Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion. What is the Australian government doing to ensure that Australian families who are affected by ABC Learning going into receivership continue to have access to child care?

Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Link to this | Hansard source

I thank the member for Petrie for her question. I know that she and other members of the government are concerned about the circumstances facing mums and dads who rely on ABC Learning. We on this side of the House understand that child care is a vital service that mums and dads rely on in order to meet their work commitments and that security of supply of child care is vital to them. Obviously ABC Learning is the nation’s largest childcare provider, and as a result the government has closely monitored all year circumstances involving ABC Learning.

On 24 September this year I established the childcare industry task force in my department. That task force immediately established contact with ABC Learning directors and their lending syndicate. Until 2 November the ABC Learning directors and their lending syndicate were indicating that ABC Learning was aiming to trade itself out of current financial difficulties. As members would be aware, on 6 November ABC Learning Centres Ltd entered into voluntary administration and shortly thereafter, indeed almost immediately thereafter, a receiver was appointed.

On 6 November the receiver, McGrathNicol, wrote to all parents with children at ABC childcare centres, all employees and all centre managers with a message that their local childcare centre would continue on a business as usual basis. McGrathNicol indicated in that correspondence that it was working constructively with ABC’s financiers and with the Rudd government on measures to ensure the stability of childcare services for ABC families. The receiver also on that day, 6 November, released a media statement entitled ‘ABC childcare centres to remain open’. To ensure anxious parents and employees could get information, the government, by 3 pm on 6 November, ensured that there was a dedicated telephone line on which parents and employees could get information. In addition, we commenced regularly placing updates on the ABC Learning situation on the mychild.gov.au website.

On Friday, 7 November, the day after the receiver was appointed, I announced that the Australian government had reached an agreement with the receiver of ABC Learning and their lending syndicate. In order to ensure that all ABC Learning childcare centres remain open and providing care until 31 December, the Australian government has committed up to $22 million of conditional funding. I announced on that day, Friday, that the $22 million commitment represents the possible costs of supporting the continued operation of the unprofitable ABC centres for two months. As members of the House would undoubtedly appreciate, normally a receiver coming into a business that found parts of the business were unprofitable would immediately act either to close or to rationalise those unprofitable parts of the business. Because of the unique situation of ABC Learning, the government is providing up to $22 million to support these centres and to ensure that they continue to provide child care until 31 December this year. In the period between now and 31 December the government will continue to work with the receiver and the financiers of ABC Learning and we will be in a position to make further announcements about the future of ABC Learning Centres as a result of that work.

I do not like to criticise anything coming from Queensland, for all of the obvious reasons, but there is a report in today’s Courier Mail which contains the following words:

A spokesman for McGrathNicol—

the receiver—

said it was far too early to tell where and how the Federal Government’s $22 million bailout payment would be spent.

This report is incorrect. I draw the attention of the House to my transcript from 7 November which makes it clear how the $22 million is to be spent. I also draw the attention of the House to a letter, which I am advised has been emailed today by the receiver to the editor of the Courier Mail, which states as follows:

To clarify a report in your paper today, up to $22 million was made available by the federal government to assist in the prevention of closures of any ABC childcare centre before the end of December. The amount used will be verified and independently checked to ensure the funds are used effectively. The actual detail of the funding will be worked through between the receivers and the government and the discussions are already underway. The amount of support was based on a preliminary assessment of the centres which were unprofitable under the group’s current business model. The receivers are currently conducting a full and proper analysis of the centre data in line with their review of the business.

That letter is on the letterhead of McGrathNicol and is signed by Chris Honey, Receiver and Manager, ABC Learning Centres Ltd. The government will continue to work with the receiver and continue to work with the financiers of ABC Learning in order to find a long-term solution. The government has acted quickly and decisively to ensure that parents can rely on ABC centres being available, providing care, to 31 December this year. This is in stark contrast to the position of the opposition which has dithered about every 15 minutes since this first happened.