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Monday, 23 February 2009
Page: 1563

Mrs Mirabella asked the Minister for Education, in writing, on 24 November 2008:

(1)   Is the $22 million provided by the Government to ABC Learning Centres a loan from the Government; if so, how and when will it be repaid.

(2)   How was the $22 million figure calculated.

(3)   Has the Government imposed conditions on the $22 million; if so, what are they.

(4)   Have any guarantees been sought to ensure the Government’s $22 million is properly secured, or is this essentially viewed as a gift.

(5)   Is the Government monitoring exactly how these funds are acquitted; if so, how frequent is the monitoring.

(6)   At which ABC Learning Centres will the funds be spent.

(7)   Why was 31 December 2008 chosen as the date to which the ABC Learning Centres will remain open.

(8)   In respect of the 400 ABC Learning Centres she has identified as unprofitable: (a) which ones are unprofitable; (b) why are they unprofitable; (c) is this unprofitability linked to one-off factors or accounting treatments; (d) do any nonetheless have a positive cash flow; (e) which ones are expected to close after 31 December 2008; and (f) are any located in the priority areas the Government has identified, under its reform agenda, for building 260 new childcare centres.

(9)   Have the ABC Learning Centres provided weekly reports on their vacancy rates and has the Childcare Industry Taskforce (CIT) been monitoring these.

(10)   Since January 2008, what were the vacancy rates of the: (a) 400 unprofitable; and (b) profitable, ABC Learning Centres.

(11)   Has any recent demographic analysis been undertaken on the demand for childcare across Australia.

(12)   What analysis has the Government undertaken to determine areas of demand for childcare.

(13)   Which childcare industry representatives has she met with to discuss the problems relating to ABC Learning Centres: (a) as at 6 November 2008; and (b) since 6 November 2008.

(14)   How and when will the Government determine what other market operators can be part of the solution.

(15)   Will the Government assist not-for-profit organisations with buying ABC Learning Centres; if so, will the $22 million cover the cost of this assistance, or will further funding be required.

(16)   Has she or her department held any discussions with potential buyers of ABC Learning Centres.

(17)   Aside from the $22 million, what are the other aspects of the Government’s contingency plan for ABC Learning Centres, particularly beyond 31 December 2008.

(18)   Has the CIT sought any economic modelling or general information from Treasury on the impact on the economy (on productivity and growth, and particularly female labour supply) if the 400 unprofitable ABC Learning Centres are forced to close and families lose their childcare places for the short to medium term.

(19)   In light of the collapse, is the Government reviewing its plan to build 260 new childcare centres.

Ms Gillard (Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion) —The answer to the honourable member’s questions is as follows:

(1)   to (6)The $22 million is a payment to be spent on verified operating losses plus related head office costs, incurred by identified loss making ABC centres between 6 November and 31 December 2008 in order to assist these centres to provide ongoing care for children at these centres. The amount represented the best estimate available as at the beginning of the Receivership as to the projected losses at the then identified loss making ABC centres, as advised by the banking syndicate of ABC. The funding is not a gift and conditions governing the funding are determined in a contract between the Commonwealth and the Receiver. The Government is not making any payments under contract without first having the claimed losses independently verified by DEEWR’s appointed insolvency advisers, PPB.

(7)   to (8) 31 December 2008 reflected the outcome of discussions with ABC’s Receiver and banking syndicate and provided time for the Receiver to conduct a review of ABC’s circumstances which in turn informed further consideration of the ABC matter during this period. Since the member placed her Question on Notice further announcements by the Receiver have identified which centres are unviable under the ABC business model and which are to be retained in the ABC business. There are a range of reasons why centres may be unprofitable such as lease costs, occupancy, staff costs and revenue.

(9)   to (12) ABC Learning Centres have been meeting the requirements of section 21 of the Child Care Benefit (Eligibility of Child Care Services for Approval and Continued Approval) Determination 2000 and reporting their vacancy information to the Child Care Access Hotline (CCAH). The Child Care Industry Taskforce is using all relevant administrative data to assist in its work. This information is protected under the Family Assistance Act and can only be used for the purposes specified in that Act. The Department conducts ongoing analysis of demographic and administrative data in order to ensure ongoing estimated potential demand for child care. This data is constantly updated to reflect changing demographics.

(13)   and (16) Staff members from the Deputy Prime Minister’s Office and the Department of Education, Employment and Workplace Relations have met with peak child care associations, the Court Appointed Receiver over the ABC2 Group centres, the Liquor Hospitality and Miscellaneous Workers Union, and other interested parties.

(14)   (15) and (17) The Government does not have responsibility for buying or selling the ABC childcare centres. The ABC Receiver McGrath Nicol has indicated that at this stage there is no sale process for the 720 centres that are subject to its receivership but that interested parties will be notified if and when that position should change. Centres subject to the oversight of the Court Appointed Receivers, PPB, are included in an Expression of Interest process which commenced in January 2009. PPB will have regard to selection criteria provided by the Government.

(18)   The Government was well aware of the possible social and economic impact of the potential closure at short notice of a large number of ABC Learning Centres when deciding on short term funding to ensure centres remain open until at least 31 March 2009 while alternative arrangements are made.

(19)   The Australian Government is carefully considering child care market developments in the priority locations announced for the early learning and care centre initiative and how best to deliver early learning and care in these locations. The remaining 222 centres will be considered in light of this experience and also once the child care operators have settled. The Australian Government will work with the states and territories to ensure that the remaining up to 222 centres are established in areas of highest unmet demand.