David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

I take note of the sixth interim report of the Senate Select Committee on Red Tape, Effect of red tape on child care. The Select Committee on Red Tape was established in October 2016 to inquire into and report on the effect of restrictions and prohibitions—that is, red tape—on the economy and the community. It has presented interim reports on the sale, supply and taxation of alcohol; tobacco retailing; environmental assessment and approvals; pharmacy rules; and health care. I introduced the report on child care yesterday.

Child care is supposed to be about enabling parents, usually mothers, to return to the workforce. It's also about giving children a good start with respect to education. Getting mothers back to work is good because they don't lose their skills and slip down the employability ladder. They earn money, which boosts their standard of living. It's also good for the economy, because they consume, pay taxes and do not require welfare. The problem is that child care is regulated so heavily and is so distorted by red tape that it has become extraordinarily expensive. For many people, the cost of child care is not much less than what they can earn by returning to work. Some mothers are eager to return to the workforce. But, for those who would rather stay at home with their children, the necessity to earn an income is the only reason they use child care. If the cost of doing so is too great, they won't return.

We hear a lot about the benefits of early childhood education, and many of the witnesses focused on that. The national regulatory scheme seeks to ensure the quality of that education is high. There is evidence that quality child care is of genuine benefit in the case of children in dysfunctional households, as the Productivity Commission has noted. But we seem to have lost sight of the fact that quality costs money. Offering it to everyone and increasing the credentials of the educators costs money. Raising standard beyond those needed to ensure the safety, comfort and happiness of the children costs money. And when it costs too much money, it's not used; mothers stay at home with their children. Of course, mothers are not early educators and don't have qualifications in early childhood education. They only offer the love and care of a mother.

Red tape that makes it harder and harder to afford child care not only damages the economy but also limits the standard of living of many families, particularly those on modest incomes. Low- and middle-income families most need to return to work. Low- and middle-income families most need child care to be affordable. Low- and middle-income families are most hurt by red tape. The government's response to childcare unaffordability has been to subsidise it. The cost of that subsidy is now $8 billion, rising to $9 billion over the forward estimates. A decade ago, it was zero. That's red tape for you. The source of the red tape is a COAG partnership with the states and territories. This incorporates the National Quality Framework; the Australian Children's Education and Care Quality Authority; a national quality standard; a national quality rating system; and a national regulatory system. What could possibly go wrong!

Most submitters and witnesses to the inquiry support the NQF's regulation of the early childcare and education sector but many complained about the effect of regulation. The committee noted that 'the department has not recently reported any significant regulatory savings in early childhood education and care' and recommended that these savings should be reported in the department's next annual report for the deregulation agenda. But the Australian Childcare Alliance New South Wales warned that 'regulatory requirements usually come at a cost and can become burdensome, excessive and/or, arguably, counterproductive'. Others were less sanguine also. The Australian Childcare Alliance said: 'The government must acknowledge the increase of paperwork and stress that has been introduced to the sector over the past 10 years.' The Centre for Independent Studies said: 'The childcare sector in Australia has been characterised by growing government intervention in recent decades, culminating in the introduction of the National Quality Framework. Inevitably, this has precipitated new forms of red tape for the sector. Many of the NQF regulations entail significant administrative and compliance costs, while many of the cited benefits are contestable and not based on compelling evidence.' Family Day Care Australia argued that its sector 'has been adversely affected, resulting in excessive administrative burden, service closures and a decrease in high-level quality ratings'.

It was a matter of concern to the committee that family day care is suffering. Given its much lower cost structure, it ought to be thriving. Clearly, something is wrong. A key area of concern for both family day care and long day care providers was the regulation of staff qualifications and ratios. The committee acknowledges that there is rationale for imposing staff ratios and qualifications but is not convinced that current policy settings are correct. There just isn't sufficient evidence in this area. The committee recommends establishing a sound evidence base to promote the relationship between staffing, qualifications and children's outcomes, and between staff ratios and outcomes, to avoid the perception of that regulation being unnecessary red tape. The committee also recommends that the principles of the National Quality Framework be amended to reflect the fact that child care is, in effect, competing with home based parents who are not qualified early childhood educators.

On the subject of subsidising childcare, the committee noted that there were concerns in relation to transitioning to the new funding formula. It recommends that the department report in greater detail on this. More generally, the committee recommends that the government review the objectives of fee assistance to ensure it is actually targeting maternal workforce participation, with an emphasis on children from disadvantaged backgrounds.

I would like to thank my fellow committee members for their interest and participation in the hearings and the committee's deliberations generally. These include Senators Burston, Griff, Watts, Paterson and Brockman. I commend the report to the Senate and look forward to the government's response. I seek leave to continue my remarks later.

Leave granted; debate adjourned.