Ian Macfarlane (Groom, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Joint Committee of Public Accounts and Audit, I present the committee’s report entitled 'Report 454: Early Years Quality Fund: Review of Auditor-General report No. 23 (2014-15)' and I seek leave of the House to make a short statement in connection with the report

Leave granted.

In March 2013, $300 million was committed to establish the Early Years Quality Fund—the EYQF—to provide grants to long day care providers in order to supplement wage increases for childcare workers for a period of two years. As the father of an ex-childcare worker, I can tell you that the general emphasis on improving their wages and conditions is certainly something that those in the industry welcomed.

The grants were made available to providers on a first-in first-served basis, and an advisory board, comprising employer and employee representatives, was established to provide implementation advice. Small providers and large providers were each allocated a pool of $150 million. The program was implemented by the former Department of Education, Employment and Workplace Relations, with the Department of Education and Training then taking carriage of the program.

By close of business on 6 September 2013, the day before the federal election, funding agreements had been sent to one large provider, Goodstart Early Learning, for $132 million, and 15 small providers, for a total of $5 million.

Goodstart's CEO was on the EYQF advisory board, and Goodstart was the first large provider to lodge a completed application, and received the largest allocation of EYQF funding: 96 per cent of the $137 million allocated to all providers.

In its audit, the ANAO noted that the program's funding cap of $300 million, which was estimated to only cover around 30 per cent of all long day care workers, meant the program would most likely be oversubscribed—in fact, almost certainly oversubscribed. In the event, this funding cap was reached less than 13 hours after the application process commenced. The ANAO found that the department did not provide frank, comprehensive and timely advice to its minister on the program's implementation risks. However, it noted that this role was made more challenging because many of the key elements of the EYQF policy were developed by advisers in ministers' offices and then settled through ministerial correspondence rather than through more conventional cabinet processes.

The ANAO also found that key risks evident in the program's design—in particular, the first-in first-served approach—were compounded by inadequacies in the department's subsequent administration of the program. In short, the department did not demonstrate a disciplined approach to implementation that satisfied the requirements of the then Commonwealth grants guidelines.

At the public hearings, the committee also raised a number of probity and transparency matters regarding the EYQF. However, the committee notes that the Auditor-General did not make any adverse findings in this area. In its report, the committee made seven recommendations, including that: the Department of Education and Training report back to the committee on its progress implementing the ANAO recommendations, and that the ANAO consider including, in its schedule of performance audits, a priority follow-up audit of the effectiveness of grants program administration by the department; the Department of Finance amend the Commonwealth Grants Rules and Guidelines to refer to the implementation risks of a first-in first-served approach, and to specify that, where a method other than a competitive merit-based grants process is used, officials better document implementation risks and complete a risk management plan; the Department of the Prime Minister and Cabinet update its Guidance on caretaker conventions to clarify what constitutes 'appropriate consultation' with the opposition on grants administration matters during that caretaker period; the ANAO consider providing a clear statement on probity matters in its reports, outlining any probity findings and the Auditor-General's powers in such matters be covered; and the ANAO also consider expanding its Implementing better practice grants administration guideto further set out Commonwealth probity principles for grants administration, particularly regarding best practice information relevant to advisory boards.

On this last recommendation, I would like to take the opportunity to commend the ANAO for its better practice guides. They are important documents in bringing together collective experience on how to achieve outcomes beyond simple compliance with minimum requirements.

In conclusion, I thank committee members for their deliberation on these significant matters. I commend the report to the House.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

Acting Deputy Speaker Vasta, I seek leave to make a few comments on this report.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Leave is granted.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

First off, I do want to commend the secretariat for their excellent work in running this inquiry and I want to thank the two chairs of the JCPAA during this inquiry. It is not an understatement to say this has been the most politically contentious inquiry we have had in this term of parliament and, on the whole, I think both chairs have managed the partisan heat in this issue quite well. So I thank both of them for their efforts there.

The member for Groom alluded to the policy circumstances in which this policy was being developed. We had a national quality framework that led to an increase in the training requirements for childcare workers, where the decline in the ratios meant that we needed to get 15,000 additional childcare workers into an industry where the staff are underpaid. When you look at the qualifications required, they are underpaid and competing against the education system for teaching graduates.

We also had the context of a national wage case. The last federal government chose to intervene to supplement wages in a limited way. It is fair to say that everyone going in knew the $300 million were going to be stretched very thinly. I think the chairs' remarks about the shortcomings and departmental administration really go to the nub of the matter here.

I make a couple of points about the hearings. Certain members of the committee used the hearings to explore probity concerns and that was absolutely their right. But I make the point that the ANAO stated very clearly that, in the end, they found no evidence of any probity wrongdoings, that the systems put in place were sufficient and if they had found anything to indicate probity concerns, they would have 'chased down that particular rabbit burrow'. They did not find anything, so they did not investigate that particular matter.

On the caretaker conventions, we had evidence from the Department of the Prime Minister and Cabinet that they provided advice to the department and the minister of the day about how to fulfil the caretaker conventions, and they were followed. PM&C certified that the minister of the day followed the caretaker conventions to the letter and they were implemented in regard to the opposition. But I do support the recommendation to further clarify in detail how effective consultation with an opposition should be done.

On the issue of Goodstart receiving 96 per cent of funding that was finally allocated, this is not an accurate figure. That is the figure when you take into account the broken promise from the coalition. The coalition promised to honour the $300 million of funding and they broke that promise. So, in the end, $137 million was allocated. So the accurate figure was that Goodstart received 44 per cent of total program funding of $300 million. If the coalition had fulfilled their election promise of allocating the full $300 million, Goodstart would have received 44 per cent, not 96 per cent. So, in effect, it was a choice of the incoming government to allocate 96 per cent of funding to Goodstart.

Nevertheless, this was an important ANAO audit. The hearings of the JCPAA went to some very important matters around departmental administration and caretaker conventions. I commend the report to the House and again thank the secretariat for their always excellent work on what was a very high-profile audit.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Does the member for Groom wish to move a motion in connection with the report to enable it to be debated on a future occasion?

Ian Macfarlane (Groom, Liberal Party) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

In accordance with standing order 39(c), the debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.