CHILDCARE SERVICES

Mr HAMILTON-SMITH (Waite) (11:02): I move:

That this house establish a select committee to inquire into and report upon the availability and affordability of childcare services in South Australia and, in particular—

(a) the types of childcare services presently available across the state;

(b) the current and future need for childcare services in South Australia;

(c) federal, state and local government capital investment, concessions, rebates, subsidies, means testing arrangements and out of pocket costs to families;

(d) the impact of regulation, accreditation and other quality control arrangements across each level of government upon the quality and costs of care;

(e) the impact of workforce management and remuneration arrangements;

(f) training requirements and capabilities;

(g) competitive neutrality issues between private and non-private childcare providers including taxation issues, federal, state and local government charges and regulatory fairness; and

(h) options within existing funding parameters for improving the choices available to families, reducing childcare costs and making more efficient use of taxpayer and private investment and funding.

It is hard enough for families at the moment to pay their power bills, it is hard enough for them to pay their water bills. The costs of living are going through the roof, but families with children needing child care are suffering in particular. They are suffering under the burden of massively increasing childcare costs, which is destroying family budgets and putting children and families in danger.

Not that long ago, the cost of child care for a day was $30. It is now around $80 across South Australia and, according to Mr Kerry Mahoney of Childcare SA, who represents the small family business sector of long day care, the cost is heading towards $110 a day. Who can afford that? That is $500 a week per child, $1,000 for two children, $52,000 per year after tax. Who can afford that?

The industry is being crushed by costly red tape and over-regulation. What is so wrong with the way in which we have been running our childcare centres over the past 30 or 40 years, not only in Adelaide but across regional South Australia, that it needs complete regulatory reinvention and the increased costs which accompany mountains of red tape. Child care is being made unaffordable by evermore demanding regulatory arrangements imposed by government, federal and state.

Everyone agrees that the early years of development are critical to a child's development. These are no-brainer propositions. What needs to be made clear is why these particular costly regulations and arrangements are essential to achieve those standards, given that they push the costs of care into the stratosphere, and budget-sensitive families are forced then to consider unregulated backyard care.

Quality is a fine goal—no-one would question the need for it—but do our gold-plated childcare centres need to become platinum plated? Where is the science and where is the objective research that demands the complex array of regulatory arrangements that Labor (federal and state) is now demanding of childcare centres? What has been so wrong about our childcare centres up to this point? Where are the damaged children? Where are the unhappy families? Where is the cry for change coming from? It is not coming from families. It is coming from the bureaucracy and self-appointed experts. The cry for more and more regulation is particularly loud from those who do not have to pay the bill, either because they are not parents or they are looking for the federal or state taxpayer to pay that bill for them.

On our current trajectory, Labor (federal and state) will be putting the private long day care centre out of business within a few years or it will be further bankrupting federal budgets for extra demands for childcare funding, a budget which the current Prime Minister and Treasurer say is under the pump.

Members only need to look at today's Australian for contemporary information. Three states have now warned that they will need to raise fees across the board next year to meet national quality frameworks. Three surveys have been done, in New South Wales, Victoria and Western Australia. It is all in the paper today. The results are striking. PricewaterhouseCoopers have found that 26 per cent of respondents are unsure as to whether or not they will need to close their childcare centre in the years ahead as a result of the changes. The survey found each staff member spent an additional three to 10 hours complying with new regulations.

Only 50 per cent of the centres have recruited the required number of early childhood educators; 48 per cent did not have staff willing to undertake the extra training, and 34 per cent expected workers would retire or leave the industry. Since the introduction of the National Quality Framework, 97 per cent of respondents in New South Wales had increased their fees by up to 8 per cent and 89 per cent expected the NQF to increase costs, with 48 per cent planning to pass it on to parents. In Victoria, 92.5 per cent of respondents raised their fees last year. Just read the paper. It is a mess.

I can tell the house today, having spoken to the childcare industry this morning, that a similar survey is about to be underway in the next two weeks here in South Australia. We will see the facts here, and they will be just as destructive. Families are facing a crisis, and it is a crisis that was avoidable. Childcare providers are upset, families are upset, children are being forced into backyard unregulated care, and treasurers (both state and federal) are having trouble paying the childcare bill. Some unions, academics and bureaucrats—some—are trying to make the case for ever more costly industrial and regulatory arrangements for child care. All sorts of claims are being made—some based on science and some based on pure conjecture.

That is why I am asking the house to agree to this motion for a select committee. All of the voices need to be heard. Both government and opposition need to be informed through an intelligent interaction with the stakeholders across the state. Childcare costs are pivotal to the cost of living for families, and there can be nothing more important than caring for our children. This is a key issue facing South Australia, it will be a key issue at the September federal election and it will be a key issue at the next state election. We are failing. The system is broken. It needs fixing.

The motion calls for a look at the types of childcare services presently available. According to the Office for Early Childhood Education Child Care Update of August 2012, there are 305 long day care centres in South Australia, 40 family day care in-home networks, two occasional care networks and 830 outside-school-hour services. Thirty-one thousand families use long day care. The majority of those long day care services are privately owned, family, small businesses. They care for 38,600 children. In the federal seat of Adelaide—and note this—occupied by the commonwealth Minister for Childcare, Kate Ellis, there are 49 childcare centres reaching out to 12,000 voters. This is going to be a key issue in the seat of Adelaide. You better believe it. They are all unhappy—all of them.

The current and future need for childcare services in South Australia needs examination. South Australia's problem is Australia's problem. There are nearly 608,000 children in long day care across the country and another 300,000 in outside-school-hours care. Working mums and dads want long day care and that sector of care is being choked to death by government interference, overregulation and mismanagement. Most of it is driven by unions and well-intended but out of touch left wing decision-makers, who are paying for child care on the credit card, while at the same time making it so unaffordable for many families that children are being forced into unregulated backyard care.

Here is what treasurer Foley had to say about the genesis of these decisions in the Sunday Mail on 13 January, 'Support for the "nanny state" is a side of Labor that I detest with a passion.' When this issue was raised at COAG he said:

It didn't appear to be contentious until former Queensland Premier Anna Bligh questioned the cost impact on families. A major element of the Commonwealth reform was to increase the number of childcare workers (in ratio to children) in each centre.

He goes on and says this:

I can only assume the reform to add more staff to childcare centres was one made from a basis of naivety, or worse the result of internal pressure from the Miscellaneous Workers Union to grow its membership. Average mums and dads make a calculated decision as to whether they can afford childcare.

So he goes on. It is worth a read. Current commonwealth expenditure on child care is budgeted at $4.86 billion for 2013—the childcare benefit, $2.44 billion; the childcare rebate, nearly $2 billion. This figure is expected to reach $6 billion by 2015-16. It is a cost largely driven by the adoption of national quality frameworks, which set standards childcare centres must meet if families using the service are to be given those financial benefits. This NQF is overlaid standard set-out state regulations. To some extent, there has been duplication of regulatory arrangements in the federal NQF, state regulations and local government. Every level of government is coming at this sector.

The childcare benefit is means tested and it cuts out at $142,000 for one child in care and $148,000 for two children in care. If you are a police officer married to a nurse, earning between $70,000 and $80,000 a year each, you are out of it. You get nothing virtually. You get no benefit. You might get the rebate for out-of-pocket expenses, but mostly you are paying for this yourself. You are not rich. How do you find $52,000 a year to put two kids in child care at $1,000 a week after tax? You cannot afford it. The only people that can afford this are the wealthy and those who are able to access the maximum of the childcare benefit, those most in need. Middle Australia—the families in the middle—are the ones getting crushed.

By COAG agreement, it is the commonwealth's task to fund child care, yet year after year the state government has been taking up the tab. Back in 2008-09, the state budget for early years education was $95.8 million; that had spiralled to $145.4 million in the last financial year 2011-12. That is a 52 per cent increase. We seem to be quite happy to take responsibility for this off the commonwealth so they do not have to pay. We move money from primary schools and high school education into child care—money that is needed for the Gonski reforms. Who is going to pay? Why is the state government allowing the cost of child care to be shifted in this way?

The impact of regulation is phenomenal. Prior to 1972, the childcare sector in SA was largely unregulated. Creep by creep, step by step, it has now gotten out of control. The industry is alarmed about the cost impacts of the current set of arrangements. There needs to be an airing of these issues.

Training requirements and workforce management issues have also come up. Part of the problem is that both Labor's federal minister, Kate Ellis, and state Labor's Premier, on behalf of the union movement, have up-qualified childcare work to align it with the mainstream education system. We seem to be seeking ever-higher education. This is the nonsense of it: you can be a nurse; you can be 40 years old; you can have three children of your own; you go to a childcare centre and you cannot work as a qualified worker; they do not want you; you are paid as an unqualified worker; you are on the scrap heap.

You can be a high school teacher with three children, a woman at the age of 40 with all the experience in the world—you are an unqualified worker. However, if you are a 21 year old diploma graduate, not job ready yet in some instances, you fill the senior position. These are the people that the government wants. We are undervaluing the so-called unqualified workers who are actually the senior women with children and other academic qualifications who are in a position to make a fabulous contribution to child care, and we are saying they are worthless, that we do not want them. It is absolute nonsense. We need to review this and we need to sort it out. If it ain't broke, why fix it?

There are those who would have the commonwealth and the state taxpayer fully fund child care from zero to five, as it does the education system. There are those who dislike the private sector being involved in caring for and educating children. They do not like private schools, they do not like private childcare centres. If it is our goal for state and federal taxpayers to pick up the tab for all early children's services from nought to 18, let's have an open debate about it. At the moment, nought to five is not part of the mainstream education system, yet state and federal Labor governments are making it so.

They are taking us down the pathway of transforming child care into education. The ship has tilted too far towards the educational outcomes and moved away from the basis needs of working mums and dads to have loving, safe, high-quality care for their kids. Is it about child care and working families and families under pressure, or is it about formal education outcomes? We have to get the balance right. We've got the balance wrong, because parents cannot afford to pay.

This is an extremely serious situation. The children of hardworking dual income families, as I mentioned earlier, are facing the difficult choice of having to go to unregulated backyard care as families face these extraordinary bills. There is a question that needs an answer. Should the childcare portfolio remain in the education portfolio or should it be considered to be part of Families and Communities, as is the case in some other states? Is child care about supporting families or is child care about formal educational outcomes for children? Have we got the balance right?

In regard to regulation, there are some fundamental and basic questions we need to ask. Should government regulatory arrangements set the minimum safe standard or should they pursue year after year an ever unachievable pursuit of quality that we will never reach? This select committee will enable all the stakeholders to hear the issues. Let's hear from the union, let's hear from academia, let's hear from government, let's hear from the private sector. It is a problem that needs an answer. I commend the motion to the house.

Mr PISONI (Unley) (11:18): I thank the member for Waite for the work that he has done on this motion here today. Having had that experience in another life, if you like, prior to being in politics, he has a very strong understanding of the childcare sector here in South Australia. I thank him for his advice and his support for the Liberal Party and for me as the shadow minister in this area of concern that South Australians are facing at the moment.

We know that ultimately the issue of rearing children is a family choice. The issue of responsibility for children and families is a family choice. It is something that we, as a government, never want to get involved in, and we believe on this side of the house that we should have as little impediment to that choice as possible. Parents should be encouraged to make those choices as to whether both parents work full-time, whether one parent works part-time, whether one parent works full-time or, as was the case in my situation, whether there is a full-time caregiver. People manage their own situations based on that.

The concern that we have seen now with the changes to the early child regulations, in particular as part of the so-called nationalisation or harmonisation of this bill and these regulations, is that there is no harmonisation between states. Every state has their own set of regulations that deal with ratios and time frames in particular as to when those ratios kick in.

We were concerned at the time. We had prepared on our side of the house some amendments for the bill for the upper house. That was before the former minister for education, the member for Hartley, had agreed to a meeting with Childcare South Australia (just for the Hansard,they represent the non-government early childhood education and care services here in South Australia), who expressed concerns about the speed at which the regulations saw increases in staff for the same number of students.

I would like to read an except from the letter that was sent to the minister on 8 October 2012. It says, 'The Honourable Grace Portolesi MP', and for your benefit, Mr Speaker, that is the member for Hartley, Minister for Education and Child Development. There is a very polite introduction and then the letter goes onto say:

Regarding the two to three year old ratio change, we are seeking confirmation of the unqualified commitment that you made in your office to our members of our association on 4 November 2011.

So, this is almost 12 months later.

The commitment that you made was that, in SA, the ratio for two to three year olds would go from 1:8 in 2016 and then go from 1:5 in 2020. This unequivocal commitment was quoted in The Advertiser on 5 November 2011—

and they have attached a copy and they have extracted some quotes here in the letter. It says:

Child development minister Grace Portolesi said centres now have until 2020 to fully meet the requirement to halve the ratio of children aged 24 to 36 months...Centres will need to achieve a ratio of one staff member to eight children in that age bracket from 2016.

It went on to say:

The decision to offer an extra four years was made after a meeting between Ms Portolesi and representatives of the private childcare industry yesterday.

'I've met with them, listened to their concerns and we've come to an agreement on the most significant aspect of the new regulations,' Ms Portolesi said...'There are costs associated with this, so, in recognition of this, I am pushing out the timeframes.'

But that is not what has happened.

The minister then wrote to the organisation and said that she was not bound and that she could not honour that commitment that she made to Childcare SA, because it would need ratification at a federal level. But, of course, under no circumstances did she give that qualification when she made those promises back in November 2011. Consequently, because those promises were made by the former minister for education, the Liberal Party then were persuaded to not present their amendments in the upper house because we, as did Childcare SA, believed the word of the minister. We believed the word of the minister, the member for Hartley, that she would honour her commitment.

This is just one example as to why we on this side of the house are supporting this select committee be established. We know, through the events that have been exposed, if you like—and they have been happening for years within the education department in the way that they manage child protection issues—that changes to the way that this education department operates are well overdue. Because of the significant impact that these new regulations have made, because of the broken promise made by the former education minister, the member for Hartley, this has now put extra costs on families and extra costs on businesses in the childcare sector.

It is for that reason that I certainly support the establishment of this select committee and encourage all members in this house to put parents and children in the picture when considering the motion that is put to you today. It is an extremely important issue for families. We do not want to force a parent to become a full-time caregiver simply because it is too expensive to place their children in child care. We want families to have that choice; we do not want them to be forced into having that choice. The majority of caregivers are women and the high cost of child care is an impediment for women and their careers because it is often the female partner in a relationship who becomes the primary caregiver. In my experience, I have seen the majority of women in that role.

I encourage members of the House of Assembly to support the select committee. What harm can be done? It will give us all, as members of the South Australian parliament, a better understanding as to the impact of these changes. We may, in fact, at the end of this committee, come up with recommendations that will significantly improve the way that we can offer choice to parents and the way the childcare centres operate. It could significantly improve our access to federal funds that we may not be aware of or we are not exploiting as a state at the moment. If we can ensure that we are getting the full entitlement from the federal government for childcare centres here in South Australia, that should surely should be encouraged in a bipartisan manner, so I encourage members to support the motion.

Debate adjourned on motion of Mrs Geraghty.