Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Community Services) Share this | Link to 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.

Harry Quick (Franklin, Independent) Share this | Link to this | Hansard source

Is the amendment seconded?

Jennie George (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Environment and Heritage) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

David Fawcett (Wakefield, Liberal Party) Share this | Link to 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.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to 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.

Stuart Henry (Hasluck, Liberal Party) Share this | Link to this | Hansard source

The Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Bill 2007 is an important government initiative in meeting its commitment to Australian families and their childcare needs. These amendments to the family assistance legislation will assist in creating a new online based management system, the Child Care Management System, or CCMS.

This system will be a significant investment in improving accountability and in the provision of information across the childcare sector. It will standardise and simplify the current, largely paper based, childcare benefit administration processes and significantly reduce the time in which payments are made to approved childcare service providers. It will also improve and enhance the management of childcare benefit entitlements for families. It will reduce the administrative burden on childcare service providers; however, it will also represent a significant change in the way service providers interact with the Australian government—a change for the better. This new system will be progressively introduced through childcare service providers from 1 July 2007 for up to a period of two years across Australia.

Child care has changed dramatically in Australia over the past 20 years or so since the early 1990s, when most centres were operated by not-for-profit organisations or, in some cases, by local government organisations. Child care was most often provided by a community childcare centre which operated as not for profit and was often run by parents for parents. An example of childcare facilities available at that time includes my family’s thoroughly good experience with our two daughters at the Citiplace Child Care Centre located adjacent to the Perth city railway station. This excellent centre was developed by the city of Perth, providing an excellent service with wonderful, caring staff and an excellent manager, with care and facilities second to none. Indeed, some of these highly proficient staff are still working at the centre today and maintaining their excellent level of care and support. This centre aims to provide quality care for children and a happy and secure environment. It recognises that each child has individual needs, and every endeavour is made to accommodate those needs. Its programs take into account the different developmental levels of the children, and an environment is created to allow each child to explore in their own time. Carers at the centre and families all work together to achieve the best outcomes, recognising this essential service is a great support for families and working parents.

However, back then demand for places in childcare facilities was not as great because, as I am sure members on the other side of this House will appreciate, we had the highest levels of unemployment, the highest levels of inflation and mortgage interest rates over 17 per cent. It was interesting to hear the great lament by the previous speaker, the member for Shortland, about the challenges. The reality is that 11 years ago Labor had opportunities to do things for child care and parents and they did nothing. It is only since 1996 and the Howard government that things have changed a lot for the better as far as families and parents with children in child care are concerned. Now in Western Australia unemployment is less than 2.4 per cent, and lots of families in my electorate of Hasluck are in the workforce and looking for childcare places for long day care, outside school hours care, occasional care and, in some cases, in-home care, which is now much more readily available. The Howard government has been the best friend working families have ever had in ensuring positive choice for families in balancing work and family commitments by providing an increasing level of financial support to underpin these choices.

I am sure that many Hasluck and Australian families will remember the Labor government years. I have already mentioned the high levels of unemployment and even higher interest rates—they were a disaster for Australian families. It should also be noted that childcare fees rose at twice the rate under the then Labor government, and, as my wife and I appreciate only too well, Labor did not provide a childcare benefit or the childcare tax rebate as the Howard government has since done. Mothers and families did not have any options under Labor on returning to work or getting support for child care. Child care was a very expensive exercise, with those who gained employment achieving very little after paying childcare fees from their weekly pay packets, in many cases leaving families questioning the value of the exercise.

If we look at the Howard government’s record, we see significant and progressive improvement since 1996, with spending on child care increasing threefold and with budget estimates that a further $11 billion will be spent over the next four years. The number of approved childcare places has doubled from some 300,000 in 1996 to over 615,000 in 2006. Across Australia there are over a million children now placed in child care with some 100,000 to 140,000 childcare vacancies existing across Australia, which is a great testament to the Howard government’s program that ensures places are available for those who need them.

Let us look at what else this government has done for families. On average, families receive over $2,000 per annum in childcare benefit, working families can claim up to $4,211 per child under the childcare tax rebate and on average families are also receiving $8,300, including supplements, in family tax benefit. We also have the non means tested maternity payment or baby bonus of $4,100 on the birth of a child. By any measure these are very significant increases in benefits and support for Australian families.

The next step in locking in the gains since 1996 and ensuring the future for families is to introduce the new electronic Child Care Management System, a new computer based system designed to bring the processing of claims in enrolments into the much more efficient computer age. Currently this information transfer is undertaken by way of the post. It is both time-consuming and inefficient. In this day and age the current system is not an efficient use of time for parents, especially those parents who work and place their children in child care, or for childcare service providers. For approved childcare providers, communicating with the Family Assistance Office and Centrelink by mail is both a lengthy and costly process. Replacement with a user-friendly, integrated computer system will be greatly beneficial to all parties. The new computerised system ensures prompt turnaround as well as up-to-date information on childcare placement vacancies. The Child Care Management System is also a significant investment in improving the supply of information and accountability across the childcare sector.

The government has recognised the need for better management of information. In October last year my parliamentary colleague the Hon. Mal Brough MP, Minister for Families, Community Services and Indigenous Affairs, announced that the Howard government would invest $73.2 million to develop the national Child Care Management System. It was clearly recognised that there needed to be a more efficient way to reduce the red tape and lengthy delays. The new system will bring all approved childcare providers online and at the same time will standardise and simplify childcare benefit administration, enabling the lodgement of childcare benefit data electronically. It will also enable the childcare centres to focus on their role of providing quality of care rather than having to undertake the onerous administrative requirements of working out how much childcare benefit each family will receive.

This national childcare computer system will provide the best information on childcare supply and usage that has ever been available across Australia for families, childcare service providers and the government. It will also provide support to the Child Care Access Hotline. The hotline provides parents with information about local services, types of services and government funded assistance. In July last year it was expanded to provide parents with childcare vacancy information. Childcare services will now have simplified online arrangements for reporting to the hotline on a weekly basis, ensuring that vacancies are listed much quicker, which is a huge benefit for the childcare centre and families wishing to use the centre. All approved childcare services will provide information online to give weekly updates on childcare usage and fees directly to the Department of Families, Community Services and Indigenous Affairs and to Centrelink. Families will have direct access to the Family Assistance Office about their childcare usage and childcare benefit payments made on their behalf to their childcare services provider. In the future, this information will be able to be accessed online, making it much more efficient for working parents, as they will be able to access an online monthly statement.

The new system is designed to reduce the administrative burden on childcare service providers. It represents a significant change to the way in which services currently interact with government. Australian government approved childcare services and many Australian families will benefit from the improvements made possible by the Child Care Management System. The new system will be progressively rolled out across childcare services from 1 July. The Child Care Management System will also provide the basis for the payment of the childcare benefit to approved childcare providers. Approved childcare service providers will need to comply with the Child Care Management System computer and reporting requirements. This will mean that approved providers will have appropriate computer software and staff trained to use the program to ensure correct childcare information reporting to the Family Assistance Office.

If a childcare provider wants to become an approved provider and offer reduced childcare fees on an ongoing basis to parents, they will be required to use the Child Care Management System. The method of paying childcare benefit to providers who in turn reduce the childcare fee is the main method of delivering the childcare benefit. The new Child Care Management System also changes the way childcare benefit is paid to approved providers. At the moment, approved childcare providers receive childcare benefit in advance—bulk payments quarterly—and they in turn provide reduced childcare fees to eligible parents. In future, the childcare benefit will be paid to approved providers weekly in arrears for the child care used in their centre by eligible parents for the past week. The new system will require far more regular and ongoing communication between childcare providers and the Family Assistance Office about childcare usage, using the Child Care Management System.

The new computerised system will provide information about childcare usage or lack of usage, ensuring the government’s childcare planning and budgeting needs reflect the true nature of the demand for service in specific areas. This up-to-date data is important as it will allow the government to make better informed decisions about allocating unused childcare places to areas of need, providing a useful picture of the needs and vacancies in approved childcare centres. The Family Assistance, Social Security and Veterans’ Affairs Legislation Amendment (2005 Budget and Other Measures) Act 2006 enables the government to change or move the placement of unallocated childcare places to areas of greater need. This enables greater flexibility for all—families and service providers alike.

An enrolment advance payment will be made to approved childcare centres when they enrol for child care a child who is eligible for assistance and can provide a customer reference number. This enrolment advance is recovered when the child leaves child care. The Child Care Management System will ensure that childcare benefit payments are more efficient and are accurately tied to the actual childcare use by a parent, reducing overpayments by human error or fraud. The childcare benefit entitlement for individuals will be calculated by the Family Allowance Office and advised via the Child Care Management System to the childcare provider. This will be a saving for providers, enabling them to get on with their important core business of providing high-quality, stimulating, safe child care.

The Howard government strives to ensure that Australian people have as many choices and options available to them as possible. For those people who wish to or have to place their children in child care, it is never an easy decision, so it is important that the level of care is of a high standard and that there are adequate childcare placements available in the areas that people require. For those parents who rely upon the services of childcare providers, it is important that the arrangements be simple and efficient. The recent budget announcement took into consideration the needs of the working family and has provided a range of measures to assist parents. An additional 13 per cent increase in funding to the childcare benefit will take effect on 1 July. This is a 10 per cent increase on top of the CPI and will help parents. Bringing forward the payment of the 30 per cent childcare tax rebate will mean that parents and families will not have to wait to claim it directly from the government. This change will mean that some 700,000 families will receive a one-off payment of up to $8,000—being two years worth of the rebate. This measure alone will cost $1.4 billion.

Another important initiative is the $43.8 million over four years to assist families in regional and remote areas. This assistance provides childcare facilities operating in areas of need with financial support that is necessary for them to remain viable. The additional $71.3 million over five years to assist an extra 3,000 children with high-support needs to be included in high-quality child care each year will be of great benefit to many people—and many people in my electorate. I know of a number of families within my electorate of Hasluck who are very keen to ensure that there are additional placements available to children with high-support needs. Having spoken with many of them about the difficulties they face each day, I am very pleased that the government has increased the placements by an additional 3,000 places per year. This initiative will have a huge impact on not only the child attending the centre but also their parents, siblings and families. Good government is about responding to the needs of the people and ensuring that new ideas do not negatively impact on those we are trying to assist—unlike when Labor changed the funding regime in the mid-nineties, negatively and negligently impacting on the community childcare not-for-profit sector.

It is anticipated that the new Child Care Management System will commence in January 2008. However, given the rollout over two years to such a large group, it was decided to pilot the system to enable a smoother transition. The Department of Families, Community Services and Indigenous Affairs will provide support and assistance, including training, information and the all-important help-desk support. Those taking part in the pilot program will have been chosen from voluntary nominations from childcare service providers.

This bill also provides compliance measures aimed at strengthening the relationship between the government and the childcare sector, ensuring that the childcare needs of Australian families are met. There is projected funding of around $1.7 billion per annum in childcare benefits, which is most commonly delivered to families through their childcare service provider. Approval of childcare services to participate in the childcare benefit program is based on their compliance with certain conditions. This compliance system is now being strengthened. Incorporated into the system are new compliance measures which will help to minimise the risk of incorrect payments and fraud. It will enable these problems to be detected as soon as possible should they occur. The new system will help to increase approved childcare provider awareness of their obligations and the consequences of noncompliance with those obligations.

The introduction of a civil penalties scheme will assist the strengthening of the compliance system. The penalty scheme provides for the imposition of a pecuniary penalty on a service that contravenes a civil penalty provision. This bill also sees the introduction of a new obligation on a service to provide information in relation to the childcare access hotline on time. The delivery of up-to-date information on time to the hotline means that families will be able to be fully informed of any vacancies at childcare services in their local area. This reporting requirement through the hotline also allows for this information to be used to assess the childcare placement needs in different localities and areas, greatly assisting families in locating vacancies.

This bill streamlines the system by introducing the latest technology in electronic information systems, bringing both efficiency and effectiveness to an expanding service provision. It is another important step forward in ensuring Australian families have easy access to assistance to provide further choice in maximising both work and lifestyle opportunities. I commend the bill to the House.

Jennie George (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Environment and Heritage) Share this | Link to this | Hansard source

As other contributors to this debate have pointed out, the centrepiece of the Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Bill 2007 is the creation of a new online based childcare management system. This national childcare computer system should ultimately improve the supply of information and accountability across the childcare sector, but, as others on my side have pointed out, the system is not without some problems—and I will address some of those later in my contribution.

It is a very significant change in the administration of the childcare benefit, and, through this system, the relationship between government and childcare service operators will also change. On the most recent data available, we see that over one million children now use approved child care, with more than 700,000 families now receiving childcare benefits in respect of child care provided by approved services. There are currently about 10½ thousand childcare services approved for childcare benefit purposes, and all of these approved services will be affected by the introduction of this new management system. The major changes that are incorporated in this bill include the weekly payment of childcare benefit in arrears; the calculation of each family’s childcare benefit entitlement, which is to be done by FaCSIA and provided to the operator, rather than the operators calculating the childcare benefit, as in the current system; having enrolment advances, which will be payable for each new enrollee to help operators with cash flow; and, in future, having all communication of information done electronically.

Examining the arguments outlined in the explanatory memorandum, obviously the benefits to government include a number of the following things, which other speakers have also commented on. The system should improve the accuracy and timeliness of childcare data, which has been a major problem to date, and should provide greater efficiencies in the administration of the CCB. It will decrease the funds tied up in the current advance-acquit cycle by moving to a weekly arrears payment model, which might be good from the government’s perspective but certainly not so welcome by many of the operators in the sector. It will, we hope, reduce any financial impacts from incorrect claims due to error or fraud and align payments with FaCSIA’s increased compliance roles. It will ensure that the operational functions of the Family Assistance Office and FaCSIA are aligned with their departmental responsibilities. It will enable a significant amount of childcare related information and data to be held by one central agency, hopefully improving the reporting ability of FaCSIA and, all in all, it will generate administrative savings for the government. But, on the reverse side of the coin, various stakeholders will face many financial and non-financial negative consequences. I want to refer to some of the downsides of the proposals contained in the bill.

First of all, childcare services will be required to purchase and maintain new or upgraded software and possibly even newer, upgraded hardware and to set up and maintain internet access. For a lot of operators, particularly in the corporate, for-profit sector, this will not be a problem. But for the smaller business operations and the not-for-profit sector, I think some of the costs associated with the transition to the new program need to be given further consideration by government. Revised administrative processes will need to be developed and implemented in many of our childcare services. This will include, of necessity, the training of staff on new or upgraded software and training in the more frequent reporting requirements that the new system will require.

A third area of concern that has been identified by some in the sector is that services will no longer be paid advances, which are currently paid monthly. Services that currently use these advance funds to smooth their cash flows across the month will no longer be able to do so. This cost will be mitigated to some extent by the enrolment amount, which will operate like a float paid in respect of each child enrolled at the service. Nevertheless, it could have some significant financial consequences—again, for the small, not-for-profit operators in the sector.

A number of the concerns about the system were identified by the government in the consultation phase, and it does appear on my reading of the bill that some proposals have been modified in response to the concerns that have been raised. However, I believe that the legislation does warrant further detailed consideration in the Senate. Some of the particular issues that I think need to be further looked at include, firstly, the requirement that the services report the in and out times for each child for each session of care; secondly, the application of childcare benefit eligibility limits through a first-in, first-served application—and I think that causes some concern for operators in the childcare sector, particularly where families might avail themselves of more than one service in a week—and thirdly, the availability of the childcare benefit percentage. There was a strong preference in the consultation phase by operators for this information to be continued when an enrolment is confirmed to enable services to undertake their own estimates of the reductions. There is also some concern about the policy in relation to absences with the new rule of 42 absent days without an impact on childcare benefit payments.

Others have pointed to the potential administrative load of weekly submission of attendance records, and I do understand that perhaps the detailed requirements that were originally mooted might be now varied to include survey periods during the course of the year, not the actual recording in and out on every day of every week. The payment of enrolment amounts could create complexities, particularly for services like school vacation care, when students might come along for one vacation care session but not attend the next so they have to be continually re-enrolled. The childcare operators also raised issues relating to the security and confidentiality of the information provided on the central computer system. And, rightly, they raised too concerns about the nature of the support services that will be provided in the transition period and the cost that this might involve.

So while supporting the bill in general I would refer again to the proposal that the matter should be given further detailed consideration by a Senate legislation inquiry so that we can hear further the views of childcare operators on the impact of the proposed changes to the administration of the childcare benefit scheme, the new online system and the penalty regime that will apply in future.

I understand that this new system has been undertaken on the basis that it will complement the childcare compliance strategy that was announced in the budget last year. We have no objection in principle to protecting the integrity of payments made in support of families using child care. In the minister’s second reading speech he said:

In combination with the new CCMS, the new compliance measures will help to minimise the risk of incorrect payments and fraud, and to detect them as soon as possible should they occur. They will also help to increase services’ awareness of their obligations and the consequences of non-compliance with their obligations.

The bill for the first time also introduces the notion of a civil penalties scheme. Under the proposal there would be the imposition of a financial penalty on a service that contravened a civil penalty provision and, specifically, the provision that there will be an obligation on a service to provide information to the childcare access hotline. The scheme will operate with an infringement notice proposal which would provide a childcare service operator with an option of either paying the penalty at a lesser financial amount or proceeding to litigation on the issue. I agreed with the minister when he said:

Families are entitled to know if the service’s approval is under threat or terminated because their childcare benefit may stop and they may become as parents liable for full fees.

I think that statement made by the minister is unexceptional, but in my opinion, and it is something I would ask the minister to give further consideration to, there should be an obligation on childcare service providers also to ensure that they are complying with the law as determined by this parliament and that they are complying with industrial instruments that apply to the workforce before those services are approved as being eligible for childcare benefit fee subsidies.

I draw the minister’s attention to a local case study to highlight the point I am making—and I see the minister and the Assistant Treasurer both at the table. Today I have written to the Assistant Treasurer because I have had no satisfaction through the ATO to date on this particular case. I repeat for the minister: I think that in future consideration of amendments to the legislation there should be an obligation on childcare services to ensure that they are complying with the law and with the industrial instruments.

In my own area the Wilbur Childcare service operates eight local childcare centres. For some months local union organisers had been pursuing complaints raised by staff in relation to payment of wages and superannuation entitlements. The ongoing problems were reported in our local media outlets in March this year. The owner was advised by the organiser of the particularly union that covers the staff that the staff complained of ‘incorrect or non payment’—of wages—‘at all and dishonoured cheques’ as well as salary payments being made out in the name of the various companies with which the owner is associated. Further in the correspondence received by me the organiser of the union points out that ‘superannuation has not been paid for some time and that individual members were asked’—by the union—‘to notify the ATO’ of that particular issue.

Our local newspaper, the Illawarra Mercury, reported on one individual case before the Industrial Relations Commission involving the Wilbur Childcare centres. It involved a trainee who alleged underpayment of wages and entitlements at one of these centres in Moruya, which closed in November 2006. The union’s lawyer said:

... discrepancies in the trainees pay began to appear shortly after she started work at the beginning of 2006. What confused the situation greatly was infrequent payments, payments on different days, at different intervals made it difficult for the employee concerned to gauge whether correct payments were made or not.

The union’s lawyer claimed that when the centre closed in November the trainee was ‘not paid her entitlements and had been left without seven weeks pay’. After negotiations the owner had offered to pay the trainee $3,000 in April; however, only $1,000 was deposited into her account. This one case that I have referred to, and it was reported in our media, appears to be symptomatic of the problems facing staff at a number of Wilbur Childcare centres.

The union and individual constituents have now raised their concerns with me and sought my assistance to pursue their cases through the ATO in relation to their superannuation entitlements and salary payments. In April 2007, in response to my representations, I was advised that the ATO was ‘pursuing the matter actively’ but that no further details could be provided either to me or to the individual constituents. It is now June 2007, Minister, and it appears that the matters of concern have still not been resolved. I have today pursued the issues in written correspondence to the Assistant Treasurer. These childcare workers are being denied their legitimate and legislated superannuation entitlements and their employer appears to regularly breach their award conditions. As well as these industrial breaches, the minister should be aware that I have seen a copy of a letter of complaint sent to the National Childcare Accreditation Council which listed serious matters of concern including:

... special accreditation staff were brought in at every Centre for accreditation that do not normally work at the Centre.

I understand that the National Childcare Accreditation Council has informed the licensee of Wilbur Childcare centres of the issues of concern raised in that correspondence and advised them:

... to provide a written response to the National Childcare Accreditation Council which adequately and appropriately addresses each area of concern.

The lessons that I draw from this, Minister, are the following. First of all, the ATO needs enhanced powers and greater accountability in ensuring more vigorous and rigorous enforcement of superannuation contribution payments. After all, those payments have been legislated by the national parliament and to not pay them is, in my view, a breach of the law and something ought to be done about it. The second point I draw out from this case study is in relation to childcare services that wish to offer child care that attracts childcare benefit fee subsidies for families. As we know, these services must be approved. In my view, such approval in future should be dependent on the service complying with their legal obligations and their statutory obligations, including prescribed payment of superannuation, proper taxation remittance and compliance with relevant industrial instruments. The bill before us does not go as far as the recommendation I am making but I think it is certainly worthy of the minister’s consideration. If service operators expect to be given financial assistance by the federal government then I do not think it is too much to ask that those services also comply with other pieces of legislation.

In the time available I have raised the general matters that I wanted to pursue in relation to the childcare management system bill. As I said earlier, it is a system that ultimately should provide the government with a better supply of information and enable better accountability across the childcare sector. It is not without some problems, and I think those have been identified by a range of operators in the sector. I hope there will be an opportunity for some detailed consideration when the matter goes to the Senate. I think it is incumbent upon the government to address the problems, particularly as they always say that they do not believe in a one-size-fits-all solution. I think there are some requirements of the new system which might have negative consequences for the small business operators and the not-for-profit operators in the childcare sector. While we support the main principles outlined in the legislation, the shadow minister has moved a comprehensive amendment to the bill which points out some of the inadequacies in the handling of the childcare issue by this government, and those matters in the amendment go to the critical issues of affordability, accessibility and quality of childcare services. I think the shadow minister has outlined the scope of our concerns with regard to those areas. I encourage the minister to give further consideration to the matters I have raised, and I am hoping the Assistant Treasurer will assist me in my endeavours to ensure that workers receive their just and legislated superannuation entitlements.

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I thank all those members of the House who have contributed to this debate. The Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Bill 2007 is an important bill because it is taking child care into a new age. It will ensure that the interaction between the federal government and the childcare industry is using the latest technology. We can swap information to ensure that parents are getting the right amount of money and that we have the best possible advice on where childcare places and vacancies are. We can then make that information available through our childcare hotline. That is all possible because the federal government has made a major investment in the childcare management system. It will start to roll out later this year through long day care centres and then over the next two years through the remainder of the childcare industry.

It will really reduce the burden on, particularly, directors and the work that they do—many doing work manually. This will speed up not only their internal work but also the clarity of it, and provide that information in a timely fashion to government and then back to the centres. There are a couple of other intended consequences: the new compliance measures supported by CCMS will minimise any risk of incorrect payments and fraud and maximise the speedy detection of these problems should they occur. The amendments will raise awareness by services of their obligations and the consequences of noncompliance. Unfortunately, what occurs now is that through our compliance measures you do not get this information until well after the event. You then have to go back to parents to ascertain when a child was in fact in care et cetera. So this is in the interests of the taxpayer, the parent and of course the childcare centre.

The Howard government makes a massive contribution to assist families with child care and this will help to ensure that what is spent is spent the correct way, that we get quality childcare places and also that all moneys expended can be accounted for. When I refer to a massive sum of money, I am talking about $11,000 million which is what we anticipate spending over the next four years, more than twice what was spent when the Keating government was last in power. We have also doubled the number of childcare places and have put in place other measures to ensure that there is greater access to child care, such as freeing up before and after school care.

There are no limitations on anybody wanting to start up a before or after school care program, a family day care, or a long day care service. The federal government will fund the childcare benefit for those parents. It is important to acknowledge and understand that that is how we fund: we do not fund centres; we fund parents to help offset the cost of their child care.

The member for Capricornia, the shadow minister present in the chamber, made some comments about the cost and lack of affordability of child care. Although she does not need to be reminded, I remind her that it is important to note the federal government in its budget has increased childcare benefit by 13 per cent from 1 July—in 18 or 19 days time that kicks in. That will mean $20.50 per child for low-income families using full-time care and that is clearly where we have targeted the majority of our assistance.

Obviously we have made other improvements to the childcare tax rebate, bringing it forward in a timely fashion. Most importantly, we are ensuring that approximately 100,000 families who do not have a taxable income sufficient to offset that rebate will benefit. This means that they will be able to offset another $300 to $500 per year against their childcare fees.

When you take into account the subsidies, as a result of the increase in childcare benefit, the Howard government will pick up between 55 and 93 per cent of the fees of Australian working families who use approved long day care. That is incredibly generous and appropriate. It will assist parents to get back into the workforce and will offset those costs—and it belies the story that the opposition would have you believe.

On the weekend, I was in Brisbane with the Queensland childcare association. I had a few hundred people sitting in front of me, all predominantly childcare owners. In this open forum with the media present, I said, ‘Put your hand up if you are charging $350 a week for child care.’ Not one did. ‘Three hundred dollars?’—it was like a bidding war. I think I got one hand at $300. ‘Two hundred and fifty dollars?’—and the majority of hands went up. That is not surprising because that is exactly what our figures show.

Are Australian families paying $250 a week? No. The Howard government is picking up up to 93 per cent of that $250 a week and, for the majority, it is picking up at least $125. Divide that by five and you have parents out of pocket about $25 a day for having a quality childcare place. The Child Care Management System helps to protect that and ensures that parents get the money that they deserve. That is what this bill is aimed at.

There are those who do not get childcare benefit because they are high-income earners earning over $108,000. In those cases, through the federal government’s childcare tax rebate and by making sure that the childcare benefit minimum rate is available, high-income earners can expect at least $5,000 per child in direct assistance towards their childcare costs. High-income earners do not get nothing; they get up to $5,000 or thereabouts. If their child is in care for two days a week, because it is calculated on 30 per cent of their out-of-pocket expenses, the more expensive that care is, the more that the government is paying. We are contributing to everybody regardless of where they are on the income spectrum and we are providing the majority of support to the low-income earners.

Another example is that a working family with an income of $60,000, which is fairly common these days in Australia, using part-time care for one or two children will have between 55 and 79 per cent of their fee subsidised, depending on the centre they use. That shows that parents cannot listen to what the opposition says because they get told two things. They get told that there are no places. I have challenged the shadow minister on air many times to name but one place.

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

Ms Macklin interjecting

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Oh, they have. And it is?

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

Ms Macklin interjecting

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Would you like to tell us where it is now in this place?

Barry Haase (Kalgoorlie, Liberal Party) Share this | Link to this | Hansard source

Order! The member will address his comments through the chair.

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

The member for Jagajaga says we have one place. When confronted in Adelaide she said that there were places needed in a suburb there and it turned out that she was wrong. When in Brisbane she was wrong again. In the Torrens Road Child Care Centre in my electorate she said, ‘There are shortages, but not here. We’ve got lots of places across the board and, by the way, so do all the other centres around here. In fact, there are a thousand vacancies.’ So never let the truth on childcare places get in the way of a good story says the former Leader of the Opposition. She is wrong. Those opposite are saying one thing to the Australian public when they know it is undeliverable.

There is no shortage of child care for the zero to two age group, preschool age or any other age. The former Leader of the Opposition can say this as long and as hard as she likes. We have before us tonight a piece of legislation that will take us from the rudimentary work that we have at the moment—phone calls of availability from every childcare centre—to having information electronically available and being able to get the best information to the market and also to the parents.

While we are on the issue of availability, I would point out to the shadow minister that a number of centres in my own electorate, ones at which she stood only a few weeks ago and said that there was a shortage, have closed. Why? Because there is a more than adequate supply. So the hurt that the Labor Party has done to those people’s businesses, to which families have contributed millions of dollars to set them up, should be in the consideration of the former Deputy Leader of the Opposition if she cares at all for small businesses and what they are trying to contribute to the Australian economy. It is one thing to sit there and laugh; it is altogether another thing when you consider the pain that your sorts of comments are creating for those people as families do not go and seek a quality childcare place because of your living this misconception—living a lie, you might say, Mr Deputy Speaker—in saying that there are in fact shortages around the country when that is simply untrue.

The shadow minister also talked about the OECD report on early childhood education. What this report failed to take into account is that the state governments are the primary providers of preschools and that this is about the Commonwealth contribution. It also did not take into account that many of our childcare centres actually do provide a preschool. Once again, just as Sharan Burrow likes to go overseas and prattle on and tell fibs about the state of workplace relations in Australia, here we have the shadow minister once again misleading people about the real level of government—state and federal—support to Australian families so that their children can get a preschool education. In fact, take the most recent data in the report on government services for 2007. It estimates that 86 per cent of children attend a state or territory government funded and/or provided preschool in the year before full-time school. That is about 216,000 children, so I am not sure where the shadow minister gets her figure of 100,000 from. These figures do not include the many thousands of children who do receive a preschool education program through childcare centres.

A couple of other issues that were raised by those who sit opposite are worth commenting on and highlighting for their benefit. We were criticised over the consultation for this bill. This consultation was incredibly extensive and is ongoing. Briefings with childcare peak organisations and third-party software providers were undertaken. We had the release of the childcare management information paper. We had national consultations and information forums held throughout Australia. There was a web page. There was a mailbox for feedback and questions. We established an industry technical reference group which the government is still consulting, and the last time I spoke with them they had been extremely happy with the consultation. Most importantly, to take up the member for Throsby’s point, because some of the issues she raised were the very issues that they had raised with us several months ago, I note that all of those issues, such as the reporting time lines et cetera, have been dealt with. The whole idea of having a consultation task force or a technical reference group is to listen. As this is about the industry, that is exactly what we did.

Opposition members have run around the country having people believe three things about child care. Firstly, they say it is unavailable, yet they cannot tell us where they are going to put their centres. Why? Because they know that as soon as they do they are going to be blown out of the water by everyone around there demanding to know what compensation they are going to give them for destroying their businesses when they have vacancies. Secondly, they have said as to the cost that child care is unaffordable, yet they have a policy which will actually drive the cost up and do nothing whatsoever for the quality of child care because it does not take into account a large percentage of the childcare industry. Thirdly, they talk about the quality. Right now we are looking at the accreditation process. We are trying to improve that accreditation process so that parents can actually know that the most senior person in a childcare centre, the director, is overseeing the workers and having their time freed up to do so, not filling out bits of paper. The childcare management system will go a long way to directing that.

I have huge faith in the childcare service providers of this country, whether they be private providers, not-for-profit providers or councils that have invested in child care. I do not distinguish one from the other. I do not go around the country telling people that there is a shortage and telling them not to look because they cannot afford child care as they would be paying $350. We face up to issues, we get information, we deal with the crucial issues and we invest in child care because it is a good decision by the federal government to do so on behalf of families. It helps families be involved in the economy of this nation and to be more self-sustaining and it gives families real choices about the decisions that they make. We will continue to build on the success of doubling the places, doubling the funding, improving the accreditation, improving things like IT and making better information available to parents and to the sector so people do not find that investing their hard-earned money has been a mistake. We will not mislead the Australian community, as the opposition continually does, day after day after day, without any basis for their allegations. This is an important piece of legislation. It is another downpayment by the Howard government on trying to assist the professionalism of the industry on behalf of the whole nation—not just the parents who use the child care and not just the directors and owners—because it contributes to people’s capacity to be a part of this strong economy and to be able to make their way in the world. I commend the bill to the House.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Jagajaga has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The immediate question is that the words proposed to be omitted stand part of the question.

Question agreed to.

Original question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.