David Fawcett (Wakefield, Liberal Party) Share this | Hansard source

I rise to address the Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Bill 2007 as tabled by the minister. As the opposition has outlined, this bill is predominantly meant to make amendments to family assistance law for the purposes of a new online childcare management system. There are a number of reasons for this system and there are a number of benefits that will flow from it. Today I wish to talk through some of the measures that are in this bill, some of the context that has led to this bill and some of the people who have been involved in developing it.

This Child Care Management System will standardise and simplify childcare benefit administration and reduce the time taken for payments. In particular, it will increase the timeliness of information which is provided to the government and parents. This is important for a range of purposes including calculating the amount of benefit that is to be paid to parents and also for planning, to understand in the short term where vacancies are in different childcare centres around the country and in the long term for local government authorities, who determine where centres can be built, to get a feel for the supply and demand factors that are actually taking place.

Amendments are also made to the absence provisions, the provisions relating to the way the hours of care are calculated for childcare benefits, and to the part-time percentage rate component of childcare benefits. Further amendments will introduce three new sanctions for the failure of a childcare service to comply with the conditions of continued approval. There is also a civil penalty and infringement notice system introduced in this bill. Finally, there are some amendments that deal with information-gathering powers and the location of records and further amendments that will reduce the overpayment of childcare benefits. That is of considerable importance to families in my electorate of Wakefield.

I would like to address the context of why this bill is being introduced and, in particular, why child care is important. I had the privilege last year of participating in the House of Representatives Standing Committee on Family and Human Services inquiry into balancing work and family, whose report was tabled in this House on 7 December last year. One of the things that came out of that, in terms of balancing work and family, was that there is a great multitude of factors and that no two individual families face identical circumstances.

One of the themes that occurred time and again in the submissions supplied to the committee—and in fact a whole chapter has been dedicated to it in the report—was choice and flexibility in child care. Some two-thirds of the submissions received made comment on child care, particularly its accessibility and affordability and its impact on the ability of parents, especially women and single parents, to participate in the workforce.

In 2005 the Australian Bureau of Statistics found that in any given school week some 35 per cent of Australian children aged zero to four received formal child care and some 38 per cent received informal care. Those numbers vary a little with age and location, but it gives a very strong sense that the amount of child care has a strong influence on people’s ability to work, particularly when it comes to long day care, family day care, outside school hours care, occasional care and vacation care. The percentage of long day care, family day care, outside school hours care and vacation care that is work related ranges from 88 per cent—which is the lowest amount for family day care—through to 97 per cent for outside school hours care. Long day care is around 90 per cent. So there is a very strong correlation between accessing those types of day care and people’s ability to be involved in the workforce.

The costs reflect a number of local characteristics of supply and demand as well as state requirements, which may influence fees through things like staffing ratios, licensing, wages and whether additional services are charged for things like nappies and meals. Those costs vary greatly across Australia. One of the ways to reduce those costs is to have better management of the systems. As we have engaged with childcare providers there have been a number of areas where they have called for additional funding, some of which is one-off funding. As part of the context of understanding where we are at with child care, it is important to recognise the initiatives that this government has taken to make child care more affordable and accessible and a quality system for our children. For example, just this month some $4½ million in one-off equipment grants has been provided to 360 childcare services around Australia to help them replace or upgrade equipment. This childcare support program looks to support childcare centres that are primarily located in rural, remote or Indigenous communities. These can include mobile childcare services as well as multifunctional Aboriginal childcare services. I welcome that funding, which has gone to one of the mobile childcare services that work with disadvantaged families in my electorate of Wakefield, and they do an outstanding job.

It is also important to note that in this year’s budget there have been some significant developments for families. Overall the Howard government will be contributing more than 50 per cent toward the vast majority of families’ formal childcare costs, following the $2.1 billion in additional investment in child care in the recent budget. The Department of Families, Community Services and Indigenous Affair’s post-budget modelling found that, particularly for long day care—and remember that around 90 per cent of that is related to people using it for work—between 55 per cent and 93 per cent of the fee will be subsidised by the government as a result of the increase in childcare benefit and the improvement in the childcare tax rebate. For some low-income families that are looking to return to work and are receiving the JET childcare fee assistance, the government contributes more than 98 per cent of the cost of child care. A common example that came up through the modelling was that a working family with a combined income of around $60,000 using part-time care for one or two children had between 55 and 79 per cent of their fees subsidised, depending on the centre that they used. So the changes that this government has brought in are actually finding ways to target the aid that we need to give to the people who need it, particularly to re-enter, train for and engage in the workforce. Interestingly, the modelling supports the OECD findings that show that Australia has higher levels of subsidies supporting parents’ childcare choices than comparable nations. The OECD estimates that the government contributes on average around 60 per cent of parents’ childcare costs, whereas other comparable nations in the OECD were more likely to contribute about one-third.

The budget also includes a number of things such as bringing forward the payment of the childcare tax rebate. That will be provided as a direct payment soon after the financial year in which the costs are incurred, and that is a significant benefit to those families who previously did not benefit from it through their tax return. There are a number of other measures that the government has taken, such as the extra $15.4 million for the Jobs Education and Training—or JET—childcare fee assistance and the $71.3 million for the inclusion support subsidy that allows some 3,000 extra children with high needs, particularly those with a disability, to be included in child care. As we await the state government responses to the Commonwealth government’s offer of matching unmet need in the area of disabilities dollar for dollar, we look forward to their contribution. I welcome this budget measure to make more child care available to families with children with a disability.

Overall this budget builds on the record in child care of the Howard government, which has more than doubled the funding of the previous Labor government and has massively increased the supply of places, which are now uncapped for 99 per cent of the sector. I cannot emphasise enough how important that uncapping is when I look at the community of Clare in my own electorate of Wakefield, where there was one childcare centre. Interestingly, going back to 1997, when the Hon. Judi Moylan was the minister and the Hon. Rob Lucas was the Minister for Education and Children’s Services in the then Liberal South Australian government, they jointly put in half a million dollars to establish the first childcare centre in Clare, which had around 31 places. But, when I left the military and started working as a candidate, we found that the waiting list in Clare was some 90 children. Through the government’s decision to uncap places, we found that the market responded and there is now a brand new childcare centre open in Clare. In fact, there are now vacancies in the childcare centres there.

The feedback I have had from childcare centres in Gawler, as well as around the Elizabeth area, is that there are vacancies in a number of the centres. In fact, some of the operators are saying that we should recap places, because they have concerns about their viability going forward because those places have been uncapped. I welcome the fact that we are still providing the sustainability grants to regional communities. In Kapunda, for example, another half a million dollar grant has enabled them to establish a childcare centre at the hospital and it will, over a number of years, build up the number of children using that service until it becomes viable. So this government has doubled the amount of expenditure on child care. It has a vision to provide quality, accessible child care moving into the future. But there are some problems with it, and that is why we are looking at the Child Care Management System.

The problems particularly come back to the fact that childcare services regularly exchange significant amounts of information with the government. This has been predominantly done by mail, whether it be in letters, on disks or in paper form. The usage data has been provided on a quarterly basis, and this time-lag makes it very difficult to use the information effectively for decision making and planning, whether that be at a family level or, particularly, at the government level. Things like the phone-in service to look at vacancies have certainly helped this, but this system will provide even more up-to-date data. Currently, expenditure data can be anything up to 12 or 18 months old by the time it is available for decision making, planning and budgeting. There is a heavy reliance on manual forms, particularly with the interaction between the childcare services, the Family Assistance Office and FaCSIA. That has a large impact on the efficiency of the system.

The other thing that we have noticed with the manual reporting and using of forms is that there has been fraud. In my introductory remarks I noted the fact that this bill brings in a number of new compliance measures. In 2006, there were a number of audits conducted and, whilst the majority of operators do the right thing and they provide quality care for the children in our community, there are some operators throughout the system who have rorted it. They have taken advantage of the money that has been spent by the government and there have been compliance issues which we obviously need to address to make sure that taxpayers’ dollars are going to the purpose that is intended. Some media reports estimate that it could have been anything up to $100 million that was rorted under the previous system. There is obviously a strong incentive to implement this new system.

Three options were considered by the department, but the Child Care Management System was the option chosen. It will establish an interface that will be used to report actual usage data by childcare services on a weekly basis. It will remove all the existing manual reporting processes and reduce government resources required for data validation. The advance and acquit system will be replaced by a weekly arrears payment cycle based on actual usage data. This is one of the factors that will help to reduce overpayments of families, and that is quite a crucial thing in terms of looking after people in my electorate of Wakefield. The data will be of greater detail, and it will include weekly usage and fees charged in a very close to real time environment. The administrative burden on childcare services, importantly, will also be reduced because it will reduce the need for those services to calculate the parent’s childcare benefit reductions.

Obviously there will be some providers who need some assistance with implementing this system, and the government will be providing assistance with software upgrades and internet connection. Some centres will have to be brought online for the very first time, and we are looking at providing funds for them to purchase computers where required. There have also been some concerns raised about whether the company will have a float, if you like, to see them through the peaks and troughs. So the system will include an enrolment amount, which will be paid to the service when they enrol a child. While that childcare service continues to provide the care, that amount will be retained by the childcare service. When the child care ceases then that amount will be repaid.

As I mentioned in respect of the operational functions, the Family Assistance Office will continue to be responsible for determining childcare eligibility, the family entitlement and interacting with families. But, in the majority of cases, it will no longer have the direct relationship with the childcare services. FaCSIA will assume that responsibility for making payments to the childcare services and monitoring compliance based on that entitlement information. This has not been done in isolation. There has been a broad range of consultation. Back in November 2006 there were a number of documents released around this proposal. They were released both on the website and by being sent out to agencies. Consultation forums were conducted in all capital cities throughout 2006. Two reference groups have also been established: the industry reference group, with childcare services from across the sector—both community based services and for-profit services—and a technical reference group, which is working with the software providers.

Whilst some people have been saying about this user technology, ‘Parents will be scared off by the fact that their children are going to be clocked in and out,’ in the modern day that is certainly not the case. I refer in particular to a childcare centre in Sydney, the Building Blocks Early Childhood Learning Centre. They have gone the whole nine yards. They have security devices based on biometric screening so that they can check exactly who is picking up or dropping off a child. There is monitoring to make sure that there can be no false accusations against the staff and also so there is peace of mind about what has happened if there is an incident. And the parents welcome that use of technology—the service and the security that is provided to their children.

The software industry is also well and truly gearing up for this. In fact, I notice that one supplier already has a product out called the Child Care Management System. It is obviously looking to market that to the sector. Feedback from the sector, through consultation, has been positive. Most have supported the development of the CCMS, particularly because they see that it will assist them in managing information and will simplify their involvement in the CCB. They have been very positive about the replacement of letters from Centrelink with the electronic messaging system.

In summary, the Child Care Management System is going to be a significant investment, improving accountability and the supply of information across the childcare sector. It is going to provide the best information on childcare supply and usage. It is going to simplify and standardise the administration of childcare benefits for families. It is going to reduce the administrative burden on childcare services. Importantly, it is also going to protect the integrity of payments made in support of families using child care. I certainly support this bill.

I note the comments from the opposition about early learning. The government support early learning. We recognise the importance of early learning and the invaluable role that early learning plays in setting up children for life. Whether that is best linked in a formal sense with child care is a matter for discussion. There are preschools at the moment that provide that education. They do that only for 10 or 15 hours per week. They normally do not operate during school holidays et cetera. So there is not a direct link to the requirements of day care, which has much longer hours and operates throughout the year. But there certainly is scope to see how we can get better early learning outcomes, whether through child care or even kindergartens, if they want to do that. Because of uncapped places there is nothing preventing preschools and kindergartens from becoming approved, providing approved care and therefore being eligible to claim the full entitlement to CCB and the childcare tax rebate. So there are options that are provided by the framework that this government has put in place. I commend this bill to the House.

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