I will make a very brief contribution on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015, as I am a very strong supporter of the need to ensure that our tax system does not reflect the costs of growing and raising a family.
The principal way we do that in this country is through the family tax benefit system. However, I am also very much of the view that we have a responsibility to manage our nation's finances in a responsible way. We are far from balancing our budget at this time.
I disagree with Senator Siewert that, somehow, we can simply outsource the budget repair task to some component of the community. It is completely impractical actually that, somehow, big business, in her words, could do that. We all have to tighten our belts to do that. I am prepared, notwithstanding my general support for a supportive family tax benefit system, to support the legislation which responsibly seeks to save money for our budget, for our country, and this bill certainly does that, delivering savings of more than $4½ billion. If we did not do that, that would be a bad thing for Australian families because that would mean our children and our grandchildren would have to pay back the money that we are spending today on parents.
I principally want to say that at the heart of any family tax benefit system, and at the heart of those changes, should be what is best for children. I think the way we can generally get the best outcomes for children is to ensure that parents have the most flexibility in the choices they make for their children, because in the vast majority of cases it is the parents, not government, who are in the best position to decide what is best for their child. My wife and I, I think, are on the same team when it comes to that. I hope my family is on the same team. Sometimes I think my kids are on a different team, but it depends what game we are playing. We try to make decisions together.
One thing I am concerned about—notwithstanding my general support for this bill—is the difference in the relative costs between raising a child yourself and outsourcing at least some of that care to formal childcare or educational means. The budget underlined that relative cost difference very graphically this year when it produced cameo tables showing that a family on $100,000 a year with two children and with two people in the workforce—both parents working—pays a lower amount of tax, to the tune of $23,500, than a family on $100,000 with two children and with just a single income earner. So for two families with two kids and the same amount of household income, $100,000, the single-income family ends up taking home $79,500 and the double-income family actually ends up with $103,500 after tax with family benefits and child care. So there is a $23,500 difference a year for families with the same starting point, the same household income. I think that is blatantly unfair. It is a new car a year for the double-income family, and it has to have, of course, very distorting impacts on what decisions parents make. I think it is very important, as I said, that we try to let parents make their decisions, without socially engineering those decisions through the tax system or otherwise. It is extremely important when children are very young. That is not a view I have come to only through my personal experience; the evidence is stacked far in favour of allowing parents to look after their own children, particularly when they are young. The OECD did a report in 2007 saying:
Taking stock of the evidence … it seems that child development is negatively affected when an infant does not receive full-time personal care (breast-feeding issues aside …) for at least the first 6 to 12 months of his/her life.
The Productivity Commission in 2009, in its Paid parental leave report, said:
Most of the more recent evidence tends to support the view that the use of non-parental care/child care (usually necessitated by maternal employment) when initiated within the first year of a child's life can contribute to behavioural problems and, in some contexts, delayed cognitive development …
They have a range of scientific studies showing that. So I think it is very important we promote parental care at those young ages, and that is why I have been a strong advocate for ensuring that parents have assistance if they choose to make that decision so there is not this relative cost difference between the choice to look after your own child and the choice to put them into child care.
I am proud that the National Party, as part of the coalition agreement with the new Prime Minister a matter of months ago, succeeded in obtaining an additional $1,000 for families with a child below the age of one who currently receive family tax benefit B.
It certainly does not completely remove that $23,500 gap, but it is a step in the right direction, the direction of making sure that this system is based on what is best for the children, not the costs for the parents involved.
I certainly agree with Senator Siewert that sometimes the older your child gets the more they cost. I have a child of 10 and also one of one year old, and the one-year-old does not need cricket pads and does not demand computer games and all these other things that the 10-year-old does. But I also recognise that the care requirements that the one-year-old places on us and the opportunity costs of not being able to go into the workforce or do other things with our lives are much, much greater. The one-year-old cannot look after himself, and that, of course, comes at a cost to a parent who decides to stay out of the workforce to do that.
So I am very proud that the National Party have stood up for the stay-at-home mums and dads of this country. They do the most important work in this country. They might not get paid the most, but I do not define people's contribution to our nation by how much is in their pay cheque every fortnight. It is my firm view that, while my wife is staying at home looking after the kids, she does much, much more important work than I do—and it is work. When I have to stay home and look after them, it is much harder work than we do here in Canberra, and we should do as much as we can to support that decision, not to penalise it. I am proud that in this bill we move at least partly in that direction.