Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition (Social and Community Affairs)) 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 Child Care Management System. First announced in the 2006 budget, the new management system will require all childcare service providers to come online and establish new electronic reporting arrangements with the Commonwealth government.

Labor supports the new Child Care Management System, and we support this bill. We believe 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, importantly, vacancy information. The system should 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. However, we are concerned that the government’s broader attitude towards child care leaves much to be desired.

Just six months after the Commonwealth Treasury said that parents were being too choosy and child care was affordable, the Treasurer’s budget gave belated and insufficient recognition to the problems that many Australian families have with childcare costs. The government has taken no action on childcare access, and it has no plans to improve early learning and development for our children. Given these shortcomings in the government’s approach to early childhood, I foreshadow that I will move the second reading amendment now being circulated in my name.

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 the childcare benefit as fee relief paid to their childcare centres. So, whilst CCB is an entitlement for families, it is overwhelmingly paid by the government to approved childcare service providers.

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 FaCSIA weekly via the internet. FaCSIA will then pay the appropriate amount of CCB to services to pass on to parents as fee relief. This is a 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 amounts to one week’s maximum rate of childcare benefit per child and 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. This requires providers to have appropriate information and communications technology and ensure 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. Parents will be required to log each child in and out every time they pick them up and drop them off.

Labor recognises that there is a lack of appropriately qualified, experienced and trained childcare staff. We are concerned that these weekly reporting requirements will require staff to do a lot of data entry and that this will place an extra burden on the staff resources of all childcare providers. We hope that the quality of care our children receive will not suffer as a result.

One positive from the implementation of the new management system is that it gives 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 the information available to parents. We also hope that the move to the payment in arrears system will ensure that childcare benefit calculations are more timely and accurate and will reduce childcare benefit overpayments.

Under questioning during the recent Senate estimates hearings, departmental officials admitted that, in the last financial year, around 124,000 families were hit with an average childcare benefit debt of $309. That is a total of over $38 million in childcare benefit overpayments. This is in addition to the $140 million in overpayments that families faced through the family tax benefit system.

Labor understands that family budgets are under pressure as a result of record mortgage payments, spiralling credit card and household debt, rising childcare fees and, most importantly, record petrol prices. We support the changed payment arrangements in the new management system and hope that it is able to help 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 government and the sector with the necessary information about childcare demand and does not relate this demand to the current availability of places to assist future planning.

While this bill introduces new fines for services which do not give required information to the Child Care Access Hotline, the government has given no indication at all that it will quickly and accurately use the new information it is gathering to help better identify present and future childcare needs. The recent House of Representatives Standing Committee on Family and Human Services report Balancing work and family noted that:

Unfortunately, given the economic importance of child care provision, some Australian families are experiencing problems in accessing affordable care.

The government has completely abandoned all planning issues in the provision of child care in Australia. The government continues to deny that parents face any difficulties in securing a place for their child, especially one that meets their needs. Labor knows that this is simply not the case. We know that many parents face weekly challenges in securing a childcare place for their child. We believe that the substantial investment being made in the new management system should be focused on gathering and analysing the information necessary to improve the planning and provision of child care in Australia.

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 in the bill. These new civil penalties are currently limited to situations where childcare services fail to give the Child Care Access Hotline information on the places they have available within the required time frame, as set down by the departmental secretary. Aiding and abetting—withholding information—will also render 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, and they can be followed up with more substantial fines if the problems continue. Labor supports an infringement regime that introduces an intermediate layer of sanction in between taking no action and the complete suspension of an operator. We know that the suspension of an operator’s approval has a major impact on families, and this new fines system will provide a new incentive to improve operator compliance with the requirements of the family assistance law.

Schedule 3 of the bill contains a range of other miscellaneous amendments. These include new powers for the departmental secretary to immediately suspend a childcare service if the operator fails to comply with Commonwealth, state or territory law relating to child care or if the secretary believes there is an imminent threat to the health or safety of a child. 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.

High-quality and accessible child care in Australia is of fundamental importance to Australian families. Labor has strongly argued for many years that the government has a responsibility to support families with the costs of caring for their children. Yet, time and time again, Australian families have been told that there is no problem. Treasury says that families are being too choosy. The Minister for Families, Community Services and Indigenous Affairs claims that families are spending less of their household income on child care. But families know that they are in fact paying more and more for child care—at the same time as the Prime Minister is telling families they have never had it so good. How out of touch is this government after 11 long years in office? Families know just how costly child care has become—even if the government does not.

According to the Australian Bureau of Statistics, childcare costs are rising five times faster than the average cost of all other goods and services. Independent analysis by Mr Saul Eslake from the ANZ Bank, undertaken for the Taskforce on Care Costs, shows that childcare affordability has declined by 50 per cent in just the last five years. This year, after denying there was any problem—and five minutes before an election, of course—the government decided to give families a one-off bonus increase, but families have carried very heavy costs for the last four years.

Labor welcomes the increase as a belated recognition of the challenges that families face but continues to be concerned that the government has failed to provide the ongoing relief that families genuinely need. We are very concerned that what will happen is what happened four years ago: the bonus will be quickly overtaken by increased costs.

It seems perhaps that this view is shared by the minister, who was reported on Saturday as saying that, if any service provider did the wrong thing by increasing their fees to completely absorb this increase, the government were ‘not going to be casual bystanders’. But then he admitted that the government were powerless to stop these fee increases and in fact he was going to do nothing at all.

One area where the government are most definitely casual bystanders is in the area of early childhood education. The government are doing 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 pre-primary education, spending 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. There is no coherent policy agenda. There are no clear directions. On the one hand, we hear from the Minister for Education, Science and Training how important early childhood is and how she wants all four-year-olds to have preschool. On the other, we have the Minister for Families, Community Services and Indigenous Affairs saying that child care has nothing to do with early education. In his view, all he is responsible for is providing care.

In contrast, the opposition is providing fresh policy ideas and showing a new direction for early childhood education. The Leader of the Opposition, Kevin Rudd, understands the importance of early childhood education and knows how critical it is to provide the best future for Australia’s children. Labor has now committed to providing all four-year-olds with 15 hours of early learning per week for up to 40 weeks a year. We will provide $450 million each year in new Commonwealth spending to ensure this occurs and to make sure this service expansion does not increase fees for parents. Importantly, unlike the minister for families, we understand that early education and care should be integrated across all service types because young children do not stop learning when they are in a place the government calls ‘child care’. Our children are always ready to learn. Labor believes that early childhood programs are an opportunity for the foundational growth that all Australian children should have and we will provide it for them.

I now move the second reading amendment standing in my name:

At the end of the motion, add: “but the Senate notes that:

        (a)    child care out of pocket costs are increasing five times faster than average prices for all goods and services;

        (b)    for the past 4 years, child care out-of-pocket costs have increased by more than 12 per cent each year;

        (c)    as a result of these increases, child care is becoming less affordable for Australian families;

        (d)    despite the international consensus on the benefits of early childhood education, Australia ranks last in the Organisation for Economic Co-operation and Development countries on the percentage of gross domestic product spent on pre-primary education;

        (e)    there are currently 100 000 four years olds in Australia that do not attend preschool; and

         (f)    the current Government has no policy agenda to provide preschool education to all Australian four year olds”.

Nigel Scullion (NT, Country Liberal Party, Minister for Community Services) Share this | Link to this | Hansard source

The Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Bill 2007 will help realise several substantial childcare initiatives for Australian families announced by the government. The new Child Care Management System, the CCMS, is the key in this agenda, providing a significant boost to the supply of information and accountability across the childcare sector. The CCMS is a national childcare computer system that will underpin the government’s projected $11 billion investment for the years in child care. Families, childcare services and government will all, under the CCMS, be able to base their operations on the very best information on childcare supply and usage that has ever been available across Australia. This is partly to provide simplified arrangements for childcare services to report to the Child Care Access Hotline so that families can get up-to-date information on childcare vacancies.

However, the CCMS will be just as important in simplifying and standardising the administration of childcare benefit for families. The information on childcare usage and fees will now be reported online by all approved childcare services directly to the Department of Families, Community Services and Indigenous Affairs, and Centrelink. This will allow childcare reductions and weekly arrears payments to services to be calculated and paid swiftly. Also, information on families’ childcare usage and childcare benefit payments made on their behalf to the childcare services will now be directly accessible by families through an online statement. While the CCMS will reduce the administrative burden on childcare services and therefore benefit Australian families, the significantly changed arrangements for services’ interactions with government will be recognised by rolling out the new system progressively across childcare services from 1 July 2007 over a period of two years.

The CCMS will support the childcare compliance strategy announced in the 2006 budget to protect the integrity of payments made to families using child care. Those compliance measures are also provided by this bill. The compliance measures are aimed at the childcare benefit program, which is mostly delivered to families through their childcare services. Services must be approved to participate in the childcare benefit program and the approval is based on their compliance with certain conditions. This compliance system is now to be strengthened. As a result of the new compliance measures, combined with the benefits of the new CCMS, the risk of incorrect payments and fraud will be minimised. Improvements will be made to detect problems if they should occur. Childcare services’ awareness of their obligations and the consequences of non-compliance with their obligations will be increased because of the new measures.

A new civil penalties scheme is a major element of the compliance measures in the bill. The new scheme will allow a pecuniary penalty to be imposed on any service that contravenes a civil penalty provision, such as the new provision which puts an obligation on a service to provide information on the Child Care Access Hotline on time. This obligation reflects the importance of getting timely and up-to-date information into the hotline. If this information flow works well, families can readily find out about any vacancies at childcare services in their local area, and childcare place needs in a particular location can be assessed efficiently.

The new civil penalties scheme will operate in conjunction with an infringement notice scheme. If an infringement notice is issued to a childcare service, the service will have the option of either paying the lesser penalty set out in the notice or proceeding to a court to determine liability. The new civil penalty scheme and infringement notice scheme will be developed in future legislation to consolidate the range of penalties that may be applied to childcare services, relevant to the level of non-compliance. The two new notice schemes will not directly impact on families receiving childcare benefit. A family will only be affected where an approved childcare service consistently fails to comply with its obligations under the family assistance law, such as through the application of existing sanction provisions.

A further compliance measure in the bill will allow families to be notified if their childcare service should fail to comply with one of its conditions of approval, or have its approval suspended or cancelled. Families are entitled to know if this occurs because their childcare benefit may stop and they may become liable for the full fees if they stay in the service. As it is only fair, the bill will allow this information to be passed on to families.

Further childcare measures relating to compliance and other matters are included in this bill—for example, amendments to the absence provisions for childcare benefit. These amendments will reduce the administrative burden on both families and services by providing for childcare benefit to be paid for the first 42 days of absence from care for each child, regardless of the reasons for the absence and without the need for documentation. Other similar amendments are made by this bill.

Question negatived.

Original question agreed to.

Bill read a second time.