Second Reading Speech
Senator SHERRY (Tasmania-Minister Assisting on Deregulation and Public Sector Superannuation, Minister for Small Business and Minister Assisting the Minister for Tourism)Today I am introducing a Bill to that builds on the Government's commitment to better ensure the financial viability of the child care sector.
Members will recall the overnight collapse of ABC Learning in 2008 - a collapse that was simply unprecedented in this country.
It was a collapse made possible by the fact that the former Coalition Government allowed ABC Learning to continue to expand virtually unchecked and unhindered.
As a result, with virtually no notice, almost 100 000 families across the nation were left wondering what they were going to do the next morning.
Tens of thousands of confused parents didn't know if they'd be able to go to work or to study the next day.
16,000 child care workers didn't know if they still had a job to go to.
When a child care provider as large as ABC collapses, the consequences for both families and staff are severe.
If it hadn't been for the Australian Labor Government's quick and decisive action in 2008, when we stepped in to stabilise the sector and keep ABC's doors open for families while future arrangements were made - these families, children and workers would have been left in the cold.
Instead 90 percent of these centres continue to operate for Australian families today.
Following that catastrophic collapse the Australian Government committed to strengthen stability in the child care industry so that parents' could be confident that their care arrangements would be there to support them when they need it.
We have introduced a range of new measures to better ensure the financial viability of child care providers.
We are:
- more closely scrutinising the financial background and key personnel of child care providers when granting approval to operate a child care service; and
- requiring operators to give the Department 42 days notice of their intention to close.
Furthermore through legislation that is currently before the Senate, we will:
- enhance the Government's ability to deal with 'pheonixing' - where an operator who accumulates debts, exits and then re enters the market under a restructured company; and
- strengthen the Secretary's powers to refuse applicants who are not fit and proper persons to operate child care services.
The Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011 builds on these reforms.
The amendments in the Bill broaden the powers of the Secretary of the Department to request detailed financial information about large Long Day Care providers and use this information to assess their financial viability on an ongoing basis.
It will also deliver greater audit powers to the Australian Government where we have serious concerns about a provider's financial health.
This means that for the first time large Long Day Care providers will be required to demonstrate that they are financially viable as a condition of receiving Government funding.
These providers will also be required to continually demonstrate their financial viability each year in order to receive Government funding.
This will establish an 'early warning' system, so that the Australian Government can anticipate and respond to a potential collapse of a major child care provider.
Our focus on large long day care providers in this Bill is in recognition of the widespread impact a collapse of such a provider - like ABC Learning - can have on families, children and child care workers.
The Australian Government recognises that child care is an essential enabler of workforce participation, most particularly for Australian women.
At a time when employers are crying out for workers then it is essential that we are supporting parents who want to return to work to be able to participate confidently.
Parents need to have trust that when they drop their child off in the morning that their child is in quality child care.
Importantly, they also need to know that when they drop their child off at care, someone will be there to meet them each and every day.
Debate adjourned
Ordered that the bills be listed on the Notice Paper as separate orders of the day.