As a member of the Senate Education, Employment and Workplace Relations References Committee, I rise to speak about the inquiry into the provision of child care. Having previously been an on-the-ground childcare worker for over a decade, I was particularly pleased to participate in this inquiry that followed the collapse of the largest provider of child care in the country, ABC Developmental Learning Centres Pty Ltd. When ABC was placed into receivership towards the end of 2008, almost a quarter of all the childcare places available in Australia were placed at risk.ABC operated over 1,000 centres, providing care for more than 100,000 children. For the families who relied upon this child care and for the workers at these centres, ABC’s collapse just prior to Christmas created a great deal of stress—one might say a crisis. Families dropped their children off in the mornings, not knowing whether the centres’ doors would actually be open or whether the centres would continue to operate beyond that day. Workers did not know if they would still have jobs the next day or at the end of the week. This was an unacceptable situation for the government, the workers, the families and most of all the children.
The Rudd government addressed this crisis with funding of $24 million, which allowed the centres to keep operating and allowed the receivers time to investigate the financial state of all the centres. The receivers identified 720 centres which were profitable. Fifty-five centres had to be closed. The children from those centres were transferred to other childcare centres nearby. Two hundred and sixty-two centres were deemed unviable—these became known as ABC2. Again, the government stepped in to provide reassurance and stability for workers and families, providing a further $34 million to prevent the closure of more than 200 childcare centres—closed with little notice, basically overnight. Because of the government’s support, the majority of ABC2 centres continued to operate—236 have now been sold to 78 different operators, a process which has ensured greater diversity in the sector. Of the ABC2 centres sold, 34 were purchased by not-for-profit organisations. This is a good outcome for the sector and for those centres. The majority of the workforce has also been retained which is good for the workers and good of the children because they remain with familiar caregivers.
The ABC1 centres have been operating successfully and the receivers are currently in the process of negotiating their sale also. It is anticipated that this process will be complete by early 2010. While a small number of ABC centres were closed, the threatened loss of almost one-quarter of all childcare places has been resolved in a positive manner for the majority of the workers in these centres and the many families who relied upon these childcare services.
Despite accusations of market failure, ABC’s collapse was largely due to high levels of debt resulting from its expansion based business model. Accusations of market gouging and aggressive tactics by ABC have been proposed as justification for ridding the sector of corporate and, indeed, all private operators. But, whatever the reasons for ABC’s collapse, the actions of one corporate provider are certainly not representative of all private operators, given that most private providers in the sector are not corporations but small-business owners running only one or a small number of centres. We support and value the inclusion of a diverse range of providers in the sector, including small business owners and not-for-profit providers.
The most important consideration is not the type of provider but the quality of the care provided. There must be a focus upon quality of care and an adequate regulatory framework ensuring such quality. Now is the time for us to act on the quality of child care. Quality in care and education of our young children was ignored for 12 long years under the Howard government. In contrast, the Rudd government recognises that the early years are crucial to ensuring each child has the best start to life. That is why we have firmly placed early childhood on the national agenda.
Our report highlights the need for change. We know quality varies considerably across different childcare centres. Recent national childcare accreditation reports show that 25 per cent of services are failing on basic safety standards, and this must concern parents. We know that quality is important and that children deserve individual time, attention and affection. In some states, carers are looking after eight toddlers aged two to three. Childcare workers are doing the best they can. They are generally hardworking and completely committed to delivering quality services. But, as every parent knows, one young child is a handful; imagine looking after eight toddlers. We want each carer to have fewer children to look after so that they have more time to spend with each child to give them the individual attention, care and affection they deserve.
The Rudd government also believes childcare workers need better qualifications so that they can lead play and activities that inspire children and help them learn and develop. Better qualifications, amongst other things, mean staff can design programs and activities that best suit each individual child. The committee also recommends that minimum qualification levels be introduced into the sector. The Rudd government is committed to introducing a new ratings system for child care so each service will have a rating based on the quality of care they provide. This will help parents decide upon the most appropriate care for their child. A ratings system will also give more incentive—for those services that need to—to improve. Lower staff-to-child ratios and improved qualifications will mean a happier, less stressed workplace, with less staff turnover and greater continuity of care for each child. That can only be of benefit to the children in care. Better quality care means that parents can confidently participate in the workforce, knowing their child is getting a good education and care.
The Rudd government has also delivered on a range of initiatives to improve the affordability and accessibility of child care. We delivered on our commitment to raise the childcare rebate to 50 per cent of parents’ out-of-pocket expenses, with an investment of more than $4 billion over four years. ABS data demonstrates that this reduced parents’ childcare costs by over 20 per cent. Other key achievements include the development through COAG of a national early childhood development strategy—Investing in the Early Years. The government is also working on an early childhood development workforce strategy, outlining how to build skill levels and improve the retention and remuneration of workers in the sector. Working towards these outcomes, the government has committed more than $60 million to remove the fees for childcare courses at TAFE and has committed in excess of $53 million to fund extra university places for early childhood teachers. Overall, the Rudd government has committed almost $16 billion over four years to early childhood education and care. This is an increase of $1 billion per year compared to investment under the Howard government. We recognise that the early years are critical to give children the best start to life and we will deliver on our vision.
In concluding, I would like to thank the secretariat for their hard work and patience throughout the inquiry and for finalising the report.