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EXCERPTS
MAXINE McKEW: It's something working parents constantly worry about, and it's a system that many believe is in urgent need of an overhaul. Child care is now back on the political agenda, and from a curious quarter, Liberal backbencher Jackie Kelly &em; a favourite of the PM - has attacked her own Government's policy. She says the current mix of child care funding is a shambles. With spiralling costs and long waiting lists, the former minister is calling for child care to be a priority in this year's Budget. Finance Editor, Emma Alberici reports.
EMMA ALBERICI: Philippa Waters has always loved her job as a primary school music teacher, so her decision to walk away wasn't an easy one. Right now, she's planning to move home and then stay there - a choice forced on her by the rising cost of child care in her Sydney beachside suburb.
PHILIPA WATERS, MUSIC TEACHER: Well I get about $180 a day after tax and for two in child care, that's 150, which leaves me about $30 to live on.
EMMA ALBERICI: That child care is expensive and hard to find is hardly breaking news, but it will make headlines when it becomes a hot argument within the Howard Government. That surfaced over the weekend when outspoken Liberal backbencher Jackie Kelly declared the Coalition's approach to child care a shambles and in need of a ground-up rebuild.
JACKIE KELLY, GOVERNMENT BACKBENCHER: Well, we're currently spending $9.2 billion over the next four years under our current policies and all I'm saying is that that money could be better spent.
EMMA ALBERICI: Tax deductability for child care is a key plank of the Jackie Kelly plan. It's often been argued that if you can claim your work equipment on tax, you should be able to claim child care, too. It's not an optional expense where both parents have to return to work after the birth of a child and a place in a centre costs up to $110 a day.
JACKIE KELLY: Mums earning between $20,000 and $40,000 a year - they need to have the childcare relief on the day they access child care, and not wait until the childcare centre has tallied their CCB contributions and then they put their tax in.
TANYA PLIBERSEK, OPPOSITION CHILDCARE SPOKESWOMAN: I simply think that child care hasn't been a priority for this Government.
EMMA ALBERICI: What is Labor's childcare solution?
TANYA PLIBERSEK: We need to look at the tax treatment of child care. Fringe benefits tax is paid on employer-provided child care unless the employer actually owns and operates the child care centre. That's nonsense.
EMMA ALBERICI: The Federal Government spends billions of dollars each year on child care but as many parent also attest, the policy appears ad hoc and unfair. The Government subsidises mothers who want to stay home with their children, all mothers, regardless of their incomes. Tens of thousands of them are in households where their partner earns more than $100,000 a year. On the other hand, though, the Government will this year introduce a system that forces single parents who depend on welfare benefits to look for work after their youngest child turns 8.
PETER COSTELLO, TREASURER: The second thing which has been introduced in the last Budget, of course, was the childcare rebate. Many parents haven't been able to claim that yet. But I think once they do claim that and that's a 30% rebate, that's going to make a lot of difference to the costs of child care.
EMMA ALBERICI: Making good on an election promise, this year the Coalition will introduce a 30% tax rebate for childcare fees. Again, it's not means tested. The Government was forced to put a $4,000 cap on the benefit after the National Association of Community Based Children's Services pointed out to them that millionaire parents stood to make thousands a year from the scheme.
LYNNE WANNAN, COMMUNITY BASED CHILDREN'S SERVICES: I think it's bizarre. I mean, it's bizarre that you could imagine you're helping people meet the cost of something when you don't give the money until two years after they've spent it. If the Government is serious about making child care affordable then they have to do it at the timeframe that parents can deal with. You need the money when the fees are due.
PHILIPA WATERS: I could afford to work with one child in child care. As soon as you bring in that second child or subsequent children, the cost of child care just doesn't make it worthwhile to be working.
EMMA ALBERICI: Australian mothers now have one of the lowest employment rates among OECD countries. Only 43% of women with two or more children are in the workforce - a much lower rate than in Britain where 62% of mothers work and Sweden, where 82% are in paid jobs. Much of the blame for that can be sheeted home to two things. A lack of availability and affordability of child care. As waiting lists stretch out to two years and more than 175,000 children wait for a spot, child care has become a playground of profits for the private sector.
TANYA PLIBERSEK: We haven't asked ourselves as a community why is it OK to make money out of 6-month-old babies but not 6-year-old children. We don't do it in education, but we do it in child care.
EMMA ALBERICI: Now, the world's biggest publically listed child care operator, Australia's ABC Learning, collects 60% of its income from the Federal Government. Each child allocated up to $150 a week depending on their parent's income. ABC Learning is projecting a record profit this year of $88 million.
LYNNE WANNAN: People often look at Australia and are aghast that we would have companies making $88 million out of taxpayers' money when in fact we don't even have enough services on the ground. I think it is a very odd way for Government policy to have gone.
EMMA ALBERICI: The services that are on the ground are increasingly out of reach for many families. In the year to September 2005, the price of child care jumped 9.1%. That's more than three times the official inflation rate. Only the price of pork and petrol rose more than child care. In fact, over the past four years the childcare price index has soared 60%.
JACKIE KELLY: It's just a part of a very healthy discussion that governments should have. I think ministers take that on board and have a look at their departments and hopefully take up my suggestion of the four ministers coming together with a cohesive policy.
- reprinted from the Australian Broadcasting Company