EDUCATION AND EARLY CHILDHOOD SERVICES (REGISTRATION AND STANDARDS) (MODIFICATION OF NATIONAL LAW) AMENDMENT BILL

Introduction and First Reading

Mr HAMILTON-SMITH (Waite) (10:33): Obtained leave and introduced a bill for an act to amend the Education and Early Childhood Services (Registration and Standards) Act 2011. Read a first time.

Second Reading

Mr HAMILTON-SMITH (Waite) (10:33): I move:

That this bill be now read a second time.

This bill is one of two measures that I have brought to the parliament this week to address a very important concern and that is both the quality and, as importantly, the affordability of child care. It occurs at a very interesting time when families are under extraordinary pressure to pay the family bills, child care being one of the most important of those bills. This is a bill that speaks for women, it speaks for single parents and it speaks for children. There are some problems here that need solutions.

I bring it, I hope, with a spirit of bipartisanship. I have moved for a select committee so that stakeholders can address some very important concerns in an open and public forum and that in a bipartisan way we can work through those issues and find a solution through both state and federal parliaments. I hope the government will consider supporting the select committee as it would be good for the community.

In respect of this bill, I hope to address a second issue, namely, some outstanding irregularities that flow from the state parliament's decision to support nationally instigated new regulations that passed through the parliament some time ago. Certain commitments were given by the government in respect of transitional arrangements, which subsequently have not in the view of the industry been adhered to, and I seek to rectify that as part of this overall picture of getting child care back to being an affordable proposition for families.

In 2011 the federal government, in concert with mainly state Labor governments at the time, sought to impose a new set of regulatory arrangements, referred to as the national quality framework. The South Australian child development minister at the time, Grace Portolesi, sponsored the Education and Early Childhood Services (Registration and Standards) Bill 2011 to give force to the new federal regulations across SA.

I note that former Labor treasurer, Kevin Foley, has commented publicly that there was considerable internal consternation when these new standards were first put on the agenda by former prime minister, Kevin Rudd, in November 2008 at a COAG meeting. As Mr Foley describes the events, the room, full of all predominantly Labor premiers and ministers, initially warmed to the prospect of raising childcare standards. However, former Labor Queensland premier, Anna Bligh, herself a mother of two and someone I expect who understands the pressures of returning to work with young children, raised the spectre of dramatically increased costs to accompany these new standards and regulations.

Considered in isolation, no-one could dare to question the value of such reforms designed to lift the quality of care. No-one doubts the benefit of quality child care on the development of young children, least of all me. Members would be aware that I partly grew up in a childcare centre. My mother was one of the first proprietors of a childcare centre in this state, at a time when there were no regulations. She was involved in the instigation of the first regulations in 1972 under the Dunstan government, and our family have a long history in this important business of child care.

I have been a proprietor of six childcare centres in two states, employing over 120 people. I have come into contact with hundreds, probably thousands, of families over time who have needed care, and I am very aware of the pressures working families are under when it comes to needing care for their children. I am also equally aware of the need to provide high quality care for children but also of how important it is for it to be affordable, because the alternative is the dangerous option of unregulated backyard care, where children are offered no protection and no safety.

So, I bring this bill to the parliament with that background and an earnest belief in the need for us to do better for families on the issue of child care. Any change to regulations brings with it cost pressures. These pressures are felt hardest by single parents and families from lower socioeconomic groups. These are the very children who will be moved out of child care first and whose mothers will likely be pressured into leaving the workforce. But, they also impact on middle income families, who are not wealthy and who are not eligible for the maximum childcare benefit or rebate because they are not underprivileged. These are the hardworking husband and wife teams, both with a job and earning perhaps up to $150,000, who are completely means tested out of the childcare benefit. These are the people falling through the crack.

No specific evidence has been produced or provided by the National Quality Framework advocates that particular staff ratios enforced by the new National Quality Framework will necessarily equate to better developmental outcomes. Lots of emotion, not much science. It is clear that childcare costs are a major barrier to workforce participation, particularly against women from lower socioeconomic groups, with fewer skills and education. The Productivity Commission's recent Report on Government Services 2013 showed that children from disadvantaged backgrounds are far less likely to be enrolled in child care. As for the developmental value of high quality child care, evidence suggests that the benefit is moderate or negligible for children from high-income families, whereas children from disadvantaged backgrounds have been shown to have the biggest gains—and this is a really important point.

The unfortunate paradox of Labor's childcare reforms is that, by deliberately increasing the cost of care, they are pushing out children and families who have most to gain from an already high-quality childcare system in this country. Despite concerns held by former premier Bligh and former treasurer Foley, the reforms pressed on. The National Quality Framework was established and agreed upon, and mirror legislation was pursued in every jurisdiction. On the whole, the National Quality Framework was endorsed by the industry—they would all like to see higher quality—but the question that could not be answered was: who will pay?

Despite over 800 pages of new legislation and regulations, operators were willing to embrace much higher minimum standards and more elaborate regulations, but who will pay? Even today in the national media, the industry is calling for billions more of childcare benefit payments, already set to hit $6 billion of federal taxpayers' money on its current trajectory. Despite these challenges, the industry was fully committed to implementing the quality framework. The government's time line, however, was deemed to be unrealistic, and the industry was therefore alarmed at the feasibility of these new measures, the cost impacts, and ultimately the viability of their operations.

A prominent media campaign was run on 4 November 2011 here in South Australia seeking a modest range of amendments to the Education and Early Childhood Services (Registration and Standards) Bill. Of particular concern were staffing ratios and qualifications which would put significant pressure on wages—the core component of any childcare business expenditure. Significant media coverage led to a prompt meeting of representatives from Childcare SA and minister Portolesi that very morning. A hasty agreement was made on the spot, with Childcare SA making concessions on their demands in order to receive the support of the minister in delaying the implementation of some of the key national regulations in the transitional plans.

Childcare SA's position on the matter of this radical legislation has been extremely amenable to the demands of the current Labor governments (both federal and state), and they have been willing to make concessions in good faith, despite their fairly held concerns about the measures. That afternoon, minister Portolesi told FIVEaaradio that she had:

...met with people like Richard Munro and representatives of that sector. I'm very happy to report that we have agreed on a number of transitional measures.

Later, the minister told ABC radio:

What is true is that there will be an increased cost. I acknowledge that, I hear what people are saying, so what we are doing is—in fact I just had a meeting with representatives of the private childcare sector; what we are doing is acknowledging that and we are pushing out the timelines for compliance.

The very next day, the minister also told The Advertiser:

We all agree that what we are seeking to do with the reforms is a good thing in principle. But I acknowledge there are costs associated with this, so, in recognition of this, I am pushing out the timeframes.

The article also stated:

Child Development Minister Grace Portolesi said centres now would have until 2020 to fully meet the requirement to halve the ratio of children aged 24 to 36 months to a staff member from 10 to five. Centres will need to achieve a ratio of one staff member to eight children in that age bracket from 2016, the original deadline for the halving.

Despite the assurances from the government, the opposition continued to push amendments in the Legislative Council to codify these transitional arrangements in the bill. In rejecting the amendments put forward by the opposition in the other place, the representing minister again stated that the promises made by minister Portolesi would be upheld, and contained within the transitional provisions in chapter 7 of the national regulation. The representing minister said:

I am advised that every jurisdiction has transitional provisions and they would have every reason to understand our transitional provisions. If Queensland has transitional provisions that can be agreed to, then why can't we as a state?

Further, it was confirmed that if the minister was unsuccessful in her endeavours to enforce the transitional provisions in the national regulations, the state parliament still retained the authority to disallow the national regulations.

On 20 October 2012, the Hon. John Darley MLC directed questions to the Minister for Education and Child Development in which he described the minister's promises to Childcare SA representatives as an 'unequivocal and unqualified agreement'. Considering that Mr Darley voted with the government in support of the original bill, one might well presume that his vote was conditional on the presumption that the promised transitional provisions would be included in the national regulations. If Mr Darley had changed his mind, many of the amendments moved by the opposition would have passed and the government would have been forced to include these provisions in the legislation.

The SPEAKER: Member for Waite, the man you referred to as 'Mr Darley' is of course 'The Honourable.'

Mr HAMILTON-SMITH: The Honourable., indeed.

The SPEAKER: And I suspect if he had been voting differently, you would have called him the Honourable.

Mr HAMILTON-SMITH: Thank you for your guidance, Mr Speaker. If the Hon. Mr Darley had changed his mind, many of the amendments moved by the opposition, as I said, would have passed. In any case, on 24 November 2011 the bill was agreed to without any amendment. The national regulations were released soon after, in December 2011, and none of the public agreements reached between the minister and Childcare SA had been realised within the regulations—a great disappointment to the industry.

Further, according to the industry, regulations 107 and 337 pertaining to the calculation of unencumbered space within a centre had not been consulted with or anticipated by the industry—measures that have a crushing impact on these small family businesses. The regulations have included significant changes to the way floor space is measured when granting a licence to a childcare centre. The effect has been to reduce the number of licensed places at most childcare centres when centres are sold or refurbished—a crushing blow.

The industry expects that almost 3,000 childcare places could be removed from over 300 licensed childcare centres in SA at a revenue loss of around $61.2 million per annum as a result of these new undisclosed regulatory imposts that have appeared out of nowhere. The value of individual family businesses has also been slashed by this measure and some banks as a result have tightened lending provisions, putting some services at risk at point of sale in particular.

To add insult to injury, on 7 December 2012 federal childcare minister Kate Ellis told FIVEaa radio that blame for growing childcare waiting lists sat with local and state governments. She said this:

I've actually been hearing from childcare operators who are desperate to set up new centres to expand and bring about new places but they're saying that it's just too hard because there are too many barriers, there's too many regulations, red tape in place that's preventing them from doing that, which is why I've said to both State and Territory Governments, but also Local Government, let's all sit down, establish a working group that works all three levels of government, stop playing the blame game and actually come up with solutions so that we can increase the number of childcare places that we have.

The minister then went on to blame state and local governments' planning and development regulations for impeding the development. She started to play the blame game. What a contradiction!

Immediately after Ms Ellis, childcare centre operator George Skrembos stated on radio:

Can I say our Local Government…local councils are great in approvals. We have not had too many difficulties in seeking approvals, that is not the problem.

According to minister Ellis' own data, demand for child care has grown. I refer to sections 15B, 15C and 15D of the bill. These seek simply to make the government adhere to the promises and the commitments that Ms Portolesi made. That has not occurred; it needs to occur.

The SPEAKER: Member for Waite, would you be seated? I have tried to deal in the past two days with members repeatedly referring to members of this house by their Christian name or their surname or both. The person you are referring to is, I think, the former minister for education or currently the Minister for Employment, and I would ask you to refer to her by that name, because to do otherwise is to promote quarrels. Member for Waite.

Mr HAMILTON-SMITH: Thank you, Mr Speaker. Has the clock been held?

The SPEAKER: No, it has not, nor should it be.

Mr HAMILTON-SMITH: Alright. I ask members to look very carefully at the bill and the clauses, particularly 15B of the current bill, which thereby amends the bill so that sections 107(3) and 337 of the national regulations are taken to not apply; and section 15C, the most significant component of the bill, as it seeks to implement the transitional arrangements around staffing ratios for children who are toddlers. I seek leave to have the explanation of the clauses inserted in Hansard without my reading it.

Leave granted.

The SPEAKER: And I think you got the time anyway.

Explanation of Clauses

Part 1—Preliminary

Part 2—Amendment of Education and Early Childhood Services (Registration and Standards) Act 2011

3—Amendment of heading to Part 2—Adoption of Education and Care Services National Law

4—Insertion of heading to Part 2 Division 1

Division 1—Adoption of Education and Care ServicesNational Law

5—Insertion of sections 15A and 15B

Division 2—Modifications of Education and Care Services National Law

15A—Interpretation

These clauses are formal

15B—Modification of Education and Care Services National Law—indoor space requirements at child care centres

This clause removes regulations 107(3) and 337 from the Education and Care Services National Law and reverts indoor space requirement methodology to Child Care Centre Regulations 1985. The space requirements per child otherwise remain at the same ratio.

15C—Modification of Education and Care Services National Law—educator to child ratios

This clause slows the implementation of Education and Care Services National Law relating to educator to child ratios for children aged between 24 and 36 months. A ratio of 1:8 shall apply after 31 December 2015, and a ratio of 1:5 shall apply after 31 December 2019.

15D—Modification of Education and Care Services National Law—educator qualifications

This clause allows for workplace flexibility relating to reasonable breaks (not exceeding 1 hour) and how they impinge on minimum ratios of tertiary qualified educators in that period. In cases where a tertiary qualified educator has taken a reasonable break, their place may be temporarily filled by an educator who holds certificate III in education or child care, or by an educator who is actively working towards an acceptable tertiary qualification, as to satisfy Education and Care Services National Law in regard to relevant educator ratios.

Debate adjourned on the motion of Mrs Geraghty.