I just wanted to briefly explain to the chamber why I will not be supporting the Family Assistance Legislation Amendment (Child Care Subsidy) Bill 2021. In doing so, I want to make three quick points. First, I do support funding for child care. I do support helping families who would otherwise struggle to look after their own children or make decisions to go to work, and I do think we should support families on low to middle incomes to do that. We already do, of course, provide substantial assistance to low-income families. Up to 85 per cent of childcare costs are covered for families on lower incomes and, with a sliding scale, on over $180,000 or thereabouts. This bill, though, would of course remove caps for families on very high incomes—above-average incomes of nearly $200,000 a year. I will come back to that.
The main issue I have, though, is not necessarily the change in this bill itself. The second point I would like to make is more that, if we have $1.7 billion to allocate to support families, it seems completely out of whack and out of balance to me that we cannot find any assistance for those families who decide to look after their own children. As I say, I support families and want to support families who make the choice to work and therefore have to provide and pay for child care for their young children, but there are, of course, families who make the decision for one or other of the parents, or sometimes both, in combination, to look after their own children. We should support that choice as well. We should support parents in any choice as to what is best for their own children, because I do want to say that those mothers and fathers who look after their own children at home are often ignored in this debate. I don’t like calling them stay-at-home parents. They are work-at-home parents; I know that. My wife, for a long time, did work at home, looking after our children. She’s back working a little bit at the moment, but she works a lot harder than I do in this job. She was working at home, and others were working at home, looking after kids, long before it was cool, during the coronavirus, and they have not been recognised adequately.
I want to say here that I recognise the effort they put in, and I think it was summed up in a quote that’s attributed to CS Lewis: ‘The homemaker has the ultimate career. All other careers exist for one purpose only, and that is to support the ultimate career.’ And that is exactly right. The point CS Lewis was making was that our defence forces are there to defend the home. Our businesses are there to make wealth to support the home and the education of the children in the home. It’s ultimately, then, the homemaker—the person who is looking after the home, supporting children and raising a family—who has the ultimate career, because all other careers are just there to help them.
I often say my job as a senator is very important, but it pales into insignificance compared to my job as a father and a husband, and likewise for my wife. That is the most important job any of us can do, yet it is barely recognised in our tax or welfare system. It is barely recognised because, today, if you make that choice, to look after your own children, you are massively penalised by our tax system, which only looks at the individual and does not look at the household choices that families make. I make decisions with my wife as a team. We are a team. I’m not sure if my kids are on that team half the time, but we are on the same team. We are working together, yet the tax system treats us as two completely separate entities. When we had young kids, if we’d made a choice for my wife to go back to work we would have been much further ahead because the tax system would have supported us. We would have had two tax-free thresholds. It would have made an enormous financial difference.
I’ll put that difference into stark terms. Right now, let’s say there are two families. One is a double-income family on $150 grand a year. That sounds like a lot of money, but the average full-time wage today is nearly $80,000, so $150 grand a year is not unusual for a household with two incomes to be on. Let’s split that, with $100,000 a year coming from one parent and $50,000 a year from another. They pay, under our tax system, roughly $32,000 in tax. They would receive, roughly, another $7,000 or so in childcare subsidies. That has to be estimated. I’ve assumed three days a week at $10.40 an hour, the prescribed rate. In total, when you net off those childcare subsidies, their tax bill comes in at $25,000 a year for a household income of $150,000.
We then have a different family, a single-income family, that says: ‘Look, one parent is going to go out and earn the money. They’re going to work a bit harder, maybe work longer hours, and they’re going to earn $150 grand, and the other parent is not going to earn anything but is going to stay at home and look after our child.’ They will have exactly the same income as the other family, but their tax bill will be $43,000 a year. They of course get no childcare subsidies because they’re not using it, so their tax is $43,000 a year. The difference between those two families is nearly $18,000 in net tax per year. They have exactly the same household income of $150,000 a year—a little bit above average, but it’s not unusual for households to be on that amount of income today—and yet the difference in tax is nearly $18,000 a year. That is completely out of whack. It is grossly unfair and, of course, it ultimately distorts the decisions parents make about their children and the raising of their children, because it is a very, very costly choice to look after your own children.
I note the contribution of the previous speaker, who said it’s really important that we support the education of young children. I couldn’t agree more. Absolutely it’s very important, yet all the evidence shows, especially for children under the age of one, that if a parent—a mother or father—can spend more time with them it makes an enormous difference in their development. That is not me speaking. OECD reports and psychological studies have all shown that the more time a child under one can spend with their biological mother or father, the better it is for their development.
So why aren’t we doing anything, with these arrangements, to support the child? Isn’t that what it should be about? As I said at the start, I do support helping parents who want to go back to work, helping them to put their children in child care, and I hear a lot about that in these debates, but I hear very little about the child. In a childcare bill, shouldn’t our children be front and centre of what we are trying to do? That is another reason why we should be seeking a more neutral outcome in this legislation.
My final point is this. I don’t have a fundamental objection to supporting families more. I do think, though, that families that are on over $200,000 a year, who this bill helps to support, shouldn’t be at the front of the queue for government assistance. If you are lucky enough to have a household income of that kind of amount—I’m in that category—and you decide to bring a child into the world, I think, primarily, it should be your responsibility to look after that child. There is some government assistance there, but I don’t support the idea that through this legislation we would now spend another $1.7 billion on the richest people in our community—the absolute top few per cent.
This bill only helps out those few who are in the absolute top few per cent, like us. This bill’s for us, by the way. We’ll all benefit from this bill, but not people in single-income families on $80,000, $90,000 or $110,000 a year. They’re often at those levels when they’re just starting a family. If you’re a young family, you might not be earning a lot of money. We’re not doing anything for them. I know so many families who would love to spend more time with their children when they are young, and they are not necessarily earning high incomes yet. We are not doing anything to help and support those choices, yet we are helping out the very lucky few that are very rich. For that reason, I’m sorry, I cannot support this legislation.
