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Monday, 23 November 2009
Page: 8636


Senator HUMPHRIES (9:07 PM) —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.


Senator HUMPHRIES —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.