Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Hansard source

I thank Senator Brown and acknowledge her long interest in childcare issues. Child care is an essential service relied on by parents every day across Australia. It allows them to work to earn income to support their families and so is vital to the welfare of those families. ABC Learning is the largest private childcare provider in the country, and the government has continued to monitor all developments relating to ABC Learning closely this year. I think many of us have been concerned for a number of years about what a large share of the market ABC Learning has captured. Unfortunately, this contributes to the level of concern now.

On 24 September 2008, the government established the childcare industry task force, which immediately established contact with ABC Learning directors and their lending syndicate. Up until 2 November, the ABC Learning directors and their lending syndicate were indicating that ABC Learning was aiming to trade itself out of its current financial difficulties. But, on 6 November, ABC Learning Centres entered into voluntary administration and a receiver was appointed.

On 6 November, the receiver, McGrathNicol, wrote to all parents with children at ABC childcare centres, all employees and all centre managers with a message that the childcare centre would continue on a business-as-usual basis. McGrathNicol indicated that it was working constructively with ABC’s financers and the Rudd government on measures to ensure the stability of childcare services for ABC families. To ensure that anxious parents and employees could get information, the government had a dedicated telephone line open from 3 pm on the same day that the receiver was appointed and was placing regular updates on the mychild.gov.au website. On Friday, 7 November, the day after the receiver was appointed, Minister Gillard announced that the Australian government had reached an agreement with the receiver of ABC Learning and their lending syndicate.

The Parliamentary Secretary for Early Childhood Education and Childcare, Maxine McKew, has been consulting with stakeholders since the election of the Rudd government, including more than 50 stakeholders meetings and 25 childcare centre visits, and forums have been held in each state and territory. A forum with around a dozen peak national childcare organisations is being held in Canberra today as part of the government’s ongoing consultation with the childcare industry. The agenda includes a discussion about the ABC Learning situation.

The Rudd government was elected with a comprehensive childcare and early childhood education agenda, which has been pursued through COAG. We have taken decisive action to ensure that more than 400 unprofitable childcare centres, based on preliminary data from the receivers, are not immediately shut down, leaving thousands of kids without care and families with worries about being able to work. In order to ensure that all ABC Learning childcare centres remain open and providing care until 31 December 2008, the Australian government has committed up to $22 million conditional funding. The $22 million commitment represents the possible costs of supporting the continued operation of those unprofitable ABC centres for two months. Normally, a receiver coming into a business that found parts of the business were unprofitable would immediately act either to close or to rationalise those unprofitable parts of the business. Because of the unique situation of ABC Learning, the government is providing that $22 million as a maximum to support those centres and ensure they continue to provide services to the families. We will continue to work through this situation in the interests of these families to ensure childcare is supported for them. (Time expired)