Jill Hall (Shortland, Australian Labor Party) Share this | Hansard source

At the commencement of my contribution to this debate on the Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Bill 2007 I would like to pick up a couple of issues raised by the previous speaker, the member for Wakefield. Firstly, he highlighted that there had been widespread consultation. The paper was released in November and the ability to be involved in the consultations ended in December—one month later. Widespread consultation? It was only in capital cities. I represent an electorate that is not in a capital city and I know that there were providers of child care within my electorate who were very unhappy with the consultation process. I would like to point out to the honourable member for Wakefield that it was not widespread consultation; it was very limited consultation and there were many people involved in child care who were unhappy with it.

I would like to put before the House the idea that the nation’s most precious resource is its children. Children are the future of our nation. By investing in our children we are in actual fact investing in our nation. It is very disturbing to see that the government do not realise the true economic advantage of investing in children and child care. If they did, they would realise that it is one area where you make a maximum investment rather than holding back, because it gives an enormous return to the nation. Educate your children when they are young and you reap the benefits of that later as a nation.

It is very sad that Australia ranks last among the OECD countries on the percentage of GDP that is spent on pre-primary education. Anyone who knows or understands anything about education can tell you that the time that a child learns the most is at that pre-primary school age. That is the time when children are most receptive to learning. I would have to argue that it is a missed opportunity if you scrimp in that area and do not provide the maximum learning opportunity for our young children. I re-emphasise the fact that our OECD ranking is very sad.

I will talk a little more about the second reading amendment later in my contribution to the debate. The legislation that we have before us tonight provides for the implementation of the new Child Care Management System. It is a significant change to the way in which childcare operators interact with the government. It changes from an advance-acquit system to a system of payment in arrears based on actual attendance, with services now required to submit weekly attendance records. To facilitate the introduction of this new scheme, many rules on childcare benefits have been changed, such as allowable absences, the calculation of part-time percentages and the introduction of new sanctions for failure by services to comply with the conditions.

The legislation introduces civil penalties and an infringement notice scheme for childcare service operators who fail to comply with the obligations imposed by family assistance law. The penalty scheme is to commence on 1 July. Today is 12 June. Today we are debating legislation that commences on 1 July. To be quite frank with you, Mr Deputy Speaker, I find that absolutely disgraceful. This government likes to bring things into the House and rush them through at the last minute. I think that this really impacts on the ability to give due consideration to legislation.

The implementation of the new scheme will cause significant changes to the administration of childcare benefits. It restructures the relationship between the government and childcare service operators. It has the potential for significant implementation difficulties. Far from what the previous speaker said about the childcare sector welcoming it and uniformly accepting it, there has been a very mixed response to this legislation. The first point I made was about the lack of consultation. That is one of the areas where there has been a very mixed response.

I want to share with the House a response that I have received from a childcare provider in my electorate. This is a very reputable childcare provider; it is a private provider that operates four childcare centres. They say that the new management system will require centres to inform Centrelink and FaCSIA of children’s attendance details—that is, when they arrive, when they leave and the actual hours that they are in attendance. This report has got to be done on a weekly basis. This information will have to be keyed into the system manually, and compliance will be very time-consuming, quite expensive, and it will take the centre management away from core duties. Parents will be able to access CCB made to the centre on their behalf online, but the childcare provider asks: will they be able to access information as to how they were calculated? If they do have access to this information, will they understand it? She highlights the fact that the CCB is currently paid monthly in advance and, under the new system, it will be paid weekly in arrears. You might ask what this will mean to someone like the provider of quality child care in my electorate. She points out that currently payments in advance are automatic, and adjustments and corrections are made after the claim is submitted. Under the Child Care Management System, payments will not be initiated until after the claim has been submitted.

The impact on the flow of working capital in centres is enormous. Members need to think about that. The software package that this childcare centre uses is not designed to function in this way, and I would suggest that that would be the case with many centres. They will need to buy new software packages—because I am sure the government is not going to pay for them—and pay for training to utilise the software. Once again, it is throwing extra costs onto the provider, but I believe that cost will be passed on to the parents of the children attending the centres. The provider I am talking about is in Lake Macquarie, in the Hunter part of the Shortland electorate. The Hunter payment team receives 75 per cent of its CCB claims electronically, and the Hunter payment team has the highest percentage of claims of all payment teams in Australia. Here we have an area where these payments are being assessed electronically, but now the whole system has to be turned around. Even though 75 per cent of claims are submitted electronically, a significant proportion still submit manual claims—and it is much higher nationwide than it is in the Hunter. Some services do not even have computers, so again that is going to be an enormous cost to those centres. There is no allowance in the Child Care Management System for alternative submission methods, and I ask the government: how will services that do not have access to the internet be able to cope with this change?

With the Child Care Management System, all attendance details will have to be entered and submitted manually. I understand, from talking to childcare providers in my electorate, that this information is then handed to not one but three government departments: FaCSIA, Centrelink and the FAO, and then it goes back to FaCSIA before the service is actually paid for. To my way of thinking that is not a streamlined service. That is not a service that will work better; it is a very convoluted service that is going to be time-consuming, bureaucratic and full of red tape. The services have been told that there is going to be a 48-hour turnaround, but the provider that I spoke to believes that this is going to be impossible. She feels that it will be more like six to eight working days. If I look at the way the services currently operate, at the processing times and the variety of tasks that Centrelink has, I think that it is going to be very difficult for them to be able to work with these other departments and turn it around in 48 hours—simply because they do not have the staff or the resources to do that. And we are talking about three departments that are in very similar situations.

Under the Child Care Management System, centres will receive one week’s CCB at the end of the first week. Once the data has been processed they can calculate the usage during this time, but until that happens there will be no CCB to cover the centres. The childcare provider told me that this will have an enormous financial impact on her business. It could be as great as $18,000 a week, and this is all working capital for the business each week. If the payments take up to eight days, the business could be owed between $30,000 and $35,000. I think that these are very real concerns that my constituent has put to me. I know that she is a very caring person and she really cares about the children and the parents who use her centre. She will be put in the position where she will have to reassess how she charges her parents. Currently parents pay the gap in the weekly amount; but if it turns out that this system becomes very expensive, parents will be forced to pay full fees up front and then be reimbursed once the childcare centre receives their payment.

This will disadvantage parents—particularly those parents who are on a low income. If it operates in the way that my constituent is concerned it will, the financial viability of services will be affected. The requiring of the electronic recording of all arrivals and departures and the fact that the new system will provide online access to benefits will in some ways benefit some parents. But the thing that I am really concerned about is the potential for the costs of child care to increase for parents who are already struggling to pay their childcare bills. Invariably, people have to pay for child care because both parents are forced to work due to the high cost of living under the Howard government. It would be a real concern if childcare fees were going to increase because of the cost of implementing this system. Under the Howard government, as is pointed out in the amendment moved by the shadow minister, childcare out-of-pocket costs are increasing five times faster than the average price for all goods and services. That is incredible. And we are asking struggling families to pay those increased out-of-pocket expenses. Over the last four years, childcare out-of-pocket expenses have increased by a minimum of 12 per cent, with the increase in some years being 13 per cent. The government needs to look at that issue and at the costs families are incurring. In my own state of New South Wales, the average childcare fee is $274 per week. I hear of families who look to cut the cost of their child care by each parent working a four-day week so they can cut their child care back to three days a week and make it affordable. They find that this is one way that they can try to get around it—by reducing their hours.

I draw the attention of the House to the independent analysis by Saul Eslake of the ANZ Bank for the Taskforce on Care Costs. He showed that childcare affordability has declined by 50 per cent in the last five years. This is what we are asking young families to pay. I was speaking to a young person last night who is considering starting a family. This young woman said to me that the single biggest issue is the cost of child care. The other issue that she highlighted to me was the availability of places. I know that many mothers go and put their child’s name on the waiting list for childcare centres immediately after having that child. My son went and put his child’s name on the waiting list within weeks of the child being born because his family was in a situation where the mother needed to return to work so that they could meet their mortgage repayments. It is very sad that it has to be done at that stage. I have heard of instances of mothers going along and putting their name down on a waiting list for child care the moment that they find that they are pregnant. While the government may say that the issue of availability is not one that is having an impact in the community, I would have to say that there are definitely areas where availability is a big issue. The other big issue—the key issue—is affordability. The government is not addressing that issue here.

It is not clear how the proposal that we have before us will operate. The proposal is quite bureaucratic; quite a lot of red tape is involved in it. There was not the level of community consultation on this proposal that I would liked to have seen. This proposal leaves providers like the quality provider in my electorate unsure about where this will take them. We on this side of the House see that it has the potential to be quite beneficial if it is implemented properly. There are questions that need to be answered by the government. It is imperative that the government makes a commitment to early childhood education and a commitment to providing universal education to all Australians under four—as the ALP has done in its policy statement. The ALP recognises the fact that 100,000 four-year-olds missing out on early childhood education is not good enough and that Australia ranking bottom of the pile in the OECD on the proportion of GDP spent on early childhood education is not good enough. The government stands condemned for that.

See this speech in context