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Media Release by The Hon Mal Brough MP

Families to Reap the Benefit of a $2.1 Billion Child Care Investment

The Howard Government is investing a further $2.1 billion in child care as part of the 2007-08 Budget, including a major boost to Child Care Benefit.

Minister for Families, Community Services and Indigenous Affairs, Mal Brough today said the Budget built on the Howard Government’s significant investment in supporting families with child care choices.

“In the 2007-08 Budget, I can announce that Child Care Benefit (CCB) will be increased by more than 13 per cent on 1 July this year. This will further assist families in meeting the cost of child care.” Mr Brough said.

The cost of providing this increase in CCB is $728.5 million over five years for the measure, plus an additional $163.7 million for the cost of indexation. As this reduces the out of pocket payments for some families there will be some reduction in total Child Care Tax Rebate payments.

This means a low income family with one child in full-time Long Day Care will be up to $20.50 better off a week.

In another significant step to help working parents using approved child care, the Government will bring forward payment of the 30% Child Care Tax Rebate (CCTR).

From this year, CCTR will be provided as a direct payment soon after the financial year in which the costs of child care are incurred.

CCTR provides significant support for working parents, reimbursing up to 30 per cent of out of pocket child care expenses up to $4,000 per child per year (indexed). The cost to bring forward this assistance for families is $1.4 billion over five years.

“The Government recognises that families would prefer to receive the rebate early. I am particularly pleased the Howard Government has been able to respond with this highly practical improvement.”

“This means that later this year, parents will receive two years of rebate; their 2005 06 CCTR as part of their tax assessment this year and they will also receive their first new payment for 2006-07 rebate through Centrelink.

This is a total of up to $8,000 per child that families may receive later this year, depending on the circumstances” Mr Brough said

Mr Brough said the Government was also making a substantial commitment to Australian families by investing $169.5 million to increase parents’ access to quality child care with a focus on regional and remote Australia, including children’s services for Indigenous families; providing additional help for children with high support needs using child care; and further increasing support for parents entering the workforce.

“The Howard Government will commit an extra $15.4 million for Jobs, Education and Training (JET) Child Care fee assistance. The extra funding will enable approximately 20,000 additional parents to undertake training, study, rehabilitation and work, which will help them find work and reduce dependency on welfare.

“In addition the Howard Government will commit an extra $43.8 million to provide further financial support to child care services operating in areas of need, particularly rural and remote communities. This will help ensure quality child care is available where services may otherwise not be financially viable.

“We are also providing an additional $71.3 million over five years for the Inclusion Support Subsidy (ISS) programme which will allow 3,000 extra children with high support needs, particularly those with a disability to be included in high quality child care each year,” Mr Brough said.

The Howard Government will commit $10.7 million to integrate the three current child care Quality Assurance systems for long day care, family day care and outside school hours care into one system. The new system will reduce overlap and simplify the quality assurance process across the sector.

“The Howard Government will also invest $23.5 million over four years to create 20 new Innovative Child Care Service Hubs in regional and remote communities with high Indigenous populations. Child Care Service Hubs provide child care, but also link with other local early childhood services to better bring together services, for the benefit of children and families.

“The new Hubs will provide greater access to child care for 700 children living in rural and remote Australian communities.

“Further support will be provided for Indigenous families with $13.8 million to expand access to quality early childhood development activities for vulnerable Indigenous children. Over 6,000 Indigenous children and their parents or carers will have access to improved and expanded playgroup services.

Mr Brough said the 2007-08 Budget provided further evidence that the Howard Government was committed to supporting Australian families to balance work and family life.

“We are continually looking to help those families who have children with additional needs and those who may not have ready access to child care.

“This Budget builds on the Howard Government’s record in child care which more than doubled the funding under the previous Labor Government, massively increased the supply of places – which are now uncapped for 99 per cent of the sector – and substantially improved child care choices for Australian families,” Mr Brough said.

Child Care Benefit – increased rates

Why is this important?

  • The Government will increase the rate of Child Care Benefit (CCB) by 10 per cent on top of the normal CPI increase from 1 July 2007. This will assist all families using approved child care with the cost of care.
  • As a result of these changes on 1 July 2007 families will receive a total CCB increase of more than 13% which means up to an extra $20.50 per child per week, for one child in full time care (5 days per week) for low income families.
  • CCB is a subsidy paid to families to assist with the cost of care, which provides Australian families with choices around work and family.
  • This measure is part of a package for families to increase assistance with the cost of care. Families will also benefit from the bringing forward of the payment of the Child Care Tax Rebate.

Who will benefit?

  • All families who are currently receiving CCB and those who are eligible for CCB in the future will benefit from the additional financial support provided through the CCB rate changes.

What funding is the Government committing to the initiative?

  • The Government will provide $728.5 million over five years to increase the rate of Child Care Benefit. As this reduces the out of pocket payment for families there will be a reduction in the Government’s total Child Care Tax Rebate Payments of $180.0 million.

What have we done in the past?

  • The Australian Government introduced CCB in 2000 to assist families with the cost of child care. Currently over 730,000 families each year receive this government subsidy for child care.
  • In addition, the Government introduced the Child Care Tax Rebate to further assist working families with the cost of care.
  • Since 1996 funding and places in child care have doubled.

When will the initiative conclude?

  • This is an ongoing measure.

Child Care Tax Rebate – conversion to a direct payment

Why is this important?

  • The Government will bring forward payment of the Child Care Tax Rebate (CCTR) and pay it through the Family Assistance Office (FAO) at the end of each financial year.
  • This means eligible working families will receive the rebate soon after the end of the financial year. Additionally in the future, with introduction of the new Child Care Management System, the Government will look to pay the rebate at regular intervals during the year.
  • Parents will have greater choice about their participation in the workforce and not have to wait as long to receive help with the costs of child care.
  • This measure is part of a package for families to increase assistance with the cost of care. Families will also benefit from the increase of the payment of the Child Care Benefit.

Who will benefit?

  • The change will benefit all working families who receive CCB for approved child care. These families will now be able to receive a payment equivalent to 30% of their out of pocket expenses up to $4,000 indexed per child per year for approved child care at an earlier time. The payments will begin from September 2007 for the child care expenses incurred in the 2006-07 year.
  • Families who incurred out of pocket expenses in both the 2005-06 and 2006-07 will receive two rebates in 2007-08, potentially totalling up to $8,000 (indexed) per child. They will receive the first rebate as part of their tax assessment, while the second will be received as a direct payment from the FAO. The Government will also look at introducing regular payments throughout the year once the Child Care Management System is in place.

What funding is the Government committing to the initiative?

  • $1.4 billion over five years.

What have we done in the past?

  • Under the Howard Government, since 1 July 2004, working families receiving CCB have also been eligible for CCTR. This provides families with a 30% rebate on out-of-pocket child care costs, up to $4,000 (indexed) per child per year.
  • CCTR has been paid as a tax rebate through the Australian Taxation Office. The rebate was claimed in the tax return for the year following the year the child care costs were incurred. This measure will mean families will now be able to receive the rebate as a direct payment from the FAO soon after the end of financial year.

When will the initiative conclude?

  • This is an ongoing measure.

Jobs, Education and Training Child Care Fee Assistance – additional resourcing

Why is this important?

  • Jobs, Education and Training (JET) Child Care fee assistance provides extra child care assistance to eligible parents wishing to undertake work or job search, rehabilitation and study activities.
  • The increased funding will assist around 20,000 more parents to enter or re-enter the workforce. JET Child Care fee assistance can help meet the cost of child care in approved child care services by paying most of the gap fee. The gap fee refers to the difference between the full child care fee and Child Care Benefit (CCB).
  • Eligible parents pay their child care service only 10 cents per hour per child for each of the hours they are charged for up to the weekly limit of their CCB eligible hours.

Who will benefit?

  • Eligible families on income support will be able to get extra child care fee assistance while they look for work, undertake rehabilitation, study or start a job. The Family Assistance Office (FAO) can help determine a family’s eligibility for assistance with child care costs and other family payments.

What funding is the Government committing to the initiative?

  • $15.4 million over four years.

What have we done in the past?

  • The measure builds on the $170.9 million over the next four years that the Australian Government will fund to provide extra support for parents with the cost of child care as they enter or re-enter the workforce.

When will the initiative conclude?

  • This is an ongoing measure.

Child care in regional and remote Australia – additional resourcing

Why is this important?

  • It is very important that families in outer regional and remote areas have access to quality child care to help support their participation in the workforce.
  • The Australian Government provides financial support through the Child Care Support Program to child care services in outer regional and remote areas, to ensure parents have access to quality child care.
  • The additional funding recognises the higher cost of providing care in outer regional and remote Australia, The funding will ensure quality child care is available in communities where services may otherwise not be financially viable.
  • This initiative provides additional financial support to services that meet existing eligibility criteria for Sustainability Assistance for Long Day Care and Outside School Hours Care and for Service Support for In Home Care. In addition:
    • Potential Family Day Care carers living on a property in remote and very remote locations will be able to apply for a Family Day Care Start Up Payment of $5,000.
    • Financial support will now be available to private Long Day Care (LDC) providers in outer regional and remote areas, that meet Long Day Care Sustainability Assistance eligibility criteria.
    • Up to 20 LDC centres that are eligible for Sustainability Assistance in outer regional and remote areas will be able to apply for capital funding to upgrade or expand their centre.

Who will benefit?

  • Providers and potential providers of child care in regional and remote areas.
  • Families in regional and remote communities where services may not usually be viable will retain access to quality child care for their children.

What funding is the Government committing to the initiative?

  • $43.8 million over four years.

What have we done in the past?

  • The Child Care Support Program already provides financial support to child care services with a particular focus on regional and remote communities where the market would otherwise fail to provide access to quality child care.

When will the initiative conclude?

  • These are ongoing measures.
  • This measure increases the Sustainability Assistance funding available to Long Day Care services and broadens the eligibility criteria to provide assistance to sole private providers operating in regional and remote Australia.

Child care Inclusion Support Subsidy – additional funding

Why is this important?

  • This measure builds on the Government’s child care Inclusion Support Program, with an additional 3,000 children to be supported.
  • The measure is being implemented to ensure child care services are better able to respond to growing demand for high quality child care that can meet the needs of children with ongoing high support needs, in particular children with a disability.

Who will benefit?

  • There will be a positive impact on Australian families using child care who have children with ongoing high support needs who need to use child care.

What funding is the Government committing to the initiative?

  • $71.3 million over five years.

What have we done in the past?

  • The Australian Government implemented the Inclusion and Professional Support Program, on July 1, 2006 which aims to promote and maintain high quality care and inclusion for all children, in particular children with a disability.

When will the initiative conclude?

  • This is an ongoing measure.

Child care – integrated quality assurance system

Why is this important?

  • The Australian Government has a focus on quality child care and this will further strengthen the current Quality Assurance System.
  • The three child care Quality Assurance systems, which assess the quality of care provided by Long Day Care, Family Day Care and Outside School Hours Care services, will be integrated into one system. Random quality assurance spot checks, which assess if quality care is being provided on a day-to-day basis, will continue to be part of this process.
  • The integrated child care Quality Assurance system will:
    • ensure all children are receiving quality care in approved child care services;
    • reduce overlap with state and territory licensing regulations; and
    • enable other service types to participate in the accreditation process over time.

Who will benefit?

  • Families and their children will also benefit as implementation of random quality assurance spot checks will encourage services to provide quality care on a daily basis. The integrated Quality Assurance system will eventually enable Indigenous specific child care, In-Home Care services and other service types to participate in the quality assurance process for the first time.
  • Child care services and child care staff will benefit, as having one integrated child care Quality Assurance system will reduce the complexity of the process and enable staff to more easily transfer between service types.
  • What funding is the Government committing to the initiative?
  • $10.7 million over five years.
  • What have we done in the past?
  • The Australian Government links child care with quality. Services must participate in the Quality Assurance System to be approved for Child Care Benefit. Spot checks, unannounced validation visits and professional validators were introduced last year – strengthening the system. The integration of current systems into one, will ensure that children are receiving the same quality of care no matter which type of child care they use.
  • When will the initiative conclude?
  • This is an ongoing measure.

A Better Future for Indigenous Australians – improved access to child care and early childhood services

Why is this important?

  • This builds on the Government’s plan for Indigenous children by expanding the number of quality services in regional and remote areas.
  • Access to child care and early childhood services improves ‘school-readiness’ and ensures children get the best possible start in life. This is particularly important for Indigenous children who experience poorer life outcomes than non-Indigenous children. Indigenous early childhood development is one of three priority areas identified by the Ministerial Taskforce for Indigenous Affairs.
  • The Australian Government will create 20 new Innovative Child Care Service Hubs in regional and remote communities with high Indigenous populations. The new Innovative Child Care Service Hubs will provide not only child care but also additional services for families and children aged 0-5 at one location.
  • Who will benefit?
  • The new Child Care Hubs will provide access to child care for 700 additional children in regional and remote communities. Support for existing services will improve the quality of care provided to approximately 840 children and enable their families to claim Child Care Benefit.
  • What funding is the Government committing to the initiative?
  • The Australian Government will provide $23.5 million over four years.
  • What have we done in the past?
  • The Government supports Indigenous families with access to child care and a range of children’s services. These include Multifunctional Aboriginal Children’s Services, JET Creches, Mobile services and Indigenous playgroups. The Government’s $490 million Stronger Families and Communities strategy and the Indigenous Child’s program deliver programs aimed at improving children’s outcomes by better access to services.
  • When will the initiative conclude?
  • This is an ongoing initiative.

A Better Future for Indigenous Australians – expansion of playgroups for Indigenous families

Why is this important?

  • Playgroups provide parents, grandparents and caregivers with opportunities to share ideas and experiences while their children interact and further develop their social skills through play. Supported playgroups provide additional assistance for vulnerable families in areas such as parenting, health, safety and wellbeing.
  • The Australian Government will expand access to playgroups for vulnerable Indigenous families by increasing the number of supported playgroups and further strengthen the effectiveness of the nine existing Intensive Support Playgroups. This builds on the Government’s plan for Indigenous children.
  • Who will benefit?
  • Over 6,000 Indigenous children and their parents and caregivers will benefit from access to expanded playgroup services. Benefits include improved access to play based early childhood development opportunities and improved parenting support for Indigenous families.
  • What funding is the Government committing to the initiative?
  • The Australian Government will provide $13.8 million over four years.
  • What have we done in the past?
  • This measure builds on the Government’s overall Playgroups Program, which delivers $22.5 million over four years to support over 100,000 families across Australia using Community, Supported and Intensive Supported Playgroups.
  • When will the initiative conclude?
  • This is an ongoing initiative.