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

I am very pleased that the House has had the opportunity to return to this very important piece of legislation and that I have the opportunity to continue my remarks. When I was last speaking, I was talking in general terms about what the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011 is seeking to achieve and, very importantly, what it is seeking to avoid. And very clear in everyone's mind and memory are the events of late 2008, when ABC Learning centres collapsed so spectacularly and potentially disastrously. What we found out going through that process was that ABC was a ticking time bomb of financial incompetence and risk-taking. It was a ticking time bomb that was all the bigger by the time it blew up as a direct result of the Howard government's preference for letting the market rip rather than taking any responsibility for the childcare system relied on by millions of Australian families.

At the time it became insolvent, ABC Learning owned or operated just over 1,000 childcare centres in Australia, caring for around 120,000 children from 95,000 families and employing 16,000 childcare workers. It was the largest single provider of child care in the country, with up to 20 per cent of long day care centres and 24 per cent of all long day care places. Those figures and the growth of ABC Learning had all happened in the space of fewer than 10 years, with ABC Learning only listing on the Australian Stock Exchange in 2001. A lot of that growth had come from the acquisition of existing centres. So ABC came to completely dominate the market. We got to the stage where the collapse of ABC Learning, when it came, was potentially catastrophic for the day-to-day functioning of families and their employers.

As a member of a working family myself, I know how finely balanced families are and how the carefully constructed schedule of work and family obligations is only made possible by the availability and reliability of child care. Take child care out of that delicate balance and you have major consequences for family finances and family relationships. That is what families were faced with the day the banks moved on ABC Learning. Those family members are also employees of thousands of businesses across Australia that all of a sudden were faced with accommodating panicked requests for unscheduled leave from parents whose childcare arrangements had evaporated for what looked at the time to be an indefinite period. The collapse of ABC happened virtually overnight, but the government was very quick to appreciate the consequences for families and for staff of the centres. The government acted immediately to keep centres open in the first instance and then worked with the receivers to carefully manage the process of assessing individual centres, offering some for sale, all the while continuing to provide financial support where necessary to minimise the impact on families and the employees of ABC.

By intervening so quickly and responsibly the government was able to protect families and staff from the worst of the ABC collapse. However, it took an enormous effort from the government, from the then Minister for Education, Julia Gillard, down, and it was a very expensive exercise. In total the government put up $58 million to shield families and childcare workers from the consequences of ABC's corporate failings. Following initial discussions with ABC Learning's banks and the receiver, the government announced an initial support package of $24 million to ensure the centres could continue to operate to the end of 2008 while the receiver carried out a proper assessment of the viability of each centre. I know that was not an easy task because of the appalling state of ABC's financial records, something that will no longer be tolerated under the system of responsible monitoring established by this bill.

Later in the administration process the government made available a further $34 million to keep 262 centres open while the court-appointed receiver managed the sale of the centres to new owners who could then continue to operate them. A $15 million loan was ultimately made to the Good Start consortium to help it to purchase and operate 678 of the former ABC centres. That money will be repaid in full, but the government made sure it was there when it was needed. On behalf of the families in my electorate who had children in ABC centres and ABC staff, I say that that was money well spent. In the end over 90 per cent of ABC centres continue to operate for Australian families today.

The government did what we had to do during those difficult times of 2008 and 2009, but we never want to find ourselves in that position again. We have already acted to introduce measures to better ensure the financial viability of childcare centre operators and to protect parents in the event of any future closures of centres for whatever reason. New applicants seeking to operate a childcare centre and to receive childcare benefit payments will now undergo closer scrutiny of their financial background and that of any key personnel associated with the centre.

Since 2010, the operators of childcare centres are required to give the department a minimum of 42 days notice of their intention to close. This protects parents from the ABC situation of showing up one morning to find the door of the centre closed. Families should not have their lives thrown into disarray like that. It is important that, if children have to move centres, families have the time they need to find a centre they feel comfortable with and children have time to settle into that new centre. It should be not done in a way that causes stress or employment difficulties for parents. Children are usually fairly resilient and adaptable; nonetheless, families should have the chance to change their child's care in a way that causes the least possible disruption and distress to the child.

This bill takes the scrutiny of those organisations that operate a large number of childcare centres even further. The government is not going to ignore the lessons of the ABC debacle. ABC was allowed free rein by the previous Howard government while it gambled with the lives of its employees and the families who relied on ABC as a vital piece of their work and home life jigsaw. One lesson from the ABC collapse is that government must take responsibility for ensuring the stability of the childcare sector. The other lesson is that special attention needs to be given to the dynamics of the sector.

The collapse of ABC, the subsequent sale of centres and the emergence of new providers have resulted in one large long day care centre operator and a number of medium-sized operators. This is a trend that is likely to remain in place in the future. We cannot leave ourselves exposed to the risk of any of these large providers running into financial difficulty and having to close. The measures in this bill will therefore apply to providers that operate 25 or more long day care services.

There are currently six providers that will be required to comply with the new financial viability process. Those providers will be required to submit financial reports to the department on an annual basis. Where there are concerns about the financial position of an entity, the department will be able to seek more frequent reporting from the entity to monitor its financial position. In addition, the bill gives the government greater powers to audit any of those large long day care providers where there are concerns about the ongoing financial viability of the provider. For the first time, large long day care providers will be required to demonstrate that they are financially viable as a condition of initial approval and they must continue to demonstrate this each year. This is a sensible and reasonable early warning system which is all about preventing the kind of chaos that threatened families and, indeed, our whole economy when ABC collapsed almost without warning a few years ago.

As a mother with children who attend a local childcare centre most weeks, I know how hard the staff there have to work. After providing fun and stimulating activities for the children and giving them individual care and attention and documenting their progress, it is hard to see how those workers could fit anything else in. I would hate to think that this bill placed any greater burden on childcare workers, but that is something the government is very well aware of. There has been consultation with the childcare sector, particularly those affected operators, about these proposals and the consensus is that they do not expect the financial scrutiny requirements to be difficult or onerous. The view was that the financial statements required are already prepared and that these new requirements could be met using existing financial systems and resources.

There was certainly no indication during the consultation that the measures in this bill will lead to an increase in childcare fees. That is just the opposite of what this bill seeks to achieve. We want to make sure that childcare centres remain strong and viable and therefore open so there is choice and competition in the sector for the benefit of parents and children. The government has announced $1.9 million to support these and other regulatory measures that will ensure the stability of the childcare sector. That is just part of the historic levels of funding the government has committed to in order to enhance the quality and affordability of child care for Australian families. That includes $273.7 million to support the introduction of the new National Quality Framework for Early Childhood Education and Child Care.

The government has also acted to help families with the costs of child care. One of the first things we did on coming to government was to increase the childcare rebate substantially. Families can now claim 50 per cent of their out-of-pocket expenses for child care, which is an increase from the 30 per cent rebate that was available under the previous government. The maximum amount of the rebate—the cap—was also raised at the same time that we brought it from a 30 per cent rebate to a 50 per cent rebate.

One of the other things we have done, directly in response to listening to families and understanding their daily and weekly needs to balance their budget and meet the costs of child care, was to increase the frequency of payment of that rebate. When we took over from the previous government we changed it from an annual payment to a quarterly payment, and as of 1 July this year it will become available to families on a fortnightly basis. Again, this was in response to the pressures families are under and is a very practical measure to help with the costs of child care.

Just as important as the affordability of child care is, of course, the stability of the sector. This bill gives the government more power to monitor the viability of large providers, which means that families can be more secure in the childcare choices they make for their children. I commend the bill to the House.

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

I rise to speak in relation to the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. I will begin my contribution by referring specifically to the second reading speech by the Minister for Employment Participation and Childcare and Minister for the Status of Women. There were plenty of rhetorical flourishes in that speech as the minister tried to muster what I regard as quite a broad defence of the government's appalling record in regional child care. I quote from that speech to set the scene for my comments today. The minister said:

The Australian government recognises that child care is an essential enabler of workforce participation, most particularly for Australian women.

At a time when employers are crying out for workers then it is essential that we are supporting parents who want to return to work to be able to participate confidently.

Parents need to have trust that when they drop their child off in the morning that their child is in quality child care.

Importantly, they also need to know that when they drop their child off at care, someone will be there to meet them each and every day.

This is in the context of the collapse of the ABC Learning Centres, but the message is consistent with the minister's comments in the Women's Budget Statement from earlier this year. I quote again:

Childcare is essential in enabling parents who are primary care givers, often women, to enter and remain in the workforce.

As I have said before in this place, this government is very good at making these grand statements, but when it comes to actually delivering on the ground in regional areas it has been a complete failure.

I refer the House specifically to some recent activity in the Victorian state parliament, where there was quite a bit of excitement about the Take a Break occasional care program. For those not familiar with the Take a Break program, the Executive Officer of the Association of Neighbourhood Houses and Learning Centres, Angela Savage, describes Take a Break as follows:

The Take a Break (TAB) occasional child care program provided respite for parents and guardians of children aged from 0-6 years, enabling them to participate in a range of activities including recreational classes, activities, shopping, social events and voluntary community activities.

Two hundred and twenty community organisations received government funding through the TAB program, over 120 of which are Neighbourhood Houses and Learning Centres. This funding contributes towards the organisation's child care operating costs, such as salaries, on costs and consumable items. At least 142 childcare workers stand to lose their jobs if the services close.

It goes on to say:

Long day care is not an appropriate or affordable option for all families. Occasional care often provides the only opportunity for these children to socialise and for families to have time out.

The TAB program makes occasional care more affordable for the families who need it. This includes those on low incomes, culturally and linguistically diverse communities, grandparent carers, and parents of children with a disability.

TAB funding is critical to the continued provision of affordable occasional childcare for communities serviced by Neighbourhood Houses, particularly those in rural and regional areas.

The legislation before the House is all about the financial viability of childcare services and providing oversight so that there are no nasty surprises. In her own words, the minister said that it would never happen again. She said that following the catastrophic collapse of ABC Learning, the Australian government committed to strengthen stability of the childcare industry so that parents could be confident that their care arrangements will be there to support them when they need it.

Quite frankly, that is just not the case in regional areas like Gippsland, and it is not the experience of the occasional childcare providers who have had their funding stripped away by this Gillard Labor government. I do not know why anyone is surprised that this government has stripped away funding from the Take a Break program. After all, it has already withdrawn its funding and its promises to build 260 childcare centres, and the people in Yarram in my community are still waiting for the $1.5 million that the Labor candidate promised during the 2007 federal election. Nonetheless, it is worth tracking the reactions to the withdrawal of the funding from the Take a Break program and the action in the Victorian parliament that I mentioned earlier. I have here some copies of Hansard from the Victorian parliament in which the member for Narre Warren South is absolutely outraged. She says:

Our local occasional child-care providers are valued by our local families. They are available for local mums and dads who may need their kids to be cared for while they do the shopping, attend appointments or return to study. These services also provide children with the opportunity to socialise and interact with other children.

She goes on to say:

The Premier just does not know how hard it is for ordinary families to access affordable child care.

That is the Labor member for Narre Warren South in Victoria.

Then we have the Labor member for Yan Yean, who has whipped herself into a frenzy. She thundered in the Victorian parliament:

The action I seek is for the minister to reverse her decision to defund the Take a Break occasional child-care program. Scrapping this important child-care program is one of the massive budget cuts across the education sector.

The member for Yan Yean was directing her anger at the Victorian state minister. Perhaps she should have been directing it to this place, where the federal minister is the one responsible for cutting $12.6 million out of the program. The member for Yan Yean went on to say:

This means that in the district I represent and nearby, occasional child-care services at Eltham, Montmorency, Diamond Creek, Panton Hill, Warrandyte and Greensborough are now at risk … The Premier claims he is supporting families, but at the same time he is making it harder to access occasional child care.

I have a news flash for the member for Yan Yean. It was the federal government, under the Gillard Labor Party, that took 70 per cent of funding away from the Take a Break program in the first place.

But the facts do not get in the way of a story when it comes to the new Labor member for Bendigo West either. This is what she had to say about the Take a Break program:

Six months is all it has taken for the conservatives to reveal their true colours and the fact that, despite their spruiking of false promises, they have never had and will never have the community or families as their no. 1 priority. Worse still, these three centres are not alone, because at least 31 rural towns and regional centres stand to lose their only child-care providers as a result of this government's budget cuts to community-based occasional child care.

The member goes on:

In Maldon the neighbourhood centre's occasional child-care program runs for 3 hours a week and provides paid employment for three staff, and it is the only child care offered in Maldon. In Maldon there is no other choice. There is no family day care or after-school-care program. There are 21 occasional child-care places at Maldon's neighbourhood house. That means 21 families will be affected by these cuts, including single parents, young mums and dads needing a break, parents attending classes or work, and children from Tarrengower Prison. This service will not survive these funding cuts and the program will cease to run. With community sector workers already the lowest paid in the state, what a blow it would be for the staff of these centres to now face unemployment because of this government's heartless decision to cease funding for this program. So much for a caring budget!

These are Labor state members expressing their outrage at the Victorian state government, which was only ever responsible for 30 per cent of the Take a Break funding program. The federal government was the one that withdrew 70 per cent of the funding.

The member for Bendigo West and her colleagues need to understand the bulk of this money was stripped away from regional communities by the Labor Party, by her colleagues here in this place. Her own federal colleague, the member for Bendigo, has meekly sat here in this parliament and done nothing to help Maldon, or any of the other 31 rural towns she expresses so much concern for, retain their Take a Break funding. The member for Bendigo West should really direct her anger at her colleague, the member for Bendigo. The member for Bendigo has done exactly what he has been told—he has turned up to vote when he has been told, he has shut up when he has been told and he has not done a thing to protect the families of Maldon or anywhere else from the cuts to the Take a Break program.

I am pleased that the minister is here today to hear me express some of the concerns coming from the Gippsland community in relation to the Take a Break program. We are talking about communities, Minister, where it is the only source of child care available to these desperate families, and this government has decided to withdraw its funding and leave it to the state government. Now we have state members of parliament in Victoria expressing their outrage. They are so angry, Minister. I wonder if they are contacting you and expressing their concern to you directly. I wonder if they have actually bothered to get on the phone and raise it with their local Labor federal members of parliament, who are the ones responsible for the withdrawal of 70 per cent of funding for this program. The good people of Bendigo and other parts of regional Victoria certainly deserve better representation in this place than their members, who are just doing what they are told on such an important issue for regional families.

I happen to believe that the Victorian government should make a contribution to the Take a Break program. They should continue to make their contribution of 30 per cent, but the federal government should restore the 70 per cent of funding that it ripped away from regional families last year. I am proud to say that the coalition made that commitment during last year's federal election campaign and it remains our policy today. To save a miserable $12.6 million over four years this Labor government withdrew its support for a childcare program which responded directly to local needs. What this government does not seem to understand is that one size does not fit all. In small regional communities you do need to have local solutions to local problems, you do need to have the flexibility of the funding program, and this was a program that worked, and the minister should be supporting it.

The feedback I am receiving from my electorate is a case in point. It is not just me standing up here complaining, Minister, I have families right across my electorate who want this program to continue. They need both levels of government to work together to deliver it for them. Recently I had the great pleasure of visiting the Paynesville Community Centre, which the East Gippsland Shire Council has just redeveloped. It is now a brand new and terrific centre. Minister, you would enjoy a visit to it to see what has been achieved in the Paynesville community. I visited the brand new childcare centre with three lovely mums and their six children who showed me around. The problem is that the centre is about to become redundant because there is no funding to continue the occasional childcare program after December this year. The manager of the Paynesville Neighbourhood House, Karen Fleischer, wrote to me after the visit and said:

If the service ceases to exist at least thirty families will be affected. Support for these families is limited at the best of times with little, if any, extended family, no public transport, and generally limited means of income.

Occasional Child Care benefits not only the children but equally the parents who either attend work or study commitments or are able to simply take a break or pursue other activities such as sport & recreation, work, study, attend appointments etc. The result is a win-win for the family and community as a whole.

Karen went on to say:

If this vital service ceases to operate due to lack of funding, children will be placed at further risk than already exists. Increasing the fee structure sufficiently is not an option due to the small population of this rural town and due to many children coming from low income families. We also believe such an increase would in fact eliminate the children most in need.

…   …   …

To sum up this situation, it is the community, families (especially working families), employers and people undertaking studies or attending medical appointments that will be affected by the funding cutback and I am sure that there will be an out cry from the public at large.

I have also received correspondence from a more remote part of my electorate where the big providers, which the minister is so worried about in this legislation, will never establish a service. It will simply not be commercially viable for any of those big providers to establish a service in these areas. But we did have a service, at least partially funded by the federal government, until last year. Families are desperate in the area of Swifts Creek, for example, to keep their service associated with the local community centre. I received a letter from Charlie Schroeder at Cassilis that said:

It would seem that the federal Labor government has abandoned responsibility for children and in particular young families with children in the more isolated areas. Certainly the Swifts Creek/Omeo region of Victoria.

…   …   …

I wonder if the person/people who decided to cut the Occasional Childcare funding considered the hardship the tyranny of distance loads onto young families.

…   …   …

Children, especially in rural areas where there is greater distance between neighbours benefits from childcare by:

Charlie Schroeder's letter continues and makes a very good case, so I forwarded his letter to the minister for her consideration. I also have a letter from Bev Kibble of Swifts Creek who wrote:

How can the Government propose major training programs for single mothers to fit them for employment and in the current budget remove any means of support for the same people to have their children cared for?

There are also young Mums who may have inclinations of post natal depression who can have considerable relief to know that even for a few hours one morning a week they can have a break to go to the shops or just have some personal space.

I have sent all these letters to the minister so she will be able to get copies in her office. The final letter is from Mal and Kath Smith also from Swifts Creek in relation to the withdrawal of occasional childcare funding which said:

The effect this will have on our family and others like ours is devastating. This funding has ensured that at least some form of regular childcare is available to our families in this isolated and remote township of Swifts Creek.

…   …   …

Our family does not have other options for childcare on the days currently being offered by the Swifts Creek Community Centre within the area.

Losing regular childcare will mean that one of us has to give up our jobs, our career and our security.

With both of us working the second income enables us to pay bills and mortgages and still enjoy sport and recreational activities with our children. Two incomes decreases our stress from financial pressures and reduces our reliability on other government services.

Our children have benefited from this outstanding childcare service and are exposed to different environments, adults, and children, which has aided in developing their ability to integrate with the world outside this isolated community.

…   …   …

We believe that both Federal and State Governments need to commit to funding remote communities for childcare services, as childcare here must be run as not-for-profit. Profit based childcare is just not viable given population and socio-economics.

I sincerely do appreciate the minister being in this place while I read out those very compelling accounts from people in my electorate in relation to the Take a Break occasional childcare program and the need for continued funding. Now I understand that the government believes that we need to move towards all licensed premises but in the Victorian example the neighbourhood houses were meeting all of the criteria and the neighbourhood houses themselves had taken enormous steps in providing a professional and accredited childcare service. In many regional areas, and I note that the member for Corangamite is in the House this morning, we will have small towns which simply have no option at all for parents as to occasional childcare services. Mr Deputy Speaker, even if you look past the broken promises and the empty rhetoric from those opposite in terms of plans to build 260 childcare centres and to provide $1.5 million for Yarram in my electorate, there is one last insult to rural and regional Australian families in this debate in the House today. It is going to cost $1.9 million for the minister to introduce a watchdog to look over the shoulder of the large childcare providers to make sure that, in her words, 'this never happens again'. That $1.9 million would fund all of the Take a Break programs in Victoria and families in my electorate would be able to enjoy a small sample of one of the basic services that their city friends take for granted. Instead of more nanny state legislation, why won't the minister reinstate the funding for the Take a Break program and live up to some of this government's empty rhetoric?

Kate Ellis (Adelaide, Australian Labor Party, Minister for Employment Participation and Childcare) Share this | Link to this | Hansard source

I thank all members for their contribution to this debate today on the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. If ever you wanted an example of opposition for opposition's sake, then we have heard it today in the comments from those members opposite. I want to take a moment to remind people of what this legislation is about. This legislation is about cleaning up the mess that they let be created in Australian child care. I have to admit that I am shocked that I have to remind those opposite of the impact of the ABC Learning collapse. Let us recall that when ABC Learning collapsed 100,000 Australian families and 16,000 workers were at risk of being left out in the cold—100,000 Australian families who did not know if their care arrangements would be there for them the next day and 16,000 Australian workers who did not know whether they would have a job to go to the next day. This would have been a catastrophe, and we know this, if not for the government's quick and decisive action. We stepped in and we stabilised the sector, keeping ABC Learning's doors open for families while future arrangements were made. Because of this 90 per cent of these centres continue to operate for Australian families today. But, going further, our government is determined to make sure that this never ever happens again. We are deliberately taking a more hands-on role in monitoring the stability of the childcare sector so that such a collapse cannot happen again.

I remind those opposite that the ABC Learning experience happened only because the former coalition government let it virtually expand unhindered and unchecked. They sat back and were quite prepared to let the childcare market rip. The members opposite might be well placed to read the regulation impact statement when it comes to this bill or to talk to some of the services who will be impacted by this measure. We know that this does not represent a huge burden on large long-day-care providers. Many already collect and prepare financial information like this. The majority of large long-day-care providers consulted in the development of these measures indicated that they could address the requirements by using existing financial systems and resources. The difference is that we will now have an early warning system so that the government knows where the problems might lie so that we can instigate an audit where we have serious concerns about financial liability so we can protect the care arrangements and indeed the jobs of all of those relying on our childcare services.

So this will establish an early warning system so that the Australian government can anticipate and respond to a potential collapse of a major childcare provider like ABC Learning. We are taking these steps here today because parents need to have trust, when they drop their child off in the morning, that their child is in quality child care. Importantly, they also need to know that when they drop their child off at care someone will be there to meet them each and every day. The coalition clearly does not support this commitment but we remain committed to ensuring this for Australian families and indeed for the sector so it can remain strong and stable. I commend this bill to the House.

Question negatived.

Original question agreed to.

Bill read a second time.