CHILD CARE IS NOT ONLY WRONG BUT IT'S COSTING TAXPAYERS HEAPS

ALAN BARRON

CONVENOR, INSTITUTE OF MEN'S STUDIES

The Australian Government will spend around ten billion (not millions) in 2006-07 to provide financial assistance to help working parents meet child minding costs, mainly through the Child Care Benefit (CCB) and the Child Care Tax Rebate (CCTR).

CCB is a subsidy which varies according to parents’ income, the number of children in formal child-minding and the type of care. CCB is increased every year in line with inflation to maintain the value of the payment to families, and increased by 2.6% in July 2005. It will increase again in 2006.

The CCTR is a non-refundable tax rebate on out-of-pocket child minding expenses, that is, fees incurred for approved child minding less CCB. The CCTR will cover 30% of out-of-pocket expenses for families who receive CCB and meet the work/study/training test, up to a maximum of $4,000 per child. Families can claim the rebate in the tax year after child-minding expenses have been paid. This means that families will lodge claims for 2004-05 child-minding expenses in their 2005-06 tax return. The Government has allocated $1 billion over four years for the CCTR.

To give an example of CCB, a family with two children under the age of five in full-time child-minding for a family with an annual income of $80,000 would be $162.43 per week. Both parents must satisfy the work test to receive this level of CCB.

The CCB entitlement for a family on an annual income of $45,000 with two children under the age of 5 in approved child-minding for 50 hours per week would be $267.42 per week. Both parents MUST BE IN PAID WORK, training or study to receive this level of CCB. If both parents do not satisfy this requirement, the family would only be entitled to 20 hours of CCB per child per week. This would reduce the level of CCB that the family is eligible to receive to $117.66 for two children in 20 hours approved child minding per week.

As of 3 July 2006, all eligible families will be able to receive CCB for up to 24 hours of approved child-minding per child per week, regardless of whether they are working, studying or training. However, in order to receive more than 24 hours of CCB per child per week, parents will need to undertake paid or voluntary work, or work-related study or training for around 15 hours per week, or have an exemption from this requirement. Please note that it is important to look at the whole family financial situation (including private income, Family Tax Benefit Part A and Part B, child-minding fees, CCB, and CCTR when comparing scenarios). Source: Letter from Jonathan Epstein, adviser to the Treasurer, the Hon Peter Costello, dated 26/6/06.

Comment: In 1979, Australia signed the UN’s Declaration on the Rights of the Child. Principle 6 of this Declaration said: “…a child of tender years shall not, save in exceptional circumstances, be separated from his mother.” And in Principle 2, it stated; “The child shall enjoy special protection…In the enactment of laws for this purpose, the best interests of the child shall be the paramount consideration.”

In 1979, Australia declared its intention to protect children by signing this Declaration and apparently took seriously Principle 6 on not separating the child from his mother. However, 27 years down the track, not only does the Australian Government sanction the separation of a child from his or her mother, but in fact pays them a handsome dividend for so doing. It is clear from the present funding of universal formal child-minding that the interests of the child are no longer of `paramount consideration’.

Two-income families who can earn up to $80,000 per household, can receive $162.43 per week! The stay at home mother does not receive anywhere nearly as much for doing the right thing and caring for her own children in the family home. Plus the Government spends millions for subsidizing private and State built child-minding centers.

In 1999-00 the Howard Government spent an additional $79.5 million dollars to provide an extra 12,500 child-care places. The average family receives about $2,000 a year in child-care benefits, which is tied to the consumer price index. (There are over 760,000 children in formal child-minding. Representing about 25% of all families with children.)

Unjust: Also, as a man who has been out of work for some time I am dismayed to think the government is so generous to two income households as child-minding costs are seen as a legitimate “working expense”. I’ve been unemployed for nearly 3 years and the reason why I'm cheesed off is that I don’t get a brass razoo from Centrelink. This is because my wife works part-time and earns over $24,000 per year. No payments, no health-care card, nothing. We have to live on my wife’s part-time wage. Yet dual income families can earn up to $80,000 and still get $2,000 assistance for placing their children in formal child-minding.

This doesn't seem right to me Why should dual income families get anything? Child-care may be a cost of being employed, but doesn’t everyone have costs associated with work? I used to pay over $60 per week to use public transport to get to work, but I didn’t get anything from Centrelink for that!

And why should single-income families subsidize the child-minding arrangements of two-income families? It’s not right. If a couple make the choice to work then they should accept the responsibility of that decision and not expect the taxpayer to fund their child-minding arrangements. The government is always looking to reduce expenditure and to trim Centrelink payments, and yet here it is paying money (“middle-class welfare”) to people who don’t really need it. Child-care payments are clearly a mindless concession to placate the snapping hordes of femocrats ensconced in the bureaucracy.

Paying child-care allowances exacerbates unemployment as it encourages married women to stay longer in the paid workforce, thus depriving many school leavers and long-term unemployed of jobs. In addition, it also deprives a baby and young child of his/her mother's time and affection. It is nothing short of child abuse to fund an arrangement that encourages separation of a mother from her child for long periods of time on an ongoing basis.

Clearly child-care payments are wrong as they encourage the minding of young children by total strangers for up to 50 plus hours per week. Secondly, it is a waste of taxpayers money. This money, some 10 billion, would be better spent on health and in paying the genuine needy - like unemployed breadwinners of low income households, so that they are not living on their savings while unemployed.

Fairness would dictate that both low income families and high income families be paid the same, or better still, the scales should be weighted in favour of low income families.

With present government policy, married women are not given a genuine free choice if they wish to work inpaid employment or not because they do not receive anywhere the amount paid to women in paid jobs. To balance the scales, stay-at-home mums should receive at least comparable support from the government for doing a most important task. This could be supported by providing tax breaks for single and low income families.

Until this is done, stay-at-home mums will never have a genuine free choice. Present government policies act as an enticing carrot to lure mothers out of the home and into the

workforce –and to keep them there. Encouraging mothers with young children to forsake their own offspring for paid jobs not only denies job opportunities for those unemployed or under-employed, but it also exacerbates this nation’s below-replacement-level birthrate. Increasing the Family Payment would also reduce the need for a second income, allow women a genuine choice and give them greater flexibility in balancing family and paid work.