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Wednesday, 1 June 2011
Page: 5522


Mr MITCHELL (McEwen) (12:52): I rise in support of the government's Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. This bill will amend the A New Tax System (Family Assistance)(Administration) Act 1999 and set up new requirements for large long day care bodies to continuously administer their financial viability. The passage of this bill is critical to ensure we can sustain and monitor the financial foundations of our childcare centres so that these centres do not collapse, like when ABC Learning centres went into voluntary administration in 2008.

The bill will also allow for the secretary to request financial information more frequently if there are concerns about a provider's financial viability and make amendments to allow for civil penalties and sanctions if the provider does not comply with the requirements to provide financial information. The bill will also make clear what constitutes a `large' long day care provider, who in turn will be required to provide financial information. So we are creating a more transparent and accountable childcare system. This bill will protect and strengthen our childcare system, with new powers to commission an independent, confidential audit of providers where there are concerns about a provider's ongoing financial viability.

The Gillard Labor government recognises the importance of a stable childcare market to Australian families. The unprecedented collapse of ABC Learning affected families across the country because it impacted on the availability of childcare places, jobs and operations around Australia. However, because of the government's swift and decisive action 90 per cent of these centres continue to operate for families today, including ones in my electorate, and we have provided certainty and options for our working families. We will continue to strengthen the financial foundations of our childcare system so that we do not see those sorts of events again.

If we had not provided support for almost 100,000 Australian families, they may have been faced with the prospect of finding alternative care arrangements with little or no notice, and some 16,000 employees would have found themselves with no work and no future. Again, it underlines the strength of this government's commitment to jobs and ensuring that our families have every opportunity.

The Senate Education, Employment and Workplace Relations References Committee report into child care found that by 2008 ABC Learning was the largest provider of childcare, holding around 20 per cent of the long day care market and providing care to about 100,000 children. The purpose of that inquiry was to look at the condition of childcare provisions with the intention of informing the current debate over the most desirable practices to pursue as part of a national policy.

As I said, ABC Learning employed around 16,000 staff. The company sold 45 of its childcare centres in July 2007, which contributed to a reduction in the number of centres in 2008. In researching the growth of the company between 2001 and 2006, the Australia Institute noted that ABC Learning achieved close to 100 per cent growth between the financial years of 2004-05 and 2005-06. The collapse of ABC Learning raised serious questions about the regulatory framework for childcare centres. The Commonwealth government and state governments moved swiftly to understand the impacts that the collapse might have on families through the reduced availability of childcare places, jobs and operations around the nation.

In May 2010 the Australian government announced that it would invest $273.7 million to support the introduction of a new national quality framework for early childhood education and child care. Of the announced funding, $1.9 million was to support new regulatory measures to help achieve ongoing stability in the childcare industry following the ABC Learning crisis. This included developing measures that require large childcare providers entering the market to prove their financial viability. The bill will create an early warning system to help prevent such collapses. For parents to receive the child care benefit, large day care providers will have to demonstrate each year that they are financially viable.

When ABC Learning collapsed in 2008 we immediately stepped in with $58 million to ensure continuity of care for 68,000 families and, as I said, around 90 per cent of the centres are still operating today. The government are increasing diversity through a $15 million loan to the not-for-profit consortium GoodStart Childcare to purchase 678 ABC Learning centres. This will allow for greater diversity in the childcare market through a balanced mix of not-for-profit and for-profit providers. This will also give Australian families more choice when it comes to childcare providers.

The establishment of the MyChild website helps parents easily identify child care that suits the needs of their families and provides updates on childcare centres like the ABC Learning centres. The Gillard government are also funding an unlimited number of childcare places. The number of childcare centres in Australia has increased from 11,342 in 2007 to 13,417 in 2010—an 18 per cent increase. We believe in supporting families and giving every child the best possible start in life. This is why we are implementing measures like those in this bill to ensure that childcare providers are sustainable not only today but also in the future.

Research undertaken in a study titled Growing up in Australia has shown the positive effects of child care and its importance to Australian families and children. The study found that the childcare sector assisted parents of those children, particularly those who worked or wanted to further their studies or other activities outside the home. It also pointed to the vast damage to family budgets, as well as to the national economy, that could occur if a significant number of parents gave up work due to a lack of child care. The long-term social benefits that child care brings are vital. The report states that the benefits extend beyond the personal or family domain to the nation's future health, educational achievement, workforce participation and social connectedness. The New South Wales Commission for Children and Young People submitted:

The quality of children's early experiences, including of early childhood education and care, has a significant impact on children's lives. The quality of early childhood settings impacts on children's daily experiences, their healthy brain development, as well as their response to experiences at school and throughout their lives.

There are so many benefits child care brings to families, children, our economy and society, which is why the Gillard Labor government is taking many other measures in addition to this bill to support families and child care. We are helping families access more affordable child care by putting $14.9 billion over four years into assistance for families through the Child Care Benefit and the Child Care Rebate. That is a total spend of $20 billion over four years that we are investing into families and children.

The Child Care Rebate has been increased from 30 per cent to 50 per cent of parents' out-of-pocket expenses. The annual limit for each child also increased from $4,354 to $7,500—an increase of 72 per cent. This has been helping more than 735,000 Australian families since 1 July 2008. The rebate is now paid quarterly rather than annually so that parents do not have to wait until the end of the year to get the childcare assistance they need.

In addition we are providing assistance for 640,000 low- and middle-income families each year through the Child Care Benefit. A low-income family using full-time child care now has around 80 per cent of their childcare fees covered. This bill shows the government's commitment to young families across Australia as we continue to ease the cost-of-living pressures through tax cuts, improvements to family payments, childcare assistance, the education tax refund and, of course, Australia's first ever Paid Parental Leave scheme.

Unfortunately, not all members in this place support young families. The Liberal Party opposed the Paid Parental Leave scheme and, as the workplace relations minister, the Leader of the Opposition said that paid parental leave would be introduced over his government's dead body. Guess what? That happened: they are a dead body of a government. A good government came in and actually contributed to helping families across the nation. The Leader of the Opposition displays mindless negativity, opposes everything and has no real plan to support families when a child is born or to deliver affordable and sustainable child care when they need it.

The government is serious about our childcare sector and is ensuring that it is financially viable today and into the future so that we do not see any collapses of providers like we did in 2008. We, unlike those opposite, are continuing to support young families and children to ensure that they get the best possible start in life, and this bill plays a big role in doing that. As I said, the Gillard government is committed to doing everything in our power to ensure continuity and reliability of child care across Australia, and that is why I strongly commend this bill to the House.