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Thursday, 28 November 1985
Page: 2513

Senator GRIMES (Minister for Community Services)(8.49) —We have just heard two quite differing speeches tonight. Senator Haines made what can mainly be described as her populist speech. She quoted liberally from various documents which had been sent to her, without any evidence of course, and came to the conclusion that, because people are disturbed, she should oppose this legislation. I will deal with the points that she raised later.

I really must first of all deal with Senator Short's speech which I find the highlight of the evening. As honourable senators will know, Senator Short was a Treasury official. We have heard many speeches from him here in the past. One of the best speeches I can remember-like all the others he delivers in this place, a Steely economical rationalist's speech-was after the May cuts were announced by the Government this year. In that speech Senator Short said: `They are not enough. There is no way they are enough. The Government can cut much harder into its expenditure'. In his speech on the Budget, Senator Short said again: `This Government is irresponsible. The deficit is too much. It must cut and cut again'. He was very careful not to indicate on either occasion where he might make those cuts but he said: `The Government must cut and cut again'. Tonight we have heard, for the first time since Senator Short has been a member of this chamber, what may be called a bleeding heart speech from him; but it has been made without any evidence at all.

In the course of his speech tonight, Senator Short, like the Opposition amendment, has advocated several things. The first thing he has advocated is that we do not make the $10m cut in children's services expenditure; so, there is $10m. He said that we should not spend $200m on the bicentennial. The $200m for the bicentennial was a decision of the Fraser Government, and one that we inherited. So there we have $210m extra expenditure. Senator Short then says that we should introduce tax deductibility for child care. There is another $350m. Remember: Revenue forgone is the same as revenue spent. So we have $560m that he has spent already. And then he says that we should introduce income splitting for single parent families which, on the figures of the former Treasurer, the Leader of the Opposition (Mr Howard), is another $400m. So we are heading up to about $900m in one speech from our great economic rationalist tonight. He says: `This is what the Government should do; it should continue to expand children's services, but it should introduce all these other things'. Suddenly we are supposed to find another $1,000m for all these things; and he said that he knew of other things that we could do, too. That is a demonstration of the seriousness of Senator Short's speech tonight.

But then Senator Short said that the Hawke Labor Government's record in children's services is appalling and something to be complained about. When I became Minister for Social Security and first took over the responsibility for child care nationally, we had just had a year of what was called consolidation and review by the previous Government of children's services expenditure. What that meant was that the previous Government would spend nothing more on children's services than it had spent the previous year; nothing at all. It had just had a whole year when it had not spent anything. We had a situation in which about 4 1/2 per cent of children under the age of five had access to children's services. The fee relief subsidy and the funding system were such a shambles that people were marching up and down the streets-even more than they are marching up and down the streets now, Senator Haines.

We were determined that we would do something about this, and we did things. We increased the coverage from that miserable 4 1/2 per cent of children under the age of five to a slightly less miserable 7 1/2 per cent; and we have committed ourselves in the next two or three Budgets to the expenditure of another $107m to provide another 20,000 places for children's services in this country. That is because what we believe is important is not only quality child care and not only affordable child care; we believe it is also important for the people in this community who need it to have access to child care, and there is no way that they have adequate access when we cover only 7 1/2 per cent of children in the relevant age group.

We shall continue with that policy. But what we also had to do was to introduce equity into the system, and that is what this legislation is all about. Back in May we decided that we had to reduce expenditure. We knew that we had to do that ourselves and we were told by people such as Senator Short that we certainly had to reduce government expenditure. We thought at the time that we might be able to reduce recurrent children's services expenditure by about $30m. We were quite wrong, and we found that out by conducting, over six months, the most careful and detailed research into the children's services system. We reached the conclusion that what we could reasonably do, if we were to maintain quality, improve access, maintain affordability and protect the low income earners-we make no bones about the fact that we are interested in protecting them-would be to get only the $10m, and that the way that we would get that was through this legislation.

I find it incredible that Senator Short, that great advocate of reduced government expenditure, of economic rationality in this chamber, of needs-based welfare, and of needs-based expenditure generally in this country, should come here tonight and say that what we are doing here is not any of those things; that what we are doing in this legislation is somehow damaging the whole children's services program. I deny that and I shall proceed to demonstrate that I deny it.

We have proposed changes in expenditure to make that expenditure more equitable. Under the existing system, every service in this community, every individual in a Commonwealth funded children's service in this community, gets an average of about $30 a week in assistance from the Commonwealth Government through the present operational subsidy, no matter what their income or their family income is. The operational subsidies vary from about $15 to $20 a week to about $53 a week. Under the new system, the operational subsidy will be per approved place. It will be fairer and less complex, and it will depend on the age of the child in the service. That is fair; in fact, is not only fair. I have refrained in the past, as I shall refrain tonight, from pointing out that that sort of change has been advocated in the past-not when it was advocated by the Australian Labor Party-by articles in the journal of a very well known and very large early childhood association in this country.

But we have done it now because we believe it is fairer and more equitable, and we believe that it is demonstrably more equitable. How honourable senators can justify $30 a week for someone on the sort of income that Senator Short and I have, in children's services, is frankly beyond me-especially when we are covering only 7 1/2 per cent of kids and especially when, because of previous policies of submission based child care, those children's services happen to be concentrated in middle class and upper middle class areas. So we made those changes.

At the same time we knew that we could not make those changes just by themselves, so we looked at the three sources of funding of each individual child care centre. We diminished the operational subsidy. We increased and extended-I shall not go into it; it is in the second reading speech-the fee relief subsidy, and, of course, for some people there will be increases in fees paid. For low income earners it will be about 5c an hour; therefore, it cannot be more than $2 a week for a 40-hour week. In fact, for most of those low income earners, it will be in the vicinity of 85c a week.

Of course, people in this community will complain if one tries to change anything. But the complaints this time have been made on several bases, and I suppose that I had better deal with them, as Senator Short and Senator Haines dealt with them tonight. The first one is, I think, the easiest one that I can deal with. That is Senator Short's complaint, and Senator Haines's complaint, I think, that we did not consult; we did not talk to people. My only response to that, senators, particularly Senator Haines and Senator Short, is that I can assure the Senate-and I think that previous Ministers for Social Security in this chamber will agree with me-that for the dollars spent and for the number of people serviced, there is no one who is consulted more by this Government-or was consulted, I believe, by previous governments-than people involved in children's services. If one wanted to, one could not avoid consulting them as much as one does. I think that that goes for other honourable senators, too. They are the most assiduous lobbyists-I admire them for it-and I do not say this in a pejorative way. The number of letters and telegrams sent in the last couple of weeks would probably have saved the Daintree forests if they had not been sent. They are very active. They are very active because they believe in what they are doing. They are very active because they think it is terribly important, as we all do, that we provide adequate children's services.

I and departmental officers think that the claim that they have not been consulted is an extraordinary one. We will continue to consult them. We want to monitor carefully the quality of children's services in this community. We want to monitor carefully the States' standards and, in particular, the Territory's standards; some- one mentioned that here tonight. For that reason, we have asked the Australian Early Childhood Association to assist us in this regard. If it agrees, it will monitor the services-in the past under the old child care Act it was the accrediting authority-so that we can report to this Parliament and to the people of this country about the relative standards and quality of children's services throughout the community, so that we can play a continuous monitoring role in this area and, at the same time, when the Department, when I and future Ministers approve funding it will be on the basis of the quality of staff, the level of staff, the standard of services, as well as on the number of services and the needs in the area. We will continue to do that; as we have always done.

When people such as Senator Short complain about the alleged decline in quality in their States which is likely to result from the changes we have made we find almost inevitably that they are talking about an amount of money. That amount of money is a drop in the operational subsidy. They ignore the other two sources of income they have; the fee relief and the fees paid by their clientele.

In the last few days we have looked at the Victorian situation and at individual budgets. We have found in every case so far that they have come in way under the budget they claimed they would need. Some of them in Victoria will still have very high costs. One of the things we wanted to do was to build in an incentive for them to reduce costs and we make no bones about that. This is not unique to childrens' services in Victoria. For instance, the cost of providing a nursing home bed in Victoria is 50 per cent more than in Tasmania and 70 per cent more than in Queensland. What that is about is State regulations, State awards, State conditions and a tradition of services in Victoria. There is no evidence there or in the children's services to show that the State's services are any better than anybody else's, even though all Victorians believe that they are. Some Victorians will have to cut their costs and we will assist them to do so. In the first year we will assist them to do so by providing transitional assistance so that people do not have to pay excessive increases. We will provide management assistance, help and advice so that they can cut these costs.

We have a peculiar situation in Victoria-Senator Haines, Senator Peter Baume and Senator Short all mentioned this-which involves the Municipal Association of Victoria, a group of some of the councils in Victoria, which came to an agreement with the State and Commonwealth governments earlier that it would open children's services as part of the State-Commonwealth agreement. I suppose the best example to use is Senator Haines's example, and that is the Prahran Council's Union Street child Care centre. It is a good example of what this is all about. The Council first of all claimed, although it cannot produce any evidence of this to me or to anybody else, that it had a guarantee that the Commonwealth Government would pick up the costs of running the centre; for example, the cook for 20 hours a week, the gardener for 16 hours a week, and all the other things. When I said: `You demonstrate to me where anyone ever said that we would pick up that sort of deficit funding'-this Government will not and I am sure that no conservative government will-it could not demonstrate that. It said: `We do not care. That is the sort of service we will run. It costs $130 a week and we want you to pay for it'. I said: `I am sorry, neither this Government nor any other government will willy-nilly pay any expenses that local government wishes to incur'.

I have negotiated with the Municipal Association of Victoria. My Department has been negotiating with that Association. Until the last few weeks it was complaining and saying that it would not open its centres under the existing child care funding arrangements. It is only in the last couple of weeks that it has decided it is a good idea to get stuck into the new child care arrangements. For the last six months it has been getting stuck into the existing child care arrangements. Under the existing child care arrangements and future child care arrangements the councils of the MAV have been treated in the same way as every other council and every other community child care organisation in this country. But they have said: `We are Victorians. We are a special group of Victorian councils. We cannot do it like everybody else. We need extra funding. We want the Commonwealth Government to pick up that extra funding'. We cannot do it, we will not do it, and I do not think any future government will do it. I think the Opposition is very wise in supporting this legislation because in 10, 12, 15 or 20 years time, when by some accident the Opposition gets back into government, it really does not want to be left with a children's services bill which is increasing at 30 per cent a year for recurrent funds, which is getting out of hand, and which means that we will not be able to increase the number of services that are available in the community. We just cannot increase them at anywhere near the rate we have increased them in the past.

Senator Haines talked tonight about the problem that the Standing Committee for the Scrutiny of Bills is having with this legislation. She mentioned sub-clause 11 (1) and 11 (10). I am afraid that I did not catch them properly. Senator Haines is a member of that Committee and that report is not available; obviously it has been available to her. The Alert Digest is available and it mentions only clause 11, sub-clause (7) which it describes as the Henry VIII clause. Its complaint is that I am some form of Henry VIII. Senator Haines was kind enough to say that it was nothing to do with my girth, but that it was to do with the capacities that this legislation has given me.

Senator Macklin —It is Richard II in this Bill.

Senator GRIMES —It is not Richard II, or Richard III, I hope. Anyhow, he did not do it, Buckingham did. Senator Tate's Com- mittee complained about a section of the legislation--

Senator Haines —The inestimable Senator Tate.

Senator GRIMES —The inestimable Senator Tate. He complained that this legislation gives me the power to provide $16 a week for children under three years of age and $11 a week for children over three years of age, or in each case such greater amount per week as is determined by the Minister from time to time by notice in writing published in the Commonwealth of Australia Gazette. This means that I cannot reduce the fees but I can increase them. I thought that Henry VIII was the fellow who went around and took everything away from the monasteries and the monks. I do not think he was good at doling things out; he had another attribute which I try not to emulate. He was not in the habit of increasing the largesse he was handing out; he was in the habit of reducing it. According to this legislation, I am not allowed to reduce it; I can only increase it.

To be serious, I think the Government will consider in the case of the operational subsidy in the future whether we should not index it in some way, although I am wary of indexation and I think child care groups and others should be wary of indexation. Once we build indexation in to things such as this it becomes the norm and the chances of getting higher than indexation operational subsidies are not very good, if we look at the operation of previously indexed benefits in this country. I accept that the Senate does not like giving me the untrammelled right, apparently, to increase fees. I thought it would have been more concerned if I also had the right to decrease them. But if Henry VIII I am, Henry VIII I am. I will wear that for a while and we will take into account the views of the Scrutiny of Bills Committee on this and other matters, and if we need to alter the situation in the future we can do so.

It is important that we get this legislation in now so that we can do what Senator Short complained about, and that is introduce the new changes by 1 April. We were originally going to introduce them by 1 January but we felt that it was best not to do it by then because it would not have given us time or the organisations time to adjust, and also we would have been trying to introduce those changes over the Christmas period and on 1 January when most of them were closed for the holidays. That would not have been very sensible so we thought that 1 April was a good time. That is why we chose that date. We are not introducing it on 1 July because part of the process involved doing what Senator Short and his colleagues urged us to do, and that was to reduce government expenditure but to reduce it in such a way that it did not affect low income people, or for that matter anybody else.

I think that the Government has proved its commitment to children's services, proved its commitment to quality and proved its commitment to accessibility and affordability. We are continuing to demonstrate these commitments in a number of ways. There are many determinants of quality in a child care centre. They include the employment of appropriately qualified staff, the physical environment, the structural components of the facility and, above all, the effectiveness of the management. We have been concerned about all of these areas, and we have created improvements and will continue to do so. Staffing is important and we will continue to provide the across the board operational assistance that we have provided in the past, albeit in a different, but we believe fairer, way. The staff will continue to be paid at award rates. The greater subsidy for younger children recognises the higher cost for those children. Certainly the operational subsidies have decreased but at the same time we have introduced a more generous fee relief service. In fact, fees will be reduced in many cases for those with more than two children in care. The reduction in assistance through fee relief is such that we will have expanded accessibility to fee relief for many people. Services will still be able to employ qualified staff and will still be able to operate on a break-even basis. We will be making additional grants available to those who operate for more than 10 hours a day, recognising the needs of parents who work long hours or shifts, or who have long distances to travel to and from work. Services will continue to include in their budgets the cost of employing qualified staff. Fee relief will continue to be provided for low and middle income earners and in fact special fee relief will be available for those who can pay very little.

We recognise the fact that in some areas, because of special circumstances, centres will not be able to reduce their fees as much as in other areas. We will continue to provide special assistance for groups all over this country in special regions so that they can provide the services they have been providing, and we will be taking particular care of Aboriginals, the disabled, migrants, and isolated children and children at risk of abuse. The Government recognises, and will continue to recognise, the need for equipment grants. But all these things do not ensure quality. They will still need staff with appropriate skills; they will still need individuals who can provide the stimulating developmental environment that exists in centres now, and I believe that they will not change in that regard. We will keep an eye on what is happening. We will expand services and maintain a monitoring role.

Senator Short was worried that putting on a fee relief ceiling of $80 but allowing fees to go up to $85 would mean that users would leave centres, forcing those centres to retrench staff and cut their costs. Very few centres have fees over $80 and in cases where they do they will be provided with transitional assistance, with special fee relief for low income earners. But in other cases they should be looking at why their costs are so much higher than the average, and that particularly applies in Victoria. Services are run by community groups which retain discretion and responsibility for many elements of their administration. Included in that is the development of mechanisms for centres to hold down their fees, whatever mechanisms they might be. We cannot as a government, and we cannot as a community, be expected to let services charge increasingly higher fees and then subsidise the users willy nilly so that they can pay those fees. We must recognise that if we are going to expand these services, if we are going to proceed in the way we have proceeded in the past to provide those high quality community-based services, we will have to make the sorts of changes we are making now.

I accept that there will be criticism of any change of this type but I really think that the Opposition's amendment is a bit rich when in all other debates in this Parliament the Opposition complains about increased government expenditure but in this debate it is complaining about what it calls a lack of equity and a lack of quality. Members of the Opposition are proposing that children's services be funded primarily by way of deductions through the taxation system, which inevitably assists the high income earner and those who pay taxes more than it assists the low income earner. In fact for most of the very low income earners it is of no assistance at all because they do not pay tax or, if they do, they do not pay much. They are suggesting that we provide taxation relief in the form of income splitting, which again is of greater benefit to the high income earner than the low income earner. It is of no benefit at all for those who are single parents, an increasingly large number of whom utilise child care centres. As I said before, those two measures would cost in the region of $750m a year and it is inevitable that if those two measures are introduced by any government the amount of money available for community child care, for the capital grants, operational subsidies and fee relief, will drop. In fact, if the Government were willing to forgo $750m in this way I suggest that children's services expenditure would be held exactly where it is now and gradually be eroded by inflation. The Government would throw away all responsibility for quality and throw away all responsibility for distribution on the basis of need. We would have a service which would be based largely on profit making child care centres that in many cases would have the low standards that people are complaining about tonight.

We introduced these changes to increase equity, to enable us to increase access, to maintain affordability, to maintain quality and to cause some reduction-a very small reduction-in government expenditure. I believe that our record stands for itself in the area of children's services. As the next couple of years go by and the alarmist predictions are demonstrated to be wrong and access and the number of services increase, the community will recognise that what we are about is achieving the aims we have set out, as we have been doing in the last three years. I thank honourable senators for their assistance in this debate. I thank those who are supporting us; I understand those who are not. It seems to me, as I count up the numbers, that the Bill is likely to be successful and I commend the Senate for passing it.

Amendment negatived.

Original question put:

That the Bill be now read a second time.