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Thursday, 14 November 1985
Page: 2134


Senator PETER BAUME(11.02) —I thank the Minister for Community Services (Senator Grimes). I want to raise two matters relating to child care arrangements. The Minister will recall that he answered a question yesterday which related to the concerns of the Municipal Association of Victoria about some of its centres. I listened to his answer with considerable interest and a little sympathy. The issue that has been put to me, which I think requires some response, concerns the belief of some of the councils that expectations were raised of certain events that occur and that those expectations have not been met. I was interested in meeting officers of the Prahran City Council yesterday. I think the Minister has also met officers from that Council, so that he will be aware of the concerns they have expressed. The Council offered documents, which included extracts from correspondence with the Office of Child Care. I will quote some of the extracts from the correspondence. The November 1984 extract stated:

I would emphasise that the funding enables services to operate on a break even basis provided of course the conditions and guidelines are adhered to.

I acknowledge that there is the proviso about adherence to conditions and guidelines. The Council advises me that further correspondence in February 1985 from the Director of the Office of Child Care stated:

Funded child care services are required to operate on a break even basis.

The Council's extract goes on to say:

The fee is approved at the level which allows the service to break even.

They are incomplete sentences but I take it that the Council has not displayed any bad sense and that they are accurate quotations. The Council then quotes from the Melbourne Herald of 12 August 1985 in which Senator Grimes is quoted as saying:

The Government wants services to remain viable and does not believe that this should require councils to contribute towards operating costs as long as they are reasonable.

I thought the Minister's answer yesterday was a fairly reasonable answer but it does not move us away from the problem that the budget which the Prahran City Council has shown to me indicates that in fact the funding will not be on a break even basis and that that Council will have to find $70,000 a year, an amount which it asserts it is unwilling to find at present. The argument seems to be about what is a reasonable level of costs. I ask the Minister whether or not the statements that were made by the Office of Child Care and the statements in the Herald reported as having been made by the Minister were accurate and whether, in fact, that was the intention of the Government. If that is the case, the issue comes down to how one tries to reconcile the proposed budget which has been put in by the Prahran City Council with the goals that have been laid down by the Government.

The situation at the moment, as the Minister indicated yesterday, is that we are faced with the prospect of these centres, having been built, now not opening because the Council asserts that it is unwilling to entertain that kind of operating subsidy. I asked the Minister by way of interjection yesterday whether or not there were restrictions on the payment of fees and the Minister said, I think, only for those people obtaining fee relief. The Council indicated that by increasing fees it could not break even. That may or may not be true, but the situation we are faced with is a series of expectations which have been raised from within the Minister's Department and by the Minister, in good faith, and the Prahran City Council-which is only one of a number-proceeding in good faith and now reaching a situation where it now believes it is faced with a situation to which it cannot respond. I ask the Minister whether the scenario I have set out is broadly correct? If it is broadly correct, what is going to be done to resolve the situation. In the end it is the parents with children who stand to be the losers. Obviously the Council sees itself as being a loser. How is it going to explain to its ratepayers that it has a child care centre which it now cannot operate? How is the Federal Government going to explain to the same ratepayers, who are its electors, that a child care centre is not operating because the Council asserts that certain promises have not been met? What are the parents to do? I am not in a position to apportion right or wrong. I simply ask how to resolve it.

I wish to refer to another child care centre to raise another problem. I will lead into this problem by saying that the second reading speech in respect of legislation introduced by the Minister this morning-amendments to the Child Care Act-contains the statement that an extra 20,000 places will be provided at a cost of $107m. If one does some simple arithmetic that works out at more than $5,000 per place. This just illustrates the fact that child care is a very expensive undertaking. I do not think there is an independent school in Australia whose fees, leaving outboarding expenses, would be $5,000 per year; yet the average cost of child care for Australian families is $5,000 according to the Government's own projections.


Senator Jessop —You are not talking about boarding fees?


Senator PETER BAUME —Leaving boarding fees to one side; just the fees for tuition. It is a very expensive undertaking. I have been advised by a fellow senator from New South Wales, my cousin Senator Michael Baume, that the Barrack Heights child care centre situated in the Illawarra region, has a budget for next year which involves no increase in staff-the same numbers of staff-but which has provided for a 21 per cent increase in costs mainly because of increased pay and conditions for employees. I am advised that the wages costs are expected to rise from $127,000 to $153,600. Of that increase, $5,000 comes from a move to a 38-hour week and $1,300 comes from forecasts of extra leave for teachers, but the rest is made up of increases for the automatic indexation of staff salaries. The point I am rising with the Minister is that-


Senator Grimes —What was the name of that centre?


Senator PETER BAUME —Barrack Heights child care centre, which I think is in the Illawarra region. I have noticed that officers of the Department have just come into the chamber; so I will therefore repeat that it is anticipated that its budget will increase by 21 per cent at a time when inflation is increasing by more or less 7 per cent, and that most of that 21 per cent increase is going to be as a result of salary increases and not as a result of an increase in the number of staff employed. The concern that has been expressed is for the cost pressures this will put on the centre or on the parents, or if it is going to be taken up by the Government, the pressures this is going to put upon the capacity of the Government to offer as many child care places as are needed. That level of increase may in fact limit the Government's capacity to increase places.

I do not see either of these as matters of partisan politics. The first is a concern about how a council such as the Prahran City Council is to proceed from here, whether the assurances it believes it has received are correct, and what the Minister proposes to do to overcome the problem. The second question is what underlies the situation where there is a very significant increase in costs at the child care centre in the Illawarra, against the background that there are around 200 children unable to obtain child care places in that area and parents are concerned that at that level of increase it will not be possible to provide extra places for their children.