Maxine McKew (Bennelong, Australian Labor Party, Parliamentary Secretary for Early Childhood Education and Child Care) Share this | Hansard source

I rise to speak in support of the Appropriation Bill (No. 5) 2008-2009. The total additional appropriation being sought through this supplementary additional estimates bill is $384 million. This funding will support and secure the jobs and training of apprentices, trainees and adult workers who are vulnerable to redundancy in the economic downturn, and it will provide assistance to workers recently retrenched. It is a package also designed to support economic development in the East Kimberley region through investment in social and common use infrastructure.

In the time available to me I would like to particularly draw to the House’s attention a critical component of this bill—that is, the $34 million in funding to keep the 262 ABC childcare centres open until 31 March this year, ensuring continuity of care for Australian families. The collapse of ABC Learning is a problem not of this government’s making. It was the previous government which, in 1996, removed operational and capital works subsidies for community based not-for-profit childcare centres. It was the previous government which uncapped the provision of long day care services. And it was the previous government that sat on its hands while ABC Learning constructed its empire, an empire that has turned out to be so very flimsy.

There was not a strong enough emphasis on quality, sustainability or viability; there was merely a belief that the market would deliver. An important question for my colleagues opposite is: how is it that, for so long, the failed corporate giant ABC Learning was unchecked by the previous government, at the very time that it was underwriting its activities through millions of dollars of subsidies every year? That question remains unanswered. But this government has had to deal with the consequences.

At no stage has the opposition argued against the Rudd government’s timely intervention to secure the 1,100 ABC centres and to provide security for children, families and staff. When Mr Groves’s empire, laden with $1.6 billion in debt, came crashing down in November last year, the chorus from the community to government was unanimous: ‘Fix it.’  The opposition’s spokeswoman on child care, the member for Indi, was also part of this chorus. I note that the member for Indi was in the House not so long ago, with a range of baseless accusations about the government’s performance on early childhood policies. It was pretty breathtaking. The member for Indi failed to mention the work that is progressing on the first national quality framework or the fact that around 2,500 people participated in public consultations last year so that we could hear their views on what is important. The clear message that we received loud and clear from that consultation was that there is considerable impetus for reform in the early childhood sector. And no wonder because, for the first time in 11 years, the sector is being given the serious attention that it deserves.

The member for Indi also failed to mention the development of the Early Years Learning Framework, which will guide early childhood educators around the country on how to provide quality programs for young children. I would also refer the member for Indi to this additional fact. Over 11 years the coalition government left the states and the sector to go their own ways. But, in just 15 months, there are now childcare centres around the country taking part in a trial of the first ever national Early Years Learning Framework. The member for Indi also failed to mention the $126 million commitment to training.

The miserable inheritance, after 11 years of cavalier coalition government, is a workforce where 40 per cent of those who care for children have no qualifications. Labor are redressing that. In 2009 TAFE fees for early childhood diplomas and associated diplomas across the country have been waived and university students are taking advantage of the 500 extra places for early childhood teachers. It is early days, but we are seeing strong enrolments from childcare professionals who are only too eager to take advantage of the government incentives in this area.

I also note that the member for Indi was concerned about reports that the Queensland government will receive $252 million over the next five years to deliver early childhood education. I make no apologies for that. Indeed, if the member for Indi were to acquaint herself with the COAG Early Childhood Education National Partnership she would find that the Commonwealth commitment is to provide funding to all states. Indeed, the commitment to the member’s home state of Victoria is $211 million.

The member for Indi also raised questions about the structure and supply of the childcare market without making the critical link that the operational market has changed dramatically with the collapse of the huge corporate provider ABC Learning. Interestingly, there were no complex arguments about interfering with the market when Labor acted decisively last year, just a clear expectation by the community that the government would be the central player in managing the future of one-quarter of the childcare market.

With the collapse of ABC Learning, the Rudd government was left to sort out the mess. Through the combined efforts of the Deputy Prime Minister and me, the task force set up by the Department of Education, Employment and Workplace Relations, and various receivers, we are all moving to resolve this mess. The appropriation, then, of $34 million in this bill is central to the government’s work here.

This government’s actions in the weeks and months following the collapse of ABC stand in stark contrast to the previous government’s inaction over many years. ABC Learning went into receivership on 6 November last year. It is worth bearing in mind that, at that point in time, there was a real risk that hundreds of ABC centres could have ceased operating immediately. Mass closures would have been catastrophic for tens of thousands of children and their mums and dads and for thousands of workers and their families and would have had a significant economic and social impact. The Rudd government did not sit back and let this happen. We acted with speed and with responsibility.

On 7 November, following discussions with ABC’s banks and the ABC receiver, McGrathNicol, we announced that up to $22 million in funding would be made available to keep open until 31 December last year those centres considered to be loss making. Importantly, this created space for the receiver to carry out a proper assessment of the viability of the centres. By 10 December, the receiver was able to identify 720 centres which could continue under the ABC business model. The receiver also announced that 55 centres would close on 31 December, as there were suitable alternative centres close by. Critically, all children were offered alternative places at a nearby centre, and the majority of staff were redeployed.

At the same time, the government announced additional funding of up to $34 million, the subject of part of this bill, to keep open into 2009 the residual 262 centres that were judged by the receiver to be unviable under the ABC business model. The government believes that a number of these centres could be viable under different arrangements and that these centres, now known as ABC2, represent an opportunity to gain greater diversity in the childcare sector. So this $34 million has been crucial to thousands of Australian families and workers.

Some might ask, of course, why the government is providing funding at all. Let me say that ABC has proved to be unique. It is very important to note that these funds are not for the directors or the owners of ABC Learning; rather, these funds are simply aimed at keeping loss-making centres open for a period of time while sustainable long-term options are resolved.

But fixing this state of affairs is more than just about providing funding. The government announced that we had established a process for managing the operation of these centres through the appointment of Steve Parbery and Daniel Bryant, of PPB corporate recovery, as court appointed receivers. This has ensured that an orderly process is being conducted to determine a sustainable future for these centres while minimising disruption for families and employees. The expression-of-interest process, which the court appointed receiver formally commenced on 14 January, is progressing. By 31 January, PPB had received 470 non-binding offers for the centres from a diverse range of parties. In line with the agreed selection criteria and with their duties as court appointed receiver, PPB provided short-listed bidders with access to more detailed information on the centres. On 25 February this year, over 180 interested parties submitted formal binding offers, highlighting that the market believes that there is a viable future for many of these centres. The court appointed receiver is working progressively through each offer to determine the optimal outcome for all stakeholders, most importantly the children and their families and centre employees.

The government has asked the court appointed receiver to ensure that future operators are going to be able to deliver high-quality early-learning and care programs that meet community needs; that they have the necessary organisational capacity; that they are financially sustainable; and, of course, that they will meet the requirements of workplace relations, occupational health and safety and other laws.

In conclusion, we want to see a varied range of organisations, be they for profit or not for profit, gaining a share of the market, and ideally we would like to see some larger not-for-profit entities building their presence in the sector. So, from a position in November last year where it appeared—the possibility was there—that 1,100 childcare centres were in jeopardy, we are now in a position where the future of just a quarter of that number remains to be determined and in the coming weeks we can expect much greater stability in the sector. In managing this situation, the government has the interests of parents, their children and ABC Learning employees front and centre in wishing to offer stability and help to ensure that parents can continue to access quality child care. I commend the bill to the House.

See this speech in context