Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I present the report of the Education, Employment and Workplace Relations References Committee on the provision of childcare, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

by leave—I move:

That the Senate take note of the report.

I think it needs to be acknowledged that the report I have just presented is probably the most significant report of the Education, Employment and Workplace Relations References Committee in the course of 2009. Indeed, the inquiry lasted for the entirety of the year. It was extended on a number of occasions because of the amount of material and contentious issues that were placed before it. The catalyst for this inquiry was the collapse of listed childcare provider ABC Developmental Learning Centres Pty Ltd. ABC Learning went into receivership in late 2008. At the time, it was the largest provider of childcare in Australia, supplying about a quarter of all available childcare places. Its collapse was a serious issue for the many families who relied upon childcare services that they provided.

Although the sale of all ABC Learning centres is yet to be finalised, some centres have already been sold and others are currently trading successfully pending their sale. Despite accusations of market failure, ABC’s collapse was largely due to a number of factors, including high levels of debt coinciding with the global financial crisis. There were many critical comments made in the course of the inquiry about the role and the practices of ABC Learning. It was difficult from the committee’s perspective to be able to pass judgment, particularly on the comments about its financial or commercial practices. It is also true to note that bodies such as ASIC continue to investigate the way in which regulatory processes apply to ABC Learning and it may not be productive to rake over those issues in this particular debate.

What is clear is that accusations of market gouging and aggressive tactics by ABC Learning have been proposed as justification by some for ridding the sector of corporate providers—indeed, in some people’s submissions of all private providers. I think the committee would say that such views are an overstatement of the position and are not warranted on the evidence. Whatever the reasons for ABC’s collapse, the actions of one corporate provider are certainly not representative of all private providers, given that most private providers in the sector are not corporations but in fact small businesses running only one or a small number of centres. There is no evidence that one particular sector or one type of provider in that particular part of the economy is better or worse than any other. In fact, the committee would probably take the view that the common factors to be found in quality childcare centres—and there are many of them across Australia—are management that is low to the ground, operators that are in touch with the parent community and a sensitive policy of delivering services to and meeting the needs of the local community.

It is clear that a great deal has changed about the provision of child care in Australia in recent years. It is also very clear that the explosion in the number of childcare places which occurred between about 1993 to 1995 and a decade or so later was in large part the result of the privatisation of the childcare sector, including the advent of corporate child care. There are many critics of that particular policy, but it is also clear that the approximate doubling of the number of childcare places between about 1996 and 2006 from 300,000 to 600,000 places was in large part the product of a freeing-up of the sector and the encouragement of corporate investment in child care. Such a large increase in the number of places would probably not have been possible without such a policy being pursued.

Historically, child care was viewed before that time as a means of enabling parents to remain in or return to the workforce. However, it is clear that the expectation of many in the sector, including providers and parents, is that child care should be viewed not merely as a means of minding children but as a way of providing young children with vital skills for their future lives; hence the focus on the provision of this service in the form of early childhood education and care rather than child care per se. Quality in early childhood education and care is central to meeting the needs of all children and there is renewed focus upon the ways in which the quality of childcare programs can be improved.

In large part, high-quality programs are dependent upon having skilled staff. The committee recommends minimal levels of qualifications be introduced to contribute to quality improvements in the sector. However, the committee acknowledges that many dedicated and highly skilled carers currently in the workforce do not hold formal qualifications. Those carers—and there are a great many of them—are extremely valuable assets in the sector and offer a wealth of experience. It is important to recognise and value the role those carers play and put in place requirements that are flexible enough to support those carers continuing to offer their experience to the sector.

As a federal system, Australia experiences a variety of models of regulation and a variety of standards of childcare provision. The committee heard that that variety of outcomes causes confusion and there is some inequity of outcomes between different states and territories. The committee does not believe that working towards nationally agreed standards will pose significant difficulties, given the advances already made in working towards common goals in this area. The committee recommends that that process continue.

The committee also found that higher levels of childcare services are lacking. It recommends that the provision of child care be more deliberately planned and coordinated at the federal level in consultation with state, territory and local governments. The process should take into account areas of need, local contexts and the need for flexibility in provision. In particular, the committee recommends the establishment of a new statutory body to assume responsibility for the oversight of the provision of child care be quickly considered by the government. The accreditation of childcare providers is a function carried out by the National Childcare Accreditation Council. The committee believes that the new statutory body should operate separately from but alongside the National Childcare Accreditation Council to effectively plan the provision of child care, ensuring services are established where needed. The committee believes that the new statutory body should also be inclusive of state, territory and local government representatives.

One of the most significant issues before the committee was the question of what funding mechanism should be put in place in the future, given a background of expansion in the sector in recent years with the childcare benefit and childcare rebates—the chief mechanisms whereby the federal government furnished affordable child care to the Australian community. Despite reports in the media that the committee would recommend in this report that the childcare rebate be abolished, the committee decided to rely upon the work of the review into the tax system, the Henry review, in order to guide the future work of developing the best possible model of childcare funding. There are complex and sometimes conflicting arguments about the best model. As a result, the committee avoided forming a view about this before the Henry review is handed down. The committee believes and hopes that there will be some useful contribution to this debate from the Henry review, but if not it expects to have to return that issue.

Finally, I want to comment on the question of increased funding. This was a difficult issue but the overwhelming strength of evidence presented to the committee was that the sector needed additional funding, particularly in certain areas and areas of particular need—for example, children in rural and remote areas of Australia. Accordingly, the committee recommends that increases in funding be considered by the federal government to deal with a number of challenges facing child care in the community. I close by saying that, notwithstanding the criticisms and weaknesses in a number of areas such as training and retention rates and so forth, the committee found a system that was strong, robust and generally of a very high standard.

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

As a member of the Senate Education, Employment and Workplace Relations References Committee, I rise to speak about the inquiry into the provision of child care. Having previously been an on-the-ground childcare worker for over a decade, I was particularly pleased to participate in this inquiry that followed the collapse of the largest provider of child care in the country, ABC Developmental Learning Centres Pty Ltd. When ABC was placed into receivership towards the end of 2008, almost a quarter of all the childcare places available in Australia were placed at risk.

ABC operated over 1,000 centres, providing care for more than 100,000 children. For the families who relied upon this child care and for the workers at these centres, ABC’s collapse just prior to Christmas created a great deal of stress—one might say a crisis. Families dropped their children off in the mornings, not knowing whether the centres’ doors would actually be open or whether the centres would continue to operate beyond that day. Workers did not know if they would still have jobs the next day or at the end of the week. This was an unacceptable situation for the government, the workers, the families and most of all the children.

The Rudd government addressed this crisis with funding of $24 million, which allowed the centres to keep operating and allowed the receivers time to investigate the financial state of all the centres. The receivers identified 720 centres which were profitable. Fifty-five centres had to be closed. The children from those centres were transferred to other childcare centres nearby. Two hundred and sixty-two centres were deemed unviable—these became known as ABC2. Again, the government stepped in to provide reassurance and stability for workers and families, providing a further $34 million to prevent the closure of more than 200 childcare centres—closed with little notice, basically overnight. Because of the government’s support, the majority of ABC2 centres continued to operate—236 have now been sold to 78 different operators, a process which has ensured greater diversity in the sector. Of the ABC2 centres sold, 34 were purchased by not-for-profit organisations. This is a good outcome for the sector and for those centres. The majority of the workforce has also been retained which is good for the workers and good of the children because they remain with familiar caregivers.

The ABC1 centres have been operating successfully and the receivers are currently in the process of negotiating their sale also. It is anticipated that this process will be complete by early 2010. While a small number of ABC centres were closed, the threatened loss of almost one-quarter of all childcare places has been resolved in a positive manner for the majority of the workers in these centres and the many families who relied upon these childcare services.

Despite accusations of market failure, ABC’s collapse was largely due to high levels of debt resulting from its expansion based business model. Accusations of market gouging and aggressive tactics by ABC have been proposed as justification for ridding the sector of corporate and, indeed, all private operators. But, whatever the reasons for ABC’s collapse, the actions of one corporate provider are certainly not representative of all private operators, given that most private providers in the sector are not corporations but small-business owners running only one or a small number of centres. We support and value the inclusion of a diverse range of providers in the sector, including small business owners and not-for-profit providers.

The most important consideration is not the type of provider but the quality of the care provided. There must be a focus upon quality of care and an adequate regulatory framework ensuring such quality. Now is the time for us to act on the quality of child care. Quality in care and education of our young children was ignored for 12 long years under the Howard government. In contrast, the Rudd government recognises that the early years are crucial to ensuring each child has the best start to life. That is why we have firmly placed early childhood on the national agenda.

Our report highlights the need for change. We know quality varies considerably across different childcare centres. Recent national childcare accreditation reports show that 25 per cent of services are failing on basic safety standards, and this must concern parents. We know that quality is important and that children deserve individual time, attention and affection. In some states, carers are looking after eight toddlers aged two to three. Childcare workers are doing the best they can. They are generally hardworking and completely committed to delivering quality services. But, as every parent knows, one young child is a handful; imagine looking after eight toddlers. We want each carer to have fewer children to look after so that they have more time to spend with each child to give them the individual attention, care and affection they deserve.

The Rudd government also believes childcare workers need better qualifications so that they can lead play and activities that inspire children and help them learn and develop. Better qualifications, amongst other things, mean staff can design programs and activities that best suit each individual child. The committee also recommends that minimum qualification levels be introduced into the sector. The Rudd government is committed to introducing a new ratings system for child care so each service will have a rating based on the quality of care they provide. This will help parents decide upon the most appropriate care for their child. A ratings system will also give more incentive—for those services that need to—to improve. Lower staff-to-child ratios and improved qualifications will mean a happier, less stressed workplace, with less staff turnover and greater continuity of care for each child. That can only be of benefit to the children in care. Better quality care means that parents can confidently participate in the workforce, knowing their child is getting a good education and care.

The Rudd government has also delivered on a range of initiatives to improve the affordability and accessibility of child care. We delivered on our commitment to raise the childcare rebate to 50 per cent of parents’ out-of-pocket expenses, with an investment of more than $4 billion over four years. ABS data demonstrates that this reduced parents’ childcare costs by over 20 per cent. Other key achievements include the development through COAG of a national early childhood development strategy—Investing in the Early Years. The government is also working on an early childhood development workforce strategy, outlining how to build skill levels and improve the retention and remuneration of workers in the sector. Working towards these outcomes, the government has committed more than $60 million to remove the fees for childcare courses at TAFE and has committed in excess of $53 million to fund extra university places for early childhood teachers. Overall, the Rudd government has committed almost $16 billion over four years to early childhood education and care. This is an increase of $1 billion per year compared to investment under the Howard government. We recognise that the early years are critical to give children the best start to life and we will deliver on our vision.

In concluding, I would like to thank the secretariat for their hard work and patience throughout the inquiry and for finalising the report.

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

I rise this evening to add my comments about the report tabled by the Senate Education, Employment and Workplace Relations References Committee about the provision of child care. It was some 12 months ago that I moved that this issue be referred to a committee. It has been a long inquiry. When the inquiry was first referred to the committee, John Carter, the former secretary of the committee, said, ‘I can’t remember the last time we looked into child care.’ I guess that said it all from the word go. We needed to have a good look at the childcare sector in Australia, because over the last decade or more it has changed significantly. It has gone from being a service that some people use to being a service that almost all working parents use in some form these days. With the growth of demand comes the growth in expectations of quality, of cost and of who foots the bill. There is also the opportunity for the sector to be manipulated by what was referred to various times during the committee as the ‘Kentucky Fried Kids’ approach to delivering child care.

This inquiry came out of the collapse of ABC Learning. Twelve months ago this chamber faced some decisions that needed to be made. It was an example of government needing to step in and support what was essentially a service that had been run for quite a while as almost a luxury, a market based industry—as if parents could choose if they needed to send their children to child care and which childcare centre. When we look at the facts about the needs parents have when they send their children to child care or put their child into the care of a provider, where they choose—there are many complexities that go into making those decisions. When ABC Learning collapsed, it left over 100,000 families in the lurch. People did not know what they were going to do. Over 11,000 centres closed or were in limbo. People did not know if they were going to be able to send their kids to child care that week, next month or the next year. This meant turbulence for those individual families—let alone the staff of those centres. Everything was up in the air. We did not know what kind of stability they were going to be given.

I saw this as an opportunity for us to have a really good rethink about the way we deliver child care in Australia. The collapse of the corporate giant ABC Learning has presented us with opportunities to reform child care across the country. I would argue that, perhaps, some of those opportunities needed to be taken sooner by the government. We needed to see a number of the centres that were resold under the ABC2 Group prioritised to non-profit, community based childcare providers. I am concerned that the remaining 700-odd centres that are in receivership will simply go to another ABC look-alike. Those are opportunities that I believe we have missed in the last 12 months, but, having said that, there are still some great reforms that could be happening and which we can take the opportunity to pursue.

I think the majority report of the committee outlines a number of those—really important things that the government should grab hold of and run with. Being quite passionate about this issue, I put in my own additional comments and the Greens have included eight additional recommendations to the majority report dealing with a few more of the complexities of how we view child care and how we use the mechanisms available to government to link quality issues with funding.

At the moment, we—both parents and the government—spend a considerable amount on child care around the country, yet there is no link to the quality of care. You may pay $100 a day for long day care for your child; you may pay $80; you may pay $50—this is before the childcare tax rebate—but there is no link between the money that is going to that place and the quality of care that you are getting because the quality standards and the benchmarks are different across the different states. There is no real link between the money that goes in and the type of service you get back. I think it is something that the government seriously needs to consider. I know that the majority report recommends a little bit of a rethink of the mechanisms currently used to fund child care in order to drive some good quality outcomes.

We know we need to address the ratio issue. Children from birth to the age of two years should be looked after by a carer who is looking after one to three kids. That is what the experts tell us. That is going to give us the best quality care and the best quality educational outcomes. For those children over two years, it should be one to four. These are significant reforms that, if they were made across the country, would deliver good quality educational outcomes for our youngest Australians and good quality care, but they are things that governments need to be brave about and take forward.

How do we do it? We need to fund it. We need a better investment and an increased investment from the federal government, but we also need to ensure that we link that funding with the delivery of good quality outcomes. Therefore, we need to have a look at how we set those funding levers so that we deliver those policy outcomes. It is no good just saying, ‘Here are our quality standards—okay, COAG, you tick off and sign all these things’ if we are not going to set the levers right to deliver them. So we need to do that. Addressing the ratios issue is one part of the solution.

The other thing that struck me as the inquiry travelled around the country and we heard various submissions from people was the lack of qualified staff looking after kids around the country. Do not get me wrong; there are some amazing people working in child care—people who are passionate about it, know their stuff and have been in the field for years—but there are no guarantees that, if you put your child into a childcare centre, the person who is looking after them on a day-to-day basis is actually qualified. I think most parents would assume that, if you pay $50 to $100 per day to get your child looked after in child care, the person looking after your kid is qualified. You would assume that that is the case. Unfortunately, it is not. We need to tackle the issue of qualified staff in centres and ensure that we can support providers to deliver the best quality care by ensuring that they can give training and support to their childcare workers.

We simply do not value kids enough and that is one of the problems. If we were valuing children—our youngest children and most vulnerable kids—then we would be investing significantly in early childhood education and care and ensuring we are delivering those good quality outcomes. We need to start valuing kids more. We need to ensure that they are looked after properly, that they have the best facilities, based on developmental outcomes, and that the staff looking after them are qualified. To do that, we need to be valuing those childcare workers. It is a hard job looking after kids and we do not value it enough, so we obviously need to see an increase in wages and better conditions for childcare workers.

The last issue that I want to address in the remaining one minute and 42 seconds that I have is the corporatisation of child care. I referred earlier to the Kentucky Fried Kids approach to delivering child care. The ABC-McDonald’s style of child care simply does not work. We know that it does not deliver the best outcomes. It is pretty difficult to make a profit from child care and to do it you have to cut back or skimp on something. What gets skimped on? It is quality. It is how much time and interaction the kid has with their carer, the types of activities that are provided and the qualifications of staff looking after them. The corporatised style delivery of child care—an essential service—just does not work. The collapse of ABC Learning has proven that.

We need to seriously question whether providers of early childhood education and care should be allowed to float themselves on the share market and have making a profit as their primary objective. We do not accept it in the school sector. Parents would be outraged if the school sector was run for profit. Parents expect that we—as the government, as the parliament and as the state—have a special investment in education. We need to see nothing less for the education of our youngest children.

We cannot continue to go down a Kentucky Fried Kids approach to child care. We need a rethink. Here is the opportunity. I hope the government takes the committee report seriously and adopts the recommendations. I seek leave to continue my remarks.

Leave granted; debate adjourned.