Sussan Ley (Farrer, Liberal Party, Shadow Minister for Childcare and Early Childhood Learning) Share this | Link to this | Hansard source

I rise today to speak on the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. The coalition will be moving a second reading amendment during the second reading debate. We will also be moving an amendment during the consideration in detail phase. This bill reiterates the government's love affair with red tape. The coalition does not oppose sensible regulations. However, when those regulations do not clearly define their mandate and seek to do little more than impose more and more onerous requirements on business, we do need to raise our voices.

The childcare sector is already more than overwhelmed with administrative requirements. At every childcare centre I visit I hear the common message that it is the administrative requirements which are so extensive that take away from the primary purpose of a childcare centre, which is caring for children. I have painted the picture before of the toddler on one hip and the clipboard on the other and the boxes being ticked. I know that is not what this bill is about. I understand that this bill is about something quite separate and I will come to that. However, I do want to make the point that we are dealing with a sector that is completely overwhelmed with red tape, whether it be in the community services area or the small business area. We know that because we have heard the message from small businesses that talk to us on this side of the House anyway about the amount of time they have to spend doing book work to satisfy external stakeholders, including government. Remember that all of the time spent on this sort of carry-on is time away from your principal activity, and in the case of a childcare centre that is the care of children.

I have heard from one centre recently that does not care for nought to two year olds but is still required to have cot death information within their sleeping policy. That is one example. Childcare workers are overwhelmed, and that is not because of ratios between them and the number of children, it is not because of busy little toddlers, it is not because bottoms need wiping and faces need cleaning and food needs preparing—it is not because of any of those things; it is because of the paperwork.

The amendment that we are moving highlights this government's lack of understanding of business, constantly trying to make life harder for business and imposing more and more red tape. It is ultimately another broken promise. The Rudd Labor government made an election commitment to ease the red tape burden on business by a one in, one out requirement for regulations. Unfortunately, this promise has been shelved and now the government marches forward madly intent on imposing regulations left, right and centre.

Ultimately, the six or so businesses that will be affected by this legislation have their own measures in place to ensure their financial viability. On that point I will come to the substance of the bill. It seeks to amend the A New Tax System (Family Assistance) (Administration) Act to provide for the assessment and ongoing monitoring of the financial viability of large long day care centre operators of approved childcare centres. By way of background, in late 2008 the largest provider of childcare services in Australia, ABC Learning, went into voluntary administration. At that time they had approximately 1,000 childcare centres nationally. It is well known that the rapid collapse of this provider saw the childcare sector thrown into turmoil. A government bailout of $58 million took a while coming. It was needed to keep these centres open and provide certainty for Australian families and the childcare workers.

During the period of receivership a decision was made to close 55 of the unviable centres. A further 262 unviable centres were transferred into the ABC2 group and sold through a process managed by a court appointed receiver at the request of the Commonwealth. Up to an additional $34 million was allocated in total to keep these centres operating until the final completion of that process in August 2009. A further 26 of these centres closed before being sold. The remaining 720 centres continued to operate until sold by the receiver in 2009 and 2010 with GoodStart being the preferred purchaser for the majority of these centres. That is all a matter of history and a matter of fact. I do not wish to reflect on the reasons why ABC Learning went the way it did, except to note that it was during the global financial crisis. There may have been factors related to the strategic direction of the company; there may not have been. But I do resist the implication in this bill that there is, because of that instance, something wrong with the private provider model of child care in this country, because we know that the community sector and the private sector each have a role to play in the provision of child care and that there is no one type of centre that is better than the others. I certainly know that they are all struggling with increasing costs, red tape and the requirements of the national quality framework that are being imposed on them, whether they be community or private providers. From that point of view, they have been put under the pump by this government. There is no one model to be preferred and I do resist that implication in this bill. There is a subtext running through it that, if you are a large private provider, maybe something could happen to you and you could go broke as a result.

I want to reflect on the regulation impact statement that was produced as part of the explanatory memorandum for this bill and the approach that was taken by the department and the government in looking at a framework for assessing the viability of large long day care providers. As I said, this was part of the national quality framework. In May 2010 the government announced that it would invest $273 million to support the introduction of that National Quality Framework for Early Childhood Education and Care. I have had much to say about that in other forums and will continue to do so, but for the purposes of this bill $1.9 million of the announced funding was to support new regulatory measures to help achieve ongoing stability in the childcare industry following the ABC Learning crisis. So this bill has its particular genesis in the ABC Learning crisis, and that is the slight problem that I have: this implication that there was a problem in the private provision of child care by large operators. It is large operators that are targeted by this bill. You would need, according to the explanatory memorandum, to have 25 sites across Australia in order to come under the ambit of this bill. Currently I understand there are about six large providers who would do so.

According to the explanatory memo­randum:

This Regulation Impact Statement (RIS) provides an assessment and information from the consultation process conducted with the child care sector on the two regulatory measures below:

It sounds quite reasonable. There is the possibility of something happening in the sector and of course parents need to be reassured. I agree with that. I agree that when a childcare centre closes it is enormously disruptive to any family. So the principle is sort of okay, but when we look a little bit deeper into the substance of the bill and how it would actually play out in practice, we in the coalition see problems. I alluded to the problem relating to the amendments that I will move at this stage, which is simply the size of the regulatory burden that would be imposed. In providing this information to the Department of Education, Employment and Workplace Relations, centres might have to take even more time out from running their small business or, in the case of a voluntary board, take more time out of their lives in a voluntary capacity to come up with information that might be available on the public record anyway, in which case it is not so much of a problem, might not be necessary and might not be any of the department's business. In other words, I do not agree with the department, because a centre or operator receives childcare benefit, going on a fishing expedition and scooping up information through a provision in this bill that says, 'Any other information required by the secretary can be sought.' We know that could mean a multitude of things. It could mean that centres are required to appoint outside consultants or financial analysts or wheel their accountant in for another whole round of paperwork during the year just to satisfy the bureaucrats of something. That is essentially where the problem lies.

Coming back to the rationale, which is that large childcare providers might go belly up and we need to know about it in advance, I introduce the suggestion that the centres that are most likely to encounter problems are small ones. The going broke, for want of a better word, of a small centre in a small town with very few alternative options for parents is just as dramatic for families. If the department and the government are satisfied that measures are in place for small centres, and I am satisfied that they are, that would be something that could not be controlled by government. After all, we cannot control everything that happens, but what we can do we have done. If that is okay for small centres in rural areas, if that is okay for operators with less than 25 sites across Australia, why is there the suggestion that it is not okay for operators with 25 sites or more. Would you not expect that the requirements of the Corporations Act, the requirements for centres that are owned by large operators, would demand that they provide this information, that they provide it regularly, that they have it on hand and that they have in fact climbed over those regulatory and business hurdles in the first place?

The financial viability framework costs $1.9 million. Some in the government may say that it is only $1.9 million, but it is going to employ more bureaucrats in the department. It is going to employ more teams of assessors and the problem is that, if those assessors decide that there is a problem with some of the information they receive, or more likely that there might be a problem, the first issue is whether they have the expertise to determine that themselves. I noticed in a report that was commissioned as part of the homework for this particular piece of legislation there was a suggestion that the department actually calculate the financial ratios. I do not think the department should be calculating financial ratios. I suspect they would hive that activity off to consultants. But even more alarmingly, they could send that back to the childcare provider and say: 'You do it. We need this information. We need this set of ratios. We need to know all these things and you pay for it because it is user pays.' So what looks like quite an innocent provision is, I am certain, going to add to the regulatory burden on small business.

The existing regulation of childcare centres is sound. When centres apply for childcare benefit, in other words for the right to receive government assistance, they do have to demonstrate that they are financially sound, they do have to demonstrate that they have got it together and they do have to demonstrate that their operation, not just financially but in every other sense, is a good and proper one. We in the coalition are happy with that. We are quite suspicious of a bill that imposes a greater regulatory burden on the sector. Large providers are accountable to shareholders and boards. There is little point in reinventing the wheel and giving departmental staff access to financial records that they may or may not be able to interpret.

This legislation also fails to clearly restrict the types of evidence that may be called for by the department. That is what I would allude to as a fishing expedition, where something else that the secretary may want the secretary is entitled to ask for. I understand that in drafting laws we cannot be too prescriptive. We do not know what we may encounter down the track so we have to be careful. But I also think that if we leave it wide open we could have overzealous bureaucrats, newly appointed to the financial viability framework for large childcare providers section in the department, deciding that everything is not all right out there and that more information needs to be sought and more statistics provided.

When looking through the types of information to be provided I was alarmed that you need to make the government department aware of such things as other investments the childcare operator might be involved in. I do not know that it is any of the government department's business. It is a government department's business that you are operating a sound organisation and, as I said, you are required to provide that information anyway. But it is not the government's business to know what else you might be investing in or the concurrent activities of other investors in your organisation who may have a 15 per cent—that was the figure quoted—shareholding or investment. Why is all that relevant? There are some transactions that take place in the private sector, within small businesses, that this government has no right to know about. Why should the sector itself be charged with the cost of providing that information? It looks like that is what this bill is going to do.

The coalition is tired of the government's obsession with increasing the burden on business. A prime example of this is its decision to have employers play the role of pay clerk for the Paid Parental Leave Scheme, which I am sure will apply to small businesses in the childcare sector, instead of leaving that role with the Family Assistance Office. That is where it started out, so presumably the software and infrastructure are already there in the Family Assistance Office to enable it to continue to be the pay clerk for the Paid Parental Leave Scheme. After a mere six months of the scheme, the government is insisting that the responsibility go back to small businesses, which just underscores its approach. We want a commonsense approach to ensure that business is not required to hand over all manner of information—frivolous, commercial, repetitive—to the department when there no legitimate need. With this in mind, I move:

That all the words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes:

(a) the bill proposes that information will be obtained to determine whether the operators of child care services are financially viable, and likely to remain so;

(b) the bill also proposes that financial information will be obtained relating to large long day care centre operators;

(c) the growing burden of red tape and regulation imposed on small businesses, not-for-profit organisations and industry by the Gillard Government; and

(d) that the increasing regulatory burden represents a broken election promise whereby the Labor Government said that it would only introduce a new regulation after repealing an earlier regulation: a "one in, one out" rule; and

(2) calls on the Gillard Government to immediately adopt the Coalition's red-tape reduction policy which will seek to reduce the cost of the Commonwealth's regulatory burden by at least $1 billion per year."

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Is the motion seconded?

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. I had a look at what the coalition want to do in moving their amendment. I had a look at point 2 of the amendment, which calls on us immediately to adopt their alleged red-tape reduction policy that seeks to reduce the Commonwealth's regulatory burden by at least $1 billion per year. I saw '$1 billion' and thought: 'That rings a bell, the coalition wanting to take $1 billion out of something. Let's have a look back to when those opposite had Mr Howard and Mr Costello at the dispatch box. What was one of the first things they did to the childcare sector? They ripped $1 billion out of the sector.'

So the billion dollars those opposite are talking about here has some resonance for me. I want to remind everyone who listens to this that just about the first thing the then coalition government did after 1996 was to rip $1 billion out of the childcare sector. Those in the childcare sector know very well that that is what they did. When the opposition talk about taking $1 billion of federal government money off the sector, it is a bit rich for them to say they are going to reduce the regulatory burden. You always have to listen to what the coalition do, not what they say. There is an old saying in the Bible that it is not the hearers of the word but the doers of the word who are righteous. Those opposite are not very righteous when it comes to child support or child care. They are not particularly good at all, because they say one thing in this place and when they get into government they do exactly the opposite.

The member for Farrer talked about the Paid Parental Leave Scheme. When the coalition were in government did they show heartfelt sympathy for small business operators who collected the goods and services tax, acting as conduits for the tax office? Did they show any sympathy, love or affection for them, or any empathy? No, they did not. The coalition have never supported families with things like the Paid Parental Leave Scheme, except for the ridiculous and fanciful notion they came up with at the last election. They mentioned the ABC Learning Centres collapse. This happened on their watch. The empire was created on their watch, and we had to deal with the problems created through the lack of a regulatory burden, financial capacity and capability in the sector.

This bill we are supporting today introduces new requirements for large long day care entities to provide financial information. We want to make sure that nothing like the ABC Learning collapse, which affected electorates across the country and communities across the nation, never happens again. Why? Because we had to put in $58 million of taxpayers' money to prop up the sector so that 90 per cent of the kids who went to those centres were able to go to continuing centres—for example, in my electorate where Bush Kidz took over the ABC Learning Centre at the back of the Brassall Shopping Centre, where my electorate office is, we had to provide a $15 million loan to the not-for-profit consortium GoodStart Childcare to purchase 678 ABC Learning Centres. That is taxpayers' money. That is taking decisive steps to support child care to ensure that the mums and dads in small businesses and large businesses across the country who rely on childcare centres are available to work. Their kids can be looked after, educated and socialised and the mums and dads can work, use their labour to support small business to make a profit and help about 2.4 million small businesses across the country.

The opposition say they are supporting small business but they never supported child care properly. They will not even support the regulatory measures which are necessary to make sure the viability of the system continues. If the opposition were in, it would be a Milton Friedman type of response: complete laissez-faire, let it go, let the market rip and let ABC and all those problems occur again. If they were in power again they would do it. If you do not believe me, listen to the member for Farrer. That is what they want. They feign support for small business but they will not support the childcare centres that allow the mums and dads to work in the small businesses. They feign support for small business by saying, 'We want to take regulatory burdens off you.' But, when they were in power, they never ceased to tax higher than any other government previously, and certainly the burden of taxation on small business is much lower now compared with when they were in power.

This bill will allow the department to get financial information more expeditiously and more frequently to make sure that if a childcare provider is in trouble we can be aware of it. We can take steps to protect taxpayers' dollars and to step in if necessary to give a helping hand, and that is good for business. It is good for both large and small businesses, and mums and dads everywhere across the country are in need of it.

It is the case that many Australians need to use child care. The last record I could find showed that there were about 870,000 children in child care. That is 628,000 families with parents working and building our economy. There are nearly 14,000 childcare services creating jobs. Once again, those opposite are negative, not supporting the sector. But then, they have form. The member for Farrer talked about the GFC and somehow blamed the GFC. They never like to talk about the GFC. It is almost something they do not want to talk about because they have a record on the GFC. Just as we had to support the childcare sector, the retail sector and the construction sector during the GFC, those opposite would have let 200,000 Australians lose their jobs, including in the childcare sector. I really do wonder if they had been in power in 2008 what they would have done about the ABC Learning Centre collapses. Would they have propped them up? Would they have provided child care? Their record would indicate that they probably would not have done so.

We are undertaking further reform and this legislation that we are debating today is important. It proposes amendments to allow for civil penalties and sanctions if the provider does not provide the financial requirements and comply with the burden. When you read what it is all about, I think it is not difficult for them to provide information because they do that anyway. Business provides information and childcare centres do as well. The legislation defines which providers are large long day care providers and specifies certain related persons who have to provide that information. It makes amendments to allow for the commissioning of an independent audit of large long day care providers where there are concerns about a particular provider's financial viability. There are amendments which enable an audit team accompanied by an authorised officer to enter premises to carry out an audit. This is really important to protect taxpayers' dollars.

As alarming and potentially dangerous as the collapse of the ABC Learning Centres could have been, our quick action prevented it and so there were no locked doors. Those opposite are in favour of locked doors. That is the case because they have taken every step they possibly can to prevent reform in the childcare sector. We have introduced a range of measures since 2008 to strengthen the approval processes and establish a penalty regime. We have assisted families across the sector with that. In fact, with respect to child care, we have provided $20 billion over four years for early childhood education and child care.

Those opposite say they are supporters of child care. But I want anyone who is listening to note that the $20 billion we are providing for early childhood education and child care is almost $12.8 billion more than that provided by the previous Howard coalition government over the four years. That is an enormous increase in funding for the sector. A billion dollars was ripped out by those opposite. First act, what did we do? We massively increased financial support for the sector, and we are providing $16.4 billion to help Australian families annually with their costs.

One of the big burdens for families who engage with the childcare sector is the actual cost of child care. What did we do? Those opposite said, 'Thank you very much, we'll provide a childcare rebate.' They wanted to pay it annually and, when they left office, it was $4,354. We increased that by 72 per cent, to $7,500, and so we have helped nearly 740,000 Australian families since 1 July 2008 with additional assistance, including about 5,600 families in Ipswich and the Somerset region in my electorate of Blair. We have provided additional assistance for 640,000 low- and middle-income families through the childcare benefit. We have also, as I said before, stepped in to help GoodStart to purchase those nearly 678 ABC Learning Centres. We have established 38 priority early learning and care centres across the country, including one in my electorate at Yamanto, at Amberley District State School, and I was very pleased to be there with the minister to open it.

With the states' help, we have integrated the kind of assistance we provide and focused these centres in areas of high disadvantage. So we are helping with child care, playgroups, the childcare rebate, the childcare benefit, the Paid Parental Leave scheme, tax cuts three years in a row and the national quality standards that we are bringing in to make sure there are new training requirements and a ratings system to help families make decisions about the best service for their children. And there is the Healthy Start for School program. So a broad range of funding programs have been rolled out across the country since the election of this federal Labor government in November 2007. It is a record unparalleled by those opposite.

When I went to the last election as a candidate, I looked at the policies of those opposite. It was a bit like a football team looking at video clips or DVDs of matches; I had a look at their policies and checked them out to see which ones were all right and which ones I thought might be a bit of a problem. In politics, you punch, you defend, you feint and you have a look around. I had a look at what the coalition were saying with respect to child care, child support and family support, and I worked out something about the way the coalition operate. I always knew this in the past, but I became even more convinced of it.

The coalition always claim they support business, but they do not act like they support business. They claim they support families and put families first, but they do not—because family values are about education, accommodation, child care, good health care and all the things that really count every day in a person's life. They claim they are supporters of family values, but they are not. Family values are the values that Australians really believe in, and I emphatically believe that they are the values that the Labor government and the Labor Party support: decent child care, help for families, good jobs. Those opposite always, when given the opportunity, put the burden on business. They want to make good employers into bad employers by changing industrial relations and they want to rip money out of child care. They do not support families and they do not want a watch on money. They are the party of waste with respect to money. They are the party of burden on business. They are the party that will not support families.

This legislation is good. The opposition should support it. They should not be coming in with the nonsense they have moved as a second reading amendment to this bill. That amendment is simply a political document without any policies. That is the point I want to make finally. They went into an election without a policy. All they are is mindless and negative. Any policy they have is null and void. I think at the next federal election the people in this country will vitiate them and declare that they are simply not suitable and competent to be, or capable of being, on this side of the House once again. They do not deserve it because they just do not care about Australian families and Australian business. Do not listen to what they say; look at what they do.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

The question before the parliament as we consider the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011 is not whether the collapse of ABC Learning in 2008 and early 2009 was a bad thing and caused great inconvenient and uncertainty to parents. Of course the collapse of ABC Learning was a bad thing and caused such inconvenience and uncertainty to parents. Speaking as the parent of a 2½-year-old who presently attends long day care, I can absolutely empathise with parents about the disruptive consequences of the collapse of a childcare centre when they had made their arrangements in reliance on the ongoing operation of that centre and were suddenly required to rapidly make alternative arrangements.

That is not the question before this House. We are all in agreement that the collapse of ABC, or indeed of any childcare centre, is a bad thing. Nor is the question before this House whether it would be a good thing, if it were possible to do, to prevent the risk of such a collapse—to ensure against the possibility of any childcare centre ever collapsing. Clearly, if that could be done, that would be worth doing. The question is this: will the measure which is before this House be of any material benefit in actually reducing the risk of the collapse of a childcare centre, and how is such benefit as may fairly be attributed to this measure to be weighed up against the costs of imposing this measure?

I want to put three arguments to the House in the brief time that I have available to me. Firstly, I think there are grounds to doubt whether this measure makes any real difference at all. Secondly, I do believe there is a risk that this measure could impose significant costs and burdens on childcare operators, particularly in view of the breadth of the drafting of the provisions in this legislation. Thirdly, there is, I submit, real doubt as to whether this measure actually achieves anything or is simply a piece of window dressing.

Let me turn to the first issue. On a fair and reasonable assessment, what practical difference will this measure make? There are two key elements in the bill. The first is a requirement for large childcare centre providers to report certain information to the Department of Education, Employment and Workplace Relations on an annual basis. The second is the power for the secretary of that department to call, should he choose to do so, for an audit of individual large childcare centre operators. The premise underlying these measures appears to be that officials of the Department of Education, Employment and Workplace Relations will have some superior capacity to assess the risks of the financial collapse of a childcare centre operator, a superior capacity beyond that presently available to and exercised by the other bodies which have regulatory responsibility for the ongoing financial viability of companies of all kinds.

I think it is worthwhile testing the viability of this assumption by having a look at what actually happened in relation to the collapse of ABC Learning. I reiterate that it is not contested that the collapse of ABC Learning was a bad thing and caused deep inconvenience and anxiety to many thousands of parents. ABC Learning was a publicly listed entity subject to continuous disclosure obligations. That meant it was required to provide all kinds of detailed financial reporting to the stock exchange and there is an obligation on the directors and senior management of a publicly listed company to provide, effectively immediately, any information which materially changes the assessment that an investor would make of the value of the securities in that entity. Having myself been a member of the senior management team of a listed company responsible for complying with those continuous disclosure obligations, I can testify that they are onerous and that they exercise, quite properly, the continuing attention of the senior management team and directors of any listed company.

The second point to make is that such information as was disclosed under this regime by ABC Learning was subject to continuous scrutiny and examination by a whole class of expert financial analysts: equity analysts employed by the major investment banks, investors in ABC Learning who had a clear financial incentive to be watching like a hawk for any indication that something was wrong. As the historical record shows, ABC Learning collapsed in 2008-09 but concerns about the financial viability of ABC Learning had been raised significantly earlier. In fact, according to one press report that I have reviewed this morning, concerns were raised with the corporate regulator, the Australian Securities and Investment Commission, in 2006.

I do not argue that the continuous disclosure obligations immediately and instantly picked up signs of trouble as the historical record clearly shows it took some time for the consequences of ABC Learning's financial management to be realised. But the question I simply ask is this: if the specialist corporate regulator, with all of its resources in relation to financial management, or if all of the organisations and individuals who had an incentive to monitor and scrutinise the information disclosed by ABC Learning under the continuous disclosure obligations, were unable to identify until very late in the day that there was a serious problem with the financial viability of ABC Learning, then on what possible basis can we believe that officials of the Department of Education, Employment and Workplace Relations will in some way have such superior financial acumen and such an enhanced capacity to see into the financial future that they are going to identify risks which are not identified by the regulator—which is specifically responsible for corporate and financial activities—and which are not identified by all of the players that have a clear incentive to be looking out for such signs of trouble?

It is instructive, I believe, that the regulatory impact statement prepared as part of the explanatory memorandum for this bill says the following:

The options assessed in this RIS are:

Self-regulatory and quasi-regulatory options are not explored for several reasons.

I will tell you the main reason that they were not explored. It is the philosophy of this government that whenever there is any doubt you simply hand more power to a bureaucrat and that in some miraculous way is going to solve the problem. But we have not seen any explanation of the rationale for giving these powers of financial scrutiny to a department which has no competence or experience or specialisation in this role. I do not say that to be in any sense critical of that particular department. It does important work. I am simply making the point that this is not their core mission and this is not their area of expertise. Nor have we seen adequate demonstration in the materials provided to this House in respect of the existing regulatory mechanisms to scrutinise and monitor the financial performance of companies of all kinds and all organisations of all kinds including the obligations on directors not to trade while insolvent, including the obligations to provide annual accounts and including, in the case of listed companies, the continuous disclosure obligations. We have seen no evidence that this additional measure is going to provide some extra level of support. I do not say, lest my arguments be mischaracterised, that the present arrangements are perfect and automatically and instantly pick up signs of trouble. Of course, they do not. We live in a complex and difficult world and no human institution has yet been devised which can achieve that. But I will say this to the House: I am very confident that the particular institutional measures proposed in this bill will not advance the cause. They do not in any material way add significant useful, reliable tools to achieve the purported objective.

The second point that I want to make in the brief time available to me is that there is one thing that these measures certainly do, and that is to impose additional regulatory costs and obligations. There is an annual reporting requirement and there is also a questionnaire about which the explanatory memorandum is troublingly opaque. But let me make this confident prediction: the length of that questionnaire will increase each year. Every year somebody will have new ideas about what should go into that questionnaire. There will be people whose career assessments, whose performance assessments within the department, depend upon how long and voluminous that questionnaire is. The reporting obligations will grow and grow and grow—and, of course, the reporting obligations under this measure have the force of law.

There is a long list of people upon whom obligations can be imposed by virtue of a notice being issued by the secretary of the department to provide financial information, not just the operator of a childcare centre but a person who at any time owns 15 per cent or more of the operator; 'a person who, at any time during the financial year, is owed a debt by the operator'; or a person who acts, or is accustomed to act, 'in accordance with the directions, instructions or wishes of, or in concert with' the operator or 'if the operator consists of more than one person—any of those persons'. The draftspeople have gone to town. This is a textbook example of bureaucrats—I do not say this critically but I say it analytically—filling out the pages to make this measure look as substantial as possible because they know in their hearts that it materially does very little indeed.

But of course there is a press release on this matter, issued by the Gillard government, and the unfortunate public officials have been charged with coming up with some piece of window-dressing that can be alleged to substantiate the wafty, broad claims made in the press release dated 11 May 2010. We are told that there will be, amongst other things:

… $1.9 million to support new regulatory measures to help achieve ongoing stability in the child care market in the wake of the ABC Learning crisis. This includes developing measures that require large child care providers entering the market to prove their financial viability.

I pause parenthetically to make the point that the measures which are before the House today do nothing towards this stated objective of requiring large childcare providers entering the market to prove their financial viability. In fact, they are a set of measures which require existing participants in the market to file annual accounts. Indeed, the explanatory memorandum is somewhat conflicted, because on the one hand we are told that this is a sweeping measure which will deliver new security, new confidence, new assurance, to parents all around Australia but on the other hand we are told, 'Oh, well, in fact all that you'll need to do to comply with this is to provide the financial accounts which you are already required to provide under other reporting requirements.'

This again raises the very obvious question that I have already asked: if these organisations are already required to provide these accounts under other reporting obligations, what is the possible purpose of imposing this additional piece of bureaucratic artifice? It allegedly provides additional safety and security to parents but in reality provides a piece of convenient window-dressing to substantiate a couple of lines that were whacked into a press release in a desire to demonstrate to parents around Australia, who are naturally and properly concerned about the risk of a childcare centre collapsing, that this government has a measure to deal with it.

This measure does nothing seriously or materially to address the risks which it purports to address. Indeed, if you look at the expert commentary, one of the real issues that arose with the collapse of ABC Learning was that it had such a large share of the market, a very high degree of concentration. This measure does absolutely nothing to deal with that issue, but it does one thing with certainty. It imposes additional regulatory requirements and obligations on businesses, and for that reason I think the case for it has not been made. (Time expired)

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to speak in support of the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. It has been great to hear from the previous speakers, particularly the member for Bradfield and the member for Farrer, the old free marketeers when it comes to kids in child care. But strangely, when it comes to our kids' future in a carbon constrained environment, they are not free marketeers. They do not believe in the market when it comes to pricing carbon. They have a completely different approach. They are free marketeers when it comes to sending our kids off to child care, but when we talk about our kids' future, the future of the planet, which every reasonable person understands is what we are talking about in terms of carbon pollution, there would not be a person in this House—oh, I beg your pardon; there would not be a reasonable person—who takes a scientific approach to it who would not understand that we were going to have—

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Madam Deputy Speaker, I raise a point of order of relevance.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Thank you. The member for Cook has made his point of order. The member for Moreton could return to the bill. Mind you, some latitude has been given to other speakers, but the member for Moreton will refer to the bill before the chair.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

As I said, Madam Deputy Speaker, I was just comparing the different approaches to the market in terms of child care versus carbon pricing. I would have thought that was very relevant, but nevertheless I will defer to your fine judgment, Madam Deputy Speaker.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Yes, I get to decide what is relevant, actually, so the member for Moreton will proceed.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Obviously. This bill builds on the Labor government's strong commitment to child care and supporting Australian families. In fact, this week marks the three-year anniversary of the Australian government's increase to the childcare rebate. I am sure the opposition party room had a little cake to celebrate that. We did not have one in our caucus room, but we did acknowledge the three-year anniversary of the increase to the childcare rebate.

Madam Deputy Speaker, you would remember that we increased the rebate from 30 per cent all the way up to 50 per cent to help take the pressure off Australian families by making child care more affordable. It enables parents to claim up to $7,500 per child per year. We know about cost-of-living pressures. We understand that. We are a Labor government. We actually get it. We have had three years of tax cuts; three years of making sure that people are in jobs. We have created nearly 700,000 jobs. We have had an increase for the pensioners. This is a government that continues to drive changes to support families and the childcare sector.

From July this year families will be able to choose to have their childcare rebate payments made fortnightly or weekly, a much more effective approach to the family budget, as well as the current options for annual or quarterly payments. Parents can also choose to receive a reduction on their bills or continue to receive the rebate as a direct payment. This is a government that understands flexibility. I take this opportunity to remind parents to contact Centrelink and choose a payment option before 17 June.

All these reforms have transformed the childcare landscape in Australia. While families are still not without their cost pressures—we acknowledge that—the Gillard Labor government can be very proud of the difference we have made in the area of child care. All good economists know that money invested now in child care and children's lives saves us money later down the track.

These innovations have not been without their challenges. All of us would remember hearing the news in November 2008 that ABC Learning Centres was in voluntary administration. It was not just a company in limbo but almost 100,000 families around the country were uncertain about their childcare arrangements and 16,000 childcare workers faced the prospect of losing their jobs, with very little notice. It was a very tough time and, as we heard from the member for Bradfield, the Howard government was aware of this back in 2006, I think he said. So, with that many people being affected and particularly when they included society's most vulnerable, our children, obviously that was not a good state of affairs.

The Labor government sprang into action to support the childcare centres, ensuring that 90 per cent of the centres were able to continue operating. The government also worked to find new places for families when their centres closed. As a person with a two-year-old I know how hard it can be to find places for your children and, with the juggling act of careers, bills and mortgages, how crucial it can be to ensure that your children go into a childcare centre. This event showed just how vulnerable the childcare sector was and how much upheaval could be caused by one operator failing, especially when that operator was the biggest in the country.

The ABC Learning child care collapse also put a spotlight on the effectiveness of the regulatory framework for childcare centres. If we look back at the history of ABC Learning and Eddy Groves, we are talking about a milkman who was lucky enough to have a milk run where they plonked down a shopping centre, which meant he and his wife, who was a childcare operator, I think, were from there able to build a centre, and ABC Learning grew like topsy. It was under the Howard government's watch, but these things happen. I remember it being the darling of the stock exchange. Once I think they were deemed to be an ethical investment, because it was child care rather than a coal mine or something like that, and the shares took off. That is why in May last year the Labor government announced $273.7 million to introduce a new national quality framework for early childhood education in child care. This funding includes $1.9 million over four years to cover the costs involved in monitoring the financial viability of large long day care centre operators. We are not talking about the single, standalone, community run, not-for-profit or smaller centres. We are talking about those that have more than 25 sites. As has been suggested by the member for Farrer, we are probably talking about only six operators in Australia.

This bill will help ensure that we have a more stable childcare industry by creating a critical early-warning system. This will help prevent collapses such as occurred with ABC Learning from ever happening again. The bill gives the government the power to request financial information about large long day care providers. This 'no surprises' policy will enable the government to assess the financial viability of a childcare provider. Where there is concern about a provider's ongoing financial viability, the government will have new powers to commission an independent confidential audit of a particular provider. It also authorises an audit team to enter premises and seek documents to carry out the audit. This will enable the government to take timely action to help address the risk of wholesale closures of large long day care centres.

As a condition of the childcare benefit, long day care providers will be required to demonstrate that they are financially viable, and they must continue to demonstrate that every year. This will also give families greater confidence in the reliability of their childcare service. The Labor government, having averted disaster following the ABC Learning collapse, could have sat on its hands and let the childcare market rip—if we had had the same approach to markets that those opposite seem to have—and let it be the status quo. But we cannot let a major collapse like that happen all over again. It is not the Labor government's style. We moved quickly to put in place measures to ensure a more viable childcare industry in the future. We believe in the market but on occasions you need the guiding and watching hand of government, especially when it comes to our children's future.

The Gillard Labor government will proudly ensure that childcare workers, families and governments do not again face that kind of unexpected upheaval. I commend the bill to the House.

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

I rise also to speak on the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. This bill seeks to amend the A New Tax System (Family Assistance) Act 1999 to provide for the assessment and ongoing monitoring of the financial viability of large long day care centre operators of approved childcare services. This is a case where the intent of the bill is fine but I have some serious reservations about the practical implementation of the bill.

With this government it is not enough just to look at the intent of what their actions are. You need to go into the details of what they are proposing in order to implement their intent. We know that they have had fine intent in other matters that have ended in disaster. They had the intent of helping households out with home insulation, and we know the result of that. They had the intent of supposedly being more compassionate to illegal entrants to this country, and we know the result of the practical implementation of that, also. So it is very important to look at what is actually going to be delivered rather than just the fine rhetoric about trying to save private providers from collapsing.

The intent of this bill is that it seeks to prevent the collapse of large childcare operators, such as occurred with ABC Learning in 2008, and that is an admirable intent. No-one wants to see the collapse of a single childcare centre in Australia let alone many childcare centres as occurred in 2008 when ABC Learning went into voluntary administration. At that particular time, 55 of its 1,000 premises were closed down immediately and a further 26 were subsequently closed down before it was sold. That had a large repercussion for thousands of families across Australia. I understand that. I have young children myself. My children have been in childcare centres in the past. I personally know the importance of childcare centres and what they do and how they facilitate parents being able to work. So the intention to put measures in place to prevent a childcare centre from ever going into voluntary or involuntary liquidation is a particularly good one. But, as with a lot of things, how the intent is enacted is the problem with this particular bill. My concern is that this bill will contribute little towards implementing the fine intent of preventing any childcare centre from collapsing in the future but will have some considerable downsides.

What does the bill actually impose? It requires the largest childcare operators to submit a financial viability assessment each year when they reapply for childcare benefit approval. The explanatory memorandum provides a list of the types of financial proof that will have to be submitted. It is quite a lengthy list. It includes a statement of comprehensive income, a statement of financial position—that is, the balance sheet—a statement of cash flows, notes to the accounts, material changes to the financial situation over the reporting period, breaches of debt covenants, ownership structures et cetera.

The childcare operators—and six will be affected by this piece of legislation—have to provide this information to the government. What will then happen to that information? That we do not know. We do know that $1.9 million is set aside to facilitate this—$1.9 million over four years. That equates to just a little under half a million dollars per year for the government to assess the financial viability of six childcare providers. Half a million dollars can buy you quite a few public servants—maybe five or six in this particular instance. So this bill will actually deliver six additional public servants in Canberra to assess the financial viability of six childcare providers. Each childcare provider will have one public servant all of its own to assess the financial viability of its operations. That public servant will have the whole year to assess that. At the end of that year the childcare provider will get a new set of accounts, and the public servant will have a whole further year to assess the financial viability of that one particular childcare operator. It sounds a bit like the Sydney Harbour Bridge. You just finish painting the Harbour Bridge and then you have to start all over again. Is this what is going to occur with this particular bill?

What are the public servants going to be doing when they get this financial information from the childcare operators? Presumably they will look at some financial ratios, at debt to equity, at some of the forecasts, at whether the balance sheet is sufficiently strong to enable the operator to grow according to its forecasts, and at some of its revenue projections. I was a financial analyst myself in a previous career. I went to one of the top business schools in the world. I know the type of financial analysis that would have to be done to make any reasonable assessments of the financial viability of an organisation. It does not take a year, I can tell you that, but it does take a certain amount of skill. I mean no disrespect to anybody working in Canberra, but I question whether a public servant in DEEWR is going to be able to do a better financial viability assessment than what financial analysts are already able to do or indeed what internal financial analysts in these companies are already doing.

So I seriously question whether this is going to have an impact. These companies already have to abide by the corporations law. They already have certain obligations: they cannot trade when insolvent, and the directors have certain duties to act in the best interests of the shareholders, as you know. There is a governance framework already in place. I seriously question whether this will actually deliver on the good intent of this bill. My further concern is that we are not only expending more money for arguably little intent but are adding a further layer of regulation upon private businesses.

This government have talked a lot about deregulation. They changed the name of their minister. It is the minister for 'deregulation' now rather than 'regulation'. They have very good rhetoric in relation to deregulation across the economy. Indeed, one of the government's election promises was that whenever they introduced a new regulation they would remove a regulation. It was their one-in one-out policy. It sounded like a pretty good idea. But what do the government do in practice? They regulate and they regulate and they provide more regulations and they provide more regulations. Since 2007 there have been an extra 20,000 members of the Commonwealth Public Service to develop and administer those regulations. Let me tell the Labor government something: you cannot regulate a business to succeed. Yes, you can put in place a good governance structure—absolutely. And by and large we have good corporate governance structures in place. You can put other laws in place which require directors to act in the best interests of their companies, and they are already in place. You can put insolvency laws in place, and they are already in place. You can put other good corporate governance laws in place, which can make a difference. But you cannot regulate a business to succeed. It is something that this government does not quite understand, possibly because so few of its members have ever worked in either a managerial position or owned their own business. If they did, they would understand that it is not regulation that actually causes business to succeed. Good corporate governance can assist that, but it has to be the good operation of the particular business in place.

If this government were fair dinkum about their rhetoric on regulation then they would support the amendment which we have put forward. There are several parts to the amendment, and let me highlight a couple:

(c) the growing burden of red tape and regulation imposed on small businesses, not-for-profit organisations and industry by the Gillard Government; and

(d) that the increasing regulatory burden represents a broken election promise whereby the Labor Government said that it would only introduce a new regulation after repealing an earlier regulation: a “one in, one out” rule; and

(2) calls on the Gillard Government to immediately adopt the Coalition’s red-tape reduction policy which will seek to reduce the cost of the Commonwealth’s regulatory burden by at least $1 billion per year.

It is a good and worthwhile amendment that is indeed in keeping with the rhetoric of the government in relation to deregulation, so I would hope that the government would indeed support the amendment put forward by the shadow minister.

We do not need a further six bureaucrats in Canberra for this particular measure. The six companies in question do not need their own dedicated public servant looking over their shoulder year in, year out. The taxpayers do not need to spend a further $1.9 million for very little impact. We know that this government has already spent billions of dollars for very little impact on all number of things. It does not need to spend a further $1.9 million for very little impact. I reiterate that the intent is right. Of course we never want to see any private business collapse. We particularly do not want to see private businesses, private organisations and non-profit organisations—which provide such important services in our community, such as childcare—collapse. Of course we do not. But I am not convinced this particular bill will actually make any difference in relation to that fine intent.

The government should accept our amendments. It should deliver on its own promises and on its own rhetoric and it should let the childcare centres get on with doing their job.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. I do strongly support this bill because I believe it is essential that our childcare sector is stable and that it provides quality, affordable childcare. As a mother of three children, and having the pleasure of also having a career and wanting to work, I do not know how my family would have functioned if my children had been of the age that they required early childhood care if, at the time of the collapse of ABC Learning, my family had been caught up in that. There are a lot of pressures on families these days, and excellent childcare is a critical part of how a healthy family functions. The instability that was caused by the collapse of ABC is something that cannot be allowed to happen again, and it is for this reason that this bill is before the House today.

The collapse of the ABC childcare provider in 2008 absolutely had a detrimental impact on parents, children, childcare workers and indeed the Commonwealth. The collapse of the ABC Learning business was completely unanticipated, and that is a vital part of why this bill is being put before the House today. The fact was that it put at risk the provision of child care for over 120,000 children in more than 1,000 centres right across the nation. The word 'insolvency' is one that people do not want to ever hear. They certainly do not want to hear it with regard to the care of their children in a childcare setting, for which parents have some reasonable expectation that there will be longevity of service and that there will be stability in addition to high-quality delivery.

As the minister said in her second reading speech, over 100,000 families were affected by the collapse of ABC Learning. Let us not underestimate what that means in terms of the flow-on effect into local communities. This is 100,000 families who, overnight, were completely left with a total lack of certainty about whether or not they might be able to access the child care or long day services that they needed in the next 24, 48 or 72 hours. That uncertainty undoubtedly had an impact on unsettling families and parents. But families and kids are very tight units, and I daresay that the flow-on would certainly have been felt by all of those little preschoolers as well as they soaked up the concerns that their parents would have had at that time. Thankfully, this government responded very quickly and decisively and ensured that 90 per cent of these centres continued to operate for Australian families today.

These issues were certainly pertinent in my electorate of Robertson due to the importance of child care for families where parents commute to work daily or move around the coast for local work daily. For these families and families right across the nation, child care is a necessity, and uncertainty about its provision can have incredibly detrimental short-term and long-term impacts. This legislation is designed to ensure that we actually learn from that experience. My father-in-law had a great saying, 'Had the experience, keep the receipt', and this legislation is a response to that practical wisdom. It is designed to provide for the assessment and monitoring of the financial viability of large long day care centre operators of approved childcare services. As stated in the explanatory memorandum to this bill, this is in the context of the approval and continued approval of such services for the purposes of the family assistance law. This bill also enables the secretary of the department to carry out an independent audit of operators where there are concerns about their financial viability. This is about shining light into a place that obviously was quite dark at the time that the ABC centres collapsed. The provisions of this bill will prevent history from repeating itself and provide for much-needed stability and certainty in the childcare sector. Child care and long day care should not be a means of profiteering from families nor should it be a sector subject to abject speculation and unsustainable risk taking, and that is what we have seen in the past. We need to construct a regulatory framework that dissuades people who would employ such dangerous business practices from entering into this field ever again. And we need to make sure that Australian families are certain about the continuity and quality of care that they will receive in their local communities.

These are indeed the circumstances that resulted in the collapse of ABC Learning, a large public company that controlled what proved to be an unsustainable share of the childcare market. It was those opposite who allowed this situation to occur and allowed the childcare market to be dominated by a company that engaged in these unsavoury practices. The additional powers given to the secretary of the department through this bill will provide for a critical early warning system, which will ensure that childcare and long day care providers are accountable for their financial decisions. The Australian government had very little warning when this happened last time. It had very little warning about the financial circumstances when ABC Learning collapsed. For this reason, the department and its secretary clearly needed greater powers to ensure that governments are better warned of issues confronting the childcare and long day care sector.

I understand that long day care and child care are predominantly privately run in Australia, and I understand the desire to ensure that childcare operators are not burdened unnecessarily with red tape. Despite this, and I think with the assent of those operators who have an ethic of care for the great work that they do in our community, the government need to ensure that the people who do the right thing are supported by good practices. We need to do our best to prevent a situation like the ABC Learning demise happening again. It caused far too much stress for families, far too much stress for children and far too much stress for those great childcare workers who are so important in helping our young children grow, socialise and get used to participating in a great democracy—and the sandpit is where we start to practice that.

The first means through which this legislation will provide for greater accountability is the additional powers granted to the secretary of the department to request detailed information about large long day care providers. This information is to be used to assess their financial viability on an ongoing basis and the information will only need to be provided by these large long day care providers. That means that smaller, family-run childcare centres and long day care providers will not be required to comply. I think that that really does counteract some of the points made by the member opposite who spoke just before me regarding onerous compliance. We need to be clear about the capacity for small operators to continue to do what they do without incredible oversight.

The large long day care providers who are defined under the bill as:

... a person who operates, or proposes to operate, 25 or more approved centre based long day care services at any time during the financial year; or

... 2 or more persons who, between them, operate, or propose to operate, 25 or more approved centre based long day care services during the financial year—

subject to certain ownership criteria. Parents and families often rely on these large long day care providers because of their ability to provide a quality and stable childcare service. This quality and stability, however, is contingent upon these providers actually being financially stable and viable.

The collapse of a long day care provider with 24 or more centres is not something small or insignificant. Twenty-five centres reach out into communities right across the nation. Any sort of future collapse of some such structure is likely to have an incredible impact on the availability of care for children and families. The flow-on effects of that for workplace participation, security, family budgeting and mortgage payments should not be underestimated either. This is a critical part of the social and economic infrastructure of our country upon which we have come to depend. It needs to be carefully organised. It needs to be carefully audited. It needs to be carefully managed. This is what this bill will achieve.

Representing a suburban electorate with a large commuter population, I am committed to ensuring that everything is done to enable all the people in my area to access every opportunity to participate in our society and to provide the opportunity for those who have children to participate, confident in the knowledge that their children will be in a centre that will be open when they show up the next morning.

This bill will also allow the commissioning of an independent audit of large long day care providers where there are concerns about the provider's financial viability. It will enable an audit team, accompanied by an authorised officer, to enter premises and to carry out an audit on the financial viability of a long day care centre. This is an important audit that can be triggered in response to concerns raised.

It is imperative that this government ensures that child care and long day care is accessible, affordable and of sufficient quality. It is also absolutely important that the government act to ensure that these centres remain open. This action is absolutely needed because the ABC Learning insolvency shows that there are potentially significant risks to the continuity of care and we need to address those risks by changing the practices that allowed such an awful situation to arise. We need to have the capacity to identify risks of insolvency. This legislation allows for that.

We need to provide women in particular with greater capacity. Women are so often charged with the responsibility for organising and managing child care. I have to confess that, despite the wonderful participation of my own husband and very many men in the children's upbringing these days, I did meet many more mothers dropping children off before we went to school than I did fathers. I think this is an issue for women: the decision to participate in our economy. It is wonderful that we have unemployment down to 4.9 per cent. It is an opportunity for women who might never have thought that they would participate to come back after having their children, decide that they want to give their talents and capacities to the workplace, and participate with confidence that the child care that they establish will still be there when they show up ready to drop their child off before work. For all these reasons I commend this bill to the House.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I rise in support of the government's Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. This bill will amend the A New Tax System (Family Assistance)(Administration) Act 1999 and set up new requirements for large long day care bodies to continuously administer their financial viability. The passage of this bill is critical to ensure we can sustain and monitor the financial foundations of our childcare centres so that these centres do not collapse, like when ABC Learning centres went into voluntary administration in 2008.

The bill will also allow for the secretary to request financial information more frequently if there are concerns about a provider's financial viability and make amendments to allow for civil penalties and sanctions if the provider does not comply with the requirements to provide financial information. The bill will also make clear what constitutes a `large' long day care provider, who in turn will be required to provide financial information. So we are creating a more transparent and accountable childcare system. This bill will protect and strengthen our childcare system, with new powers to commission an independent, confidential audit of providers where there are concerns about a provider's ongoing financial viability.

The Gillard Labor government recognises the importance of a stable childcare market to Australian families. The unprecedented collapse of ABC Learning affected families across the country because it impacted on the availability of childcare places, jobs and operations around Australia. However, because of the government's swift and decisive action 90 per cent of these centres continue to operate for families today, including ones in my electorate, and we have provided certainty and options for our working families. We will continue to strengthen the financial foundations of our childcare system so that we do not see those sorts of events again.

If we had not provided support for almost 100,000 Australian families, they may have been faced with the prospect of finding alternative care arrangements with little or no notice, and some 16,000 employees would have found themselves with no work and no future. Again, it underlines the strength of this government's commitment to jobs and ensuring that our families have every opportunity.

The Senate Education, Employment and Workplace Relations References Committee report into child care found that by 2008 ABC Learning was the largest provider of childcare, holding around 20 per cent of the long day care market and providing care to about 100,000 children. The purpose of that inquiry was to look at the condition of childcare provisions with the intention of informing the current debate over the most desirable practices to pursue as part of a national policy.

As I said, ABC Learning employed around 16,000 staff. The company sold 45 of its childcare centres in July 2007, which contributed to a reduction in the number of centres in 2008. In researching the growth of the company between 2001 and 2006, the Australia Institute noted that ABC Learning achieved close to 100 per cent growth between the financial years of 2004-05 and 2005-06. The collapse of ABC Learning raised serious questions about the regulatory framework for childcare centres. The Commonwealth government and state governments moved swiftly to understand the impacts that the collapse might have on families through the reduced availability of childcare places, jobs and operations around the nation.

In May 2010 the Australian government announced that it would invest $273.7 million to support the introduction of a new national quality framework for early childhood education and child care. Of the announced funding, $1.9 million was to support new regulatory measures to help achieve ongoing stability in the childcare industry following the ABC Learning crisis. This included developing measures that require large childcare providers entering the market to prove their financial viability. The bill will create an early warning system to help prevent such collapses. For parents to receive the child care benefit, large day care providers will have to demonstrate each year that they are financially viable.

When ABC Learning collapsed in 2008 we immediately stepped in with $58 million to ensure continuity of care for 68,000 families and, as I said, around 90 per cent of the centres are still operating today. The government are increasing diversity through a $15 million loan to the not-for-profit consortium GoodStart Childcare to purchase 678 ABC Learning centres. This will allow for greater diversity in the childcare market through a balanced mix of not-for-profit and for-profit providers. This will also give Australian families more choice when it comes to childcare providers.

The establishment of the MyChild website helps parents easily identify child care that suits the needs of their families and provides updates on childcare centres like the ABC Learning centres. The Gillard government are also funding an unlimited number of childcare places. The number of childcare centres in Australia has increased from 11,342 in 2007 to 13,417 in 2010—an 18 per cent increase. We believe in supporting families and giving every child the best possible start in life. This is why we are implementing measures like those in this bill to ensure that childcare providers are sustainable not only today but also in the future.

Research undertaken in a study titled Growing up in Australia has shown the positive effects of child care and its importance to Australian families and children. The study found that the childcare sector assisted parents of those children, particularly those who worked or wanted to further their studies or other activities outside the home. It also pointed to the vast damage to family budgets, as well as to the national economy, that could occur if a significant number of parents gave up work due to a lack of child care. The long-term social benefits that child care brings are vital. The report states that the benefits extend beyond the personal or family domain to the nation's future health, educational achievement, workforce participation and social connectedness. The New South Wales Commission for Children and Young People submitted:

The quality of children's early experiences, including of early childhood education and care, has a significant impact on children's lives. The quality of early childhood settings impacts on children's daily experiences, their healthy brain development, as well as their response to experiences at school and throughout their lives.

There are so many benefits child care brings to families, children, our economy and society, which is why the Gillard Labor government is taking many other measures in addition to this bill to support families and child care. We are helping families access more affordable child care by putting $14.9 billion over four years into assistance for families through the Child Care Benefit and the Child Care Rebate. That is a total spend of $20 billion over four years that we are investing into families and children.

The Child Care Rebate has been increased from 30 per cent to 50 per cent of parents' out-of-pocket expenses. The annual limit for each child also increased from $4,354 to $7,500—an increase of 72 per cent. This has been helping more than 735,000 Australian families since 1 July 2008. The rebate is now paid quarterly rather than annually so that parents do not have to wait until the end of the year to get the childcare assistance they need.

In addition we are providing assistance for 640,000 low- and middle-income families each year through the Child Care Benefit. A low-income family using full-time child care now has around 80 per cent of their childcare fees covered. This bill shows the government's commitment to young families across Australia as we continue to ease the cost-of-living pressures through tax cuts, improvements to family payments, childcare assistance, the education tax refund and, of course, Australia's first ever Paid Parental Leave scheme.

Unfortunately, not all members in this place support young families. The Liberal Party opposed the Paid Parental Leave scheme and, as the workplace relations minister, the Leader of the Opposition said that paid parental leave would be introduced over his government's dead body. Guess what? That happened: they are a dead body of a government. A good government came in and actually contributed to helping families across the nation. The Leader of the Opposition displays mindless negativity, opposes everything and has no real plan to support families when a child is born or to deliver affordable and sustainable child care when they need it.

The government is serious about our childcare sector and is ensuring that it is financially viable today and into the future so that we do not see any collapses of providers like we did in 2008. We, unlike those opposite, are continuing to support young families and children to ensure that they get the best possible start in life, and this bill plays a big role in doing that. As I said, the Gillard government is committed to doing everything in our power to ensure continuity and reliability of child care across Australia, and that is why I strongly commend this bill to the House.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

I give my strong support to the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. The name of this bill says it all: child care financial viability. We know what this bill wants to achieve very clearly and we know what it seeks to avoid. Members have already talked about the spectacular collapse in 2008 of the ABC Learning company.

We all want to know, and the government wants to know, that companies running large numbers of our nation's childcare centres are well run and financially stable. To do that, this bill gives the government much-needed powers to monitor and assess the financial viability of companies that operate a large number of long day care centres. The bill introduces new requirements for large long day care entities to provide financial information to the government. This will enable the government to assess on an ongoing basis the financial viability of those companies. Under this legislation, the secretary of the department will be able to request financial information more frequently if there are concerns about a provider's financial viability. Also, following the passage of this legislation there will be power to commission an independent audit of large long day care providers where there are concerns about that provider's financial viability.

I am supporting this legislation because I never want families in my electorate to go through what they went through when ABC Learning collapsed almost overnight in 2008. I never want the dedicated and hardworking childcare workers in my electorate to go through what they went through, wondering whether their jobs were safe as the fallout from the ABC corporate meltdown became apparent in suburbs and towns across Australia.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.