John Hogg (President) Share this | Link to this | Hansard source

I inform the Senate that I have received the following letter, dated 11 November 2008, from Senator Hanson-Young:

Dear Mr President,

Pursuant to standing order 75, I give notice that today I propose to move: “That, in the opinion of the Senate, the following is a matter of urgency:

The collapse of ABC Learning and its effect on childcare across Australia, which requires an urgent response from the Government including an emergency summit of the key childcare providers from around the country, to ensure services to parents and children are available beyond the end of 2008.

Yours sincerely

Senator Hanson-Young

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I move:

That, in the opinion of the Senate, the following is a matter of urgency:The collapse of ABC Learning and its effect on childcare across Australia, which requires an urgent response from the Government including an emergency summit of the key childcare providers from around the country, to ensure services to parents and children are available beyond the end of 2008.

Child care in Australia is in desperate need of an overhaul. The crisis that we are seeing with ABC Learning Centres is simply the tip of the iceberg. For years and years, we have seen the child-care sector in Australia being taken over by profiteers and being seen as an industry. Child care should be seen as an essential service. Child care should be seen as part of the lifelong learning that starts at birth. Child care is something that we as parents trust to give our kids the best quality of care so that we can go out to work and pay our mortgages. How was this crisis with ABC Learning Centres ever allowed to happen? How has it been that one corporate entity was allowed to control 25 per cent of the market? How can we say that one corporate entity should be allowed to monopolise a quarter of the child-care sector—for profit, not because we are putting the care of our children first?

Child care should not be viewed or treated as a profit-driven industry; it should be seen as the essential service it is. We have seen over the last couple of weeks a response from the government, a response from the community sector and a response from various child-care providers from around the country to try to get together to talk about what to do next. We know that ABC Learning is responsible for 100,000 long day care places around the country. We know that ABC Learning relies heavily on government funding; it was anticipated to receive up to $300 million from taxpayers through benefits paid to the company and on behalf of parents in this financial year. We have heard from the government that the response in trying to keep these centres open until 31 December this year is a $22 million rescue package. What then? In estimates a few weeks ago, I asked Senator Ludwig, the minister representing Minister Gillard, whether he could explain the federal government’s contingency plans, which they assured me they had. I also asked whether they could explain what would be happening, when it would be happening and what kind of discussions had happened so far to try to avoid the possible crisis that may happen if ABC Learning Centres were to go under—what would happen to the 100,000 children in care in their centres around the country? How do we, as a government—as elected parliamentarians—ensure that we do not leave these families in the lurch?

In response, the department said that there had been some thought given to the issue of ABC Learning folding and that some scenarios had been looked at. Since then, we have seen the $22 million package but we have not seen the details of any type of contingency plan. I have been inundated by various community child-care workers from around the country saying that they have put themselves forward as experts in the sector, people working on the ground, wanting to help the government move forward and ensure that we can keep as many centres open as possible, and yet the biggest criticisms that all of them have come to me with are a lack of transparency in the government’s plans, a lack of transparency in their conversations with government. It is a lack of transparency that led us into this mess in the first place. It is time for the government to shed light on what is really happening with ABC Learning and what types of contingency plans the government has. It is time to ensure that we involve the experts every step of the way.

Today the Senate passed a motion to support an emergency summit to get together the brightest minds in child care from around the country to talk directly to the government about the way forward. I am thankful that the government has taken the opportunity to ensure that centres are open until the end of this year, but we need to be looking beyond 2008. There are people who are willing to help, willing to put up their hands, willing to step in and keep centres open in order to ensure that kids can be dropped off as their parents go off to work and that the quality of care for our kids remains the highest it can possibly be. (Time expired)

Marise Payne (NSW, Liberal Party, Shadow Parliamentary Secretary for Indigenous Affairs) Share this | Link to this | Hansard source

I thank Senator Hanson-Young for moving the urgency motion this afternoon. We are here debating this particular urgency motion about the collapse of ABC Learning Centres because, quite simply, the government has comprehensively failed to deal effectively with this problem. The impact of this failure on thousands and thousands of Australian families is indeed likely to be significant and also has the disturbing potential to be long term. It is also a serious failure for all Australians who look to the government for, hopefully, responsible economic management, sadly missing at this point in time.

It is no surprise, but there have been signs of trouble at ABC Learning Centres over many months. The government was so slow to respond that, apparently, it is still working out a contingency plan. In fact, in February this year the ABC Learning share price dropped by 60 per cent. Financial analysts at the time expressed concern about the adverse effects on families who are relying on those centres for child care.

Let me go through a little more of the chronology so that we can see where the gaps have been. Four months later, on 23 June, the Parliamentary Secretary for Early Childhood Education and Childcare, the Hon. Maxine McKew, put out a press release on ABC Learning, but it was on a fee hike, taking effect from 1 July this year. At the end of July, ABC Learning then flagged a pre-tax loss of over $400 million for 2008.

On 21 August a voluntary halt on trading on the ASX was called for ABC Learning Centres. Then a month later at estimates—and my colleague Senator Bernardi was engaged in the discussion at the time—an officer from the Department of Education, Employment and Workplace Relations told the hearing that the department was alive to the question of what would happen to ABC Learning Centres if the organisation failed. One is glad that the department was at least alive, but we are not sure what the alternative was. These issues are very serious for Australians.

On 6 November ABC Learning went into voluntary receivership. The following day the Deputy Prime Minister announced a bailout of $22 million to ensure that the centres stay open until the end of December. The coalition has indicated, through the Leader of the Opposition, the shadow Treasurer and the shadow minister, Mrs Mirabella, that support for the children of families affected by this collapse is welcome. But in reality the government still does not have a proper contingency plan. It cannot say with any specificity what the $22 million will actually be spent on and how it will actually help those Australians whose jobs and childcare places are fundamentally at risk and, most importantly, for many people—and Senator Hanson-Young also referred to this—whether there will be any security for parents after Christmas. Consider the impact of the collapse and what it has done to Australian families: we have 120,000 Australian children attending ABC Learning Centres across the country. We have about 16,000 people employed by the company, many of whom also have children who attend the centres. In the event of centre closures, even if they are able to find a new job, they will be without care for their own children.

ABC Learning caters for between 20 and 25 per cent of the Australian childcare market. It also provides a significant number of reserved places for the children of Defence Force personnel, which is obviously a very significant factor. The organisation has received considerable amounts of money—$300 million in subsidies from government this year and, reportedly, it has a debt of close to $100 million, which is predominantly owed to the banks. The coalition is concerned about the failure of the government in handling this entire problem.

Most importantly, the government should have been able to provide certainty to the thousands of parents who have children in ABC Learning Centres, but we are still waiting to see with any certainty what clear path lies ahead. That degree of uncertainty is clearly reported in newspapers, as well as anecdotally and by our constituents, and is very disturbing to Australian families. I referred earlier to aspects of the chronology of the past few months, but really the government’s time frame for action has been embarrassingly slow.

In September the government set up an education department task force to deal with the collapse, and that was four months after the trading of shares of ABC Learning ceased. They said they were working on a contingency plan but, as far as a contingency plan is concerned, we remain in the dark. We have a promise of $22 million but not a lot of detail around that. It is detail, it is information that Australian families need at this point. Essentially, they are now telling families that they need to wait until mid-December to hear more—that is, just two weeks before the guaranteed funding expires on 31 December. That two-week period immediately before Christmas—and we all know what that is like for families; it is fraught at the best of times, let alone at a time where stories of the global financial crisis are impacting on people’s consciousness and people’s psyche and where they now also have to face this problem—is not enough time if families need to find alternative care. It is not enough time if employees need to find alternative jobs in what is a difficult and uncertain employment market. It is not as though jobs are just going to fall off so-called Christmas trees.

There is evidence that this uncertainty and the lack of a clear plan may also be causing the company to haemorrhage even further. We would all have seen reports in the Australian this morning that the ABC Learning Centres are suffering from serious understaffing and seeking temporary employees from a range of sources. Also in today’s Australian the Deputy Prime Minister said it is up to the receiver to provide details about the 40 per cent of ABC Learning Centres which are apparently and reportedly regarded as unprofitable. But this is very important information. The government has a responsibility to acknowledge this information; it needs to be provided to Australians who have their children in care in this particular system. Some 60 per cent of ABC Learning Centres could be entirely profitable, and we need to absolutely acknowledge that. The problem is that, when you talk about 40 per cent being unprofitable, you end up with speculation. That does not help anyone in this process. It causes families and staff themselves in all of the 1,040 centres to be much more anxious about what is going on and causes them to perhaps then pursue plans to find alternative care for their children and alternative employment for themselves. And the problems will just cascade.

The very serious personal impact of this problem needs to be acknowledged by government, as does the package. Speculation has the potential—and this is very unnerving for those involved in businesses and those whose families have children in the centres—to severely damage the prospect of the currently profitable centres remaining just that. As far as we can tell, notwithstanding the fact that the task force has been in place for over six weeks, there is no evidence of any particular consultation with other industry stakeholders. There have certainly been no reports or statements of that.

The chief executive officer of KU Children’s Services, which is actually Australia’s second largest childcare provider and the largest provider of not-for-profit child care, was quoted in the last couple of days as saying that they had made offers of help but had not had a response back from government. I understand that they are not the only other providers to have done that. There was a forum scheduled for today, to be chaired by the Parliamentary Secretary for Early Childhood Education and Childcare, but it was an already scheduled meeting of the National Children’s Services Forum. It is not, as far as we can tell, an ABC Learning specific meeting, but it is now being used to portray the government as consulting industry leaders on the issue. I hope it is useful. I hope it does actually do something, but to pretend that it is a response to this particular issue is not accurate at all.

The coalition have made numerous calls for the government to provide details of the contingency plans, but they do seem to us to have been very reluctant to do so. In fact, they have gone so far as to try to blame the previous government for the situation in which ABC Learning finds itself, but it is state governments that license childcare centres, not the Commonwealth. One would have thought that the Deputy Prime Minister would be aware of that. If there was such a concern about the rapid growth—

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Jacinta Collins interjecting—

Marise Payne (NSW, Liberal Party, Shadow Parliamentary Secretary for Indigenous Affairs) Share this | Link to this | Hansard source

It is not rubbish that state governments license childcare centres. That is in fact the case. Had the Deputy Prime Minister been concerned about the rapid growth of ABC Learning childcare centres then perhaps she might have contacted her Labor colleagues in every state and territory some 12 months ago, after the election, and raised the matter with them, but there is no evidence of that either. This approach is a hands-off approach. It is a dangerous approach. It is dangerous for Australian families at a very difficult time of year and at a very difficult time in the Australian economy. The government should acknowledge that this needs better care, hands on the wheel, not off the wheel, and a more responsible approach all round.

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I too thank Senator Hanson-Young for raising this urgency motion today, mostly because it gives the Senate an opportunity to look a bit more factually at the circumstances in relation to ABC Learning child care. Having listened to Senator Payne just now, I have to say that she elaborated a very convenient and short-term portrayal of history.

The Rudd Labor government was elected on a platform to reform child care and establish a national early childhood agenda. There were good reasons why this was the case. Senator Hanson-Young raised some of the issues in her comments in relation to this urgency motion, but there are several others that I would like to address. Unfortunately, I may run out of time to recap some of the history, because it is also very important to look at what our contingency plans are. But I must, having been provoked by Senator Payne, at least cover some of those issues.

Child care is a vital service that families rely on in order to meet their employment and community commitments. Given the demands of the modern workforce, both the quality and the security of supply of childcare services are vital. Recent events highlight key inadequacies in the model established by the previous government that we have a plan to address. Unfortunately, the global financial crisis has meant some of those industry inadequacies are coming well to the fore.

In talking about industry inadequacies, let me take you to some of the comments made by former minister Hockey in this area. In the opposition commentary about what government should be doing at this stage, we first had Mr Turnbull saying we should not really be doing anything, that unviable centres should not be maintained, without even the constraint that there were some good, strong public interest grounds for at least doing it for the next two months. Mr Hockey moved back from that position and said, no, he accepted that our $22 million contingency plan was important and should be put in place to maintain support and services for the families and children involved. But he also made another very interesting comment which harks back to the history that Senator Payne has conveniently forgotten. He said that if there is an industry failure then we need government action.

There is an industry failure in this sector. It has been acknowledged that there is an industry failure. Senator Hanson-Young referred to that when she reflected on the concern of a multitude of parties about the dominance of ABC Learning being able to be developed under the policies of the previous government. There is a significant problem. It does not relate solely to the global financial crisis, however. There are a few points that should be highlighted there. ABC Learning has been severely affected by this financial crisis, but it was known for some time by financial commentators that ABC Learning was highly leveraged. As early as March 2006, Macquarie Bank researchers wrote:

At the current share price, strong growth has been factored in and ABC can’t afford to stumble.

This was back in March 2006. Citigroup noted:

Off-balance sheet leverage is quite high and real interest cover is low.

This is the kind of corporation that will come under the most intense pressure, should there be a credit squeeze. This was the case with ABC Learning, and we have known this for quite some time. The problem with the former government was that they were quite happy to allow this type of radical market experiment in the delivery of social services such as child care. That is the problem.

In addition, ABC Learning has quite a significant number of sites overseas. This expansion added additional risks to the company’s overall financial health, such as currency risk and also the difficulty of operating childcare services in markets with different needs. There have also been problems with the board for a considerable period of time. As the Australian Financial Review noted on 7 November 2008:

The composition of the ABC board points to many of the problems that have brought the business down. First up, it was top-heavy with politicians such as former Nationals MP Larry Anthony—

setting aside issues relating to ministerial codes of conduct—

and erstwhile Brisbane lord mayor Sallyanne Atkinson.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

He was not in breach of any code of conduct. That’s a mischievous suggestion!

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I am simply quoting the Australian Financial Review. The article continued:

Rapidly growing companies such as ABC need directors whose core competencies are reading accounts, vetting deals and reining in entrepreneurial chief executives.

Clearly, this was not the case with ABC.

If I recall correctly, I think, for instance, Tony Jones described the previous CEO, Eddy Groves, as ‘the child of John Howard’. This is the level of the previous government’s connection—and ‘problem child’ is probably a better description given the situation. Accordingly, the government has closely monitored ABC’s situation for some time. In fact, I recall that in Senate estimates, when I was a shadow minister, the department indicated back then that they were monitoring market share issues and potential risks associated with ABC. They demonstrated no contingency plan then, Senators, but on this occasion, yes, we do have a contingency plan: $22 million has been provided to work with receivers to ensure these services stay open for another two months. Let us understand this situation. Unlike Mr Turnbull, who suggests that you should simply allow unviable businesses to go—

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

Senator Bernardi interjecting—

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Perhaps Senator Bernardi would like to have the precise quote on that issue so that he understands very clearly what his leader has been saying should be the case. But when we have the opposition saying, ‘No, we should have this free-market experiment’—one that allows the delivery of community services such as child care to be vulnerable to market failures and risky market behaviour, which is what has occurred with ABC—we obviously do have a problem. I will use the remainder of my time to go back to the point that Senator Payne made about the lack of a contingency plan. Unlike the former government, we have indeed committed to provide—

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Your forensic skills have not improved since ‘children overboard’, have they?

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, I would appreciate the opportunity to speak without interruption. I cannot hear myself, let alone deal with this issue.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senators on my left, please allow Senator Collins to be heard.

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I do not know why Senator Brandis is quite so excited about this issue, but perhaps he will speak later in the debate and we will be able to understand it. Let us go back to the facts of the matter. There was a forum today, as Senator Payne indicated. That forum represented another shift that has occurred in the early childhood agenda under the Rudd government. That shift is more adequate and comprehensive consultation with the sector, as was outlined in this place in question time and in the other place in question time today. The Parliamentary Secretary for Early Childhood Education and Children, Ms McKew, has been undertaking extensive consultations across the sector to deal with the types of problems that Senator Hanson-Young has been referring to. That we have taken the opportunity today to focus on the most pressing and immediate issue is not, Senator Payne, a pretence. It is using the consultation processes that have been established to undertake the type of consultation that Senator Hanson-Young is pointing out as being critical and important at this time.

That Senator Payne claims that there is no evidence of consultation in the sector is probably more reflective of her limited dealings with the sector than anything else. So let me tell her the other thing that was announced by the minister today in question time. The Deputy Prime Minister announced that an expression of interest process has commenced to ensure that the receiver has the best available range of options for considering the future operation of ABC Learning Centres. She has encouraged the parties, be they for-profit or not-for-profit ones, to register their interest in participating with the receiver on the future of ABC. Once the review process has identified the likely future arrangements for each centre, the receiver, working with the government, will map and sort the registrations of interest against identified local needs. The government is responding to clear public interest. We have a contingency plan that involves maintaining these services for two months with the $22 million, as has been indicated, and also a process, which the Deputy Prime Minister outlined today in question time, for receiving expressions of interest and for mapping against identified local needs as will be required to ensure that delivery of service occurs into the new year.

As senators would be aware, the forum held today involved a dozen peak national childcare organisations. The organisations that Senator Hanson-Young referred to will eventually be communicated with and consulted in relation to communication back to government. Also, as I said, there is this new process that the Deputy Prime Minister outlined today to receive expressions of interest. That will be critical to ensuring that community needs are catered for in this very pressing and urgent situation.

Since I have a little more time than I anticipated, I will go back to the points that I was raising before—and Senator Brandis, in particular, seemed to want to hear more on this issue. I suspect he will be mildly amused that in fact I will spend some of this time quoting what Stephen Mayne said, in a Lateline interview that occurred with Tony Jones in February of this year, because I think this is the best synopsis of the problems with ABC child care.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

You might as well quote a Heinz tomato sauce bottle, Senator Collins.

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Well, that might be your view, Senator Bernardi, but let us have a look at the issues that are highlighted here. The ABC Learning business fails most of the government’s tests, I think it is fair to say. For instance, Eddy Groves’s brother-in-law has had more than $100 million worth of construction and maintenance contracts from the company, most of which have not gone to tender. There is a stockbroking firm—it is called Austock—which has backed ABC Learning ever since it floated at $2 a share back in March 2001. Austock has made almost $100 million in fees backing this company all the way. Bill Bessemer from Austock sits on the ABC Learning board and Eddy Groves at one stage bought a 4.2 per cent stake in Austock, so you have transactions and relationships going backwards and forwards. You have got three executives on the board and you do not have a clear majority of independent directors.

Larry Anthony, the children’s minister in the Howard government, joined the board. The former government gave Eddy Groves’s company $1 million a day in subsidies for its childcare operations, creating an unprecedented company market share in the world. Five months after he stopped being Minister for Children and Youth Affairs, Larry Anthony jumped onto the board of ABC Learning, taking all the knowledge with him. It is those types of situations, plus hundreds of thousands of donations to the Liberal Party, the National Party and those types of things, which have never been a particularly good look for the company. That is when Tony Jones then went on to describe Eddy Groves: ‘He was a child of the Howard government, wasn’t he?’

I am very surprised that, under those circumstances, Mr Turnbull made the comments that I said I would eventually take Senator Bernardi to. These were the comments of the Leader of the Opposition, Malcolm Turnbull, on 8 November 2008:

The reality is an unprofitable business—

regarding ABC Learning—

cannot be sustained indefinitely, so there is clearly a concern about the level of, and the tenure, the extent, of government support.

It looks like this contingency plan, this support, was put together very much at the last minute so I’m a little sceptical as to how much of a plan they really had.

Well, we have a plan to maintain all of the centres for two months to get families through till Christmas. It is a very clear plan. We have a plan to map out community interest in comparison to what existing services are prepared to do to maintain services. We have a plan to ensure child care remains available to these families. We have much more of a plan in our national agenda for early childhood than the former government ever had, apart from putting themselves on boards once they leave this place. (Time expired)

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

We have just been witness to an outrageous bunch of indifference from Senator Collins and the Labor Party. The mums and dads of Australia are living in fear at the moment, in fear of many different things. They are in fear of the financial crisis; they are in fear of paying their mortgages; they are in fear of losing their jobs. And what is happening now? They are also in fear of child care. What do we hear from the Labor Party? We have this trawling through history, the corporate annals and the financial reports. We have an attack on organisations that are trying to make money. Is this what we are returning to with the Labor Party? Are we going back to where for-profit enterprise is frowned upon, to where it is wrong, to where you can be employed only by the government?

Let me share this with Senator Collins and the rest of the Labor Party over there: this country was built on the back of enterprise. It was built on the back of investment by private individuals trying to create and provide services for the rest of the country. Yes, occasionally things do not work out. They sometimes do not work out for people who have invested their money, and they sometimes do not work out for those people that are reliant on the services. The coalition is absolutely mindful of this. We are concerned. We share the same fears that the mums and dads of Australia have right now, because we know just how incompetent, hopeless and lethargic this government really is.

Let’s just talk about the lethargy that is being demonstrated. Senator Collins was happy to wax lyrical about how there were warning signs for ABC Learning Centres for such a long time.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

It wasn’t lyrical.

Marise Payne (NSW, Liberal Party, Shadow Parliamentary Secretary for Indigenous Affairs) Share this | Link to this | Hansard source

It was quite discordant, actually.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

It was discordant, but she waxed on and on about how many warnings there had been. What has happened? The government now owns this issue like it owns all the economic issues in this country at the moment. What have they been doing for eight months? Nothing. They have been talking about a plan. Where is the plan? When a crisis comes and the plan hits the fan, as it has now, what do they do? They throw a few dollars at it and say: let’s hope it takes care of itself. They have a specific parliamentary secretary responsible for this, and what have we heard?

Marise Payne (NSW, Liberal Party, Shadow Parliamentary Secretary for Indigenous Affairs) Share this | Link to this | Hansard source

McWho?

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

It is not McWho; it is McKew—Maxine McKew, the parliamentary secretary and the member for Bennelong, and it pains me to say that. She has been silent on this, and that is what is really disturbing. It has been left to the Deputy Prime Minister to go out and launch personal attacks against the coalition because we are asking what the government is actually going to do. It is all well and good—and we support buying some interim relief, and that is exactly what it is; $22 million is interim relief—but what will happen on 31 December? Do they all shut down without anyone knowing? There is no plan. They have talked about it. During Senate estimates, Senator Hanson-Young asked and was assured by the department that a plan was ‘alive’ and that the department were looking at this live issue. I say we need now to get a second opinion. We need to bring the defibrillators in. We need to put in an IV and maybe ask a proper doctor to come in and look at what is wrong with this government, because clearly the parliamentary secretary, the minister and the Prime Minister have been asleep at the wheel. Senator Collins spoke about how many warnings there have been. There was a credit crunch and she said that, in the event of a credit crunch, ABC was at risk. Well, the credit crunch came and what did they do? They did not do anything. The mums and dads of Australia are living in fear of your economic incompetence and your indifference. The fear that they are living with has been met with the classic—

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Insouciance.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

Insouciance is the word that Senator Brandis has provided, and I think it is a wonderful word to use on this occasion. They are fiddling while Rome burns.

Government Senators:

Government senators interjecting—

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

The interjections from the other side only highlight the fact that we have a couple of people there that are going to come out and attack the previous government. I challenge them not to. I ask them: when is the blame game going to stop? That is what the Prime Minister promised. He promised there was going to be a new deal. We now know that ‘a new deal’ is shutting down private industry and attacking private industry. We now know that ‘a new deal’ is to bring in state-run centres and overpowering for-profit industry. I say that is wrong, and the coalition does not support that. But the coalition does support the mums and dads, particularly in rural Australia, who are worried about the potential closure of their childcare centre. That means that mums and dads might not be able to go to work because it is the only option available to them.

We are not indifferent to their pain and to the potential damage that that can cause for them as individuals, as families and as communities. But this government is. This government does not seem to care. It thinks: ‘I’ll just throw some money at it and it will go away. I’ll hide my head under the pillows and the monsters won’t get me anymore.’ Let me tell you that the monsters, the gremlins, are right there in action. They are hiding on their front bench, because there is this effort to supplant and undermine the enterprise spirit in this country. We have a government that, rather than saying, ‘How can we make this better and help to provide more and different alternatives for people?’ simply says: ‘I’ll whack away a bit more of the surplus. I’ll put it in there and buy myself a couple of months and hope the people of Australia will forget about this issue.’ But they will not forget, they cannot forget, because it goes to the very structure and the very heart of their lives.

For those of us who have children, if we want to go to work we need to make sure that our children are well looked after in the event that a parent cannot be at home with them. But what is going to happen on 1 January? Are the government banking on so many people losing their jobs between now and then that they will not need childcare facilities? You would think so, because they have been pushing and advocating that there are going to be job losses in this country. It is in the budget statements; it is in the Treasury documents. It is a great shame. Rather than looking to create and sustain jobs they are driving our economy into the ground and taking families with them. There is nothing more important than to ensure that families have every opportunity available to them, including children.

In her 15-minute speech Senator Collins did not acknowledge that there was a single problem that the government could deal with. She talked about a plan. I would suggest to you, Mr Deputy President, that their plan is a concept that is unknown to any of them yet. They are looking at a plan? They have had 12 months to work on it and they still do not know what it contains. That is an indictment of this government. It is a shame for this government. And the challenge for them is to come clean, make that admission and stop blaming other people for their failures.

Mark Arbib (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I thank Senator Hanson-Young for raising this important and serious issue today. I know the senator has a strong interest in this area, being the Greens childcare spokesperson. I also know she is a proud mother of a young daughter. So thank you for raising this issue today.

I have to say that Senator Hanson-Young’s speech is in stark contrast to the ill-informed and petty contributions that we have seen from Senator Payne and Senator Bernardi on behalf of a political party that has a lot to answer for in terms of the collapse of ABC Learning and the handing over of the childcare sector lock, stock and barrel to the free market. After hearing Senator Bernardi especially talking about the great worth of the free market and the private sector, I could only have come to one conclusion in terms of ABC Learning. He did not have any solutions; he did not put forward a case of how we could actually salvage this company; he said pretty much to ‘leave it to the free market’. If we left ABC Learning to the free market at the moment, something like 400 childcare centres would close. That is the plan of Senator Bernardi. That is the plan of the Leader of the Opposition, the member for Wentworth—’Leave it to the free market.’ But more about that later.

Child care and childhood development are areas of which the Rudd government is extremely proud. We understand that parents and workers in this industry would be extremely concerned at the moment and very anxious about the situation concerning ABC Learning. Our priority has been and will continue to be to ensure working families can access child care for their kids when and where they need it, because we know how important child care is—not just child care but quality child care.

The Rudd government was elected with a comprehensive childcare plan, not just for the centres but also in terms of improving the professional standards in child care. This year the government expects to pay $1.9 billion in childcare benefit payments to childcare providers so they can reduce their fees to families. In addition, in the May budget the government increased the childcare tax rebate from 30 to 50 per cent and improved the frequency of payments. At the last election the Rudd government promised to establish up to 260 new childcare centres, and that is something we are working on around the clock. We have also seen the great work that the parliamentary secretary, Maxine McKew, has been doing in the sector. I find it abhorrent that those on the other side would be attacking the parliamentary secretary, who has been doing some fantastic work in the sector. If you want to see the work she has been doing, go to the new website we have set up—mychild.gov.au. It is absolutely fantastic in terms of the work that this government has been doing in the childcare area. I urge those senators across from me to take a look at it.

In terms of ABC Learning, this is a complex and large-scale problem. Just to put it into a bit of perspective, ABC Learning has a 25 per cent share of the long day care childcare market. There are 1,040 ABC Learning childcare centres, of which around 40 per cent are currently unprofitable. There are approximately 120,000 children attending these centres. ABC Learning Centres employs more than 16,000 people. It is a huge, huge task. The government has been acting with great urgency. On 6 November ABC Learning Centres announced it would enter into voluntary administration. The government established a special task force to work with the receivers and the banks throughout the process. On 7 November the government announced it would provide $22 million in conditional funding to ensure that the ABC Learning childcare centres remain open and provide care to the end of December. The $22 million represents the possible cost of supporting the continued operation of the unprofitable ABC centres for up to two months.

Senators Bernardi and Payne, when you listen to them, think that is the end of the process—that it is just $22 million and after 31 December there is no plan forward. That is entirely untrue. During the period, the government and the DEEWR task force are undertaking a thorough review of ABC Learning’s operations. It is envisaged that by mid-December the government will be in a position to make a further announcement about the future of ABC Learning—that is, after working with the receivers and the banks to try and find a way forward. If you think there is some magic solution, what is it? Please— (Time expired)

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

I would also like to thank Senator Hanson-Young for bringing this issue up and giving us the opportunity to explore some of the very serious problems that there are at the moment. Senator Arbib commented that Senator Bernardi had not provided the solution. Last time I looked, Senator Arbib was the one sitting on the government benches. It is the government who should be looking for a solution. Also, Senator Arbib tells us that there is a plan. Well, we have asked; Senator Hanson-Young has asked; questions have been asked in the House of Representatives, over and over: what is the government doing about this? We do not know what the plan is unless we hear about the plan. What we currently have is, basically, a completely incoherent approach to the entire issue.

We had Minister Evans in the Senate today carefully setting out a timescale that had been developed—allegedly developed, I should say—by the government. Firstly, we heard that in September a task force had been established. He neglected to mention that that was set up after ABC Learning said to the government, ‘Hey, we’re in very big trouble; you’d better do something to help us or the industry is going to fall in a heap.’ He then went on to tell us what happened on 2 November and 6 November. He even mentioned that today there was a meeting of the national peak groups. You would have thought, from the way Minister Evans phrased it, that this was part of a coherent and sensible response to developing a quick and urgent solution to the problem. The only problem, of course, was that, at the same time that Minister Evans was saying this in the Senate, the Minister for Education and Minister for Employment and Workplace Relations, Ms Gillard, was happily pointing out in her particularly erudite fashion to the House of Representatives that this was just a routine, regular meeting with the ordinary childcare groups who came to see the minister and the parliamentary secretary regularly and normally. She even said that she ‘expected’ that the issue of ABC Learning Centres would be discussed at the meeting. She did not say she was definite it would be. She did not say, ‘Absolutely; it’s going to be our No. 1 priority.’ She said she ‘expected’ the issue would come up at a regular meeting—quite a different version of events from the coherent plan that Senator Evans would have had us believe they were going to make.

I would like to move on to just how decisive all this is looking at the moment. We are getting very used to this now: what is the word of the week from the Rudd Labor government? They used to work on ‘working families’ but—

Mark Arbib (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Still do.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Well, no; we have not heard very much at all about working families from the Rudd Labor government—because they know there are going to be fewer of them. But the word of the week at the moment is ‘decisive’; everything is very ‘decisive’. And the Minister for Education and Minister for Employment and Workplace Relations, Ms Gillard, in fact commented that the government had acted ‘quickly’ and ‘decisively’ to ensure that parents could rely on ABC centres—until 31 December. That is what they can rely on: until 31 December.

The thing that the Rudd government and Ms Gillard—and the completely-absent-from-this-debate Ms McKew—appear to have overlooked is that children grow up quickly and decisively too. When the new school year starts, in less than three months time, a large number of ABC’s clients, up to 20,000 of them, will be moving on. They will not be requiring full-time child care any longer because they will be attending school. Many of their parents, in the normal course of things, would no doubt have booked in the next crop of children. In normal circumstances, this would not be an issue. The next group of children would be coming through to fill those places.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Cohort.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Cohort—good; thank you, Senator Brandis.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

A crop of children.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

A crop of children—yes, why not? But those children would be coming in; we would have those places, and more, filled. But what parent in their right mind right now is booking their child into an ABC Learning centre if they have a skerrick of an alternative? Because you do not know whether, come February next year, April next year or some other time, that childcare place is going to be there. You do not know how much time you or your partner might have to take off work because the childcare place has simply disappeared.

So what is happening is that these parents are looking for other sources of child care. Most of them are searching desperately now for something that at least they can guarantee will be there when they need it in February next year. So what we do absolutely need is some decisive action from this government, and that is not expressions of interest or a plan that we are going to hear about two weeks before Christmas. It is now that we need the urgency summit organised, so that there is a long-term solution, because 400 unprofitable centres are going to look like child’s play as parents vote with their feet on what they think about the decisiveness of this government and enrol their children as far as possible anywhere else. If you are trying to run a business, as every ABC Learning centre is, it is unreasonable not to have any idea of what your market for next year is going to be, less than three months out, because the government cannot quite manage to organise themselves a meeting to discuss this issue properly.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I would also like to thank Senator Hanson-Young for bringing forward this matter of public importance today. I know she has a genuine interest in this issue not just because she is a parent. I also have a genuine interest in this issue, and I am probably game enough to say that I am probably the only member of this Senate who has actually worked in the childcare industry for any extended length of time. I understand that Senator Jacinta Collins has at various times, but I spent 11½ years working in the childcare industry.

In this matter there are two options: the opposition would like these centres closed down or that we come up with some process to allow these centres to continue to operate. The opposition say that they are the great economic achievers of this lifetime. Let me ask: where do you think Australia will be if we have to close down these centres, if parents cannot go to work? The Leader of the Opposition, Mr Turnbull, has said:

… the reality is an unprofitable business cannot be sustained indefinitely. So there is clearly a concern about the level of and the tenure…the extent of government support.

           …         …         …

… it looks like this contingency plan—

So there is a plan, though we have heard numerous speakers from the other side say there is no plan, and if there is a plan they do not like it anyway—

this support, was put together very much at the last minute. So I’m a little sceptical as to how much of a plan they really had.

We have got a plan. If you want to ensure that there is an ongoing service where these parents can leave their children, whether it be for work or for other activities in the community, then it is important that you do not just talk about what is going to happen between now and the end of December. We are saying that we have a plan as to what will happen after December.

Because we have a commitment to high-quality child care and because we are economically sensible and understand the commitment to the rest of the community if these places are taken out and parents cannot attend work, the Deputy Prime Minister has today announced the registration of interest process. But, no, the other side are not happy with that either. It is obvious that the other side would like to close these centres down and walk away. I have already quoted their leader’s comments. What did we see happen in the matter concerning Stan Howard, the chair of National Textiles and the previous Prime Minister’s brother? We saw money flow left, right and centre to ensure that the workers at National Textiles were looked after. That is what we are doing: we are making sure that the parents, the children and the workers are supported. It is a very important issue. I think the other side have turned this issue into a political stunt. They think they can get cute in their rhetoric on this too. We have heard some glib lines from the other side about this. I could make a few of my own. In fact, in relation to the business with Mr Stan Howard, He Ain’t Heavy, He’s My Brother comes to mind.

I do not think the opposition take this issue seriously at all. We have seen a lot of double standards and hypocrisy from the other side. Senator Bernardi says there is no plan. The Leader of the Opposition obviously thinks there is a plan because he spoke about it on 8 November 2008. There is a plan and it is not good enough that the opposition come into this chamber and try to turn this debate on a matter of public importance into a political stunt. It is a serious issue. I do not think child care was taken seriously by the other side in all the years they were in government. The Rudd government was elected with a comprehensive childcare and early childhood education agenda, which is being pursued through COAG. The Rudd government has the interests of parents, their children and, in this case, ABC Learning employees front and centre. What is critical here is stability and continuity of service for parents, children and ABC Learning staff. That is why we have committed up to $22 million in conditional funding to ensure that all ABC Learning childcare centres remain open and providing care until 31 December 2008. That is why the Deputy Prime Minister made the announcement today regarding expressions of interest— (Time expired)

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I am glad that I have been able to kick-start some debate on this issue in the chamber. I think Australian mums and dads must be sick and tired of the petty party politics that go on in this place. We have just spent almost an hour hearing about who is to blame for the ABC crisis. There is definitely enough blame to go around on both sides of the chamber. The ABC crisis would never have happened if ABC Learning had not been given the opportunity to monopolise the sector. Mums and dads around the country would not be worried about whether they can drop their kids off at their local childcare centre if companies had not been given free rein over what is meant to be an essential service. Mums and dads would not be worried about whether their local ABC centre is closing if companies were not able to profiteer from an essential service and the essential needs of Aussie families.

The government should have responded sooner. The government are creating more anxiety by their lack of transparency on this issue, keeping parents and the elected members and senators in this place in the dark on the rest of their contingency plans. The $22 million to be used to prop up ABC Learning over the next two months will only keep centres open until after Christmas, until 31 December. If the plan is more than this, let us see it. I hope there is more of a plan. I want to see it. I want the key stakeholders in the childcare sector to see it because that means we can get together and move forward.

We need to know now whether the minister will hold an emergency summit of the key stakeholders in the childcare sector, given that today the Senate voted to call on the government to hold one. We need to know within days when that summit will be held. Senator Collins mentioned that consultations will be happening and that those who were not spoken to today at a luncheon held by the parliamentary secretary—which I must point out was not a crisis meeting; it was simply a luncheon—eventually will be consulted. Frankly, ‘eventually’ is not soon enough. We need to know within days what the minister’s contingency plans are. We need the minister to commit to bringing together the brightest and best minds in the childcare sector. Those involved on the ground—the service providers, the local government associations that run childcare centres in their local areas and the small, independent operators—need to be brought together. We need to figure out how we move forward to ensure we can give parents some certainty after 31 December. ‘Eventually’ is simply not good enough.

We need to be take this opportunity to reform child care in Australia. The status quo simply is not working. We need a full investigation into how we ever allowed this essential service to be monopolised by a private company that puts the lining of shareholders’ pockets above the care of children. The company has a 25 per cent market share and that is simply not acceptable when we are talking about an essential community service. We need a full investigation as to how this happened. We need an emergency summit to move forward to ensure we can give certainty to parents and working families that their kids will not simply be left at the gate on 1 January.

Question agreed to.