Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Community Services) Share this | Hansard source

The Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Bill 2007 paves the way for the introduction of the new childcare management system. First announced in the 2006 budget, the new management system will require all childcare service operators to come online and establish new electronic reporting arrangements with the Commonwealth government. The new system will be rolled out from 1 July 2007 over two years with a budget of $82.6 million.

Labor supports the new Child Care Management System and we support this bill. We believe that the new system has great potential to provide more accurate and timely information about the supply of child care in Australia including usage patterns and vacancy information. The system could also improve information to parents about their benefit entitlements. Used effectively, the new management system could bring substantial benefits to the provision of child care in Australia. We remain to be convinced, however, that the government will use the capacity of the new system effectively. We are not convinced about the government’s approach to this management system because of their attitude towards child care, which leaves much to be desired.

Just six months ago after the Commonwealth Treasury said that parents were being too choosy and that child care was affordable, the Treasurer’s budget did give belated and, we would say, insufficient recognition to the problems that many Australian families have with childcare costs. The government has taken no action on childcare access and has no plans to improve early learning and development for our children. Given these shortcomings in the government’s approach to early childhood development, I move the opposition amendment:

That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House notes that:

(1)

child care out of pocket costs are increasing five times faster than average prices for all goods and services;

(2)

for the past four years, child care out of pocket costs have increased by more than 12 per cent each year;

(3)

as a result of these increases, child care is becoming less affordable for Australian families;

(4)

despite the international consensus on the benefits of early childhood education, Australia ranks last in the OECD on the percentage of GDP spent on pre-primary education;

(5)

there are currently 100,000 four years olds in Australia that do not attend preschool; and

(6)

the current Government has no policy agenda to provide preschool to all Australian four year olds”.

The new Child Care Management System will significantly change the nature of the administrative relationship between childcare operators and the Commonwealth government, particularly in relation to the payment of the childcare benefit. About 96 per cent of Australian families take that childcare benefit as fee relief paid to their childcare centres. So while CCB is an entitlement for families, it is overwhelmingly paid by the government to approved childcare service operators.

Currently services are paid their CCB fee relief on an advance and acquittal basis four times a year with an annual reconciliation. The new management system introduces a new payment method for CCB. Under the changes proposed in this bill, payments will now be made weekly in arrears based on a child’s actual attendance in the previous week. Services will now be required to submit attendance records for each child to the Department of Families, Community Services and Indigenous Affairs weekly via the internet. The department will then pay the appropriate amount of childcare benefit to services to pass on to parents as fee relief. This is a very significant change for providers. To help operators with any cash flow issues arising from the change to a payment in arrears system the government has proposed that providers will receive an enrolment advance for each child. This advance, which amounts to one week’s maximum rate of childcare benefit per child, will be required to be acquitted once the child leaves that operator’s care. Labor welcomes the introduction of this advance to help operators with their ongoing cash flow issues.

The new system also requires all communication between childcare providers and the government to be online. It requires providers to have appropriate information and communications technology and to make sure their staff are trained in how to use it. The weekly electronic reporting of attendance might become a significant issue for some providers. The entry and exit times for each child will be required to be entered into a computer either manually or through a swipe card system where parents log every child in and out every time they pick them up or drop them off.

Labor recognises that there is a lack of appropriately qualified and experienced childcare staff. The National Children’s Services Workforce Study of July 2006 found:

Overall, there is a projected net shortfall of 7,320 staff by 2013. Long day care has an estimated shortfall of 6,490 staff by 2013, outside school hours/vacation care are projected to have a shortfall of 1,011 staff, and occasional care services have a projected shortfall of 894 staff.

This study shows that the government needs to act not only on the staff shortages, starting with the development of a workforce strategy, but also on the weekly reporting requirements, which will require staff to do a lot of data entry, and this will provide an extra burden on the staff resources for all childcare providers. We certainly hope that the quality of care our children receive will not suffer as a result.

We know that the minister for families has already floated the idea of using the government’s new access card for this new swipe in and out of services. It is no big leap of logic to see how the government would say: ‘You might as well use the access card system to gather this information. Parents could just swipe in and out with that.’ It is very possible that the government could require that parents of the almost 600,000 children in formal care who receive the childcare benefit each year use an access card every day. We know that the government last week delayed the introduction of the new access card but we also know that this delay is purely political, designed to remove this as a political difficulty before the coming election. All Australian families deserve to know before the election what plans the government have for the access card, and especially what plans they have to connect the access card to this new childcare management system.

One positive for parents in the implementation of the new management system is that it will give parents better information on their benefits. One new function of the system is the provision of an online statement from Centrelink detailing childcare benefit payments made on behalf of families to their childcare service. This should improve information available to parents. We also hope that the move to the payment in arrears system will make sure that CCB calculations are more timely, accurate and, very importantly, reduce childcare benefit overpayments. Under questioning by opposition senators during recent estimates hearings, departmental officials admitted that in the last financial year around 124,000 families were hit with an average of $309 in childcare benefit debt. That is a total of over $38 million in CCB overpayments. This is in addition to the $140 million overpayments families faced through the family tax benefit system. On this side of the House we certainly understand that family budgets are under significant pressure as a result of recent mortgage increases, spiralling credit card and household debt, rising childcare fees and, most recently, record petrol prices. We certainly support the changed payment arrangements in the new management system and hope that it is able to reduce this overpayment burden on families.

On the question of what benefits the new management system will bring to childcare planning, the government has remained silent. There is concern that the current design of the management system does not provide the government and the childcare sector with the necessary information about childcare demand and does not relate this demand to current availability of places to assist future planning. We would hope to see some further information from the government about how this management system can be better used in that regard. While this bill introduces new fines for services which do not give required information to the childcare access hotline, the government has given no indication that it will use the new information it is gathering quickly and accurately to help better identify present and future needs for child care. The House of Representatives Standing Committee on Family and Human Services recently tabled its report, Balancing work and family. The report noted:

Unfortunately, given the economic importance of child care provision, some Australian families are experiencing problems in accessing affordable care.

The government does not seem to have listened to the findings from this House of Representatives report. We have seen the government completely abandon all planning issues in the provision of child care in Australia. It continues to deny that parents are facing any difficulties in securing a place for their child, especially one that might specifically meet their needs.

Labor know that there are significant problems faced by parents. Many parents have very significant challenges in securing a place for their child. We believe that the substantial investment being made in this new management system should, in addition, be focused on gathering and analysing the information necessary to improve the planning and provision of child care in Australia.

Schedule 1 of the bill introduces three new sanctions for failure of an approved childcare service to comply with conditions of continued approval to receive childcare benefit. These new sanctions relate to the new enrolment advance and can require repayment of the advance, suspension from eligibility to receive the advance and suspension from eligibility to receive childcare benefit.

Schedule 2 of the bill introduces a civil penalty and infringement notice system for childcare operators. Family assistance law currently provides for criminal penalties but not civil penalties. These new sections impose, for the first time, a civil penalty system on childcare operators. With the introduction of the new civil penalty provisions, childcare operators and individuals face fines if they breach any of the obligations in these particular sections of the bill. These new civil penalties are currently limited to situations where childcare services fail to give the childcare access hotline information on the places that they have available within the required timeframe as set down by the secretary. Aiding and abetting the withholding of information also renders an individual liable. These new fines impose an initial layer of sanction upon operators who continually fail to provide information to government on their vacancies. Infringement notices are the first step followed by more substantial fines if the problems continue.

Labor support an infringement regime that introduces this intermediate layer of sanction in between ‘no action’ and ‘complete suspension of an operator’. We know that the suspension of an operator’s approval has a major impact on families and this new fine system will provide an incentive to improve compliance by operators with the requirements under family assistance law.

Schedule 3 of the bill contains a range of other miscellaneous amendments. These include the introduction of a rebuttable presumption that a child is a school child once they turn six for the purposes of family assistance law and childcare benefit. A school child who, generally, is attending outside school-hours care is only entitled to 85 per cent of the relevant childcare benefit.

New provisions give the departmental secretary the power to immediately suspend a childcare service. Under current provisions, the secretary must give notice of sanction, including suspension, to providers and ask them to show cause. The new provisions allow for the immediate suspension when the operator fails to comply with Commonwealth, state or territory law relating to child care—for example, if their licence is suspended by the state, Commonwealth approval is also withdrawn; the departmental secretary believes there is an imminent threat to the health or safety of a child; and, in urgent circumstances, where it is no longer appropriate for the operator to provide care—for example, if it were on contaminated land. Suspension does not result in permanent cancellation of approval to receive childcare benefit. Suspension means that an operator does not receive childcare benefit for the period of the suspension and can no longer provide fee relief to parents.

New amendments also give the secretary of the department the power to inform parents who are using a childcare service that the service no longer complies with family assistance law and is being sanctioned. No such power currently exists. This information sharing is important for parents as they are not entitled to receive childcare benefit in respect of care at a suspended service.

High quality and accessible child care in Australia is of fundamental importance to Australian families. Labor has argued strongly for many years that the government has the responsibility to support families with the costs of caring for their children yet, time and time again, Australian families have been told by this government that there is no problem. As I said before, Treasury has said that families have been too choosy.

The Minister for Families, Community Services and Indigenous Affairs claims that families are spending less of their household income on child care. Families know that they are paying more and more for their childcare costs. At the same time, we have had the Prime Minister telling families that they have never had it so good. This is yet another demonstration of just how out of touch this government has become. Families know how costly child care is, even if the government does not. Childcare costs are rising five times faster than the average cost of all other goods and services. According to the Australian Bureau of Statistics, out-of-pocket childcare costs for families in the last four years have increased by 12.7 per cent, then 12 per cent, then another 12 per cent and then, finally in the last year, 13 per cent.

Independent analysis by Saul Eslake from the ANZ Bank, undertaken for the Taskforce on Care Costs, shows that child care affordability has declined by 50 per cent in the last five years. This year, after denying there is any problem—and as we have seen so many times from this government—and just five minutes before the election, the government decided to give families a one-off bonus increase. Families know that they have carried very heavy costs for the last four years.

Labor welcome the increase as a belated recognition of the challenges that families face, but we continue to be concerned that the government has failed to provide the ongoing relief that families really need. We are worried that what will happen is what happened four years ago: the bonus will quickly be overtaken by increased costs. It does seem that the minister is also concerned. He was reported on Saturday as saying that if any service operator did the wrong thing by increasing their fees to completely absorb this increase in childcare benefit the government ‘was not going to be a casual bystander’. We certainly hope the minister stands true to his word. I ask that he, when he comes into this House and is summing up this legislation, detail if he has been made aware of any operators increasing their fees in this way and also inform the House of what action his government will take so that it is not just a ‘casual bystander’.

I must say one area where the government most certainly is a casual bystander is early childhood education. The government is doing absolutely nothing for the 100,000 Australian four-year-olds who do not attend preschool. Under this government, Australia spends the least in the OECD on preprimary education. Our spending is just 0.1 per cent of GDP, compared to the OECD average of 0.5 per cent. The government’s whole approach to early childhood is a mess: no coherent policy agenda whatsoever and no clear directions. If anything, it is all about just passing the buck and saying that it is the state governments’ responsibility.

We have heard, though, that the federal Minister for Education, Science and Training does think that early education is important. She says that she wants all four-year-olds to have a preschool education. But, on the other hand, in the same government we have got the Minister for Families, Community Services and Indigenous Affairs saying child care has nothing to do with early education. In his view, all he is responsible for is providing care.

By contrast, the government refuses to recognise what the opposition are putting forward. Labor have put forward fresh policy ideas showing a new direction for early childhood education. The Leader of the Opposition understands the importance of early childhood education and knows, as every parent knows, how critical it is to provide the best future for Australia’s children. Labor have committed to providing all four-year-olds in Australia—that is, each and every one of them—with 15 hours of early learning a week for up to 40 weeks a year. We will provide $450 million each year in new Commonwealth spending to make sure that this occurs and we will also guarantee that this service expansion does not increase fees for parents. Most importantly, we understand—unlike the minister for families—that early education and care should be integrated across all service types. We know, as parents know, that you do not stop learning when you are in a place that the government calls child care. Our children are always ready to learn.

Labor believe that early childhood programs are an opportunity for the foundational growth that all Australian children should have. Our views are backed by yet another study, one published just last month by Professor Robert Lynch, Chair of the Department of Economics at Washington College in the United States, and called Enriching Children, Enriching the Nation. I want to finish by quoting him:

... investment in early childhood education, even when its benefits are not fully accounted for, is an effective public policy strategy for generating wealth and achieving a multitude of social and economic development objectives. A nationwide commitment to high-quality early childhood education would cost a significant amount of money upfront, but it would have a substantial payoff in the future as such a program would ultimately reduce costs for remedial and special education, criminal justice, and child welfare, and it would increase income earned and taxes paid.

Labor support these findings. Unfortunately for Australian children, the Howard government does not.

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