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Thursday, 14 November 1985
Page: 2135

Senator GRIMES (Minister for Community Services)(11.11) —To pick up Senator Peter Baume's final point, the parents' dilemma is the Minister's dilemma. The dilemma is how the Minister and the Government will provide child care places with cost increases at that level. One of the reasons we have introduced the new child care funding arrangements is that costs have been increasing at such a great rate. Because of the lack of incentive for cost control we were reaching the situation where the capacity of the Government to provide more places, which everybody recognises are needed, was severely impeded.

I will deal first with the case of the Victorian councils, which are members of the Municipal Association of Victoria. There are indeed some 42 child care centres involving 38 councils in Victoria. The Federal Government and the Victorian Government came to an agreement with those councils last year that we would open new child care centres in Victoria. It was agreed that the councils would be the sponsoring bodies and that, as Senator Peter Baume said, funding would be provided on a break-even basis for those councils. I emphasise that that arrangement was made under the existing funding system. The Victorian councils, which in some cases were to contribute land and buildings, were to be funded on the same basis as every other council and child care organisation in the country. They were not to receive any different treatment.

The statements quoted by Senator Baume and the Prahran Council are perfectly true and accurate. They are not being unfair. The Council said that funding would be on a break-even basis, with the proviso, as Senator Baume said, that the conditions were reasonable. I suppose the first indication of the problem in the specific case mentioned by Senator Baume is that the cost per place in the Prahran Council's child care centre is $130 a week, and that is very high compared with costs elsewhere in Australia. It is not so high in Victoria, where we have the problem that all those council child care centres are relatively high cost centres. However, the costs of the Prahran centre are much higher than elsewhere.

The reasons why costs are high in Victoria vary a little, but they are high because local councils put on extra staff such as cooks and gardeners, and they have full time co-ordinators. We believe that is one area where these councils can cut back their costs to the level of those in other child care centres throughout Australia-for example, those in Senator Baume's State of New South Wales, where the quality and standards are satisfactory. If councils such as the Prahran Council insit on sticking to those standards and do not reduce them, I do not believe that they can expect the Federal Government to top up their funding as compared with other child care centres throughout Australia in order to provide those extra benefits which they, not us, choose to provide. I was a little disturbed when talking to the Prahran Council to hear it implied that it would rather employ less well qualified people, or juniors even, than cut costs in the provision of a cook or a gardener or other extras.

That is the problem we face. That is the problem we have to resolve. We have a situation of centres that have been built but not opened. We have had a couple of centres that have been opened but the Municipal Association of Victoria, as I was told yesterday, is considering asking them to close after Christmas. That is a terrible situation. There are people in Victoria who want child care places. Obviously, the Government will have to consider the situation if that arises, either providing alternative places or providing alternative sponsors. That is a problem we can face only when the crunch comes. I hope we can resolve the problem by talking to the Municipal Association of Victoria, as I will be doing in the next few weeks.

My officers are talking continually to the Association. Already we have made concessions to the MAV on this matter. I hope that common sense will prevail and that these services will be provided. I honestly do not understand how the expectation can arise that the Commonwealth will pick up the tab for whatever the councils want. They are saying literally that the Commonwealth will pick up the tab for what ever they want. The Commonwealth has always said it would provide funding on a break-even basis, with the proviso that the basis for the municipal councils in Victoria would be the same as the basis everywhere else.

The 20,000 places will cost $107m. That is almost all capital expenditure. In recent years, particularly with the co-operation of the New South Wales Government, we have managed to cut down capital costs through the introduction of standard plans for child care centres and modern factory building methods. We are trying to do that in all the States. The simple fact is that child care is expensive. In Australia we have quality child care provided at a reasonable cost on a comparison internationally. We have child care which is accessible in places where we have been able to put up centres. However, the simple fact is that we still cover only 7 1/2 per cent of kids. Eventually, at the end of 1988 we will cover 10 per cent, but we have a fairly long way to go. I have not got any details on the Illawarra centre mentioned by Senator Baume.

Senator Peter Baume —I was using that as an example.

Senator GRIMES —The 21 per cent increase in wage costs and so on for this year seems to me to be very high indeed. I have asked the officer in charge of the Office of Child Care to get details for Senator Baume as soon as possible. The fact is, however, that if costs escalate at the rate they have been escalating, then we and the parents will be severely limited in the number of new child care places we can put in. I will give one example. We have been requested to provide co-ordinators for all child care centres, whatever their size. That would cost about $20m and would not provide one new child care place. That is not my priority. It is not the Government's priority. I do not think it should be the priority of people in children's services at the moment. They not only have to consider those already in child care centres but those many people outside who would like to have extra places. That is our concern. We will continue, I believe, to provide accessible, economical, good quality child care services in this country, but we can do so only by watching costs and being careful about the planning.