for parents who even if they experience a sudden or significant change in their working or earning capacity, know they will always be able to count on access to two full days of subsidised childcare.

We are aware that the sector is currently proposing a compromise of 15 hours of subsidised early learning and care per week. Whilst we argue 24 hours better reflects two full days of early learning, we would welcome 15 hours as better than what is currently proposed, especially if the sector is able to alter their arrangements to ensure 15 hours of subsidised care still delivers two days of early learning for children at no additional out-of-pocket cost to families. Further, we enthusiastically support the sectors call to increase to the household income threshold for the low income entitlement from $65,710 to $100,000.

ii. ensure, that if two days (24 hours) a week of subsidised childcare cannot be guaranteed for all families that:

a. transitional arrangements be in place to help minimise the cost burden for families if they suddenly fail to meet eligibility requirements to secure the level of childcare subsidy they depend on. Including, but not limited to, being able to estimate the expected hours worked over a 6 to 8week period; having a 6 to 8week grace period for sudden reduction in work or other circumstances that means one parent does not meet the activity test (e.g. redundancy or illness related)

b. the definition for what is considered eligible ‘activity’ be as broad as possible to capture the full variety of paid and unpaid work parents do in and across our communities. Including, but are not limited to, volunteering in schools and childcare centres as well as all forms of paid and unpaid leave.

iii. ensure, that if two days (24 hours) a week of subsidised childcare cannot be

guaranteed for ALL families: a. That the safety net / low-income result provisions guarantee 24 hours

(two full days) a week for a full financial year for children from disadvantaged and vulnerable backgrounds and families on incomes less than $100,000.

iv. keep a base subsidy level of 50 per cent in line with what was originally

announced in the May 2015 Federal Budget. This will help to keep the costs of childcare an incentive for women, of all professions and income levels to return and remain in work, furthering their careers and contribution to our community.




v. ensure there is an effective restrain on increasing fees. The legislation places a

cap on the amount the government will subsidise not the amount centres can charge. Accordingly, there is concern parents, especially for those accessing early learning from high charging centres, will continue to see their out-of-pocket costs grow as the gap between what centres charge and what the government subsidises widens over time.


Senator Rachel Siewert Senator for Western Australia ...

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