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SENATE

Official Committee HansardCOMMUNITY AFFAIRS LEGISLATION COMMITTEE

Reference: Child care funding

WEDNESDAY, 22 APRIL 1998

PENRITH

BY AUTHORITY OF THE SENATECANBERRA 1997

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SENATE

COMMUNITY AFFAIRS REFERENCES COMMITTEE

Wednesday, 22 April 1998

Members: Senator Bishop(Chair), Senator Knowles(Deputy Chair), Senators Bartlett,Forshaw, Neal, O’Brien, Payne and Synon

Substitute members:Senator Chris Evans for Senator Forshaw and Senator Woodley forSenator Bartlett

Participating members: Senators Abetz, Brown, Colston, Faulkner, Gibbs, Margetts andWest

Senators in attendance:Senators Bishop, Chris Evans, Neal, O’Brien and Payne

Terms of reference for the inquiry:

(a) impact on families, children and child care services of:

(i) the abolition of grants and subsidies to child care and vacation care and any futureabolition of operational subsidies for family day care services,

(ii) any reduction of families’ access to Childcare Assistance and the Childcare Rebate,

(iii) families only being able to access child care subsidies in the form of Childcare Assist-ance and the Childcare Rebate if their children are cared for by carers other than theparents,

(iv) limits on and regional allocation of child care hours and places and the extent of unmetdemand for child care places,

(v) any reduction in quality of services or the accreditation system, and

(vi) implementing the Child Care Payments Bill 1997 on 27 April 1998;

(b) the extent and impact of:

(i) fee increases related to budget cuts,

(ii) child care service closures,

(iii) any reduction in child care places,

(iv) the use and nature of unregulated, backyard care, and

(v) any reduction in hours and services provided to children;

(c) the effect of taxation, including but not limited to the Family Tax Initiative on parents and theirability and choice to participate in the paid work force or in the full-time care of their children;

(d) the effect of child care subsidies (in the form of Childcare Assistance and the Childcare Rebate)being available only for families who contract out their child care to others, and not for thosewho provide child care at home;

(e) the effect of fee increases and changes in the child care sector on women and their ability andchoice to participate in the work force;

(f) the extent of reductions in Federal Government revenue from people leaving the work forcebecause they cannot afford child care services and the additional cost to Government of socialsecurity payments to them and their families;

(g) the impact on work-based child care and workers where fringe benefit tax exemption foremployer-sponsored care has been denied and any restriction on child care places; and

(h) the impact of the Government’s changes on workers in the child care industry and their condi-tions, and associated job losses.

WITNESSES

BARDETTA, Mrs Frances Agnes, President, Association of Child Care Centres ofNew South Wales, Suite 12, 2 O’Connell Street, Parramatta, New South Wales2150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

BAUM, Mr Noel, Senior Policy Officer, Local Government and Shires Associationsof New South Wales, 215-217 Clarence Street, Sydney, New South Wales 2000 . 157

BERTONI, Mr Jose Felix, Director, Mount Druitt Blinky Bill’s Preschool, 7 AlanStreet, Mount Druitt, New South Wales 2770 . . . . . . . . . . . . . . . . . . . . . . . . . . 141

BIRCH, Ms Elizabeth Catherine, Director, The New Children’s Hospital Child CareCentre, Hawkesbury Road, Westmead, New South Wales. . . . . . . . . . . . . . . . . 141

BLUETT, Ms Lesley Alison, Director, Uniting Church in Australia Children’sServices Forum, Corner Moore and Boundary Streets, Roseville, New SouthWales 2069 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

BOSLEY, Mrs Julie, Coordinator, Bidwill Vacation Care, Graceades CommunityCottage Inc., 34 Oreades Way, Bidwill, New South Wales. . . . . . . . . . . . . . . . . 141

BRENNAN, Dr Deborah Jane, Policy Adviser on Child Care, Australian Council ofSocial Service, Locked Bag 4777, Strawberry Hills, New South Wales 2012. . . . 194

CAUCHI, Aaron, 52 William Cox Drive, Hobartville, Richmond, New South Wales2753 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

CONNOLLY, Mrs Lyn, Vice-President, Association of Child Care Centres of NewSouth Wales, Suite 12, 2 O’Connell Street, Parramatta, New South Wales 2124 141

CONNOLLY, Mrs Lyn, Vice-President, Association of Child Care Centres of NewSouth Wales, Suite 12, 2 O’Connell Street, Parramatta, New South Wales 2124 172

DEVERIL, Jackie, Kids Activity Centre, Mt Druitt, New South Wales . . . . . . . . . . 114

DWYER, Councillor Kevin, Mayor, Penrith City Council, and member of the LocalGovernment and Shires Associations, 215-217 Clarence Street, Sydney, NewSouth Wales 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

FIELD, Donna, 10 Borrowdale Way, Mt Pleasant, New South Wales. . . . . . . . . . . 114

FROW, Ms Linda Susan, Policy Officer, New South Wales Council of SocialServices, 66 Albion Street, Surry Hills, New South Wales 2010. . . . . . . . . . . . . 194

GADDIE, Glenys, Kids Activity Centre, Mt Druitt, New South Wales . . . . . . . . . . 114

GIBSON, Mrs Denise Lynne, Children’s Services Manager, Penrith City Council,601 High Street, Penrith, New South Wales 2740. . . . . . . . . . . . . . . . . . . . . . . 157

GODHARD, Mrs Tonia Lesley Ashcroft, Executive Officer, Sydney Day Nurseryand Nursery Schools Association, 141-145 Pitt Street, Redfern, New South Wales2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

HAYES, Professor Alan John, Head of Institute of Early Childhood Studies,Macquarie University, Sydney, New South Wales 2109. . . . . . . . . . . . . . . . . . . 194

HEFFERNAN, Ann, 16 Bellevue Road, Regentville, New South Wales. . . . . . . . . . 114

HENDERSON, Ms Robyn-Lyn, Director-General, New South Wales Department forWomen, New South Wales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

JENKINS, Mr Brian Stephen, Financial Services Manager, Penrith City Council,601 High Street, Penrith, New South Wales 2740. . . . . . . . . . . . . . . . . . . . . . . 157

JENKINSON, Mrs Lee, Director, Nought To Five Early Childhood Centre, 5Talavera Road, North Ryde, New South Wales 2113. . . . . . . . . . . . . . . . . . . . . 141

KIRBY, Mr Philip Michael, Director, Kirbys Care 4 Kids Child Care Centre, cnrCam and Cambridge Streets, Cambridge Park, New South Wales 2747. . . . . . . 114

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

LISTER, Ms Susan Margaret, Spokesperson, Ryde Child Care Taskforce, 170Tennyson Road, Gladesville, New South Wales 2111. . . . . . . . . . . . . . . . . . . . . 207

LO PO’, Mrs Faye, Minister for Community Services, Minister for Ageing, Ministerfor Disability Services, Minister for Women, New South Wales Government . . . 127

McGUIRE, Norah, Combined Pensioners and Superannuants Association of NewSouth Wales and Older Womens Network, 1/339 George Street, Waterloo, NewSouth Wales 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

McNALLY, Ms Karen, Branch Head, Long Day Care, Fairfield City Council, POBox 21, Fairfield, New South Wales 2165. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

MOORE, Ms Catherine Anne, Policy Officer, Australian Council of Social Service,Locked Bag 4777, Strawberry Hills, New South Wales 2012. . . . . . . . . . . . . . . 194

MOORE, Mr Gary Michael, Director, New South Wales Council of Social Services,66 Albion Street, Surry Hills, New South Wales 2010. . . . . . . . . . . . . . . . . . . . 194

PEPPER, Jo, Kids Activity Centre, Mt Druitt, New South Wales . . . . . . . . . . . . . . 115

PRESS, Ms Frances Louise, Lecturer in management, Institute of Early Childhood,Macquarie University, Sydney, New South Wales 2109. . . . . . . . . . . . . . . . . . . 194

REDMAN, Tracy, 12 Verdelho Way, Orchard Hills, New South Wales . . . . . . . . . 115

REECE, Neil, Kids Activity Centre, Mt Druitt, New South Wales . . . . . . . . . . . . . 115

REFSHAUGE, Mr Michael, Director Community Services, Marrickville Council, POBox 14, Petersham, New South Wales 2049. . . . . . . . . . . . . . . . . . . . . . . . . . . 157

SANDARS, Ms Deborah Ann, Manager Children’s Services, Fairfield City Council,PO Box 21, Fairfield, New South Wales 2165. . . . . . . . . . . . . . . . . . . . . . . . . . 157

STONE, Joan, ‘A Country Cottage’ Preschool, New South Wales . . . . . . . . . . . . . 115

TARRANT, Miss Joycelyn Ann, Director, St Pauls Lutheran Kindergarten, 289Desborough Road, St Marys, New South Wales. . . . . . . . . . . . . . . . . . . . . . . . 141

THORNE, Debbi, Werrington County Child Care Centre, New South Wales . . . . . 115

VAN ECK, Rose, Kids Activity Centre, Mt Druitt, New South Wales . . . . . . . . . . . 115

WARING, Mrs Diana Louise, Member, Ryde Child Care Taskforce, 170 TennysonRoad, Gladesville, New South Wales 2111. . . . . . . . . . . . . . . . . . . . . . . . . . . . 207

WESTON, Mr Ian, Consultant, Association of Child Care Centres of New SouthWales, Suite 12, 2 O’Connell Street, Parramatta, New South Wales 2124. . . . . 172

WILLIAMS, Mr John Bruce, Project Leader, Children’s Services, Target Groupsand Services, Policy and Planning Directorate, Department of CommunityServices, 164 Liverpool Road, Ashfield, New South Wales 2131. . . . . . . . . . . . 127

YEADON, Mr Kimberley Maxwell, Minister Assisting the Premier on WesternSydney, New South Wales Government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

COMMUNITY AFFAIRS REFERENCES COMMITTEE

Child care funding

PENRITH

Wednesday, 22 April 1998 SENATE—References CA 113

Committee met at 9.10 a.m.

CHAIR —On behalf of the Community Affairs Committee I welcome all those inattendance to today’s hearing. I introduce Councillor Kevin Dwyer, the Mayor for PenrithCity Council, and ask him to make some formal introductions to kick off the day’s proceed-ings.

Mayor Dwyer—Thank you, Mark. Firstly this morning it gives me very great pleasure,on behalf of Penrith City Council, to welcome Senator Mark Bishop from Western Australia,Chairman of the Senate Community Affairs Committee, Senator Chris Evans from WesternAustralia, Senator Belinda Neal from New South Wales, Senator Kerry O’Brien fromTasmania, and Senator Marise Payne from New South Wales. We understand that twofederal members of parliament will be here shortly—Miss Jackie Kelly, the member forLindsay, and Mr Roger Price, the member for Chifley.

State representatives here this morning are Mrs Faye Lo Po’, the member for Penrith andMinister for Community Services, Minister for Disability Services, Minister for Ageing andMinister for Women; and Mr Kim Yeadon, who is the member for Western Sydney andMinister for Information and Technology. Two state members present are Diane Beamer, themember for Badgerys Creek, and Jim Anderson, the member for St Marys. Also presentfrom our council will be Councillor Greenow, who I think is arriving in a few moments, andCouncillor Jackson and Councillor O’Toole.

Mr Chairman, ladies and gentlemen, it gives me very great pleasure to extend a verywarm and cordial welcome to the Senate Community Affairs References Committee. Let mesay at the outset, we feel very privileged and honoured that the committee has chosen tohold one of its national public hearings here in Penrith in New South Wales. I have beenaround these parts for some time now, and to my memory this is certainly the first time wehave had the pleasure of hosting a Senate committee in this city. You have come from rightacross the nation—and I have mentioned your locations as senators—to be here today toconsider an issue that is very important to Penrith city and our community—it is importantto communities across Australia, for that matter.

Obviously we wish that your deliberations here today are productive, and that you canget a real insight into the issues affecting children’s services and particularly child care. Iextend that welcome, Mr Chairman, on behalf of all of us of the city—there are some170,000 of us—and we are very honoured to have you here. We look forward to a great dayof hearing with great interest the matters of concern to us in this city and to western Sydneywith its population of 1.5 million. Congratulations in coming here.

CHAIR —Thank you very much, Mayor, for that very fine and warm welcome. Distin-guished guests, ladies and gentlemen, it is a great pleasure to be here today in this fine set ofcouncil chambers. Yesterday we were in Melbourne and had a lot of submissions. Allmembers of the committee have been looking forward to coming to Penrith and thisimmediate area to hear from you your comments on this critical issue of child care funding.So, again, Mayor, thank you for your warm welcome, thank you for the keen efforts of youradministration in making the planning of today’s function what will be, I am sure, a greatsuccess.

COMMUNITY AFFAIRS

CA 114 SENATE—References Wednesday, 22 April 1998

I declare open this public hearing of the Senate Community Affairs References Commit-tee. The committee is continuing the taking of evidence into matters relating to child carefunding which were referred to the committee for inquiry and report by 30 June 1998. Thecommittee will commence proceedings with a community forum. This segment will giveindividuals in the audience an opportunity to comment on issues relating to child care. Youmay wish to comment on issues such as access to child care, standards of service provided,financial impacts or decisions to remain working.

To allow this segment to run in an orderly manner, please indicate that you would like tospeak, and wait until a microphone has been passed to you. I will then call on you toidentify yourself for the Hansard record before you address the committee. To allow as manypeople as possible to have the opportunity of speaking I will have to restrict your speakingtime to three minutes.

Yesterday we were in Melbourne and we ran a similar process. On a number ofoccasions during the day there developed the beginnings of a somewhat acrimonious debatebetween those representing the private child care sector and others representing interests inthe community child care sector. The debate had the capacity to degenerate into some formof abuse and mud-slinging. All members of the committee from both government parties andopposition parties are particularly interested in the comments of members of the community,whether it be parents in this first session, or child care providers in a later session during theday.

We are on the road for some six days, going to nearly all mainland states in Australia.We are greatly interested in the views of parents, how the government’s decisions haveimpacted upon them, and how providers in both sectors are adjusting to the changes. Wewould ask you to make constructive comments to members of the committee, and treat usand other members in the public area with courtesy, and that way all members of thecommittee will be able to gain the insight that I am sure you wish to share with us in thismost difficult area. So if those persons who wish to address the committee in this communi-ty forum session would like to stand we can get today’s proceedings under way.

CAUCHI, Aaron, 52 William Cox Drive, Hobartville, Richmond, New South Wales2753

DEVERIL, Jackie, Kids Activity Centre, Mt Druitt, New South Wales

FIELD, Donna, 10 Borrowdale Way, Mt Pleasant, New South Wales

GADDIE, Glenys, Kids Activity Centre, Mt Druitt, New South Wales

HEFFERNAN, Ann, 16 Bellevue Road, Regentville, New South Wales

KIRBY, Mr Philip Michael, Kirbys Care 4 Kids Child Care Centre, cnr Cam andCambridge Streets, Cambridge Park, New South Wales 2747

COMMUNITY AFFAIRS


McGUIRE, Norah, Combined Pensioners and Superannuants Association of New SouthWales and Older Womens Network, 1/339 George Street, Waterloo, New South Wales2017

PEPPER, Jo, Kids Activity Centre, Mt Druitt, New South Wales

REDMAN, Tracy, 12 Verdelho Way, Orchard Hills, New South Wales

REECE, Neil, Kids Activity Centre, Mt Druitt, New South Wales

STONE, Joan, ‘A Country Cottage’ Preschool, New South Wales

THORNE, Debbi, Werrington County Child Care Centre, New South Wales

VAN ECK, Rose, Kids Activity Centre, Mt Druitt, New South Wales

MR Kirby —I represent the private child care centre operators in Penrith. Thank you foryour introduction. We, from the outset, have agreed with the comment relating to courtesyand respect, members of the committee. We have no desire to set up a war between privatecentres and council centres. I addressed Penrith Council on Monday night and I emphasisedthat. In many cases, the staff at council centres are our colleagues and, in all cases, childrenat both centres, private and council, are our future. We do not have a problem with any ofthose groups.

We do, however, wish to focus our argument against Penrith Council’s desire to reinstatethe operational subsidy for Penrith Council-run centres. There is a plethora of emotion in thisroom. We have placards, we have media, we have representatives of state, federal, and localgovernment. We all feel hotly. We have all been affected by government cuts. We do notwant, however, to set up a war. We do want to deal with the facts, and my role this morningis to deal with the facts for us, to deal with the facts for the committee, and even facts forthe media.

There is a huge oversupply of child care centres in Penrith. There are at least 27 privatecentres and 16 or 17 council centres. All together that is at least 42 centres—that is a lot.Demand is down, and we are all feeling the pinch. The government cuts have affected usacross the board.

We have learned to adjust to the changes—you mentioned adjusting to the changes. Wehave tried to adjust to the changes. We feel, however, that the administration of the councilcentres—not the staff, the parents, or the children but the administration that comes fromcouncil—is not adjusting to change. We feel it would be grossly unfair if council centresreceived the $40,000 per centre, at least, back if other centres did not. A simple question is:how is it then that the private centres—as an example, not as an enemy—can run a businessprofitably, provide a cheaper service in most cases, and provide a better quality service,according to the parents of Penrith? Seventy per cent of the parents in Penrith go to privatechild care centres. That is not a war statement, that is a fact.

COMMUNITY AFFAIRS


Why is it that council centres cannot run as cheaply as private centres? Why is it thatcouncil administration, not the Penrith Council centres themselves, are costing money toPenrith ratepayers to the tune of close to $900,000 a year? Penrith Council is in a deficit.They are losing money for Penrith ratepayers. Members of the committee, I ask you, is therea better way of doing it than just giving money back to a system which has not been able toprovide a cheaper, better quality service already? I would like to emphasise that point. Is itsensible to reinstate the operational subsidy to a system that has not been able to provide acheaper, better service, as evidenced by Penrith parents and by the average price per day?

We see, in a strange way, a ray of hope in the fact that operational subsidies have beencut. It is almost a level playing field. Demand is down. The cuts have affected everybody.Therefore, we say, it would be grossly unfair if Penrith Council centres received thatoperational subsidy back.

CHAIR —Thank you, Mr Kirby, for that contribution. I would remind all persons in thepublic forum that the program for today’s proceedings is 9 a.m. to 10 a.m.—albeit we starteda bit late—for the community forum, and 11 a.m. to 12 noon, for a providers and child carecentres panel. The community forum is intended mainly for parents to come and expresstheir views to the Senate committee. The views of providers in child care operations we willbe particularly interested to hear those views between 11 a.m. and midday, so please bearthat in mind. We will proceed, thank you.

Glenys Gaddie—I am a parent and my children attend the Kids Activity Centre atMount Druitt. I am also on the board of directors. Personally, I have been affected terriblyby the decision of the government. Last year I had to take my kids out of before and afterschool care because of long day care. My long day care cost increased by $15 a week.Because I am also a single parent my level at out of hours school care also increased by $25a week. I was affected by $40 a week. I could no longer carry that cost. I had to reduce myhours at work. I am lucky I am in a company where I can do that at the moment. I have alsobeen told I might have to go back to full-time work. I cannot afford to go back to before andafter school hours care. It means my kids will be sitting at home by themselves, and I cannotdo that either. I have just had to give up the opportunity of promotion because I cannotallow my children to sit at home by themselves.

We had 12 people at a meeting last night regarding the fee relief that they are claimingback. At least five of those 12 people will get nothing back on fee relief. As a single parent,I am hoping I will get something back. My children now go to vacation care because that isthe only thing I can afford. I am greatly affected by what the government is doing. All ofour parents are affected. Our fees will be doubling, as of the 27th, from $50 a week to $100a week. People who are receiving no fee relief have had their fees doubled by $50 a weekper child. Anyone with a mortgage—it does not matter what income they are on—has theirmoney tied up with mortgages and family commitments. How can they afford $50 a weekper child? It’s incredible!

How can the government allow families to be in so much debt just to put their childrenin care so they can keep working? What is it coming down to? Mothers have to give up theirwork, mothers have to reduce their hours. I have worked for the last 20 years. I have paidtaxes for the last 20 years. Unfortunately I am now a single parent. It is not by choice, it

COMMUNITY AFFAIRS


was a situation that I had no choice in. I am now, because I have had to reduce my hours,relying on benefits from the government which I have never had to do before. I hate being inthis position, and I am sure every other parent in my position hates it also.

If I was working full-time the burden on the government would be less because I wouldnot need as many benefits from the government. But I also need help with my child care,and every other parent in our centre feels the same way. With parents on two incomes,whether they exceed the limit or they are close to the limit—we have one parent whoreceives 2.9 per cent fee relief, which is less than $3 out of $100. Now, how do theysurvive? With three children in care it is extended to $150 a week more than what they werepaying. The parents cannot survive this. Our centre cannot survive this. We have lost 12families so far this year in anticipation of what is going to happen. That is not how manyfamilies will leave after the 27th.

A lot of them still have not got their letters back from Centrelink, and the letters theyhave received back from Centrelink do not make any sense. In their letters they are told togo back to the child care provider and the child care provider would then give them anotherregistration form to fill in. Our centre does not have any registration forms. We cannot evenset up our computer systems because we have not got the packages to set them up. This isWednesday. We have less than a week before this new system starts. How do we set up ourcomputers? We do not have the packages to set them up.

We have been told that our parents must sign in and sign out because the child careproviders cannot be relied on to give the correct information back to the government. Thatmeans that parents who would normally drop their children off and watch their children walkinto the centre will now have to leave home early, get their children out of bed early, get tothe centre early, come in and queue up to sign their children in. We drop our kids off atnetball, swimming, et cetera. What happens then if the parents are not there to sign them outof the centre?

CHAIR —Thank you, Ms Gaddie.

Neil Reece—I am a parent from the Kids Activity Centre at Mount Druitt also. I am alsothe chairman of the parents management committee at the centre, so I have a very good ideaof what is happening here. There are a couple of issues I would like to raise. One of thefacts is that we are not getting much information back from Centrelink. We are constantlytold, ‘Just contact Centrelink, everything will be all right.’ Our parents are contactingCentrelink and being told differently. The bottom line is that Centrelink are not sure of theirfacts; they are not sure of what they are changing next Monday.

Another thing which does not seem to have been taken into consideration is that we havea centre that runs five transport vehicles. We service 24 different schools. All our parents,including myself, enjoy this wonderful service. We are quite happy to pay a little extra for it,too, quite frankly. The bottom line is that with these changes and the increases that arecoming we have lost parents already and we have had more who are indicating they will beforced to withdraw their children from care, and we still have to maintain the same numberof buses.

COMMUNITY AFFAIRS


Another big problem seems to be this new sessional arrangement. It seems to be causinga lot of parents to need to withdraw from a morning session. They can make their budgetwork with increased fees by removing the child from care for maybe a morning or anafternoon session. That is something that I will probably look at myself. My wages excludeme from claiming any rebates. I am not a rich man, I still live week to week fairly much. Ido not see that, because I have worked hard for years to climb up various ladders and get agood position at work and have a reasonable income, I now deserve to be slugged an extra$50 a week. That is the feeling with a lot of our parents.

I am very happy to see lower income people get a little extra assistance. What I am notparticularly pleased about is under the new system I may qualify to get $2 or $3 a weekback. Quite frankly it is a waste of time; I will not claim it. I won’t waste my time doing thepaperwork because I could simply earn more money in that time. So I do not see thishelping me at all. I see it as slugging me for an extra $50 a week to have something assimple as care for my children and peace of mind while I am at work each and every day.

When I do not have that peace of mind I am not as productive at work. I believe thatthis country does need to be productive, and the government wants us to be productive, yethow can a parent be productive who is nervous, unsure, and frustrated by various govern-ment departments not knowing the answers to what they keep on claiming they do know theanswers to? They are simply going to earn less, work less, be less productive. That is aboutall I have to say for now.

CHAIR —Thank you, Mr Reece.

Rose Van Eck—I am a mother of three, and my youngest daughter Tara is still in careat the Kids Activity Centre. I consider myself one of the luckier ones where I have only onechild in care. Last year I worked hard and I fought for a pay rise and ended up with between$20 and $25 a week on top of what my normal pay was. With that, I lost my familypayment of $48 a fortnight, and now I am under threat of an extra $50 a week in child care.So I will be paying $50 extra a week, as well as the $25 a week I lost in family payment.My income is $75 less a week than my pay rise of $20.

I feel quite strongly about this, not just for myself but for all parents. We choose to, orhave to, work to give our kids a better life. We choose to do that rather than rely ongovernments for benefits. My choice is now whether I can afford the extra $50 a week. DoI leave my daughter at home in the morning to go to school by herself, as I do not have achoice whether I can start early or late? I have my hours. With that I feel I am going back20 years where kids were left at home alone, or they were left with people that were notqualified. What are we going back to? That is the big thing that so many people are saying.

What do we do? Do we give up work, go on to benefits, and cost the government moremoney? Do we leave our kids at home? The choice is not really there. We will not leave ourkids at home, so in the end we are all going to cost everybody more money. That is reallyall I have to say. Thank you.

CHAIR —Thank you, Ms Van Eck.

COMMUNITY AFFAIRS


Jo Pepper—I am a concerned parent, taxpayer, and also a university student. I work full-time and travel takes me four hours a day—two hours to travel to the eastern suburbs andtwo hours back. My husband works at 6 o’clock in the morning. Fortunately, the KidsActivity Centre opens at 5.30, so my six-year-old is dropped off there. My dilemma is: whatdo I do? Do I finish university because I cannot afford that, because my extra $50 has got tocome from somewhere?. My HECS has already risen. Or do I stop working after 13 years? Iam actually the higher wage earner. It is my wage that pays the mortgage and the bills. Sowhat do I do?

Our family is still in New Zealand and England. We have no-one to fall back on exceptthe Kids Activity Centre. To my daughter, who is six, they are her extended family. Theyteach her social skills, they teach her pottery, everything. Now what happens? Do I leaveuni, do I leave work? Is the government going to allow me to go and learn how to dopottery so I can have my child at home and teach her that, along with needlework? They arejust not things that the government would be able to give to me. They are extended familyand, being an only child, she is able to socialise properly. She is able to communicate withher peers, not only at school but in a playground area. That is all I have to say. Thank you.

CHAIR —Thank you.

Debbi Thorne—I am a parent, and I am really nervous. I have one child in long daycare and I have one child in after school care. I work full-time. I actually went back to workfor two days a week. We worked out, based on the stay-at-home allowance that the parentsget versus what I would actually bring home for working two days a week, that it wasactually costing me $10 more to go to work than to stay home. But we figured that for mymental health, for the children to see that it is okay for both parents to work, for dad to helparound the house and all that sort of thing—because I have two sons—we decided that itwas a really good idea. So I went to work, and I absolutely love what I do, and I am verygood at what I do.

The opportunity came up for me to work full-time. Bang, there was a day care problem. Ifound a day care centre in the local area, and that took me so long to give up my child tothe day care centre—I had to find a lot of trust and everything. So I did all that, not aproblem, everybody is going along fine. My six-year-old is in after school care and all of asudden we have problems with after school care fees. We are probably luckier, as the extrathree days’ work came as an opportunity, and the money is there for me to pay for goodchild care. So I did research a few centres, both private and council, until I was happy withthe one I chose. The money was not really a consideration in the first place.

Now I look at what I was paying a year ago to what I am paying now. It has more thandoubled. So there is something going on in the system where the fees just keep increasingand increasing. We actually pay $26 a month more for child care than we do for ourmortgage, which just does not make sense to me. Regarding the valid point that the lady infront of me made about the social skills, the youngest of my two was very hyperactive butthe centre has managed to show him lots of social skills.

I think people have got to stop looking at the idea that we feel child care centres are justbaby-sitters to get our kids out of the way. We do understand how important they are to our

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children. It is important for us to work because education is getting more expensive. As thelady down the front was saying about the HECS and uni, if we want our kids to have a goodfuture we have got to have money there to pay the fees. I just feel that it has got to comefrom somewhere, and it is always coming from the working parent. I pay my taxes, I pay myMedicare, and I pay my money to the centre. It would take me out of the work force.

You may feel it is only one person coming out of your dollar equation, but hundreds andthousands of women are going to have to come out of the work force, so where is the taxmoney going that you are taking away from the tax? The Medicare system is already failingand it needs our contribution as well. You are taking all of that out—my money out of thelocal community, so my local grocery man and fruit man, and butcher and so on are notgoing to have my money.

CHAIR —Thank you, Ms Thorne.

Ann Heffernan—I am here in two roles. I am the director of a private centre in Penrith,but I am not going to speak about that. I am also a parent, and I have a preschooler and Ichose to send her to a private centre, and the cut in the operational subsidies made absolute-ly no difference to the fees at all. I have been paying the same fees. It has not gone up. Somaybe the people who are having trouble might need to look at some of the private centresto see what their fees are, because I know in the Penrith area the private centres are not asexpensive as the council centres. Thank you.

CHAIR —Thank you for that.

Tracy Redman—I own a private centre in the Penrith area and I am going to say prettymuch what Ann did. We appreciate that the operational subsidies have been cut, but whatpeople do not seem to understand or what they do not care about is that they have been cutto the council centres; we in the private sector have never received those operationalsubsidies. Consequently it has not made any difference to us; our fees are still the same. Ithink we have had one increase in the last two years, so the loss of the operational subsidyreally has not affected us at all.

The people in the community are not aware of that. We are seeing a constant mediafocus on the people having to leave their jobs, the fee increases and so on. What we wouldlike everyone to know is that there is a choice. We did not lose the operational subsidies; wenever received them. It has not made any difference to us. We can offer the same sort ofcare, the same quality care, but we can offer it at an affordable price.

At the moment we are being affected, as I said, not because of the cuts but because ofthe media. In any paper you open you will see articles about the child care fee increases.What we have found has happened is that everyone is looking at the paper and saying, ‘Yes,it is terrible, we heard this morning about how much the fees have gone up for some of thepeople whose children go to the council centres.’ We just have to make everyone aware thatthat is not the case everywhere. Shop around and see what is out there. We are offering thesame hours, the same service, the same quality. We have the same resources. We have thesame resources as far as sups workers, the training, and we have the same qualifications. Weare all operating using the same regulations.

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I guess the bottom line is that it is the media, I feel, that are misleading the public. Weneed to get across that the private centres are operating and have been operating for yearsand years. I have had my centre now for nine years. I know there are people here from thePenrith area that have been going a lot longer than that. Even when the subsidies were ineffect we were very competitive. Now that the subsidies have been cut we know that thecouncil centres have had to put their price up. That really is another issue. That is somethingfor them to really look at and work out. We are still running. We still have to make a profit.We need to take home a bit of money at the end of the day.

So how about we try and get across to the media that there are choices? The councilcentres are not the only ones offering that service. We can do it, too, but we have to letpeople know that we have not been affected by these cuts. I would especially say to thepeople that have spoken, your fees have obviously gone up. That is the general case. Have abit of a shop around and see what you can find in the private sector. Thank you.

CHAIR —Thank you, Mrs Redman. Before further speakers offer their views, I wouldjust remind all persons in the gallery of my earlier comments that the program for thissession is intended for parents to express their views. There is another session between 11a.m. and midday for providers to express their views. We are particularly interested, in thissession, on the views of parents. I would ask future contributors to abide by those rules.Thank you. We will proceed.

Norah McGuire—I am not a provider, I am an older woman and a grandparent. I amfrom the Combined Pensioners and Superannuants Association and I have also been asked torepresent the Older Womens Network of Australia. This issue is not just about youngerparents. It is about grandparents, because what has happened in the past is that quite oftengrandparents have looked after the children for their sons and daughters when they wereworking. However, what is happening now is that they are losing the choice of whether todo it or not—in some cases they are being forced to do it. It is not that we do not love ourgrandchildren, because I can assure you we do. It is for many other reasons.

One of the reasons that some give is that they have already raised their children. Anotheris that physically it is very hard on them. I think one of the main things that has to bethought about is that retired, older people have worked. They have come to this stage in theirlives where they have made plans and they want to do things, and in some cases theyactually have to scrap those plans because they now have to take over the role of childcarers for their sons and daughters. It can cause tensions within the family.

I know of one family where it is already causing tension because the grandmother islooking after the son’s son, and now the daughter needs some help with the child care forher two children—she can no longer afford to pay the fees—and the mother does not knowwhat to do. She cannot look after the three children. Young children are very active, andsome of us are not so active—although I must admit some are—but it is hard to keep upwith young children. Keeping up with three she sees as impossible, which would mean thatshe would not give good quality care to her grandchildren, and she does not want to do that.But how does she decide who she helps? That is her problem.

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We have heard from grandparents who have even been asked to leave their work. A 63-year-old woman was asked by her daughter to finish work, because she can get the pensionand look after the children. She does not want to. She wants to work as long as she can.Why shouldn’t she? Once more there is tension in the family. We have talked to many olderpeople about this, particularly older women. Of course, quite often it is seen as the women’srole anyway, so that impacts heavily on older women. They say, ‘We like to help ourchildren, we like to give occasional care, but full-time care is just beyond us.’

If you think about full-time care, it is not a seven- or eight-hour day, it is a nine or 10-hour day. Child care is not just from 9 o’clock to 5 o’clock when the parents are at work—itis before and it is after. What is happening is that older people, when their working life isover, when they are looking forward to enjoying the rest of their lives, are now having togive up for their family again that time, and to take on what can prove to be quite a stressfuland, in some cases, physically impossible job.

So we believe that we should not just focus on parents. I know they are the mostimportant part of this equation after the children. However, these changes are going to affectwhole families; they are going to affect communities. There are people who will have togive up work. If there is less money coming into the house they will spend less andtherefore the business community will be impacted on. But, in particular, I am here to saythat what is happening is proving to be very unfair for grandparents. We want to have thechoice of whether or not we look after our grandchildren. We do not want to be forced to. Iknow that there are people who will hate the use of that word ‘force’, because I rememberbeing pulled up by a young man on a television program about that. I asked him did he havegrandchildren, and he said, ‘No.’ So I said, ‘Well, how do you know what it means to haveto look after children when it’s very hard to say no to your son?’

CHAIR —Thank you, Mrs McGuire.

Aaron Cauchi—I am a member of a family and I would like to share my family’sexperience. My grandmother has to look after six of her grandchildren every day afterworking shift work. My grandmother has to wake up at 3 o’clock in the morning to go towork at 4 o’clock. Then she works from 4 o’clock to 8 o’clock and goes around to myaunty’s house and looks after her two children. Then in the afternoon, at 3 o’clock she has togo to the school and pick up two of the other grandchildren, and then my sister and myselfgo back to my aunty’s house at 4 o’clock.

This means that my grandmother is waking up at 3 o’clock in the morning so that shecan go to work, then go and look after six of her 11 grandchildren. Then she looks afterthese children till 6 o’clock when my mother gets home. Then she is obligated to talk to mymother and my aunty or otherwise one of them will feel left out. She gets home at about 7o’clock. She sleeps from 8 o’clock after making dinner and having something to eat, andthen has to wake up at 3 o’clock the next morning. So she is surviving on about six or sevenhours sleep as well as in effect working at two jobs.

This has all come about because my cousins used to be in child care but now the familysimply cannot afford to pay for the child care. If we look at recent statistics, they say that itcosts on average $700,000 to raise a child in Australia. If we add 15 per cent on to this for

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the GST, it is going to make it virtually impossible for a lot of people to raise their families.So that is all I have to say.

CHAIR —Thank you, Mr Cauchi.

Debbi Thorne—I just wanted to respond to something that was said earlier, even thoughit was said in the wrong time frame. They were saying that the solution is that we shouldjust search around and look for other day care centres. My children are not motor vehicles. Iam not looking for a mechanic. It took me a long time to find somebody I trusted. I actuallyhave a mother-in-law who takes care of my son one day a week—it just gives our pocket abit of a break. At this stage, that is fine. In school holiday times when I then have my otherson, she cannot handle the two children together, so I have to rely on people or try and takeholidays. Schools have 13 weeks a year off. I get four. It just does not fit in. But I wouldjust like to say that I personally feel it does take a lot to find the right child care centre. Mycentre apparently is going from 8 a.m. until 4 p.m. That really helps. I know a lot of peoplethat work full-time. How on earth can I fit my hours in, 8 o’clock until 4 o’clock? I have gotmy travel to and from work, and it is just not going to work. And now, after spending allthis time researching centres—and I really researched them—I now have to go and do it allagain, and I have three months in which to do it, and it is not long enough. If we do havetoo many day care centres, then there has to be a better system than just continually raisingthe fees until people shut down or people give up work. There has to be a better way.

If everybody whose job it is to make the decisions can get together and look at it. It islike any business: if you have too many centres, bring them down, or whatever you need todo, but still make them workable. Do not change the hours to ridiculous hours. Non-workingparents will benefit from the hours of 8 a.m. until 4 p.m.—not a problem. But I am notconcerned about non-working parents. Non-working parents have more choices than I have.They have bigger subsidies than I have and they have more hours in which to look aftertheir own children than I have. So I just think that people who make the decisions should gettogether and think about us, not think about the money or anything like that, or the votes, orwhatever it is all about.

CHAIR —Thank you, Mrs Thorne. For those members of the community who haveentered the proceedings a little bit later, this is a community forum. We are particularlyinterested in the views of parents.

Donna Field—I have a child in a council long day care centre. I did look around atprivate centres in the area where I live and, to be truthful, I was not really happy with what Isaw. I found that when I went to the council long day care centres that their nutrition policywas much better. Maybe yours is really good, too, but the ones in my area were not. I foundthat the staff there were very well-qualified and they took care of my child very well. This ismy last baby and I planned to be with her for the whole five years before she went toschool, but because of an accident my husband had I needed to return to work when she wasonly five months old. So having to put her in child care at that age was not really nice forme.

When she first went in there, there were a number of staff. Since this cut to funding hascome into it they have had to drop staff levels. When they drop the staff levels, yes, the

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quality has dropped slightly. It has not dropped enough to cause me to pull her out, becauseI know the other staff there do care for her. They may not have needed that extra staff allthe time before, but I found that it was an extra safety thing. When they are out in the yardand there are 20 to 40 children out there that they have to care for, having an extra staffmember made it safer. They had someone more to comfort them when someone had anaccident, besides all the social skills that she is taught, the pre-writing and all the otherthings they teach her ready for school. I did not just want to throw her into a day care centrewith the council because it was cheaper or anything; I just found that it was a better centre.That was all.

CHAIR —Thank you, Mrs Field.

Joan Stone—I am Joan Stone. I have a preschool ‘A Country Cottage’ at Penrith. I alsohave 12 after school care centres in the Hills area. I feel that we miss the point sometimes alittle bit. What has happened I think is social change. When I went through school and gotmarried, we lived in an era where we could stay home for the first five years of our child’slife before they went to school. But unfortunately with the economic changes that havecome, and I think our social outlook has changed, we do not want to live with our parentswhen we are first married. We want to then get a home. We also had an education. We didnot want to stay at home all the time.

So therefore I think we have to plan our lives a little better if we do want children. Wecan either care for them ourselves or we can get into a position where we can afford theirafter school care, their preschool care, or whatever, or we do not ask for all the niceties oflife. We do not ask for the big home and the automatic this and the automatic that. We thenare more contented, like our parents were, perhaps, with something a little less. But I thinkthat it has just become part of social economics now that that is exactly what we require outof life, and what we wish to have.

So we have got to look in retrospect at why all these things are happening. We cannotexpect grandma to look after our children because we want to go and get the latest washingmachine or we want to go and get the latest automatic garage door to drive into. I think alsowe have all got to reflect on ourselves, on what we are wanting out of life as well, and Ithink that is very sad that it has got to that, but I think it is just change. We live in the eraof that.

On the point of the government subsidy being dropped, with my 12 after school carecentres that I have built up over the last 10 years, I have never had government subsidy. Myfees have been about the same as the council centres, the community centres, and I have stillmanaged to make a small profit, and I am still able to do all of the things that all of theother centres do as well, and I have never had that government subsidy. I feel that perhapswe should look at our wages, we should look at our staffing. We finely tune everything toour staffing. Fortunately we have been able to get an enterprise agreement through. As withthe hospitality industry, we do not know sometimes how many children are going to turn upeach day, so therefore we staff it at 8.30 each morning, but we have the benefit of theenterprise agreement and we now can employ casual staff.

CHAIR —Thank you, Mrs Stone.

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Jackie Deveril—I am a mother and a grandmother, and I am here today representing thehundreds of parents who are at work, because this inquiry is not at a convenient time forthem. Their children are in care. Now, apart from that being quite an insult to have aninquiry that concerns them and they are not able to be here, I would like to say that I do notknow much about private care centres. I know about our centre. I know that our centre is avery effective centre. We have always had a business plan. We cater for every conceivableneed within our community. We open at 5.30 in the morning and we close at 6.30 at night,and we know that without this subsidy that our service has to double its fees. By doublingour fees we then lose parents, and we also have parents who will not be assisted withChildcare Assistance.

We have parents who might have one child and they now pay $50 a week, and they willthen have to pay $100 a week. This government said that no parent would be disadvantagedby these changes. I am sorry, that is a lie. Rethink. Sit down with Services, talk to Services.There definitely is a win-win way to go. This is not it. Thank you.

CHAIR —Thank you, Mrs Deveril. This community forum session has now ended. Ithank all of the participants for coming along and making their contributions this morning. Ifthere are any parents who were unable to attend who wish to make a contribution, we arequite happy to receive their contributions in writing and consider them in our deliberations indue course.

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[10.01 a.m.]

HENDERSON, Ms Robyn-Lyn, Director-General, New South Wales Department forWomen, New South Wales

LO PO’, Mrs Faye, Minister for Community Services, Minister for Ageing, Minister forDisability Services, Minister for Women, New South Wales Government

WILLIAMS, Mr John Bruce, Project Leader, Children’s Services, Target Groups andServices, Policy and Planning Directorate, Department of Community Services, 164Liverpool Road, Ashfield, New South Wales 2131

YEADON, Mr Kimberley Maxwell, Minister Assisting the Premier on Western Sydney,New South Wales Government

CHAIR —I welcome representatives from the New South Wales government, andparticularly the Minister for Community Services, the Hon. Faye Lo Po’. The committee hasbefore it a submission from the New South Wales government. You will not be required toanswer questions on the advice you may have given in the formulation of policy, or toexpress a personal opinion on matters of policy. I now invite you to make a short openingstatement, and at the conclusion of your remarks I will invite members of the committee toput questions to you.

Mrs Lo Po’ —Thanks very much, Mark. I thank the committee for coming to Penrithbecause, as we have heard through people and parents this morning, this is the child carecapital of Australia. I think Melbourne and Penrith lead Australia in child care places—orthey used to before the operational subsidy cuts came. I think I need to get it on the recordthat my government is very supportive of children in this state. We see that their wellbeingis one of our priorities. To that end, since we were elected in 1995 we have increased 50 percent of our subsidy to child care and we are now up to $100 million.

What people need to understand is that in areas like Penrith and western Sydney youneed a wage and a quarter to subsidise the mortgage, and you live on three-quarters of awage. Anything that impacts on that means that people are in dire straits. So when we nowhave in the city of Penrith a charge of $35 per child per day, or $40 per day in some cases,you are looking at $350 to $400 a week for two children in child care, and out of ordinarywages that just does not work. I think the federal government does not understand that wehave families who need to have a roof over their head above all, and they are being put atthe crossroads of whether they have a home or they have children; it seems to them at thispoint in their lives that they cannot do both successfully. Any government that puts thatcrossroads in front of young people’s lives and says, ‘You decide either to pay a mortgage orto have children’ has to be condemned. In an area like this, where we have more youngfamilies than probably most other areas of Australia, this is such a big issue.

The New South Wales government is committed to supporting both community basedand private child care. We license them both and we see a place for both in the community.I am listening to the quarrel about community versus private, and I just want to get it on the

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agenda that my government is supportive of both aspects of child care. We see they workhand in glove, and it is about choice.

But I have to say to you that even the private child care is being affected. We have hadevidence. My government did some polling: 1,200 people rang in, and their concerns werevery real. One particular private centre owner in south Sydney said that he had put his wholeinvestment into his child care centre. The majority of the people who were using the childcare centre were attending TAFE courses so they were being tripped up by the 20-hour ruleand they were pulling out, and now he is in jeopardy of losing just about all of his clientele,and therefore losing his family’s fortune because he has mortgaged his house to go into childcare.

So do not let anyone for one minute think this only affects community based council-runchild care. The private sector in some areas is being just as hard hit by these cruel cuts aseverybody else. Small businesses have told us in our survey that they think that affordable,quality care is critical to their survival, because if some of their staff cannot find quality carethey are all the worse off for it.

Let me congratulate the people behind me. They have been very successful, becausecouriered to my office yesterday was a letter from Warwick Smith—an eleventh hour letter,but a letter. I had written to him previously talking about the need to keep up vacation carefunding and, lo and behold, on the 21st—given that this funding inquiry is on the 22nd—weget a letter from Warwick Smith saying that the federal govt will continue vacation care, atleast until after the next vacation. So congratulations to the people behind me. They did this.Somebody down there is listening. What I would suggest to people is: keep up the goodwork, because the pressure is on.

I know Kim wants to say something so, in summary, I think that this is short-sighted ofthe government. I have never seen before the issue of child care being so dramatically put.Young families need to know that they can go to work, have their children in child care, andpay off a mortgage. It should not be beyond people in the lucky country to do that. Whatthis government has done is put that in jeopardy. It is no longer the lucky country for peoplein my area, in Penrith, because they are now looking at whether they should have a child.We have had evidence from young women saying, ‘I was going to have a third child. I knowI can’t afford it. We’re not going to do that.’ That is appalling. Our greatest assets are ourchildren, and a government policy that curtails people’s decision to have children, or whetherthey will own a home and have children, needs to be condemned.

CHAIR —Thank you, Mrs Lo Po’. Minister?

Mr Yeadon—Thank you. I join with Minister Lo Po’ in thanking the committee for theopportunity to comment on the effects that the Commonwealth changes to child carearrangements are having on families in western Sydney, and I also join with her in congratu-lating you on coming here to western Sydney to take submissions. I am Kim Yeadon, theNew South Wales Minister for Information Technology, for Forestry, for Ports, and MinisterAssisting the Premier on Western Sydney. It is in that latter capacity that I am here beforeyou this morning.

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I think the concern demonstrated by people who are present here today really is atestament to the level of concern, and indeed the level of anger that exists in the communityabout child care funding cuts. To centre on western Sydney for a moment, I think it isimportant to note that western Sydney’s population is 1½ million people. That is a quarter ofNew South Wales’s population. Western Sydney is particularly affected by these changes tochild care funding arrangements, and the changes and their impact can be seen from thedemographics of western Sydney. According to the most recent census, 9.3 per cent ofpeople in Blacktown are aged zero to four years; 9.5 per cent of people in Wollondilly areaged five to nine and 9.8 per cent of people are aged 10 to 14 in Campbelltown. Across allof those three age groups the state average is 7.1 per cent, so you can see that there is asignificant increase in the number in those western Sydney regions. Of households in westernSydney, 49 per cent—as good as 50 per cent—contain at least one child under 15 years ofage, whereas for the rest of Sydney the figure is 37.9. So that is a very significant difference.

Ninety-one per cent of callers to the National Council of Social Services hotline reportedan increase in their child care fees of between $1 and $15 a day, which is a huge impact.For a family on average weekly earnings, up to $15 a day can be a very severe impact.Some of the impacts can be noted in a study reported in theDaily Telegraphon 23 June1997. It noted the following fee increases at local council child care centres—for example,Blacktown, $21.50 per child per week; Campbelltown, $17.50 per child per week; Liverpool,$20 per child per week; Parramatta, $20, $25, and $35 per week per child; Hawkesbury, $15to $25 per child per week; Fairfield, $44 per child per week; and in Auburn $42 per childper week.

In Fairfield the average household size is three, and the median individual income thereis $224 a week. That $42 increase in child care costs represents 40 per cent of a household’sweekly income, and that is just a huge impost on people. My own government’s submissionincludes a similar example put forward by Campbelltown Presbyterian community child care.A single parent with two children under three could no longer afford child care fees for hertwo children and also attend TAFE at the same time. So it is beyond doubt that thereductions in the overall funding to child care centres has led to fee increases for parentswhich are significant in most cases, and that is a huge impost on those families.

Resulting from the increased child care fees, the Commonwealth is giving workingparents in western Sydney and elsewhere a pretty stark choice, in my view. They comeunder three general choices: they leave work and care for the children themselves; they nolonger use child care and leave their children at school or elsewhere unsupervised—latch-keychildren is the colloquial term that is used—and that is unacceptable for the children and Ithink unacceptable for the broader community; or they use alternative informal arrangements,and that is quite often the children’s grandparents who are brought to the fore. I was veryinterested to hear the submission this morning. I think that is a very real issue and I think itis a very difficult issue.

Parents want to help their children—there is no doubt about that—and they feel thatongoing obligation. As a fairly new parent myself, people have been telling me constantlythat once you become a parent you never stop being one, and that is regardless of what ageyour children reach. You want to assist them, and when they come to you and they are infinancial difficulty and suffering pressure in their daily lives as a result of work, they will

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seek assistance from their parents, and their parents find it very difficult to tell them thatthey do not want to offer up that assistance. Therefore you get the sort of tension that wasoutlined very clearly to us earlier. Senior citizens just simply do not have the constitutionand the capacity to look after children on a full-time basis. Certainly they want to spend timewith their grandchildren and be a fundamental part of their lives, but that approach is a verydifferent one when you are a senior person and you have a rigid, set obligation every day toundertake many hours of child care with very active young children. So it is a very difficultsituation for families.

The New South Wales government remains committed to the provision of high qualityand accessible child care, and I commend the New South Wales government’s submission tothis committee in the hope that the federal government will also take the same view andremain committed to the provision of high quality and accessible child care.

CHAIR —Thank you, Minister.

Ms Henderson—I would just like to reinforce the points made already by the twoministers, that the New South Wales government supports both choice in the type and qualityof child care and the right of women to access the labour market. There is no question thatthe number of the submissions that the department and the ministers have received inrelation to this issue indicates that the federal government cuts to child care are having adisproportionate effect on women’s capacity to work, and is falling on those who are mostvulnerable.

There is no question that, in relation to the balance of child care provision in Australia,the community based sector is being affected monumentally by the removal of the operation-al subsidy, and I would just like to make the point that the child care system and thecombination of both private and community based components with family day care andvacational care are admired around the world as being a unique set of arrangements, and thatthe parental involvement in community based care is particularly important to parents whofeel that they have got a significant component still in the quality care of their children. Sothe New South Wales government has stressed in its submission that there is this balance ofprovision of care which we would like to see continued, and it is that balance which ofcourse ensures that both parents, but particularly in this case, women—who still take themajor share of caring for children—are able to access the labour market appropriately.

Mr Williams —If the Commonwealth decision to cut $800 million from its child carefunding is simply an economic measure to reduce the budget deficit, then to look forevidence of the irrational nature of this decision one only needs to look at theDailyTelegraphof Tuesday, 31 March, in which there is an article from the submission to theinquiry from Catherine Cusack, who is the former Young Liberal president who works forthe opposition leader in New South Wales, Peter Collins. The net result of her submission isthat by the Commonwealth reducing their funding to child care the Commonwealth isactually losing $7,000 a year in tax from her alone. If you magnify that out by the numberof people who are going to be leaving the work force, it means that the amount of reductionin funding is way outweighed by the loss in revenue in the tax base.

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CHAIR —Thank you, Mr Williams. We will now go to questions, and I would askSenator Neal to lead off with the questions.

Senator NEAL—I must say I was very gratified to hear you read the letter from thefederal minister which advised that operational subsidies were continuing for vacation careuntil the end of the holidays, because it has been an issue that has been raised with me andhas caused a lot of concern. Since you have been so successful in that area, you might alsolike to raise with him—since I do not seem to have as much success—the issue of whetherChildcare Assistance will be provided for vacation care. Childcare Assistance has been nowprovided for outside of school hours care, with the removal of their operational subsidy, butthere has been as yet no indication about whether, once the operational subsidy ends forvacation care, there will be Childcare Assistance provided. So that might be a matter thatyou might like to raise with him in the future.

Mrs Lo Po’ —It says here, Senator, that the Commonwealth will provide school-ageChildcare Assistance for up to 15,614 needs based planning places, 7,467 year-round careplaces, in services currently operational, and 866 proposed needs based planning places, 414year-round care places, in locations to be identified by New South Wales. New South Waleswill maintain its investment in existing vacation care services by continuing to provide anoperational subsidy equivalent to $2.084 million per annum and will contribute to the samerate for the 866 additional vacation care places.

Senator NEAL—On that issue, obviously the federal government has major responsibili-ty for the funding of child care. New South Wales seems to also have a commitment to theissue of child care. Could you outline what New South Wales’s contribution has been andany changes that have occurred in the last few years?

Mrs Lo Po’ —Since April 1995 when the New South Wales government was elected, wehave committed an additional $33 million for child care which will provide approximately7,000 new places and maintain the value of children’s services for children and families. Thegovernment’s funding initiatives include $5.5 million to create 700 greatly needed places forchildren under three; $5.5 million to create 1,500 new preschool and occasional care places,$3 million to establish innovative service responses in rural New South Wales; over $2million to improve access for child care for children at risk, children with a disability,children from a non-English speaking background and Aboriginal children.

We have also provided $2.4 million to reduce the cost of fees for families on lowincomes using preschool; $5.5 million to meet the cost of inflationary pressures; in excess of$1.5 million to rehouse services, thereby ensuring communities retain the important com-munity service; $4 million to upgrade health and safety standards in preschool, long day careand occasional care services, and set aside $1.5 million to introduce standards for vacationcare centres.

We are continuing to provide operational subsidy to over 1,900 community basedchildren’s services, totalling approximately $320 million over four years; immediately signedthe expanded national child care strategy which the previous state coalition governmentprevaricated upon for over three years; and introduced new child care regulations to establish

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improved child safety methods, standards of care and professional practice in response tocommunity expectations.

We have produced a parents’ guide on child care, which is the first of its kind inAustralia, and produced a draft best practice policy on early childhood, physical environmentand the design and operation of centres, playground and equipment—another first inAustralia. In essence, my government is absolutely and totally committed to Australia’s bestassets—children.

Senator NEAL—Contained within your submission, arising from a survey you had doneor had commissioned, was an indication that parents were paying more for child care overthe period of the last two years or so. Have you, as a government or as a department, madeany assessment about what level of Childcare Assistance should be provided to ensure thatchild care is affordable for families?

Mr Williams —One of the things that we will be working on during this year is theaffordability of child care—just exactly how much parents can pay—but it must be remem-bered that the Commonwealth, with the primary responsibility for the child care, is theprovider of the fee assistance which helps parents the most. Therefore it is really up to themto work out how much parents can pay and, if they are really about helping people in workforce participation by providing appropriate child care, they should know what levels peoplecan pay.

Senator NEAL—At the moment Childcare Assistance has a ceiling of $115. In fact thatceiling has been frozen for the last two years. Does the New South Wales governmentbelieve that this has a particular impact on the affordability of child care for families?

Mrs Lo Po’ —I think that we probably need to have a look at that. I have not personallylooked at that but if that needs a revisit I will look at that. It just seems to me that, as Johnsaid, it is the federal government’s subsidy that gets people over the hoop. The New SouthWales government can do a range of things, which you have heard we have done, but at theend of the day it is that subsidy that people need to have. If you have got children under twoyou are sending them off to child care centres that need a staff ratio of one nurse per fivechildren under two. It is very costly and if those centres do not get a subsidy they cannottake children under two. So,any which way you look at it, it is up to the federal governmentto continue the subsidies because that is what really gets parents able to afford things.

The fact that they have taken out the subsidy has led to this inquiry and to a whole rangeof newspaper headlines, ‘Care cuts hit battlers’; ‘Parents dump children’; ‘Governmentaccused as mothers leave workforce’ and ‘Child care crisis for solo dads.’ It is because ofthe depletion of the federal government that we have got these headlines; nothing that thestate has done. This is the federal government’s responsibility.

Mr Williams —Just on that inflation, Senator, the underlying inflation factor was, I think,0.3 per cent. That may not seem like a lot but if you look at the increase in child carebetween March and March it was actually 5.5 per cent. So there might have been otherfactors where they have brought that overall inflation figure down but child care was actuallyup. So the cutting of the freeze on the level does not mean that the costs in child care will

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not rise. In fact that rise of 5.5 per cent is before all the cuts come in, so who knows what itis going to be. It will be interesting to see next year’s ABS figures on what the actualincrease is.

Senator NEAL—So the freeze has played a major role in the increase in the amount offunds that parents have to pay because the gap between child care fees and ChildcareAssistance is increasing. Is that what you are saying?

Mr Williams —Yes. Interestingly, also, the New South Wales government recentlypassed on a 1.7 per cent increase in its funding for the last year to account for inflationfactors.

Senator NEAL—I do not know if you have had a chance to examine it, but the Brother-hood of St Laurence recently released a report calledIs child care affordable, and theyhighlighted the issue of two-children families being particularly affected. Is that somethingthat you found in your inquiries as well?

Ms Henderson—I think generally that the cuts in child care were falling disproportion-ately on sole-parent families, particularly where the sole parent was a woman, but there is noquestion that those families who are in the lower income bracket are suffering, whether theyare joint or sole parents. But our information from a number of submissions we tookindicated that sole parents were the primary worst affected category.

Mr Williams —The more children you have, the more costs you are going to have.

Senator NEAL—I was interested, Ms Henderson, in your remarks about women’sparticipation in the work force. I do not know if you saw a very small article in theSydneyMorning Heralda few days ago which was talking about unpublished figures prepared bythe Australian Bureau of Statistics and which showed a drop in women’s participation, andthat is the first time that has occurred for a very long time. Do you see any correlationbetween what is happening in child care and that drop in women’s participation?

Ms Henderson—Absolutely. There is no question that women’s participation in the workforce is intimately linked to quality child care provisions. I think that the situation we arefacing now is that both the Institute of Family Studies and Professor Michael Pusey from theUniversity of New South Wales in his middle Australia survey have found that the majorityof Australians support both parents’, both men’s and women’s, right to participate in thework force. There is no question that the majority of them want to work. There is noquestion that cutting child care affects their capacity to do so. The difficulty we have ingetting clear figures on how effective these impacts have been is that, as you would know,where a woman work force participant lives with a male partner, the statistics are obscuredbecause of the very fact that there is another income coming into the household. There is noquestion that, as we have heard today, women who are in the lower income brackets will bethe first to leave the work force where the child care effects are impacting on the family. So,yes, indeed, there is no question that there is a link.

Senator PAYNE—Could I just firstly ask a clarifying question of Mrs Lo Po’ in relationto some questions Senator Neal was asking you about Childcare Assistance and the oper-

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ational subsidy. Is the New South Wales government calling on the Commonwealth toreintroduce the operational subsidy for—

Senator NEAL—I did not ask about the operational subsidy.

Senator PAYNE—Senator Neal just said to me she did not ask about the operationalsubsidy. I was confused about the minister’s response when the use of the word subsidieswas being used. I was not sure whether that was in relation to the operational subsidydirected to community based child care centres and whether the New South Wales govt iscalling on the Commonwealth to reintroduce that, or whether your comments were in relationto Childcare Assistance?

Mrs Lo Po’ —I am not sure that I know. Would you say it again?

Senator PAYNE—Sure. Is the New South Wales government calling on the Common-wealth to reintroduce the operational subsidy for community based child care centres?

Mrs Lo Po’ —We are asking for the Commonwealth government to make arrangementsso that it can be affordable for families that we care about.

Senator PAYNE—Does that include the reintroduction of the operational subsidy forcommunity based—

Mrs Lo Po’ —If that is the only way they can do it, yes. If that is the only way they cando it, why not?

Senator PAYNE—That is what I wanted to know. Thank you, Minister, very much.Yesterday in evidence received by the inquiry, and in a submission received by the inquiry,the Shop Distributive and Allied Employees Association—which represents, they advised us,230,000 low income members—advised that private services provide care for more familieson low incomes than do community based services. They provide only 30 per cent of allcentre based care. Their view is that the operational subsidy paid to these services wasinequitable because only the users of those centres benefited, irrespective of means. What isyour view about that?

Mrs Lo Po’ —I have seen, and you have seen this morning as well, what has happenedwhen they have taken out the operational subsidy. It would appear to me that the costs havegone up, that that has been passed on to families who clearly have been put in the positionof making decisions about whether they continue in the work force or not. I am not here todebate mechanism. I can see the outcomes. We are inundated—the Department for Women,the Department for Community Services—with women in distress; single fathers last week.We found a group of single fathers who are also stressing out because they are concernedthat the cost to their centres is now so great, and it is being passed on to them as consumers,and they cannot afford it.

The mechanism is the federal government’s issue. I am not prepared to debate themechanism. What I am looking at is an outcome. The outcome I want to see is affordablechild care for battling families who are trying to get a house together. In Penrith we have the

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mortgage belt—a very large mortgage belt—and if you have got two people and perhaps themale is on $37,000 and the female on $29,000 that is not a lot of money when paying off amortgage. As I said before, 1.25 salaries are needed to pay the mortgage. So, if you put adent in any of that by the raising of child care fees, you put their very house in jeopardy.The mechanism the federal government uses is not my issue. I am looking for the outcomeso that we can again have affordable child care for families who need to get a roof over theirheads.

Senator PAYNE—Minister, you said when you began your statement that you wanted toreassure the committee, and I think those here, that the New South Wales governmentsupports both community based and private providers.

Mrs Lo Po’ —Absolutely.

Senator PAYNE—My question is not about mechanisms. It is about equity. Even beforethe removal of the operational subsidy, which was equivalent to about $20 per place perweek in a community based centre, the average fees in community based centres were only acouple of dollars a week lower than in most private centres. Where is the equity in subsidis-ing through the community based centres and not the private centres? The low incomeearners you are concerned about, about 28,000 low income families who are receivingmaximum Childcare Assistance, are in community based centres. About 96,000 low incomefamilies who are receiving maximum Childcare Assistance are in private centres not inreceipt previously of the operational subsidy. My question is not about mechanisms. It isabout equity.

Mr Williams —I have perhaps two responses to that. One is that in New South Wales wehave taken the approach that we believe that the quality of services is very important; thatparents should be assured that their children are cared for in a quality healthy environment.We also believe in the educational nature of the services provided for the children. We havebrought in fairly high-standard regulations and they require that if you are a 40-place centre,for example, you have to have two teachers. If you are a 39-place centre you only need oneteacher.

Of course the costs are in salaries mostly. Eighty-five to 90 per cent of costs are insalaries. You will find that most community based centres operate at 40 places and mostprivate centres operate at 39. Again, at 30 places you need a teacher; at 29 you do not.Community based centres operate at 30; private centres operate at 29. That is not across theboard. You do find a lot of mix and match there but generally that is the way things happen.The fees are then in scale to your costs.

Community based centres were the first on board. Private centres came after them andprivate centres set their fees according to the community based ones because they are incompetition with them. If they set their fees higher, then people would choose the communi-ty based ones. Removing the operational subsidy then increases the costs for the communitybased centres because they have more staff. They put extra staff on or they do a few thingsextra. Just around from where I live there is an excellent private centre and my child willprobably be going there soon.

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I think that comparing private centres and community based centres is getting away fromthe issue. I think it is losing the plot. There are many issues at play here. One of the mostimportant ones, I think, is the kind of society we want for the future. Children’s services canprovide a great incentive for the future. It builds character in children. It gives them a leg upwhen they go to school. If you have real quality centres then it is a great advantage for thenation. A study in the United States, the Perry/High Scope study, shows that every dollarinvested returns $7 in reduced social welfare costs. People who went through that study andhad access to quality care had good jobs. Their marriages stayed together. They raisedfamilies. They were well-functioning people in society.

Good quality child care can provide an advantage for children when they go to school. Itgives them early literacy. It gives them socialisation. It is just amazing. The other thing isthat, if we do not have an articulate well-functioning younger generation, then the costs fallon the older generation. With the ageing of the Australian population—there was a reportreleased just recently—there will be a very much smaller tax base to support the population.

Mr Yeadon—Mr Chairman, perhaps I could make a couple of brief comments in relationto the senator’s question. Firstly, as Minister Lo Po’ indicated, what the New South Walesgovernment is concerned about is quality child care. Whatever mechanisms are used toprovide that, your committee is probably going to be in a good position to give advice to thegovernment on that. Whether or not there is a division between the provision of child careservices by particular organisations, particularly whether they are public or private, issomething that I do not think we are wedded to. The real issue is that overall provision ofquality child care.

You gave some comparative statistics between the various sectors of public and private. Iwould caution that you need to be very careful in looking at this area because I think it isone of complexity and one that cannot be properly examined by just some fairly one-dimensional range of statistics. I think we got that from the submissions that were givenearlier by parents that went to things like quality and trust, and not just simply a costequation.

Just to reinforce that to some extent, in September 1997 a survey of child care provisionby NACBCS—I am not sure what that acronym is but somebody will be able to provide itfor you—revealed that 33 per cent of respondents in New South Wales had made cuts tostaffing, with rates as high as 79 per cent and 69 per cent in other states. That was WesternAustralia and Tasmania respectively. Many centres responding to this survey also commentedthat they had been forced to adopt other measures which seriously undermined their service,including compromising staff to child ratios, loss of program planning time, restricting accessto children with special needs, employment of more casuals and juniors, and a reduction inthe number of qualified and experienced staff. I do not want to get into what somebody saidearlier about a war between the public and the private sector but I think they are the sorts ofissues that you have to look at if you are going to get a qualitative view of what is occurringout in the community vis-a-vis private and public child care provision or community basedchild care provision, and the operation of a subsidy.

I note that one of the respondents who was from the private based sector said thismorning that she had now moved to a situation in her numerous child care centre arrange-

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ments where she was bringing staff in on very short notice, and that they were there on an aneeds basis, and I would suggest to you that that is not a good situation, or it is my ownview that that is not a good situation—in terms of the ongoing continuity of staff input into aplace like a child care centre. I think it creates problems in terms of trust with the actualclients that are using it, and also the skills base that you want in people who are lookingafter young children, so I think there could well be a lot of quality issues, staffing issues andthe general provision of service issues that need to be looked at. That whole issue of publicand private, and indeed the provision of child care generally, cannot be reflected adequatelyenough in the sort of statistics that you have given to us this morning.

Senator PAYNE—Minister, are you suggesting that, notwithstanding the fact that privateand community based centres are required to comply with the same accreditation standardsthrough the national system, private centres are somehow of a lower quality?

Mr Yeadon—No. I would think they would vary on both sides, but I think the cuts thathave been occurring in child care are significant and that they are having pressure on allsegments of child care provision on both sides of the equation—those that are communitybased and private—and I think a close examination of that is needed to see what is occurringwith that quality provision, and I do not think a real picture can be gleaned from the sorts ofstatistics that you have referred to.

Senator PAYNE—Thank you. If I could just ask Ms Henderson a question in relation towomen’s participation in the work force: I think theSydney Morning Heraldarticle thatSenator Neal referred to indicated that the seasonally adjusted figure had indicated a move inwomen’s participation from 59.1 per cent to 58.3 per cent, so less than one per cent in total.Could I ask if Ms Henderson or the New South Wales government can provide statisticalevidence, other than the anecdotal material you received through the phone-in, to supportyour statement that it was absolutely the case that these changes were occurring because ofthis issue.

Ms Henderson—Can I just reinforce the point that I made before, Senator, which is inthe second page of our submission and which you would be aware of, that it is extremelydifficult to identify women’s dropping work force participation, because of the masking ofthe gathering of employment statistics. Anecdotal evidence and indeed literally thousands ofreport-backs that the minister has had in terms of responses to the ministerial inquiry, plusthe submissions that we have received, support the fact that women have either to move outof the full-time work force into the part-time work force or indeed drop out of the workforce altogether. The Bureau of Statistics are in the position to gather that information in amuch more sophisticated way than the New South Wales government is able to do acrossAustralia, but there is no question that the anecdotal evidence is entirely appropriate to usein this case.

I just refer back to your point about equity in the delivery of services, and I would justagain refer you to the many parts of the New South Wales submissions where we talk aboutthe impact of the loss of the operational subsidy on those children with special needs. Asyou would know, probably 50 per cent of children’s learning is undertaken under the age offive. You would also know that every dollar that goes into child care is probably the saver of$7 in terms of child protection and welfare services in the long haul, and I think that in

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terms of equity we must ensure that every child has the same rights to access child careservices. It is not always easy for those organisations which operate purely for profit to offerservices to children with special needs, who need additional subsidies to put them on thesame level playing field as other children.

Senator CHRIS EVANS—I would like to start by acknowledging that I agree that Ithink the issue is more a question of the removal of $800 million out of the child caresystem than a sort of false public versus private debate that it is easier to sort of generateconflict around but which does not actually take us anywhere. It seems to me the answer isto have a viable community and private sector providing good quality child care to Austral-ian children, and I think there are a couple of issues this committee is going to have to tryand grapple with, and one of them is this question of the rationalisation centres and how weprovide that good quality care in the appropriate numbers and the appropriate places. Despitebeing a Labor Party senator I am happy to admit that it is something we did not get rightwhen we were in government, in the sense that there was a growth in the private sector, a lotof competition, particularly in my own state, Western Australia. A lot of those centres havenow had to close, both community and private, as pressure comes on.

You mentioned earlier that the New South Wales government has a licensing role. Iwondered what your thoughts are about a policy outcome that provides for rationalisation orappropriate provision of private and community sector places as required within thecommunity. You license them. Do you do a survey of needs before you license them, ordoes anyone who meets the requirements get to set up a centre even if it is next door toanother centre?

Mr Williams —No. Our responsibility is that the services meet the licensing standards.That a whole street is full of them is not the state government’s responsibility. Councilscome into the argument there, although it is in our regulations and we are currentlyundertaking a review of the head legislation that the regulations form part of, to look at theservice provider doing research of their own to see that there is a need where they want toprovide the service, so that when they submit their application for a licence they cansubstantiate that they have researched the fact that there is a need in the area.

Senator CHRIS EVANS—Yes, because it seems to me the New South Wales govern-ment via the Commonwealth is now pouring an awful lot of public money into the provisionof child care, and it seems to me therefore we ought to have some interest in where they areestablished and whether they are meeting demand, rather than that they are all setting upbecause they are in a very rich suburb where people are prepared to pay high fees, or wherewe end up with unintended consequences, with centres going bust because the competition—

Mr Williams —When the New South Wales government sets up new places, which it hasdone over the last three years, it takes on board a needs based planning approach, so it looksat the provision of all types of centres, no matter what kind of centre it intends to fund. Itlooks at the provision of all kinds of care, whether it is preschool, long day care, oroccasional care, to see what the amount of supply is. One of the difficulties, though, is thedemand factor. It is very difficult to know unless you go and knock on everybody’s door andask whether they are going to need child care or not. The ABS does a three-yearly report onchild care, and it quantifies its findings in there by saying that demand is very hard tomeasure.

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Senator CHRIS EVANS—Is that partly because of this argument about price sensitivi-ty?

Mr Williams —Well, it is a whole range of things. People might say that they need childcare this week and they change their mind the next week. It might be the type of care thatthey think they need, and also factors of affordability and a whole range of factors.

Senator CHRIS EVANS—Yes, but I was thinking you have to plan for schools,hospitals, et cetera, and I guess there is more compulsion with the school system, but againyou have got private schools making provisions as well. It just seems to me that we haveducked that issue. Is there any contact with the Commonwealth government over thatquestion about—

Mr Williams —There certainly is, yes. The Commonwealth government has over theyears been involved in joint planning groups, looking at provision. When we were first in theexpanded national child care strategy, we had a joint group looking at both the needs for theplaces that the state government had available, and also the places available through the jointstrategy, so we did that together. We are also on the Commonwealth’s planning advisorygroup for its new places that came out of the 1996 budget.

Senator CHRIS EVANS—But the bottom line in terms of private places is you have noinput in that: provided they meet the licence requirements you let them set up?

Mr Williams —Yes, because our responsibility is only around that they meet thelicensing standards.

Senator CHRIS EVANS—Yes, I understand. Mr Yeadon, I will just perhaps take up theissue with you of this 50-hour rule. As a Western Australian, I got some feedback about theproblems of commuting parents, but I would have thought, given the drive I had out heretoday, that in the western suburbs that would be a big issue for those working in the city.Perhaps you could provide me with some experience in the western suburbs but all I knowreally is about the Penrith Panthers. Do you have a lot of people commuting into the city towork and would that be impacting in terms of their ability to meet the 50-hour restrictions?

Mr Yeadon—Absolutely, and not just simply working in the Sydney CBD, wherecertainly a number of people from western Sydney do work, but in other locations withinSydney and, because of Sydney’s transport layout, that travel can be significant. Even ifsomebody from this area is working in that south-western Sydney region of Campbelltown,or vice-versa and coming the other way, that can be difficult to get to because you have gotto cross town and public transport provision, and so forth, is not optimum.

It is not just simply a matter of people travelling from western Sydney into town, buttravelling all over what is a very large metropolis of Sydney and that adds to time. You caneasily spend an hour and a half or more going to work and then another hour and a half ormore coming back home. On a 50-hour limit that really makes it very difficult for you. Notonly do you have to get to your location of work from your home but you have presumablygot to get to your child are centre first, drop your child off, and then head off to work fromthere. Often that will be close but perhaps you need to go a little bit further as well to get to

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the child centre of your choice. That 50-hour limit I think is rigid and very mandatory andone that would not take account of a lot of people’s circumstances, particularly in a city likeSydney and particularly for those living in western Sydney. I say that is a major impost.

You can also have the situation, I think, as well—and this is particularly evident in themodern work environment—where there is a lot of pressure on people to be very committedto their job, which can often entail additional hours and not necessarily with additionalovertime pay directly for that. Just simply to pursue their career and so forth, they have toput in longer hours. Given that basically it is around a 40-hour week for many people, butoften people do work much more than that, you do not have to do much additional workbeyond your set 40 hours a week, if we take that as something of a standard, to reach the 50.Once you put travelling time and everything else into that, it is a very rigid equation and onethat I think is going to have a big impost on people.

Senator PAYNE—Minister, as I understand it, there is an opportunity to apply forexemptions from the 50-hour limit if legitimate circumstances apply. Is that your understand-ing?

Mr Yeadon—The initial position is 50 hours and, as I say, that type of exemptionapproach does not take account of periodic overtime or pressures when you have to remainat work, and so forth. I think it does not provide the flexibility that people will need in thereal world.

Senator PAYNE—Exemptions are available, as you understand it?

Mr Yeadon—I understand that exemption is available but I say that it is inadequate andnot an effective enough mechanism.

Senator CHRIS EVANS—Yes, I think the issue there is the question it has then on theopening hours of the centres, but we will have that debate. The other question I want to askis about the care in babies’ places. I know a few years ago it was a real problem in terms ofplacing children under two into centres. I am interested in a New South Wales experiencewith these changes coming and what is happening with the supply of young children’s placesand the demand for those.

I know, for instance, that at the centre my own family uses the fee for the babies’ roomhas been changed. Rather than have one rate they now charge a higher rate for the babies’room than the other children’s rooms. I wonder what general experience the New SouthWales government has in terms of places and costs for young children.

Mr Yeadon—We have realised that it has been a major need in New South Wales forcare for young children. On 2 September the Premier announced $5½ million of capitalfunding to increase the supply of baby places. We sought proposals from providers for thatfunding. We ended up with double the amount of submissions for the money. We were quitesurprised by it considering that there was only capital money available. There was noguarantee of any operational funding.

Senator CHRIS EVANS—Are these just the community centres or the private centres?

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Ms Henderson—Can I just make a comment, Senator. I think this actually relates toSenator Payne’s question of inequity. I think it is evident from the submissions we havereceived that it is more difficult for the private sector than for the community based sector totake up the capacity for baby places.

Senator CHRIS EVANS—But was the funding made available to private centres as wellor only community based centres?

Mr Yeadon—It was only for community based centres. That is mainly what the NewSouth Wales government provides funding to. The other issue that has come out through theCommonwealth’s own consultations on the new places that it made available in its 1996budget is that throughout Sydney and throughout New South Wales people are saying thatthe need is for places for children under two, yet I understand that when the Commonwealthhas advertised expressions of interest, and they are only for private tenders, there has beenvery little take-up.

CHAIR —I thank the representatives of the New South Wales government and theministers in particular for coming along to today’s proceedings.

Proceedings suspended from 10.58 a.m. to 11.11 a.m.

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CONNOLLY, Mrs Lyn, Vice-President, Association of Child Care Centres of NewSouth Wales, Suite 12, 2 O’Connell Street, Parramatta, New South Wales 2124

BIRCH, Ms Elizabeth Catherine, Director, The New Children’s Hospital Child CareCentre, Hawkesbury Road, Westmead, New South Wales

BOSLEY, Mrs Julie, Coordinator, Bidwill Vacation Care, Graceades CommunityCottage Inc., 34 Oreades Way, Bidwill, New South Wales

BERTONI, Mr Jose Felix, Director, Mount Druitt Blinky Bill’s Preschool, 7 AlanStreet, Mount Druitt, New South Wales 2770

KIRBY, Mr Philip Michael, Director, Kirbys Care 4 Kids Child Care Centre, Corner ofCam and Cambridge Streets, Cambridge Park, New South Wales 2747

JENKINSON, Mrs Lee, Director, Nought To Five Early Childhood Centre, 5 TalaveraRoad, North Ryde, New South Wales 2113

TARRANT, Miss Joycelyn Ann, Director, St Pauls Lutheran Kindergarten, 289Desborough Road, St Marys, New South Wales

CHAIR —The committee will now hear evidence from a panel representing providersand individual child are centres. I will invite the representatives of each organisation to makea short statement relating to the issues which impact upon your particular centre and in theremaining time I will invite members of the committee to put questions to you..

Mrs Connolly—I am representing Vicky Taylor from Kingswood Child Care Centre whohad a submission put in but was unable to attend today at the last minute. The point that shewould like to make quite clear today, and that is something that has happened in most childcare centres in the private sector, is that the fees have not gone up. Her fees have not risensince January 1997, and from discussion with other people that is quite the norm. She is veryconcerned about a media campaign in relation to the operation of subsidies that have forcedincreases in child care, and this is having a great impact on the private sector.

Normally in August of the year people start—two or three phone calls a day—inquiringabout child care for the following year to book their children into care. This has nothappened this year and it is because people are convinced that the cost of care has escalatedastronomically. The private sector centres have their parents coming in asking, ‘When areyour fees going up?’ ‘When are our fees going up?’ ‘How much are our fees going up?’Vicky has been saying to them, ‘Our fees aren’t going up. There is not an effect, so there’snothing for you to be frightened of.’ So that is a huge concern to Vicky.

Vicky is also very committed to qualified staff and to training. She had all intentions oftaking on a trainee this year as an extra staff member over and above what is required by theregulations, but due to the drop in numbers, due to the media campaign, she has been unableto commit to that. There has been some talk about a desperate need for baby places. In thePenrith area there are available 150 baby places in the private sector, of which 50 of them

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are vacant. So here again we see people are frightened. People are thinking cost of care isgreater than it actually is.

Also another issue is that the state government is opening a preschool in Penrith. Thatwill be a $4 a day thing, so that should have a great impact on the centres too in Penrith. Itis a state government preschool. We were talking earlier about education, and all of our longday care centres offer a preschool program. We are required to under state governmentregulations, and to meet accreditation Vicky’s centre is required also to do those sorts ofthings, so the quality is there and the education is there for the children. It is not simplyplaying with the children all day.

The 50-hour reduction is not a problem for Vicky’s centre because any of her parentswho genuinely need to have more than 50 hours, up to 60 hours, simply have to fill in aform. So that is not a problem at all for the Penrith area. As we said earlier, all centres comeunder the accreditation and the regulations, the same ones, so people should not be fright-ened and think, ‘Oh, I can’t go to a private centre because they don’t offer good quality.’The private sector and the community based sector are being accredited at the rate of 90 percent and 93 per cent respectively.

In relation to baby care places, Barry White of the federal government bureaucracy hasindicated to me that in actual fact the private sector do offer more baby places than thecommunity based sector. Vicky does not wish this to become a private versus communityslinging match but the private sector people would like you all to know that they do not getfree land, they do not get free buildings, they do have to pay rates, they have to pay theirown advertising, and they do all this. They do it and they can still offer the highest possiblequality care and be able to remain in business. There was a statement made earlier that theprivate sector is there purely for profit. I would like to assure you on behalf of Vicky andevery private sector centre owner that we do not do it purely for profit. We are entitled toearn a living at the job we do best, and so I would like that noted, please.

In relation to out of school hours care and people bringing in extra staff if they need toto meet the numbers of children, that is not going against the accreditation requirements forcontinuity of care. The people that are brought in are staff known to the children; they areexperienced with the children, and it does not make good economic sense to bring in a thirdstaff member if you have only got say 20 out of school hours care children who come on aparticular day. That just makes good economic sense. So on behalf of Vicky I would like tothank you for the opportunity for her to speak and to put her case forward to you. Thankyou.

CHAIR —Thank you, Mrs Connolly.

Ms Birch—I am director of The New Children’s Hospital Child Care Centre at West-mead. We are a work based centre that gives priority of access to New Children’s Hospitalstaff and we have been in operation over the last 2½ years. We are open 12 hours a day. Weare open 52 weeks of the year and we are a 40-place centre that caters for nought to five.

Our fees are currently $32 a day. There was an increase in September last year of $2 aday. Prior to that there has not been an increase for two years. Our income is generated from

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fees and hospital funding. As a work based centre we have never received operationalfunding, so that does not come into the equation with us at all. Thirty per cent of themothers using the centre are nurses and 90 per cent of them are tertiary qualified, so it is avery specialised group that we are talking about here. I would not see it as a cross-section ofthe community. It very much caters for the hospital staff. Thirty per cent of our families areon Childcare Assistance. As a 40-place centre we are currently not full. We are running atabout 35 children booked in per day, which is lower than our budgeted level, so currently weare not breaking even with our fees. Fortunately last year we were full so that surplus iscarrying us at the moment, but if that trend continues that is of concern to us. That is a newphenomenon at the centre. We have been full up until now.

In terms of how the changes of child care funding have impacted on our centre I wouldlike to talk about many of the changes to Childcare Assistance. I allow a utilisation rate atthe centre and changing patterns of usage by the parents and also the parents’ perception ofthe government funding changes. In terms of Childcare Assistance the ceiling of $115 onChildcare Assistance per week frozen for two years, reducing the child care cash rebate forfamilies over $70,000, abolishing the $30 disregard for dependent children and determiningassessable income for Childcare Assistance and reducing the income limit for families withtwo more children—all that together has impacted on our families in the lower to middleincome group and it does affect the affordability for child care for those people.

Yesterday I had a call from a parent who was thinking about using the new centre withtwo children who had been in touch with Centrelink to check how much she would have topay, what her percentage of Childcare Assistance would be. She phoned me back and said,‘It’s not worth my while,’ and that she would be seeking other arrangements. That wasyesterday. Child care is not affordable for her in centre based care. It becomes more of anissue too when there is more than one child involved, and that is definitely the case at ourcentre in terms of people returning from maternity leave after their second child.

In relation to our lower utilisation rate at the centre—this is of concern—we have nowaiting list for the three to fives. Our nought- to three-year-old room is just full, barely full,and there is not a huge waiting list at all to get into the centre. Parents say that they cannotafford full-time care and are using other family members, informal arrangements, to make dorather than have the cost of child care added to their stretched financial circumstancesalready. We have our captive market in terms of the workplace on which to draw, and Iadvertise through the hospital constantly to let people know that we are there. If we cannotfill the centre, then I wonder what is happening out there in the community, because it mustbe much harder for them.

The talk amongst the parents at the centre is very much that changes to child carefunding are designed to force women out of the work force. They argue very much that thatshould be a supported choice and they do not feel supported in their choices at the moment.Employer sponsored child care has, as its aim, to support and maintain a highly trained,experienced work force, to enhance recruitment, to provide affordable child care and to assistwith equal opportunity in the workplace, and I question whether the government policy onchild care does support those aims. It appears to me that quality child care is becomingaffordable only for the more well off. I do not think that is right and there are questions ofrepercussions of that for our children.

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Mrs Bosley—I represent Graceades Community Cottage and we auspice BidwillVacation Care and Graceades Handicare. Graceades Handicare is a vacation care centre forchildren with disabilities. The focus today is on Bidwill Vacation Care. It was mentionedearlier that extension has been granted to the operational subsidy for July. Today we are stillunsure as to the complete impact it will have on our service. We have not been guaranteedaccess to Childcare Assistance for the service if the subsidies do go—and we are led tobelieve that they will—and we will operate on only 50 per cent of our funding, which willbe continued through the Department of Community Services.

We are unsure of what requirements are required by us through Centrelink, as training Ihave been told is not in place and not scheduled until at least June. We do not even see ourparents again after this week until the July holidays, so it is very much left in the dark forthe parents and our service. We currently have 45 children who access our service. Twentyof these children come from a working parent family; the remainder of our children are fromsole parent, unemployment or disability backgrounds. Given the nature of the area ofBidwill, if it is not the most highly disadvantaged area in Sydney, it is one of the mosthighly disadvantaged.

The history of vacation care at the cottage has adapted to suit the lower socioeconomicbackground of Bidwill, as shown by the numbers quoted above. The new funding arrange-ments will see the greater emphasis placed on working parents’ supposed ability to pay, andwill further disadvantage a very deprived area. In a letter to the Senate committee in March1998 the socioeconomic factors of the area were outlined.

Vacation care is an important part of family support for the whole community. Allchildren need a safe place to play in school vacation—not only the children of workingparents. Children need a break from the home environment, which is not stimulating, andoften suffers from the problem of the same thing day in, day out for the duration of theholidays. Parents already living with high levels of stress and finding it difficult to cope withthe children need the benefit of respite that vacation care provides. Parents require a safe andcaring environment for their children. For working parents who will not be able to afford thenew service, the alternative is latchkey children, or children wandering the streets.

It seems at present Bidwill Vacation Care has two paths for the future: firstly, to operateon 50 per cent of our annual operational subsidy; and, secondly, to operate on 50 per centsubsidy and be entitled to access Childcare Assistance. In regard to option 1 it is easy toassume that a service operating in a highly socially and economically disadvantaged areacannot and will not survive. It is being estimated that our fees could be increased to around$16 a day. At the moment we charge $3 a day but we do not break even on a budget. Wehave a small amount of surplus and that is carrying us from year to year, saving us fromputting our fees up. To expect families living in poverty or on low incomes to pay thisdifference is not a possibility. It would certainly be beyond the means of large families thatare prevalent in the area.

We are able to maintain our fee at $3 a day through very tight management, sharedresources and continuous support from Graceades Cottage. Vacation Care do not pay billsand they do not pay rent; they only make a small contribution to our overall insurance costs.Administration is done by our cottage administrative assistant or in the Vacation Care staff’s

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own time. Excursion costs are minimal due to access to a minibus through Christian BrothersBidwill at very little cost. Graceades Cottage have always aimed to make the serviceaccessible to the whole community.

In regard to option 2, being a stand-alone vacation care service we are still in the darkand unsure of the future and the full implications the funding changes will have on ourservice. I have been informed we must acknowledge we will abide by the priority of accessguidelines currently in place for before and after school care services. This means changingthe direction and the philosophy we have for vacation care. As we stated, we are not just achildminding service for working families. With funding changes, as stated earlier, our feesmost probably could rise to around $16 a day. That would be the maximum we wouldconsider charging. Parents on full Childcare Assistance will pay out of pocket $3 per day.Any increase to them makes access to the service more difficult.

Parents who work will pay substantially more as they will be entitled to less ChildcareAssistance. Because they work does not mean they can afford it any more than those who donot work. This system is not going to support them. Limiting families who do not work to20 hours relief is crucial to the downslide of our service. Twenty-five children who currentlyattend our service are from families who do not work. Some of these children may currentlycome five days a week. Twenty hours a week limit means many of our children will only beable to come two days a week. Limiting how often these families can use the service affectsour survival. To lose too many services, when we are already a small service as we do notoperate at our funded level of 30, will force us to consider closure.

In regard to administering the Childcare Assistance, upon speaking to network of com-munity activities recently, the amount of added administrative time necessary to implementChildcare Assistance will impact on our final fee level, as the cost of this can only comethrough fees. Our service cannot wear this cost and we are already looking at high feeswithout this inclusion. To sum up, Bidwill Vacation Care does not have a very bright futurewith or without the introduction of Childcare Assistance. To operate on 50 per cent fundingalone is not an option, and to operate Childcare Assistance is still not acceptable as anoption for our disadvantaged community.

Mr Bertoni —I represent two long day care centres with children aged between two andsix years old. Federal government cuts on child care have had quite a lot of impact there.We are a private organisation devoted to providing quality child care to the community forpayment of a modest wage to the owner-operator. The facts of federal government cuts inchild care have been devastating to this business. The centre before has been running full,but now it is suffering very high vacancy rates. We had to dismiss or let go staff at a cost tothe business. The staff are demoralised and there is loss of self-esteem.

Families are forced into non-quality alternative child care. We are unable to pull out andsell the business due to loss of resale value. Everybody is aware of it. It is all over thenewspapers. There is a mortgage against our home. The future of the business is probablybankruptcy within a couple of years, and loss of family homes. At the moment our home isfor sale to finance the loss of the centre. The irony of all this is that the highest qualitycentres will go under and the worst ones will survive. Our future leaders, the children, aredenied what is theirs by right, which is the best possible education. The jobs of cooks,

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cleaners, gardeners, have all disappeared and were absorbed by the licensee, who is also thedirector and sometimes teacher and bookkeeper. The licensee’s wages were cut, and thehours of working went from 10 hours to 16, 13 hours per day, seven days a week. Mostowners are now subsidising their centres—I am talking about private owners—and borrowingto keep the centre operational, hoping that the position will break up first, before they breakdown.

No-one is winning—the government, centres, children, families. I think it is time for a U-turn. How could the government possibly have wrecked this industry? It comes from twosources: first, the federal government cut the child care and then there was the stategovernment legislation for child care centres. On one side, a few years ago the federalgovernment had stopped indexing the child care percentage of the parents, and child carebecame more expensive—not because of increased fees, but simply because the componentof the parents increased. Now we have the caps on usage of child carers from 50 hours downto 20 hours per day per family for non-working families. I represent a group where there area lot of unmarried mothers and a lot of people disadvantaged, and it is not good for a childto stay in an environment; they are much safer at the child care centre, but they are limitedto 20 hours.

On the other hand, the state government regulates that the child care centre opens andcloses. Even if there is one child present we must have two staff members. How do youpeople expect us to pay a good staff member with the fees of one child? Actually, we need12 children just to pay the wages of these two staff. Families are pulling out of child carecentres, reducing hours, and placing children in friends’ backyard care or in family day care.

These operate quite economically from their homes, they do not require two staff, theydo not require specialised equipment. A person operating does not require formal qualifica-tion, and quite clearly these children could be at a greater danger of abuse such as physicaland emotional neglect than at a child care centre where qualified staff operate under opendoors, and where parents are going in and out all the time. Twenty-hour caps means thatsome parents will have to pay 150 per cent more for the child care than they paid before.You tell me which family will not take drastic action if that happens to them.

Other costs such as the costs of administering fee relief are on the licensee. It is gettingso complex that very soon we may need a university degree or the money to seek externalprofessional help just to keep it going. Union demands for a five per cent increase everyyear will further undermine the centre’s viability. We saw the proliferation of child carecentres due to the government fee relief offer over the last few years. When the governmentwas satisfied that there was no more waiting lists it felt it had done its job. Then it progres-sively moved fee relief as a budget cut. This measure backfired, because fewer people nowgo to work, less tax is collected, more benefit is paid out to mothers who are at home, andthe government revenue is less than the saving it has intended in the first place. Thanks forlistening, Senators. I appreciate your time.

Mr Kirby —The government cuts as a general rule have not affected our price. Theyhave affected us in other areas, which I will get to in a minute. But, to be very specific, weare $28 a day. We have been for 2½ years. The government cuts have not affected our price.

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We have not felt the need to go up or down. I do not want to join in the debate betweenprivate and council, but if the local council centres are more expensive—they have notaffected our price, but they have affected our enrolments. We have been full last year, theyear before, and most of the year before that. But this year suddenly we are now operating at70 per cent.

Senator NEAL—Is that your centre?

Mr Kirby —This is just us, yes. I was given the brief just to speak about how it hasaffected us.

Senator NEAL—Yes, that is fine. I just was not clear.

CHAIR —Your 12 centres?

Mr Kirby —No, just my personal private child care centre. Is that all right?

CHAIR —That is fine, yes.

Mr Kirby —Though it has not affected our price; it has affected our enrolments. Lastyear, as I said, we were full. This year, we opened at 60 and we have been able to nudge itup to 70, but it seems to be stagnating around there. What I was going to say is that,obviously, as business people, we ask what has happened. Specifically, the government cutshave not affected our families as a whole. I do not know if this is really going to be whatyou want to hear, but in the media portrayal, for example, there is a headline that says‘Anger over child care cuts’. The average person who reads that thinks, ‘Okay, my preschoolare going to put their prices up.’ The problem is in the media there has not been a cleardelineation between council and private centres.

Now, that is not, as I said, a statement of war, but when people hear that fees are up andquality is down it is going to affect us because the focus so far in the media has been just onchild care, a generic term. As I said, the government cuts have not affected our price.Nevertheless they have affected our enrolments, although we have not really lost families. Assomeone has said recently, people are not ringing us. We are still doing the same advertis-ing, but people are not coming up and saying, ‘Could we enrol our child? Could we haveour child in your centre?’ It is affecting our enrolments.

I am 90 per cent convinced that that is because of the media portrayal. That is ourresponsibility—to counteract that through our own advertising. I accept that. In relation tothe concept of the 20-hour limit, our average enrolment is between two and three days. Wehave a handful of four and five days—I am trying to be specific to our child care centre—but most people who come to our centre are two or three days. In our case 20 hours isexactly 2½ days at our child care centre. So really it has a borderline effect. It might have abit; it might have a lot. But the bottom line is that there are two, possibly three, families inour centre who might be affected by the 20-hour limit. The 50-hour cap did not affect us.

So what we see is an across-the-board cut—the 20-hour limit, the 50-hour cap: and wefeel that is across the board, that both of those are across the board—but the operational

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subsidy cut was not across the board, and that is our sticking point. If the operationalsubsidy were to be reinstated to the council centres, that would affect us and we feel thatthat is not an across-the-board change. We do not feel that it is fair. As someone has said,obviously we do not get that subsidy in the first place, but it has been affecting ourenrolments.

Specifically again to our child care centre, obviously we are in competition for parents.There are two or three child care centres within three or four kilometres of us, two of whichare council centres. Here is the problem: with the cuts, I believe, in Penrith council’smanagement plan, at least one of these centres has just come up with a plan that they wouldnow reduce their hours, and not do hot meals. That is sounding very close to what we aredoing now. My point is that we were already providing the type of service which people inour area want.

Those two centres are coming up with that same idea. That seems sensible to us, that acouncil centre should listen to the marketplace. I am sure it is not the same five minutesdrive south, but where we are, our parents need, like I said, two or three days a week—maybe one, two, or three—and they do not need their 11 hours a day which council centresoffer. So the fact that a council centre is now coming to that view is supporting the fact thatthe council centres are coming to a market awareness, and that is good.

Our big question, though, is: will it reduce their price? On average, the council centre is$36, and two down the road are, on average, $35 or $36. We have been providing a verysimilar service and we are $28. How has it affected us? I am yet to see. I have to be honest:on the one hand, I hope the fees stay high because that is better for our business because weare cheaper, but on the other hand the Penrith ratepayers I am sure would like to see thoseprices go down—if the subsidies are reintroduced, that is.

So the bottom line is that it has affected us in demand, but has not affected our price.We feel that if the operational subsidy were reinstated then a passing moment of logic intaking away the subsidy would be lost, and that will affect all of us.

Mrs Jenkinson—The centre I am representing today is a community based centre basedin the Ryde area. We at the centre were actually the first work based centre that was set upin New South Wales, and we have been operating successfully as a community based centresince the mid-1980s. We have been operating for 21 years and during that time in our localcommunity we have built up a very good reputation for the service that we provide for boththe local and business communities.

CHAIR —So you started out as a work based centre.

Mrs Jenkinson—We started out as a work based centre on a business estate, and withthe redevelopment of that estate we turned to community because the numbers on the estatedwindled. We now provide care for still a lot of businesses in the area, but also for localpeople in the area. In 1995 we received funding from the government to build a new centre,due to the fact that with the centre we are currently in, with the changes in regulations, wehave actually become outdated, and so our plan was to relocate from our existing site,

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staying in the same area but expanding our service, as well as relocating, to cater for theunder-twos, who up till today we have not been catering for.

After lots of delays we finally started the construction work on the new centre and wesee this as a time where we should be really excited and happy that our fight over the lasteight years to find a relocation has finally happened. But due to the changes and the fundingcuts to the child care industry, unfortunately part of that has been marred. Our battle at themoment is to remain viable to relocate to our new centre.

I guess the main effects we have had as a community based centre are obviously theoperational subsidies so far. We are the only centre today that has been affected by that. Welost approximately $40,000 a year with the cut to operational subsidy. Being a stand-alonecommunity based centre, our income is now obviously purely fee based, which has meantthat we have had to increase our fees in order for us to maintain the quality of care that ourparents have become accustomed to and we feel they have a right to. We do not feel that wehave a choice about reducing the quality of our care, because that is what our parents cometo the centre for.

Our fees as of January this year have gone up. We have tiered our fee system with alower fee rate for our older children and a higher fee rate for our younger children, enablingus to have above ratio staff levels with all of our age groups. This has meant an increase ofbetween $5 and $7 a day for our parents, and the effect of that on the centre as a whole hasobviously been lower occupancy rates because we have a very mixed group of parents whouse our centre. We have, obviously, a lot of working parents who are earning good incomesbut being a community based centre we also have parents at the other end of the spectrumwho are on lower to middle incomes, and the increase in fees was just too much for them,the result being that either families have withdrawn from the centre totally or they havereduced their number of days.

So the occupancy rates within the centre have changed from being a centre that had up to50 per cent of full-time children in the centre, to one where the majority of children are nowattending between two and three days a week, and parents are having to juggle other formsof more informal care if they are able to remain at work. A number of our parents have hadto reduce their days of work to be able to look after their children on the days that theycannot have them in care.

Our occupancy rates at the moment are 40 per cent down on what they were last year.We have always had a steady waiting list; we have not ever had an absolutely enormouswaiting list but it has always been steady, and we have always been a centre that hasattracted people who have just arrived from overseas, looking for care for their children sothey can go and study English or trying to find a job. We have also been used by theDepartment of Community Services as a centre to place children at risk. Obviously with theincreased fees those two areas are now less viable for those areas of the community becausethe fees are too expensive.

The other effect of the changes has obviously been on our staffing and the ability to keepstaff morale high in a time when things are very difficult; they know occupancy rates are

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low, and staff fear that they may well lose their job. If you want me to draw to a close there,they are the main points that are affecting us at the moment.

Miss Tarrant —I am from a community based centre too and in lots of ways we dostand alone because we only represent a small area in St Mary’s. We have been operating for25 years and I can speak only for my own centre, and that is what I am speaking for today. Ihave been working at that centre for 18 years and I know that what is happening now ishurting. I do not know whether it is just because of operational subsidies, but it is more thanthat. It is the 20-hour limit; it is the fact that parents are really finding it difficult tounderstand why they have to pay more. We have to pay more because of the kinds of thingsthat we offer them. It is across the board and everybody has been talking about it.

We have had to give up lots of things. I myself have administration time that I have hadto give up now; I cannot do that. Lots of the work that I do is done in my own time now.Lots of the program time that was given to staff before is not available to them any more;we have to cut that—it was available before. For the last three years we have had a specialneeds work related centre that we have provided for ourselves for $17,000 a year to workwith our special needs children. We believe all our children are special and they all havespecial needs but this special needs was done by ourselves and we cannot now provide it anymore because the operational subsidies have not come.

We have only one child at the centre who is under a special grant, and that is the onlyreason we have that child there. I am still working with six children who have special needs.I have another parent who came to me yesterday and said, ‘My child has special needs, MissJoy. What can you do?’ It is really difficult to know what to do.

I can tell you I had two parents last year, for example, who were doing courses. As soonas we had to put our fees up when the operational subsidies came in, they dropped. Onemother who was retraining for the work force—which is what the government is asking lotsof mums to do—had to give up what she was doing and find a job. My mother had only sixmonths to go in that training and she had to give it up and go and find a job—which shedid. That meant that she would have to go back and maybe do it part time for two years—and then have to give it up for six months. They are some of the things that are happening atmy own centre.

I can tell you some of the other things as far as parents are concerned. One father rangme yesterday—another lady was talking about what happens just now—and said, ‘Miss Joy,I have been working 36 days straight to keep my children, my family, together. I cannotwork any more than that. I will have to take my child out of the centre because I cannotafford it any more and their mother has had an operation.’ The government is not looking atthe situation where a person has a problem where she is not earning any money. She is nowpaying full fees; they cannot get any fee relief now because they have to wait about sixmonths before they can perhaps get some fee relief. That is a real issue for this gentleman.He said, ‘I just can’t afford it any more. I’m really sorry, Miss Joy, I can’t do it.’

The 20 hours I do feel is disadvantaging some parents. I know that there are forms thatthey have to sign and they can apply for it. But lots of people are sick and tired of signingforms and having to do that to be able to get what they need—and lining up at Centrelink all

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the time. Those are some of the issues that I can bring from my parents’ point of view. I likethe idea that Fay Lo Po talked about, working hand in glove, but I would like to say we areworking hand in glove with the parents; we want what is best for the children of this state—not for us personally or for any other centre, but for the children.

CHAIR —Thank you, Miss Tarrant. We will now go to questions of the various panelmembers.

Senator PAYNE—Could I just ask in the first instance, Mrs Connolly, a question inrelation to the operational subsidy in both your capacities, your capacity here today in termsof the Kingswood preschool, and also your organisational capacity. In relation to the runningof private centres against those community centres which are receiving the operationalsubsidy and the change to the situation now, is it your view that it is a more equitable levelplaying field, if you like, or do you have a different view?

Mrs Connolly—Operational subsidies are what we call untargeted funding. You couldhave a centre with 40 children in it whose parents were on extremely high incomes, and thatcentre would still receive 40 times $22, I think it was, a week, in an operational subsidy. Ifwe had an abundance of money to go around, that would be fine, but, as the lady up theother end said, we cannot get money for special ed teachers for children. There are plenty ofparents in need, so in relation to the removal of the operational subsidy, which wasuntargeted money, if that money is going to be spent in a targeted fashion, and that is basedon income and assets, then that is a far more fair and more equitable way of spending thelimited child care funding that we do have. Yes, we would applaud it, because it gives morechildren a better opportunity. I think about 73 per cent of long day care centre places areprovided by the private sector; therefore, we feel that the parents using all sectors across theboard now have a better opportunity to access government funding.

Senator PAYNE—Mr Chairman, could I just ask Mrs Jenkinson and then Miss Tarrant aquestion in relation to fee changes in their particular centres. We have heard evidence,particularly in Melbourne yesterday, that the loss of the operational subsidy is only part ofthe reason for cost increases in centres. There is cost of staff, there is superannuation, thereis workers comp, and probably in Mrs Jenkinson’s case there are state regulations as wellwhich require changes. Could you both comment on that, please?

Mrs Jenkinson—Yes, I would agree with that comment. The operational subsidy is justone of the items but, as I said, if we are going to try to keep the quality that our parents areaccustomed to, that being obviously above ratio staff numbers in the rooms—and also as thegentleman in the middle talked about the new regulations requiring two staff on at alltimes—all those issues add to costs within the centre. As a community based centre we arenon-profit. Our aim in putting our fees up is not to make a profit; our aim is to make endsmeet, to provide a good quality service for our families that use us. We are battling to dothat at the moment because the cost of putting our fees up has been lower occupancy.

Miss Tarrant —I would agree with Mrs Jenkinson on that. That is exactly what ishappening with us. We are doing what we are talking about. One member of staff is going toleave simply because she cannot find full-time care for her little baby, so she has to leave tolook after her baby at home. She wants to stay because her expertise is really important to

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the centre, or to any kind of care. When we replace her we will be replacing her with aperson who comes in on a casual basis. She will come for three hours and if we do not needher we will send her home. That is really not what we want for our centre or for any of ourcentres. We want to be able to offer the same kind of care we have always offered over thelast 25 years for all the children in our area.

Senator PAYNE—But in terms of the other points that I mentioned, workers comp,superannuation and the state regulations, do they have an impact?

Miss Tarrant —All of those things have an impact on us, every one of them. We havehad to put up our fees because of that. We have only been hurting since the operationalsubsidies have gone. We have not got any waiting lists. Last week we had 10 places. Thisweek we have 22 places. What is happening? That is what I am saying. People are hearingthose kinds of things about child care, and those costs are there. All of those costs that MrsJenkinson is talking about are there for us, too, and we have to look at changing those—thesame thing.

CHAIR —I have just one question of Mr Kirby. You identified this problem of enrol-ments in 1998, going down from full enrolments in 1996 and 1997 to 70 per cent in 1998.You suggested it probably would level out at that figure. You identified the cause as mediaportrayal of child care cuts in a generic sense. There has been significant press on child carecuts since the beginning of March, in about the last six or seven weeks. I was not aware ofmore than the occasional article on child care cuts prior to, say, late February or earlyMarch. Can you comment on that?

Mr Kirby —They have been in the local press earlier than that.

CHAIR —But a significant campaign for some months prior to the end of February, earlyMarch?

Mr Kirby —We are only a small centre. A small article could have a big effect.

CHAIR —So there have been isolated articles prior to February?

Mr Kirby —Perhaps we are wrong. This is my business analysis, but it is the media—that is the only major change that has happened in our area. But it seems logical that thatwould be the case. I can also give anecdotal evidence. A lot of our parents are saying that.One parent came up to me last week and said, ‘Are your fees going up?’ I said, ‘No.’ Butthere is a perception there.

Senator CHRIS EVANS—I was going to ask the same question. Mrs Connolly wants tocomment, so I will put the question to her and she can work it in. It seems to me the logicthe private providers used to put to me before these changes was that the community centresare subsidised, they get the operational subsidy, they have an unfair advantage in the marketand, therefore, they ought to be reduced back to a level playing field. That is not necessarilyan argument I support, but put that to one side. The logic of that position was that thereforethe private sector centres will be more competitive and will attract children at the expense ofthe community sector.

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What we have been hearing, and what the experience in Western Australia is, is thatenrolments and demand are down across the board. So the logic of the operational subsidyimpacting only on the community sector does not seem to be working out. Do you acceptthat something broader is happening either as a result of these changes, which is the obviousplace to look, or is there something happening about women’s participation in the work forcerelated to this? What is happening?

Mrs Connolly—Firstly, the operational subsidy being taken away for a level playingfield is not the only reason that we called for the operational subsidy removal—it is for thefairness for the children. Leave aside the businesses—that has got nothing to do with it—letus talk about the children.

Senator CHRIS EVANS—Why does taking the subsidy off one sector make it better forothers?

Mrs Connolly—Because the children in the other centres do not have access to it.

Senator CHRIS EVANS—Yes, but why does taking it away make it better for them?

Mrs Connolly—I am not saying that. What I am saying is that because it was untargetedfunding it was spent on some children, and the other children had no access to it. The logicalthing to do, if there is limited money—and there is limited money, I am sure everyonewould agree—is to put that money back into the bucket and then spread it over all of thechildren in a fair and equitable way, based on income and assets. The other thing is inrelation to the media campaign. This was a result of the May budget last year—am I correctin that? The operational subsidy—

CHAIR —Subsidy when—July last year?

Mrs Connolly—The May budget last year, was it?

Senator NEAL—It was announced two years ago.

CHAIR —It was announced two years ago and took effect from July last year.

Mrs Connolly—That is right. That is when the media campaign started. The mediacampaign did not just start in March. The media campaign started back then because therewas a lot to do in the media then, in July, as you say. It is from August, September onwards,when we normally get these inquiries, that we just did not get them. It was a result of thatcampaign, bolstered by this campaign this year.

Senator CHRIS EVANS—So you are saying to me, Mrs Connolly, that nothing else ishappening here. This was Mr Kirby’s point as well and, quite frankly, I am not convinced. Ido not want to be difficult but it seems to me that something else must be happening here ifthe enrolments and demand are down across the sector.

Mrs Connolly—There is proliferation, but that is being looked at, and the planningsystem that the government has in place and the planning meetings that we all attend and

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look at areas of need, et cetera, should help that situation. But the only difference is this—and we know it because we are private child care providers; our parents are coming inasking us, ‘When are our fees going up?’ I look at them, and I am sure every other private—

Senator CHRIS EVANS—That does not explain why centres are closing. In WesternAustralia we have private centres closing.

Mrs Connolly—I cannot talk for Western Australia.

Senator CHRIS EVANS—No. I do not think anyone disputes there is something goingon in the industry, but that is not explained purely by the removal of the operational subsidy.

Mrs Connolly—Proliferation is an issue and false and misinformation in relation to feesis the other issue. I would say they are the two primary factors.

CHAIR —Mr Kirby might like to contribute on this issue.

Mr Kirby —As was just said, it was probably the media campaign, as has been hinted. Isaid that may not be the whole case. I agree there may very well be another case acrosssociety. But obviously demand is down, whether it is market or family, whether it is break-up of marriages—who knows? But given the fact that there is a low demand—and I agree—why then should the operational subsidy be reinstated, given that as a result of that oper-ational subsidy in my centre, that council centre is now operating a more in-touch servicewith the shorter hours. I think that is good. We are not going to be able to cope if we do notadjust with the low demand.

Senator CHRIS EVANS—No, but if it was all about the operational subsidy, you oughtto be knocked down in the rush by people moving out of the community sector, coming toyou saying, ‘You’re $6 a week cheaper. Can I put my child in there?’ You are saying to methat is not happening, so I am saying there has got to be something more complex going onhere that we are supposed to be inquiring into and finding out. I am not saying I have theanswer but—

Mr Kirby —I am saying that I agree there probably is something going on underneath.We have not been rushed by price but that has started to show that it can be done at a profitand therefore the inefficiency of councils—

Senator CHRIS EVANS—But you being in your market, as you say, being pricecompetitive is not seeing you maintain a full operating service?

Mr Kirby —Yes, absolutely, but we can adjust. We can make changes but we questionwhether the other sector can, or will, if the change is stable.

Senator CHRIS EVANS—In the new market arrangements we will find out.

Mr Kirby —Yes, fine, but I do not think the operational subsidy will help in that.

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Senator NEAL—I want to ask Mrs Connolly something. You were saying that takingaway the operational subsidy means that children are on an equal footing and it would begood if it was distributed amongst all children in care—but that did not actually happen, didit? When the operational subsidy was taken away the money was not redistributed. It wasjust taken away for all children, wasn’t it?

Mrs Connolly—My thoughts on that were that the money would be going into the childcare bucket of funding and then that would be distributed more equitably.

Senator NEAL—But that did not happen, did it?

Mrs Connolly—I do not know whether that happened or not. I do not know if there isany extra for special needs or whatever, but that is the way we see that it should be.

Senator NEAL—I agree.

Mrs Connolly—We see that the government should do that and, if the government havenot done that, we call on them to do that.

Senator NEAL—We had a bit of a debate yesterday about optimum sized child carecentres. This is directed at everybody; anyone can feel free to comment on this issue. Therewas a bit of a conflict between the optimum size—or appeared to be—for the care ofchildren and the optimum size in making a centre profitable. Generally it appeared that thelarger the centre, the more profitable; the smaller, the less profitable. Do people have a viewabout what is the optimum size, balancing those two principles? If you do not think thatthose principles are valid, feel free to say so.

Mrs Connolly—It is harder to make ends meet in a smaller centre because of economiesof scale, et cetera, but parents should be able to have choice. Some parents like big centres,some parents do not, and they have very valid reasons for that. Some parents think that asmaller centre has a far more family atmosphere; other parents are very happy with a largercentre, for whatever reasons. Larger centres in many cases are designed, for example, like anumber of smaller groups within a larger building which makes it like small family typecentres. Parents should be able to have choice and we should not have any budgetarymeasures that are going to knock out any particular size of centre. We have membersranging from five places through to 90 and they are all very important to the parents whouse them.

Senator NEAL—Did anyone else want to make a comment on that issue?

Mr Kirby —Simply that the optimum size should surely be at least generally indicatedby what the parents in that suburb or neighbouring suburb want.

Senator NEAL—So you think the funding arrangements should allow for small centresto continue to exist?

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Mr Kirby —I think the funding arrangements should allow people to meet the needs ofthe local people, which speaks of diversity in range and that is what I have heard here. Theremust be choice. I do not think you can just straitjacket all centres.

CHAIR —Thank you very much, all of the participants, for attending in this session.

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[12.09 p.m.]

BAUM, Mr Noel, Senior Policy Officer, Local Government and Shires Associations ofNew South Wales, 215-217 Clarence Street, Sydney, New South Wales 2000

DWYER, Councillor Kevin, Mayor, Penrith City Council, and member of the LocalGovernment and Shires Associations, 215-217 Clarence Street, Sydney, New SouthWales 2000

GIBSON, Mrs Denise Lynne, Children’s Services Manager, Penrith City Council, 601High Street, Penrith, New South Wales 2740JENKINS, Mr Brian Stephen, FinancialServices Manager, Penrith City Council, 601 High Street, Penrith, New South Wales2740

REFSHAUGE, Mr Michael, Director Community Services, Marrickville Council, POBox 14, Petersham, New South Wales 2049

McNALLY, Ms Karen, Branch Head, Long Day Care, Fairfield City Council, PO Box21, Fairfield, New South Wales 2165

SANDARS, Ms Deborah Ann, Manager Children’s Services, Fairfield City Council, POBox 21, Fairfield, New South Wales 2165

CHAIR —The committee has before it submissions from your organisations. I now inviteyou to make a short opening statement and at the conclusion of your remarks I will invitemembers of the committee to put questions to you.

Mayor Dwyer—I am representing Councillor Peter Woods OAM, who is the Presidentof the Local Government Association of New South Wales, and Councillor Bill Bott, who isthe President of the Shires Association. In our submission we highlighted that the New SouthWales government is a stakeholder in children’s services because local government is asphere of government with the responsibility to represent all its local community in otherspheres of government on issues of concern to the community. Local government is aplanner and a regulator of the local environment, which in turn affects private and non-profitchild care. Local government is a provider of general facilities and services to children.Local government is a significant planner, supporter, provider of special children’s services.In New South Wales local government directly provides in the order of 170 long day careservices involving 7,000 places, 160 out of school services—5,000 places—and 96 vacationalcare programs and 54 family day care schemes, some 8,800 places. Councils are alsoinvolved in preschool occasional care centres which are outside the terms of reference.

New South Wales local government provides financial infrastructure and administrativesupport to these communities based on not-for-profit services supporting 90 long day careservices, 120 out of school services of vacational programs and 35 family day schemes.

Our submission noted that the New South Wales local government remains deeplyconcerned that the cuts and freezes to the Commonwealth funded section of the child caresystem have had, and are continuing to have, negative social and economic impacts on

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children, families, staff within the industry and the wider community. We stress there is aneed to revisit the objectives and principles behind the Commonwealth government involve-ment in child care, emphasising the positive aspects of affordable and good quality care.

We highlighted that we believe child care remains a communal responsibility and theCommonwealth, by virtue of its place in the nation, and the tax system need to accept alarger share of the load. The government should be committed to assisting low and middleincome families with dependent children participate in the work force in the wider communi-ty by ensuring that care is affordable. We also highlighted that we believe the Common-wealth government should be committed to maintaining the quality of child care. Childrenare vulnerable and dependent and cannot assert their right to be protected, nurtured and giventhe opportunity to develop. The Commonwealth government needs to guarantee to act toensure children grow and develop positively and to their potential. At this stage, MrChairman, I would ask Noel Baum to provide further information to this committee.

Mr Baum —I am just going to summarise very quickly, if I can, the main points that wewanted to make in regard to the terms of reference. The first reference that we commentedon was A1. We noted that the impact of the abolition of grants and subsidies on families,children and child care services are really yet to reach their full height. This is because inthe long day care area the changes are, if you like, the first adaptation to the changedregime. Many of the changes are experimental and indeed we fear that some may not work.

The changes in vacation care concern us. They are obviously in the earlier stages. Thechanges which would be required if grants to family day care were abolished are certainlyeasy enough to speculate on but I doubt whether we can say anything categorical. The mostcommon negative impact of the abolition of subsidy in New South Wales has been to placeaffordable care in jeopardy and to change the nature of the care offered in many localgovernment areas. As you have probably heard, fees have risen from between $20 to $25 perweek in long day care.

For families these fee increases and changes to the nature of care have forced them toreview their care options. As a consequence, families are either leaving care and/or themother is leaving the work force—mostly the mother—or they are reducing the number ofhours used and entering into complex alternate care arrangements. The impact on children atthis point is of course equally hard to assess because a number of scenarios could wellapply. The first concern that is coming from our constituency is that the children are now inmuch reduced or more intermittent care and there is a concern for the diminished develop-mental or educational value of that care.

The second concern is probably equally as worrying, and that is for those who are havingto enter into very complex care arrangements involving several different care settings andcarers each week, this can possibly cause stress to some children. If we turn very briefly tovacation care the picture is equally, if not more, bleak. Our members report fee increasesranging from $12.50 to $40 per week. The impacts on families and on services are similar tothose that I have spelled out before. I think the impact on children is more worrying in oneaspect. Providers are very concerned that children, especially older children, will be left tocare for themselves in greater numbers and this will throw more children into the at-riskcategory.

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To family day care: I think we would say the impact, if operational assistance wereabolished, would be very marked. To meet the cost of coordinating units would requireeither a sponsor to match the lost grant or for levies to be imposed on either the families oron the carers. In that sort of scenario it is extremely unlikely that many New South Walescouncils would want to cover the lost grant from general revenue. I think that would simplyjeopardise the future of those 54 schemes, without being too sweeping about it.

The next area that we specifically wanted to highlight today in our summary was that inregard to A4, which is about the planning system. Local government generally in New SouthWales supports the present planning system but we would seriously question whether themodelling that is being used is taking into account a wide enough set of factors, or is itdoing it in a sensitive enough manner? We certainly participated in a planning frameworkacross the state. Councils continue to be supportive of it, with the exception of the usualsorts of concerns which are of an administrative nature: time lines and the ability for theplanning to be done sensitively.

Feedback to date from councils suggests that we are still very concerned that the modelis not working with unchallengeable data about the demand for child care amongst childrenof working parents, non-working parents and non-resident parents. It is certainly notaccounting for the impacts and the dimensions of affordability, which I heard was beingdiscussed earlier. It is certainly not accounting for local demographic changes in some areaswhere those changes are fairly rapid and move in advance of available central data.

Finally, we also made comments in regard to term A5 and it is undeniable that councilsare extremely concerned about quality of services. I think it is fair to say that councils havemade, and will continue to make, every effort to ensure that quality is maintained; however,child care is a very complex set of interactions and nearly any savings measure may havesome unidentified or unanticipated impact. We have certainly given data about the sorts ofconcerns that our councils have with the removal of things like teaching places, cooks, babyplaces, reductions in hours and all those sorts of things.

I think in regard to term of reference B2 we have said that local government is in aslightly better position than the balance of the not-for-profit sector to cope with the loss ofoperational subsidy at the moment, bearing in mind what I said addressing the first term ofreference, with very few closures attributable to the budget cuts. But the situation is underclose review in quite a number of councils and we would not like to predict what willhappen in the coming year. At that point I think I would like to hand back to CouncillorDwyer to wind up for us.

Mayor Dwyer—I would just like to point out, Mr Chairman, that for quality child carewe do not want to see an erosion of the system which over the last 20 years has reached avery good standard. The Commonwealth government needs to focus carefully on how it canassist in maintaining good quality care. We recommend that an equal or higher level ofquality of care be maintained for all children in child care services. Secondly, as to access toaffordable child care, the conclusion can be drawn that the Commonwealth government’sreforms have failed to ensure that child care is affordable for low and middle incomefamilies.

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The Commonwealth government needs to carefully re-examine the complex matter ofaffordability and determine new measures to assist in making child care affordable. Werecommend that the current and future care reforms acknowledge that inequalities exist inour society and that reforms aim to do everything possible to ameliorate and not compoundthese inequalities. On the third point, evaluation of child care reforms, the New South Waleslocal government considers that recent reforms to the child care system are still relativelynew and their full impact is still not fully appreciated, even by the families and the sector ofthe government. We recommend that an ongoing review and evaluation process be undertak-en to assess the full impact of the recent reforms to child care, this information be madepublic, and this process be undertaken prior to the implementation of any further reforms.Finally, on child care policy and planning, local government has previously been involved indeveloping the national child care planning framework and seeks a similar level of involve-ment in planning the future of child care in this nation. We recommend that local govern-ment, as the sphere of government which as we know is closest to the people and elected torepresent all its community to other spheres of government, be an equal partner in thedevelopment of a national system of child care.

CHAIR —I thank Councillor Dwyer and Mr Baum for their helpful comments.

Mrs Gibson—As a representative of the Penrith City Council, I would like to thank youfor the opportunity for council to address the committee today. My colleague, Mr BrianJenkins, who is council’s financial services manager, will be here to assist with anyquestions that you may have later in the proceedings.

Our submission, and the summary today, very much focuses on long day care. It waspresented to the committee and it has explained the evolution of a comprehensive range ofservices developed to meet the needs of the community in our local government area. I thinkit is important that we put that evolution into perspective when we look at the futureprovision of children’s services in the Penrith LGA. This evolution of services occurredduring a period when there was limited provision by other providers, and council recognisedthe unique characteristics and needs of its community. It coincided with a rapidly growingpopulation of young families establishing homes in the local government area. These familieswere faced with travelling long distances to Sydney for work. We have also seen increasingparticipation of women in the work force and growing numbers of graduates from universi-ties pursuing their careers.

Council provision of children’s services evolved to be one of the largest governmentproviders of long day care as well as preschool, before and after school care, vacation care,occasional care and our mobile services. It is also acknowledged by council that familiesmay have a range of additional needs, whether these are for children with disabilities orspecial needs, whether they are families with a first language other than English, or whetherthey are of Aboriginal or Torres Strait Islander descent. Because of this recognition of thesespecial needs council sponsors projects to support these families.

It is recognised that there must be quality in the care and in the education provided to thechildren in our long day care services to enable them to reach their full potential. In itsmanagement council has the objective to provide best practice child care. To achieve this,council services continually strive to ensure efficient and effective work practices, and to

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operate services that do meet the needs of the community by providing up to 11½ hours ofcare each day to facilitate parent participation in the work force, by providing care in everylong day care centre for nought- to two-year-old children. By recognising the needs andsupporting access of families from the various cultural backgrounds within our community,including those I spoke about before, particularly in supporting access to centres for childrenof special needs, it is recognised that children with special needs may need additionalsupport. To provide that support we may need to have extra levels of staff within ourcentres.

We ensure that children’s nutritional needs are met through our food policy. We providelevels of trained staff and levels of child staff ratios that achieve the best outcomes forchildren in terms of their emotional, social, cognitive and physical development. We ensurebest practice child care by involving the parents who use the centres in the management ofthose services. Those parents are the people who have the ability to make decisions about thelevels of staffing, the quality of care that they desire for their children.

This provision of best practice child care operates complementary to other providers tomeet the needs of our community. It is accepted that to achieve these quality objectives andequity of access government support is required. In recognition of these costs councilrecommends that the federal government provides financial support for the operation ofcommunity based services. It is vital that the cost to families for child care is affordable. Oursubmission details in section B(1) the increase of centre fees of an average of $5.76 a dayfrom 1 July 1997. These increases of fees occurred following adjustments by council to theexpenditure within its centres.

Section 9(1) documents the impact this has had upon families and their reduction in use,or their withdrawal from care, and 71.4 per cent of families cited increased costs as thereason for their review of child care arrangements. Interestingly, double the number offamilies on low incomes have reduced their levels of care, compared to those on a higherincome. The level of child care assistance available to families is constrained by the frozenceiling of $115 per week. The resulting gap fee between the ceiling and the actual operation-al costs is borne by the users, regardless of income. This particularly impacts upon thosefamilies in low and middle incomes.

Senator NEAL—Sorry, what is the average cost of Penrith Council long day careprovision?

Mrs Gibson—In 1997-98 we indicate in the submission that the fees ranged from $34.55per day to $36.75 per day. The differences in those fees reflect the different levels, inparticular of staffing levels, in the centres. As we said before, both council and the parentswho are users of the centre like to determine the quality of service that they wish to receive.Council is recommending that the ceiling on Childcare Assistance be reviewed and that thelevels of Childcare Assistance better reflects the actual cost of care.

Council also calls upon the government to remove the 20-hour limitation on ChildcareAssistance in recognition that there is a need for services to operate for more than 10 hoursper day, and that associated costs of this service provision be distributed across users. In ourcentres we try to achieve an equity of cost across all our users. This is particularly difficult

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when we operate for extended hours of care. Without an equitable daily fee one user oranother will unfairly bear the brunt of the increased costs associated with providing theservice for longer hours. Just to explain: when we have explored differential chargingmechanisms for the number of hours that are used, whatever equation we used we found thatwe had to charge an inequitable fee, either for the people using short hours, or for the peopleusing long hours.

We have heard information today about the level of demand within the Penrith localgovernment area. For your information prior to the funding cuts to child care, council’s 17long day care centres were 99.9 per cent full. We had, in February 1997, 1,332 children onour waiting lists. Our waiting lists indicated a continuing demand for care. In February 1998our waiting lists continue to indicate a need for care, particularly in the nought to two agerange, with 288 registrations on our waiting lists. However, the reduction in the overall levelto 510 children on the current waiting lists has resulted since the cuts to operationalsubsidies. These figures, coupled with the number of withdrawn places, are reinforcement forthe conclusion that a need exists in our community, but cost has become a major factor forfamilies in determining their child care choices. Our community has diverse needs. Theseneeds are not easily identifiable from demographic data. Council proposes that a plannedsystem of allocation of child care places should be based on need. A process must bedeveloped to identify the diversity of these needs and the most appropriate way of meetingthem if there is to be equity of access to centres that provide a quality of service that notonly supports families in raising their children but also ensures each child’s wellbeing.

Council’s submission documents a significant impact on women’s participation in thework force. It demonstrates that many women have had to make choices about their workoptions because of child care issues. The impact upon child care centre staff has beensignificant in terms of reduced employment opportunities. It is also evident that the changingpatterns of attendance, as detailed in the submission, impact upon the levels of workassociated with continuing to provide quality care for the actual increase of numbers ofchildren within our centres.

It is well documented that the quality of care is affected by the levels of trained staff andby child staff ratios. Penrith Council believes that consideration must be given to ensuringthat centres are in a position to maintain these levels of quality. To conclude, I reiterate therecommendation of council, that the federal government support Penrith City Council in itsobjective of providing quality services that enable families to access affordable and safeeducation and care environments by providing operational subsidy to support the operation ofcommunity based services; by increasing the Childcare Assistance ceiling to reflect moreaccurately the cost of care; by removing the 20-hour limitation of Childcare Assistance, andproviding Childcare Assistance for the total number of hours of operation of the centre; byproviding a system of allocation of child care places based on the assessment of need.

Ms Sandars—I believe that council’s submission has provided you with a graphicpicture of the situation in Fairfield, so I am not going to reiterate any of the data that youhave in front of you. But in these few minutes I hope to contribute an overview to thesignificant changes to the child care community infrastructure in Fairfield which supports oursubmissions to the inquiry.

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Child care was established in Fairfield in partnership with council, the Commonwealthand state governments, to support families to ensure access to work and training, but thecurrent policy at this point in time does not see any evidence of this access happening. Thecurrent children’s services program or our services are not currently reflective of family-friendly policies. The whole issue in Fairfield revolves around access and equity, and therights of all families to have access to good quality, affordable children’s services.

The children’s population in our city has remained fairly stable. It has a very lowsocioeconomic base. The medium family income is $11,000 per year—that is $224 a week—and is one of two in Australia that has decreased in income level since the last census. Sothat gives families $224 to provide access to child care a week. This means for us that thegap is growing between rich and poor in accessing our services.

Fairfield’s unemployment level is twice the Australian average; it is nowintergenerational. The cost of child care is prohibiting families, and parents particularly,seeking entry into the work force or studying. From our information, it appears that thewomen in our community are those who are withdrawing from the work force due to cost ofcare, and therefore not utilising their skills and training and experience, and will find, andare finding, re-entering the work force difficult in future years.

Children’s attendance patterns from the anecdotal evidence provided to you in thesubmission highlights families utilising a range of child care options over the week, andworking part-time jobs. This creates stress on the families and also on the centres in terms ofthe numbers of children that are going through the doors per week. Parents have found thejuggling act has just been too difficult, and the cost and the juggling has had its toll, andwithdrawn from care and employment. Other single parents who have actively sought toreturn to employment, and particularly those with one or two children under five, haverecognised the amount that they will earn and then pay for child care is barely more thansocial service benefits, so have returned to social service benefits and withdrawn from care.

Council is committed to running an accountable viable business; but in trying to makechild care in Fairfield affordable, we are down to the bone—that is, minimum overheads. Wehave cut hours, we have cut staffing, and we have cut equipment, and we still have vacan-cies. The question we would like to pose to the inquiry is: why should low income familieshave lesser quality care? The situation has gone beyond user pays to users cannot afford topay. Families who have withdrawn from employment for economic reasons do not have theextra cash to send their children to preschool for socialisation and education, and thereforethe children are being disadvantaged.

We hope that you recognise that children’s services are more than a business, that theyare a focal point in our community which provides a support network for those families,particularly in relieving isolation for newly arrived and immigrant families, of which wehave many. Children’s services also provide opportunities for children to learn English andsocialise before they attend school. The costs of services have been made financially non-viable but are also impacting on employment in our city and, when we have such significant-ly high unemployment, the fact that people are not being able to return to employment isincreasing the unemployment levels.

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The child care industry itself not only creates an infrastructure to enable people to workand to study but also provides employment—in our case it is the council. With 158 staff, 99per cent are women in council’s children’s services who are reduced and set back into theunemployment numbers when we are reducing our numbers to make child care affordable.

One of the unique things in Fairfield is that community based management is the onlyprovider of places for under twos, and that is a significant cost for us. That is where ourcosts are. We have determined that we would like to have baby centres, but our lastestimates were that when we tried to do a 20-place baby centre to meet our needs, the feeswould be $320 a week and, considering unaffordability in our city is $175, we did notconsider it.

I would like to conclude by saying that, if the current vacancy levels continue withoutintervention, council and community based centres will be forced to close and lose thecommunity asset for ever. The damage done to children’s services in a short period will beirreparable in the long and the short term.

Mr Refshauge—I wanted to start by referring back to the statement of Senator Newmanback on 20 August 1996 ‘More Choice for Women’, in which Senator Newman indicatedthat the government’s position was that affordable child care for families who choose paidchild care arrangements will be maintained. She went on to say, ‘The government willwithdraw operational subsidy for community based long day care centres to encouragegreater efficiency and responsiveness to the needs of families.’ Of course, that was just stepone because the government has gone further. In actual fact that has simply been the preludeto rip out $350 million from child care; to compromise affordability, to compromise qualityand to compromise access to child care, and I think they are serious issues that the commit-tee needs to consider and needs to turn back.

In the Marrickville context we are the major provider of child care in our area. We arean innovative provider of child care, and we have been affected to the tune of $450,000worth of lost revenue, lost subsidies, by the changes that this government has made inrelation to long day care and outside school hours care services. No organisation, whether itbe a council or anyone else, can bear those sorts of cuts. In our case it has meant that therehas been a substantial increase in the cost of care, so that for this year our cost is $180 aweek in long day care, which is somewhat comparable with the Penrith situation, but has ledto a number of people leaving our long day care centres. Some 15 per cent of families haveleft child care, eight per cent of our families have reduced their days in care and we see anincrease in the number of part timers that are using our services. It is clear that this hascaused considerable distress in our community, as it has in other communities. In relation tooutside school hours care, this is an area which, as we highlight in our submission, literallyoperates on a shoestring. It operates often in schools where there is limited parent involve-ment, in schools which are disadvantaged, in schools that in fact need this sort of care. Inschools where people like Mark Latham might say that there is limited social capital around,organisations like ours can actually make a difference, but the extent to which we continueto make that difference, of course, is dependent upon the continued provision of fundingfrom the federal government.

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In relation to quality, I wanted to endorse the comments that have been made by otherswhere services, including ourselves, need to look at issues of reducing the numbers ofqualified staff, looking at the ratio of staff to children, and looking at providing lesscomprehensive services. It is worth noting that some of the consultants, not all, that havebeen funded by the federal government to provide advice on how to make this work havecome down with the lowest common denominator approach of just meeting your licensingrequirements, thus reducing your staff to the absolute minimum, of providing less compre-hensive services—perhaps you do not provide the meal on the site, and the parents bring themeal—and even going to extent of suggesting that services should provide other services,like haircuts and so forth. That demeans what child care is all about.

I wanted to finish simply by saying that these initiatives build on the other initiatives thatthis government is well known for. They will drive wages down in this industry, and drivepeople out. In that sense, these changes are anti-worker. They are aimed at forcing womenout of the work force. It is clear from our figures and those of others that that is what ishappening, and in that sense these changes are anti-women. These changes build as well onthose that have been introduced by the government in relation to migrants, an issue of someconcern to our area, being a place of first arrival for many migrants, so that those peoplewho are now no longer eligible for Childcare Assistance need also to bear the additional costthat this government has caused to child care delivery in our and other areas, and in thatsense it could be said that these changes are anti-migrant. It is clear that these changes aresimply another element of the mean agenda that this government is pursuing, and theyshould be seen as such by all involved.

CHAIR —Thank you, Mr Refshauge. We will now go to questions.

Senator NEAL—Mrs Gibson, you talked about the requirement of families to haveaccess to more than 10 hours care. I could not find in your submission any indication of thesort of proportion of families that are affected in that way.

Mrs Gibson—I do not think we had the figures available at that time, and I do not havethem with me today, but certainly there is enough demand there to demonstrate that theservice is required. If we look at alternative providers, we find again that some of those haverecognised that there is that need, and will provide those numbers of hours. Some of thosehave targeted a different market that require the shorter hours. Anecdotally, what we tend tofind is that particularly in the nought to two area, those families tend to need the long hours,which is an interesting combination.

Senator NEAL—I think one of the councils said that there were—was it Fairfield?—differentials between babies and over threes.

Ms Sandars—Yes, we did.

Senator NEAL—Are any other councils doing that as well?

Ms Sandars—We did do that for six months of last year, and at the parents’ request wehave done a universal fee because they found it disadvantaged them, so we only did it for asix-month period.

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Senator NEAL—Are there any other councils or local government bodies which aredoing that that we are aware of?

Mayor Dwyer—I can only comment that it was being explored but I cannot say for surewhether other people have gone as far as Fairfield and actually trialled it, but I defer tomy—

Mr Refshauge—If I could just make a brief comment. I think that the suggestion thatyou can divide the cost of care according to the age of the child does not respond necessarilyto the needs of the family, and I think the more you dissect the way in which you canprovide care, the greater opportunity there is for people to provide only an element of thecare, and it is the element that is most profitable, if I can put it that way, and that willfurther disadvantage families from being able to get into care at the times that they need it.

Senator NEAL—There has been some suggestion—in fact the EPAC report on childcare suggested there should be a differential Childcare Assistance at the moment; ChildcareAssistance just paid—that Childcare Assistance should be the same for everybody. Obviouslybabies are quite expensive to care for because of the high staffing rate you require. I supposeI am trying to explore the possibility of whether that would be advantageous to provide anadditional or a higher rate of Childcare Assistance for that age group. Does anyone have anyviews on that?

Mr Refshauge—Obviously funding needs to be provided that is commensurate to thecosts of the services, and the test must be to ensure that families who need child care haveaccess to it in an affordable way. If a package is put together that reflects the additionalcosts at the earlier ages of a child’s life in terms of child care, then clearly that would gosome way to addressing that issue.

Ms Sandars—Could I just add that one of the reasons why we discontinued it was—even though it is Childcare Assistance as opposed to fees—you do it on the chronologicalday that child turns three, and miraculously they double their fees—not double, that wasgross exaggeration, but their fees increase. The logistics of that are enormous, and in termsof equity to families, their income is not going to change on that birth date either.

Senator CHRIS EVANS—You do not necessarily move them out of that particularroom the day they turn two or three. They stay in the same room.

Ms Sandars—Yes, and that is one of the whole problems with the physical circum-stances of moving that child. The parents said, ‘Well, my child is three. I’m not paying thathigh a fee.’ There may not have been a progressive moving, and especially in centres wherethere is family grouping, where the children are together.

Senator NEAL—Mr Baum, you made some comments earlier about the planningsystem, and there was some evidence given yesterday in Melbourne from the City of Casey,where they said that there were a couple of areas within their local government area whichwere determined to be high need, but they said at the same time there were centres therewith a lot of vacancies. You said that the modelling didn’t take into account sufficientindicators. Can you elaborate a bit on that?

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Mr Baum —Yes, certainly. In starting off I would say that as a result of the first roundof planning under the framework we have had exactly the same thing happen in New SouthWales, and certainly Ms Sandars can talk about that. Basically what we have advocated aslocal government throughout this process is that the model needs, I guess, to be a lot moresophisticated than it actually is. There are, we would say, still deficiencies just around tryingto figure out, on a local government level, an allowance for the demand for formal child careamongst children with parents. That is difficult enough.

But then the imputed allowances for demand for formal child care amongst children withnon-working parents—the data gets sketchier. Allowance for the demand for formal childcare amongst children of non-residents—we are still operating with informed guesswork. Themodel really has not accounted for that, and the only way that is being accounted for at themoment is through consultation, and councils or other people involved in the planningprocess being able to say, ‘Well, this is North Sydney. We get 50,000 people a day cominghere to work. There needs to be some allowance.’ So our concerns are about, I guesstransparency and defensibility of the data. It would seem to us that there still needs to besome really hard technical planning to begin to get that defensible and sensitive. But ourother concern that we raised in our submission is about the fact that none of this deals withthe affordability issue, and there are many dimensions to affordability. The biggest crisisaround affordability is about parents affording it, but in this planning model you can actuallythrow up areas and say that there is a need for a lot more places, but you will not get anyproviders taking it up because if it is North Sydney or Bondi Junction or wherever, the costof land is just going to be prohibitive; the overheads are such that people find it extremelydifficult getting into the market. There are a host of I think quite sensible refinements thatneed to be made to the system. That is why I said we support it in general, but there is a lotof work to be done in getting it right.

Senator NEAL—I understand that letters have gone out in the last month offeringadditional places to child care providers within those high need areas that have beendetermined. Did any of the local government child care providers receive those sorts ofletters?

Mr Baum —I cannot comment, I am afraid. The feedback has not reached me yet.

Ms Sandars—I am not sure. We were previously a high needs area and one of theexamples is the fact that we have a centre with 63 vacancies. Under the current planningsystem a private provider is building next door to us and, because it was a high needs area,there was no determination to stop that. So, although it is a level playing field, it does seema bit ridiculous for a commercial operator to go in and build a 59-place centre next to a 40-place centre that has currently 63 vacancies. So we would still be seen as a high-need areabut it contradicts it.

Senator PAYNE—I just wanted to, if I could, ask Mrs Gibson a couple of questions onthe conclusions drawn by Penrith City Council. When you say ‘increasing the ChildcareAssistance ceiling to reflect the actual cost of care’, do you mean reflect the fee?

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Mrs Gibson—Well, no, to reflect the cost of providing care, which does equate to thefee, and that that cost of care needs to be better supported by Childcare Assistance for thefamilies who do have to pay for that cost of care.

Senator PAYNE—The government has no control over the actual level of the fees set.That is ultimately set by the service provider, in your case the council. Do you then thinkthat the government should play a role in the setting of the fees if it is supposed to matchthe assistance level to that fee?

Mrs Gibson—I think we are talking about there being a reasonable level of ChildcareAssistance, and the freeze of the Childcare Assistance level at $115 a week is way below thetrue cost of care. So I think there needs to be some assessment of what the true cost of careis, and that the Childcare Assistance level be set at an appropriate level to reflect that.

Senator PAYNE—So in the past where, for example, Childcare Assistance has beenraised by previous governments, fees have inevitably also risen as well. It has not actuallyended up in the sort of result that you are referring to. How would these circumstances beany different?

Mrs Gibson—I think there needs to be recognition of the fact that the costs of providingchild care do continually rise. In local government we have seen a quite considerableincrease in staff salaries through the award. We pay the award rates, and those increasedcosts have to be collected from somewhere, and that is usually from the fee. We also haveseen increased costs in such things as our workers compensation contribution. So there needsto be recognition that fees will rise.

Senator PAYNE—Do you think either you or Mr Jenkins could give me an assessmentof what sort of percentage component you think those aspects may play in fee increasesversus the removal of the operational subsidy—superannuation, workers comp, stategovernment regulation requirements and so on, the sorts of things that you have in factreferred to.

Mrs Gibson—That is very difficult to pull off the cuff.

Senator PAYNE—I would be happy to receive it later.

Mr Jenkins—It is probably fair to say that the average loss on the subsidy is about$40,000.

Senator PAYNE—Per centre.

Mr Jenkins—In a percentage, that probably relates to around—

Senator PAYNE—Sorry, Mr Jenkins, $40,000 per centre?

Mr Jenkins—Per centre, yes, that is right. And workers comp has increased fairlysignificantly over the last probably four years. Council-wide that has increased by probably100 per cent, and probably, relationship-wise, the same in the child care centres. We

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obviously pay site disabilities in our workers comp as well, so that affects the cost of childcare centres for local government.

Senator PAYNE—If I could ask Mr Refshauge a question in relation to the MarrickvilleCouncil area. Your submission indicates that there is a disinclination from the private sectorto provide services in your area. Could you just tell me how many private services there arein the Marrickville area?

Mr Refshauge—I think that there are less than half a dozen.

Senator CHRIS EVANS—I wanted to pose a question for you all to make comment on.This might not be as clear as it should be, but what I get out of this operational subsidycontext is that some people seem to think the inquiry is about whether we keep it or put itback. I want to look at how we fund child care in the future. If you start from the basiswhere I think you are all arguing, which is that there is a role for a community based sectorin child care, in a sort of mixed market of child care services, how ought we be looking tofund it?

The private sector say—and I think their argument has some validity—that by fundingcentres per se you end up funding potentially high wealth individuals, who put their childreninto those particular centres, disproportionate to how you might be funding a low incomefamily who have their child in a private centre, and that is not equal and it is not just. So,what I am saying is: how do we resolve that dilemma from funding particular centres, butcontinue to provide a viable community sector, and the values that that brings? I guess I justwant to see if you have any ideas or thoughts about how the local government area wouldsee themselves being funded or assisted, other than the demand perhaps for the operationalsubsidy being reinstated. What do you think local government needs to continue to make acontribution in providing child care, and what basis should that have? I know that is a bigquestion but it seems to me that that is at the core of a lot of this debate. We have got tocome to terms with that.

Mr Refshauge—The critical factor is money. I think it has been raised before. The factis that this government has simply taken money out of child care, and unless you put themoney back in then you will not effect any change. That is the first step. The governmentneeds to put money back into child care. As to the way it does it, I think local government—as with other providers—would be quite willing to look at ways in which that is undertaken.

On the face of it, there is a problem with someone who might earn a large wage or alarge family income getting the benefit of initiatives that are really directed to those onlesser incomes, so I think that there is a basis for some discussion. But at the end of the daywhat we need to react to is the fact that these changes have delivered a much less affordablesystem, and whatever is done needs to ensure that the gap that Denise Gibson was talkingabout between the $115 and the actual fee that is paid is closed to a much greater extent.That is what has to be undertaken.

I just want to raise one other issue that I think is important in principle, and that is Ithink there needs to be a lot more discussion with the industry about how that assistance isprovided. I think it is worth noting that the government has decided to withdraw the bulk

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provision of Childcare Assistance to centres, and to provide that individually to parents.Apart from creating a potential administrative nightmare, it certainly shows the government’scolours in terms of a desire to smash community infrastructure. It is also completely oppositeto the approach that the government has taken in regard to care for the aged, where they aredirecting the rental assistance for people in nursing homes to the nursing home itself. Thisproblem has just got to be overcome. The fact is that there is a benefit to communities incommunity infrastructure and the way in which the assistance is delivered by the governmentneeds to recognise the benefit that community infrastructure provides.

Senator CHRIS EVANS—Ms Sandars, you look like you have got something to say.

Ms Sandars—Yes, I was going to maybe add ‘value’. I was concerned at the thoughtthat we would lose operational subsidy for family day care along with everything else.Family day care does get lost in the debate. There is no way that we could operate a familyday care scheme to provide an alternative service to families without an operational subsidy,without a grant. There is not any profit in it; therefore, you are not going to get a privateprovider coming in and taking on a family day care scheme. Unless we had the operationalsubsidy for family day care, there would be no sponsors for family day care and there wouldnot be an infrastructure to support family day care.

I have grave concerns about the operational guides for family day care. For us it provideshalf the care and provides employment for a large number—75 on last count—of carers inour community; to provide home based work for them too. There is no way we couldoperate family day care and do a user-pays charge-back to carers or parents without anoperational grant.

Senator CHRIS EVANS—I take that point about my original question about what roleyou see for local government and what the principles underlying the funding to localgovernment and other community organisations ought to be to continue their role in childcare.

Ms Sandars—I suppose I am saying it is specifically for family day care, whether it isan operational grant or an administrative grant that may be somewhat different to centrebased services and maybe that is the tack, that we try to align the service types together. Iagree with Michael in terms of affordability, but in also providing equitable choice forfamilies of home based and centre based services.

Mrs Gibson—If I may just add to the points that have been raised so far, I think theoriginal question you posed was quite a complex question, and the answer will also be acomplex answer. In my opening summary I talked about the diverse types of needs for thedifferent types of services there are within our particular LGA. What we are seeing is anevolution of different models of service provision. The one thing that we do recognise is thatthe provision of long hours of care, provision of nought to two services, provision ofsubstantial meals, meeting the nutritional needs of the children throughout the day, is costly.

Whoever that is provided by will need some support by the government, if they are ableto offer that at a fee that parents can afford. There are segments of our community that needthat type of care. As groups of providers, wherever we come from, we need to look at that

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particular segment; we need to look at other segments that need different types of care.Maybe we need to have different models of funding for the different models of service thatare actually required.

Mr Baum —I would endorse the comments that have been made and I would say ourmembers would be generally attracted to any principle or system that looks at bringing upthe gap between Childcare Assistance and the actual fees. That needs to be done in a verysensitive and systematic fashion. I do not think there is a pat answer that you can just put onthe table right at the moment. The other side of the debate, which has only been touched onlightly, is that we keep looking at it simply in terms of money and subsidies, withoutrecognising a wider philosophical background, which is why local government is involved inthis sort of thing.

Some of the rhetoric and some of the whole way that principles are set up in the thingneed to be re-examined. Many councils do this and they still do not see it as a business; theysee it as a community service. They are not going to change, no matter how much we talkabout national competition policy and all those sorts of things, simply because theircommunities are demanding of them something quite different than those things suggest. Weneed to bear those sorts of things in mind when we discuss things like child care.

Proceedings suspended from 1.08 p.m. to 2.12 p.m.

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BARDETTA, Mrs Frances Agnes, President, Association of Child Care Centres of NewSouth Wales, Suite 12, 2 O’Connell Street, Parramatta, New South Wales 2150

CONNOLLY, Mrs Lyn, Vice-President, Association of Child Care Centres of NewSouth Wales, Suite 12, 2 O’Connell Street, Parramatta, New South Wales 2124

WESTON, Mr Ian, Consultant, Association of Child Care Centres of New South Wales,Suite 12, 2 O’Connell Street, Parramatta, New South Wales 2124

BLUETT, Ms Lesley Alison, Director, Uniting Church in Australia Children’s ServicesForum, Corner Moore and Boundary Streets, Roseville, New South Wales 2069

GODHARD, Mrs Tonia Lesley Ashcroft, Executive Officer, Sydney Day Nursery andNursery Schools Association, 141-145 Pitt Street, Redfern, New South Wales 2016

CHAIR —I welcome representatives from the Association of Child Care Centres of NewSouth Wales, the Sydney Day Nursery and Nursery Schools Association, and the UnitingChurch Children’s Services Forum. The committee has before it submissions from yourorganisations. I now invite you to make a short opening statement, and at the conclusion ofyour remarks I will invite members of the committee to put questions to you.

Mrs Bardetta—First of all, I would like to thank you very much for giving us thisopportunity to speak to our submission. We are very grateful for that opportunity. We willbe making a very brief opening statement, hoping that most of the issues that we wish topoint to will come up through question time. But we would ask, if they do not, if we mayhave a few moments at the end to address some of the issues.

CHAIR —What we are finding, Mrs Bardetta, is that our time is going right to the end inevery session. There has not been one session where we have had spare time at the end. Sowe would ask you to address your core points or the points that you deem to be of relevanceto us, and the senators will ask questions. I cannot guarantee that we will have the oppor-tunity to come back to you at the end, so it is better if you do it at the outset.

Mrs Bardetta—Thank you. The association has two major concerns, and those aresimply that, as we understand it, in the history of the time that we have been involved,which goes back some 27 years, no government, either state or federal, seems to reallyunderstand or know what child care really does, or what it could do if it were properlydesigned and administered and adequately funded. We have alluded to that and developedthat within our submission. I am hopeful that you have given some time to what it is that wehave expressed as our concerns on that issue.

The second concern is that circulating information which overstated the impact of recentCommonwealth budgets has itself hurt children, jobs, proprietors, owners, licensees andparents in the private sector, while at the same time it has made it easy for government toavoid valid objections to outdated policies and practices. The private providers in New SouthWales are hurting, and if we thought the cause was the Commonwealth policy or practice wewould most definitely say so.

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But the 1996-97 and the 1997-98 budgets do not seem to be the main cause of that hurt.Private fees have not gone up in any material way since 1996, but demand has dropped offsignificantly from about August 1997. Parents seem to have accepted the headlines whichtold them that child care fees are much higher. Someone forgot to mention to those parentsthat the fees for 70 per cent of services that the private sector provides, both in this state andnationally, were not affected by these budgets.

We hope that the committee will clarify what is meant by budget cuts. Does it reallymean a reduction in the proposed budget increases over the relevant period, or has there beenan actual cut to child care spending? Or is it the truth that there will be more money spenton child care than is currently being spent? I hope that is something that we are going toclarify through these meetings.

CHAIR —Mrs Bardetta, you appear to be under a misapprehension as to the purpose ofthis committee. The purpose of this committee is to address the terms of reference that havebeen decided by the Senate. Submissions have been received from 800 or 900 organisationsand a range of interest groups have been invited to come and to speak to their submissionsor amplify comments or call to our attention relevant concerns. It is not the role of thecommittee or individual members to go down the path that you are suggesting. We areinterested in hearing your views, the views of the people you represent, and the views ofyour organisation in the context of the terms of reference. That is why we are here. We wantto hear your concerns, your suggestions for change or improvement in the future. That is ourrole.

Mrs Bardetta—Good. Thank you. Well, we do hope that the damage that has beensuffered by private centres, by the children no longer in their care, and by the child careworkers, will help everyone to see that Australia’s child care system is far too important toallow the usual political and public relations techniques to drive the decision making. Thosewho care about child care simply have to get better at working together, and with govern-ment, to ensure that policy and practice are based on facts. We are hoping that this inquirywill take the lead in that process.

We have heard a lot this morning about the different funding bases, and that has causeddivision in the past. It seems to be continuing to do so. But in effect what we are all about isdelivering the most affordable, highest quality child care that we can for the children of thisnation. I really do believe that people should forget the funding base and start simplyfocusing on that. There was an excellent question from Senator Evans before, and I thinkthat the answer to your question was alluded to in the Economic Planning and AdvisoryCouncil’s suggestions that we do look at spending the limited money that we have moreequitably than it has been spent in the past. So I will leave it at that, and I am sure thatthrough questioning we will be able to cover more of the points that we would like to raise.

Mr Weston—In response, Mr Chairman, to your suggestion that it is somehow outsidethe terms of reference for this association to ask the committee to consider in its report whatit means by budget cuts: we are not trying to be clever. We simply do seek some sort ofguidance on what is meant by this notion of budget cuts. It seems to me to be fair to go onand say that the terms of reference themselves seemed to be premised upon the allegation—

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or assertion perhaps is a better word—that there has been some $800 million worth of cuts.Our question is that we do not understand whether—

Senator NEAL—You are not here to ask questions.

CHAIR —Order! I have already spelt out once what is the purpose of this committee,and how it will engage in its operations. I would ask you to address the terms of referenceand make your submissions thereto. We are most interested in hearing the viewpoints of theprivate sector providers. We would ask you to address that.

Mr Weston—With respect, Sir, that is what we are trying to do.

CHAIR —Proceed, then.

Mr Weston—All right; we will let that pass. I think we have made the point. We aresimply—

Senator CHRIS EVANS—If you want to make the point that you do not think there hasbeen money taken out of child care, make it.

Mr Weston—Well, no, we do not—

Senator CHRIS EVANS—Make your argument. That is fine. That is what you are hereto do—make your argument. You have alluded to it; you have not made it, so make it.

Mr Weston—We are not in a position, Senator, to make that point. We genuinely askthe question. Is, however, that the assertion which is being made by those that havecommissioned the inquiry? Is there an assertion that $800 million has been taken out, or isthe claim that what was going to be spent on child care in the future is going to be $800million less than what was originally envisaged? I think you are reading into our questionsome sinister motive which just is not there.

Senator CHRIS EVANS—What do you want to tell us about the budget cuts? What areyou saying?

Mr Weston—No, we do not want to tell you anything. We are simply asking for thecommittee to actually address that issue and explain to the community at large whether therehas been—

CHAIR —We are not going to go down that path. If you have a contribution to make inthe context of the terms of reference, you are welcome to make it. We are very interested init. We are not going to discuss the background to the terms of reference. We do notnecessarily accept the assertion you are making. If you want to make it, make it. But go on,please, and address the terms of reference.

Mr Weston—I will not pursue the point, Mr Chairman.

CHAIR —Do you have any other contribution to make, Mr Weston?

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Mr Weston—Not in terms of an opening statement, no. As indicated, we are happy totry and pick up the other issues we do want to say something about in the context of thequestions.

CHAIR —Mrs Connolly?

Mrs Connolly—We were asked to make an opening statement, and we were asked tokeep it short, so we have done that and we thought that there would be an opening state-ment, then we would be talking to points in it later on and there would be questions.

CHAIR —You have concluded your opening statement?

Mrs Connolly—Yes.

CHAIR —Okay. Ms Bluett?

Ms Bluett—Thank you. I welcome the opportunity to contribute to this inquiry and talkto the submission that was tabled. The basis of our document resulted from an increasingawareness that the current child care framework is presently under threat. Federal govern-ment policy, in our view, has previously allowed child care to be accessible to all membersof the community. We have currently experienced a radical shift from that position, and fromthe social equity perspective we are very concerned.

The Uniting Church attracts people driven by high values, and as such the church hasvery high voluntary commitment and support. We feel that situation is also presently underthreat and government needs to keep our community involvement alive. The ability of ourwhole organisation to deliver child care would be threatened by the current trends that wesee emerging.

Our forum takes responsibility for over 70 children’s services in New South Wales andthe ACT and those immediately affected by federal government policy changes total 34. Theservices are located in rural, regional and metropolitan areas and these services all reflect aconsistent trend that was observed. Our evidence is not just based on perception but well-documented research, which we have submitted, and has been taken across all our services.We find the trends emerging disturbing. Our forum particularly focuses on providing non-profit services to meet perceived community needs in all areas. Provision of quality,affordable child care for all members of the community is a high priority and the backgroundof our philosophy.

The major issues that we see emerging are the requirements for a national planningframework, which has been discussed here earlier, and also the immediate need for anincrease in the Childcare Assistance threshold to assist those families on low incomes whoare unable to currently access children’s services or who have left children’s services. Weare fearful of the trend continuing further with before- and after-school care cutbacks yet totake full effect. We feel strongly that future federal government policy needs to recognisethat trend and take measures to address that on an ongoing basis.

CHAIR —Thank you, Ms Bluett. Mrs Godhard?

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Mrs Godhard—I represent Sydney Day which is an organisation that is communitybased, non-profit. We have been operating for nearly 100 years. We are very proud of ourhistory. We were the original provider of long day care services in this state. We currentlymanage 21 centres in New South Wales and some in the ACT. Those include rural servicesand centres for government employees. We hope, as an outcome, that there will be amaintained commitment to a community based sector. We think that is currently under threatand there seems to be very little recognition of the efforts of volunteers and the quality ofthe services that the community base has built up over time. We see affordability as anabsolute key issue. We believe that many families can no longer access long day carecentres, and that is why we have vacancies in our organisation and in other services acrossthe country, and also centres closing.

What has changed? Obviously for us we have lost operational subsidy, but I do not thinkit is only that. I think the $115 ceiling, and its freezing, particularly for a number of years, isa major issue, because we have rising costs, particularly in salaries, which are the majorcomponent of any budget, and it is that gap fee for families that is too great, particularly forthose on low incomes. The removal of the $30 disregard, and the lack of planning over timeleading to oversupply in some areas, are also issues.

We believe it is impacting on families, children and staff, and we included in oursubmission many letters from those people putting forward their feelings. Families gave usstories about having to give up work, particularly women, or reduce their hours of work.They have to move to deregulated care. One parent sent a child away to a grandparent manykilometres away, so she will not see that child except on odd occasions. Families talk ofgreat stress and convoluted family arrangements where families in the end are not seeing oneanother because they are arranging their work patterns to avoid the cost of child care.

Who is most impacted on? In our experience it has been families on low incomes,families in rural areas, again where it is probably an income base; families from non-English-speaking backgrounds and families with two children under the age of five. Childrenare often lost in the argument. We believe they deserve a high-quality program. The researchshows that it is adult to child ratios and qualifications and experience that are critical to theexperiences of children.

I think it would be wonderful if the Senate inquiry could visit a centre and look at whatis involved in working there. In our state we have a ratio of one adult to five children. Youhave to go and see it. I did some calculations when I was sitting here this morning abouthow many nappies those people change. Five children to one carer means about 7,500nappies that they do in a year. They have to do that not only in a healthy way but interactingin a way that promotes that child, and I think they do a fantastic job. I actually see theregulation base as inadequate because a one to five ratio for babies is almost unworkable.

Children now are experiencing multiple carers, because they move between service types.Within a service type, in our particular situation, they will see many children in a week, sothe nature of the experience is changing radically for the child. In terms of staff the budgetis taken up about 85 per cent by staff wages, and the current pressures on affordability Ithink keeps wages unrealistically low. Again, that impacts on women. I recently gaveevidence to a pay equity inquiry here which was looking at wages for child carers as against

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metals, and the final question to me was, ‘What would happen if wages went up $150 aweek?’ Obviously centres would be totally closed, but the reality is those workers are notadequately paid at the moment and the cost of child care is partly borne by those low wages.

We have staff being retrenched and moved around and generally the status and morale islow, and that in turn obviously impacts on interactions with children. There are greatpressures on quality because of the affordability issue, and costs are rising. We have heardlots of things—wages, workers comp, super—and I do not believe the regulations have had amajor impact. We have always had two staff on site and we believe in fact that base is aminimum and not adequate.

There are a number of issues for us around access and equity. The people who aremissing out at the moment are those on low incomes; women’s rights are definitely affectedbecause they are the ones that are moving out. The children, who may in fact spend morehours with us than they might in the whole of primary school, are not necessarily getting thequality they deserve. We are moving to a situation where there are different standards, wherethose with the capacity to pay for higher standards will get that and those on low incomeswill get a lesser standard. One might argue that those children in fact deserve the best.

Children with disabilities are not gaining access and, although the government has mademoney available through the special needs subsidy scheme, I believe those dollars are aboutto run out, so again those children will be denied access. Children at risk cannot get in, andin the past we have managed to carry a few children from disadvantaged backgrounds butwe are no longer able to do that. What we would like to see is the $115 raised—and Iacknowledge that fees will go up, but I believe that is just a reflection of increasing costs.

We believe that there should be consideration of differential support. Children under twodefinitely cost more. Two-year-olds cost even more than three- to five-year-olds because ofstaff ratios. We believe that children with disabilities need additional funding. We hope thatthe capacity to charge a daily fee will remain because otherwise you lose the flexibility ofhours and you come back to offering fewer hours. We hope that planning will be seriouslyconsidered, taking account of what is happening to the sector at the moment. So what mighthave been a high-needs area in the past probably is no longer, because there are vacanciesacross the sector. It needs to be based on the reality of utilisation.

We hope in the end that the rights of children will come through in this; that children arein fact receiving both education and care. The cost to society of remediating poor care orpoor experiences for children is phenomenal. We hope that there will be developmentallyappropriate programs, and that needs to be adequately resourced. We acknowledge thatfamilies need rights for work force participation, but the child should not be lost in that.

Senator NEAL—Yes. Mrs Bardetta, your organisation represents about 400 members. Isthat correct?

Mrs Bardetta—Somewhat more now.

Senator NEAL—Roughly how many more?

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Mrs Bardetta—Close to 500 now.

Senator NEAL—And they are all long day care centres?

Mrs Bardetta—No, we do have a number of preschools; not a great many. By far thebulk would be long day care.

Senator NEAL—What would be the range of fees charged by your members?

Mrs Bardetta—That would be difficult. It is really related to areas and supply, et cetera,but I think for care for children nought to two it would range from $40 to $50 a day. That isfor babies under two.

Senator NEAL—Sorry, is that per day?

Mrs Bardetta—Per day.

Senator NEAL—So it is $250 a week.

Mrs Bardetta—Yes, up to.

Senator NEAL—And the lowest?

Mrs Bardetta—About $200, and that is all fees; that is not Childcare Assistance.

Senator NEAL—Yes, I understand that. And for your over-twos?

Mrs Bardetta—Well, I heard someone here today was $27 a day up to around $35.

Senator NEAL—Have you ever actually asked directly your members what their feesare, or is this just what you gather?

Mrs Bardetta—Sometimes if we have a mail-out for the purposes of a campaign ofsome description we do. We have not done that, I would say, in the last 20 months or so.

Senator NEAL—But it is based on inquiries you have made, so it is quite accurate.

Mrs Bardetta—Yes. We have state conferences and we have general meetings once amonth, et cetera, so we are in close contact with our people.

Senator NEAL—So, of those 400 members, was I correct in understanding that youwere saying before that none of those have increased their fees in the last two years?

Mrs Bardetta—Well, some have, but by far the bulk have not.

Senator NEAL—So some have increased their fees?

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Mrs Bardetta—Yes, there was one centre that was here today which has put up its feeslast year by $1 a day.

Senator NEAL—So that is one centre.

Mrs Bardetta—Yes.

Senator NEAL—Roughly what proportion of your members have put up their fees?

Mrs Bardetta—Could you allow us to go back and find out, because I would not like toguess that.

Senator NEAL—I would be very happy for you to do that, but just for the purposes ofdiscussion, do you know roughly?

Mrs Bardetta—Well, it is my general knowledge from our last state conference—andthere were 140 participants there—that there were three people that had had a fee rise since1996.

Mrs Connolly—Very limited.

Mrs Bardetta—Very limited.

Senator NEAL—But that is not a proportion, is it?

Mrs Bardetta—No.

Mrs Connolly—Well, three out of 140—

Mrs Bardetta—It is giving you some idea.

Mrs Connolly—And that fee rise would be only $1 or $2 because we have not beenaffected by the operational subsidies; we have only been affected by industrial—

Senator NEAL—You have said that, but that is not what I am asking. Can you go awayand get an accurate breakdown of which of your members have had fee increases and, if so,how much?

Mrs Bardetta—Yes.

Senator NEAL—But what you are saying is that largely you really have not had any feerises. Is that correct?

Mrs Connolly—Yes.

Senator NEAL—In your submission you have outlined a number of cost pressures, asyou describe them, on your fees, saying that the award changes have gone up five per cent

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in September 1996. That is on page 4. Bearing in mind most of your members have not hadfee increases, how have you catered for those increases in costs?

Mrs Bardetta—Quite simply by working much longer hours ourselves, and taking onmore of the supportive roles. Instead of having a gardener, we do not have one.

Senator NEAL—Do all of your owners in your businesses actually work in thebusinesses?

Mrs Connolly—Most do.

Mrs Bardetta—Mostly.

Senator NEAL—But do all?

Mrs Connolly—To a degree, yes.

Mrs Bardetta—I would say so. I do not know of any owner who does not.

Senator NEAL—If you do not know, I would prefer you to say you do not know.

Mrs Bardetta—If one of the owners is not directly working in the business duringbusiness hours, they are generally there on the weekend in terms of maintenance, in terms ofbookkeeping and in terms of accountancy and things of that nature.

Senator NEAL—I know there is an opportunity cost but, assuming your owners werenot actually charging themselves for the extra hours, how does that reduce cost?

Mrs Bardetta—Well, for example, in my particular case I was working nine hours. I amnow working a minimum of 12. So that has saved me putting on extra people in theafternoons. So it keeps the cost down because the person who would come on for anafternoon shift in the baby room is now me. I am not in the office where I would have been;I am on the floor again.

Senator NEAL—So you are employing fewer staff.

Mrs Bardetta—Yes.

Senator NEAL—Virtually what you are saying is you are replacing other staff withyourself.

Mrs Bardetta—Well, I can only replace one person.

Senator NEAL—So that is what you are doing, is it?

Mrs Bardetta—That is how we keep our costs competitive, because in my area, forexample, I know we have reached a ceiling.

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Senator NEAL—Before you were working on the floor, what would you be spendingyour time doing? Would you have been doing programs and administration? Would that beright?

Mrs Bardetta—We have now put in a computer that does a lot of what we did by hand,which has freed us up to do more work on the floor, and more work in other areas.Programming never suffers as a consequence. It is a 90-place centre and there are five earlychildhood teachers.

Senator NEAL—But you are spending more time on the floor and less time doingprogramming, are you?

Mrs Bardetta—I am doing more time on the floor. I am not doing less time program-ming. I am doing less time in administration because I have a computer taking that spot.

Senator NEAL—Are there any other things you are doing to keep costs down—not youpersonally; I am talking about your members?

Mrs Connolly—Yes. So in place of that the members then do all the administrationwork of a weekend. Instead of having someone mow the lawns, they do it themselves. Thatis the way small business operates. We have in the past been able to afford to pay people todo that, and this is general right across the state. Now people cannot afford to pay people todo it, and so they and their husbands and kids do it, and they do it of a weekend and they doit of a night. So that is how we have been able to keep costs down. We know that for theparents the bubble has burst; they cannot pay any more money.

Senator NEAL—I have actually been told this all over Australia, but I am just interestedin having it on the record—that the profitability of private centres has substantially decreasedin the last two years.

Mrs Connolly—Certainly.

Senator NEAL—And also there has been a decrease in the usage of centres. Is thatright?

Mrs Connolly—Yes. The people that were with us did not leave, but the new people didnot come. We believe the only change there was the media campaign in July last year thatwe talked about in July last year which said, ‘Cost of child care fees rise.’ It did not say,‘Cost of child care fees rise in 30 per cent of the area, not the other 70 per cent.’ So peoplejust have assumed, and they believe what they read in the paper. So that has been the issue.So we are down in numbers, but it is as a result of that.

Senator NEAL—What sort of percentage of drop in usage do you have in rough terms?

Mrs Bardetta—Approximately 30 per cent.

Senator NEAL—That is quite consistent.

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Mrs Bardetta—Can I just follow on from that?

Senator NEAL—Yes.

Mrs Bardetta—I found that my advertising was not working. I changed and I rewordedthe advertising. I am being perfectly frank now. I worded it, ‘Do not believe everything youread in the papers. Child care costs have not risen everywhere. Contact your local privatecentre. We are one. We are quality accredited,’ et cetera. I have improved from 60 per centusage, which I was at the beginning of the year, to almost 90 per cent now. We are gettingpeople every day as a result of rewording the advertising that I was doing.

Senator NEAL—So your particular centre has increased its usage over the last couple ofmonths, has it?

Mrs Bardetta—Yes, because I changed the wording in the advertising.

Senator NEAL—Well, you believe that.

Mrs Bardetta—Well, that is when they started to phone and to come, once the wordingwas changed.

Senator NEAL—In your submission it says that fees have not moved but it says, ‘Someparents have had to pay a bigger gap.’

Mrs Connolly—Yes.

Senator NEAL—What sort of additional gap?

Mrs Connolly—A 50-hour gap, 60 to 50 hours.

Senator NEAL—In asking how much, I mean what sort of size—$5, $10?

Mrs Connolly—Well, all our centres charge differently so it depends on the fee.

Senator NEAL—What sort of range?

Mrs Connolly—I cannot answer that question. We have got 500 members.

Senator NEAL—Is it $1, $10, $500?

Mrs Connolly—No, it would not be like that.

Senator NEAL—I am just trying to get an idea of the scope of it.

Mrs Connolly—We will have to get back to you with that.

Senator NEAL—If you could; that is quite important. You do not think that thatincreasing gap would affect parents’ willingness to put their children in child care?

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Mrs Bardetta—Well, we did not lose those people. They are still with us.

Senator NEAL—So you are saying that none of the people who had an increased gapthey had to pay left any of your centres?

Mrs Bardetta—I did not lose one in my particular centre but I do not know across theboard.

Senator NEAL—If I can just clarify it, are you saying that no parent that had anincreasing gap left any of the centres that you represent?

Mrs Connolly—No, we are not saying that. We are saying it was limited. From what wecan make out from discussing it with our members, it was limited. It had a very limitedeffect.

Senator NEAL—So some parents did leave because of the increasing gap?

Mrs Connolly—They did not leave; they had to cut their days and find alternate care onthe outside.

Senator NEAL—I just want to make sure I am getting the right question answered. So,as a result of the payment gap increasing, some parents left or decreased their hours. Is thatwhat you are saying?

Mrs Connolly—Decreased their days, like cut back one day, and then they would getgrandmother or somebody else to mind their child for the other day.

Senator NEAL—I see.

Mr Weston—Senator, can I approach that question from the other side and just refer youto page 6 of the submission which attempts to sort of measure the impact of the gap fee. Wehad to address essentially the same question that you are addressing—what was the impactof that gap fee—and, on the basis outlined in the submission, the association collected whatevidence it could and, as the submission points out, we could not find any material impactfor the gap. After that we struggled and cannot really identify with any degree of precisionwhat that gap is. All we can say to you with any confidence is that our attempts to collectevidence produced the result, as we have outlined in the submission, that we could notidentify any material impact for the reduction in the gap fee, which we do recognise is amove in the wrong direction but we just have not been able to identify any material impactof the result of another gap so far.

Senator NEAL—But you do know that some parents are paying a bigger gap?

Mr Weston—Yes. As we say, as a matter of principle that seems to us to be a move inthe wrong direction.

Mrs Connolly—Which I think we have stated.

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Mr Weston—Yes, it is stated in here.

Senator NEAL—Can I ask you about a quite different area now: do you know what theaverage size of the centres you represent is?

Mrs Connolly—From five through to 90 and just about everywhere in between. I thinkpredominantly around 30 to 39.

Senator NEAL—Could you check that, please, and give that to the committee?

Mrs Connolly—Yes.

Senator NEAL—Thanks.

Senator CHRIS EVANS—Sorry, Senator, I just want to make sure I have got thatquestion correct—

Senator NEAL—The average size of all of the centres that you represent.

Senator CHRIS EVANS—Thank you.

Senator PAYNE—I actually wanted to ask Ms Bluett the same question, basically aboutthe average size of your centres, and then also, in relation to your increases in costs, aboutissues such as superannuation, workers comp, state regs—to see what part they play in yourcost increases.

Ms Bluett—In relation to the centre size, our smallest centre is a 20-place long day carecentre and our largest would be 60 places. On average, the majority are probably around 40-place services. In terms of the on-costs that we have incurred over the last few years,definitely our workers compensation has increased and there have been award increases inthe last two years as well.

Senator PAYNE—And you address those along with, as you suggest in your submission,the question of the operational subsidy in the whole bulk of the fee increases?

Ms Bluett—Yes.

Senator PAYNE—Could I also direct that question to you, Ms Godhard, about the rangeand funding of services and the question of on-costs?

Mrs Godhard—Yes. The smallest service is 29; the largest is 90. Probably the averagesize would be around 50, I think. In terms of increasing costs, we have taken up the salaryincreases each time we have reviewed the budget and we always try to take account ofnegotiations that are under way because we already know there is another round coming up.Workers comp has increased for us as well.

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Senator PAYNE—Just one thing which we found in evidence given yesterday, inVictoria in particular, pertained to size and the question of viability for community basedcentres. Do you have a view on a particular optimal size, if you like?

Mrs Godhard—In our experience, the very small service like 29 is not as viable, butprobably the most valid thing is how many of the youngest children you have. For us, thehighest cost sits where we have got more nought to twos or two-year-olds than threes tofives, because of the adult to child ratio.

Senator PAYNE—If I could just also direct that question to Ms Bluett: do you have aview about the viability?

Ms Bluett—Yes. Obviously too it depends on state regulations and we are required tohave teachers in centres with 30 or more places. As a matter of policy, our organisation alsoendorses early childhood teachers even in our smaller centres, so for us obviously they arenot as cost-effective as perhaps larger services—39-place services—where there may only beone teacher as well. So it really is an individual issue and I think it cannot be looked atacross the board as being a true figure because we would say that early childhood teachersshould be employed in all our services, and if it was a 39-place service we would actuallyadvocate for two teachers as well, so there is a difficulty in that.

Senator PAYNE—That is obviously reflected in your fees and in the views of your userparents.

Ms Bluett—Yes, that is right.

Senator O’BRIEN—Ms Bardetta, the 90-place centre that you own and run, can you tellus about the composition of its clientele? For example, how many noughts to ones, ones totwos ?

Mrs Bardetta—Well, nought to one would be approximately eight and 12 one to twos.

Senator O’BRIEN—Okay. Do you have a differential charge for the nought to ones?

Mrs Bardetta—I have a charge for nought to twos.

Senator O’BRIEN—So it is the same in either of those two categories.

Mrs Bardetta—Yes, and then it changes for twos to threes and then for threes to fives.

Senator O’BRIEN—Is there any difference in the minimum staff requirement for thosedifferent age groups?

Mrs Bardetta—The staffing requirements by state regulation are one to five for noughtto twos. We average one to 3.2 children. We have staffing requirements of one to eight fortwos to threes and in that room we currently have between 12 and 14 children with threefull-time staff, one and one-half person in the morning—I know it sounds silly but one in themorning and one in the afternoon to cover the late end of the day because we are a 12-hour

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operation—and the threes to fives, the regulations in New South Wales require one to 10,but the most we have on any day are 46 children and we have a staff of six full-timers andtwo part-timers in that room.

Senator O’BRIEN—And that is to cover a 12-hour day.

Mrs Bardetta—A 12-hour day.

Senator O’BRIEN—Obviously the children do not all remain for 12 hours but that isthe span of hours.

Mrs Bardetta—I was interested this morning in a comment that the babies do staylonger and I thought that was just something in our area but it is obviously across the board.The 12-hour usage is taken up with nought to twos, particularly, and twos to threes. It seemsthat, as children get older, parents are more able to come a little bit later and go home alittle earlier. It sounds strange but that is how it is.

Senator CHRIS EVANS—Maybe the parents have the same experience you have ofbabies being more labour intensive.

Mrs Bardetta—I think you could be very right.

Senator O’BRIEN—And you were telling us about the fee range. You have a two tothree fee.

Mrs Bardetta—Yes.

Senator O’BRIEN—Did you tell us what that was?

Mrs Bardetta—$40 daily.

Senator O’BRIEN—That is two to three.

Mrs Bardetta—Two to three.

Senator O’BRIEN—So nought to two is $50, is it?

Mrs Bardetta—Yes.

Senator O’BRIEN—And three to five?

Mrs Bardetta—$35.

Senator O’BRIEN—Where is your centre? What general location?

Mrs Bardetta—I can tell you it is in Castle Hill, but it is in the Hornsby local govern-ment area.

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Senator O’BRIEN—How many other centres are in that area? There are lots, are there?It is a high-demand area?

Mrs Bardetta—No, it has been very oversupplied. I have been in child care since 1976in that area and it is our name that keeps us going, I think.

Senator O’BRIEN—So you are offering a quality service, probably not the cheapestservice in your area?

Mrs Bardetta—We find that we are actually cheaper than four of the other centres inthe area. We are running on about a par, as many of the community based ones in the areahave put their fees up themselves—with the exception of babies, of course—but they arerunning around the $38 to $42 a day overall.

Senator O’BRIEN—So that competition strikes a standard rate and you have a differen-tial rate?

Mrs Bardetta—We have a differential rate.

Senator O’BRIEN—Is your situation common with private providers—that is, adifferential rate for different—

Mrs Bardetta—I think so. I tried to run at a flat rate when we initially opened withbabies. But we found it was draining our whole capacity to provide what we really wanted toprovide.

Senator O’BRIEN—I seem to recall that there was actually at one stage—whether itwas nought to one or nought to two, I cannot recall—a specialist provider only providingthat care but at a much higher fee. Does that still go on?

Mrs Bardetta—I do know that there are centres within the CBD that charge between$56 and $64 a day.

Senator O’BRIEN—Is that for a specific age group? Is it for that age group?

Mrs Bardetta—That is for children nought to five.

Mrs Connolly—It is real estate costs that are involved here.

Senator O’BRIEN—But those sort of charges are only struck in a CBD situation?

Mrs Bardetta—Do you know the Sydney locality?

Senator O’BRIEN—Yes, I do.

Mrs Bardetta—It begins to rise about Epping and increases as you go into the city. Wehave had quite a few people come from that area because they consider us to be providingsuch a marvellous service in such beautiful surroundings at such a good price, so they are

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willing to travel back and they go that way. That is why we need to be open the 12 hourstoo.

Senator O’BRIEN—I will leave it at that. I understand we are running out of time.

CHAIR —Thank you, Senator O’Brien. I have a couple of questions, Mrs Bardetta. Canyou give us any idea of the number of new openings, new additions and closures of privatecentres in the last two years that you are aware of?

Mrs Connolly—The closures are available from the department’s own figures.

Senator NEAL—No, they are not.

Mrs Connolly—But when a centre closes they do not have Childcare Assistance anymore.

Senator NEAL—Yes, but they will not tell us.

Mrs Connolly—Really?

CHAIR —We are having a lot of difficulty getting some hard information.

Mrs Connolly—The centres that are still opening are centres that were approved by theDepartment of Community Services and councils before the cap. They have to be up andrunning, I think, by the 27th of this month. The centres received a letter just recently to say,‘This is the name of your centre and this is the number of licensed places you can haveaccording to your licence. If there are any perceived changes as a result of alterations orwhatever, could you notify the department before 27 April.’ So the new centres that arecoming on line are centres that, according to council, have five years before their DA or BAruns out. But I think the department has a more limited view on that.

Senator NEAL—What you are saying is that, if a centre was approved before the cut-offdate, which is October—

Mrs Connolly—In May the budget came down.

Senator NEAL—even though they have not actually opened their doors, they can avoidthat $7,000—

Mrs Connolly—No, I do not think they can avoid the $7,000.

Senator NEAL—If they got approved before 1 October.

Mrs Connolly—But they have a limited time in which to open in relation to the $7,000cap; however, they can open at any time anywhere if they are approved and do not apply forChildcare Assistance. So some people have DAs/Bas approved now but they will not buildfor two years or three years. As long as they build it within five years that is okay withcouncil.

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CHAIR —Are you aware of the numbers of closures in the last two years?

Mrs Bardetta—On page 13, and it is (b)2, we are aware of approximately 13 centres. Iknow of two of those particularly that were rationalisation. The people had been leasingproperty and had got themselves into a position to be able to buy land and build their ownbuilding, so they closed that one to open this one. That is two, but as for the others I cannotcomment.

CHAIR —Any idea of the capital costs of individuals seeking to enter the industry?

Mrs Bardetta—Yes, very much. Where would you like to start? What sized centre?

CHAIR —Is it 150 to half a million start-up costs—say, 35, 45, 60?

Mrs Connolly—Are you talking about leasing a property or are you talking aboutstarting from scratch, buying the land and building and equipping?

CHAIR —The latter.

Mrs Connolly—Obviously that depends on where it is, so you would have to take intoaccount real estate values. I am sure everyone knows that Crows Nest would be far moreexpensive than west-west-west-west.

Senator NEAL—In Penrith.

Mrs Connolly—Yes, Penrith and Campbelltown areas. With the state governmentregulations also there is an increase in spacing required so it is more expensive now. As wellas that, most councils require more parking than they ever did before. So sometimes youneed to buy an extra block of land just for parking. It can be anywhere between, I wouldsay, $400,000 and $1 million.

CHAIR —You are telling us that it is an intensely price-competitive industry and to getmarkets you have to go on quality; that you cannot go on price; that you have not been ableto increase your fees for the last two years; that a range of persons are withdrawing theirchildren for a range of reasons; that a range of centres are significantly below capacity forthe first time in two or three years. Is it fair to conclude that the private sector child careindustry is heading for a major shake-out?

Mrs Connolly—I do not think it is the private sector; I think it is the industry.

CHAIR —The whole industry?

Mrs Connolly—There are community based centres that are closing as well.

CHAIR —But it seems to me, when you put all those facts together, a fairly massiveshake-out.

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Mrs Connolly—There will be a sorting out, yes, where there are too many centres andnot enough children, but I do not think it will be necessarily a particular sector. It will justbe wherever.

CHAIR —Across the board?

Mrs Connolly—Across the board.

CHAIR —Has it really started as yet or can we anticipate that some time in the future?

Mrs Connolly—I think it has started.

Senator CHRIS EVANS—I think Mrs Godhard and Ms Bluett emphasised the sameissue, Senator Bishop.

CHAIR —Perhaps we might take that up with Ms Bluett and Ms Godhard.

Mrs Godhard—I had heard the statement before that—and it would be probably ninemonths ago that 27 centres had closed in Australia. I believe it would be a lot more and Ialso believe there are a lot that could close soon because we as an organisation are approach-ed by people who want to be managed by Sydney Day and we always look at whether theyare financially viable. I could say for a number of those we looked at recently, they will notbe; they will close. So I think whatever that number is now it will escalate. I think there willbe a sorting out but I think the sorting out may well happen in low income areas. I think itwill be biased because it will be those families that cannot afford it, so those centres willclose.

CHAIR —Ms Bluett?

Ms Bluett—Yes, and urban fringe areas as well. We are finding those services arestruggling to a much greater extent than those in the well-established middle to high incomeareas.

Senator NEAL—Could I just clarify that 13 closures. Is that 13 out of the 400 yourepresent?

Mrs Bardetta—No, that was 13 in New South Wales.

Senator NEAL—Thirteen in New South Wales private centres?

Mrs Bardetta—Private centres.

CHAIR —I have finished my questions. Senator Evans?

Senator CHRIS EVANS—I do not want to labour the point but I do want to ask MrsBardetta the essential question that I think Senator Bishop was also alluding to there, whichis that really you are saying New South Wales providers are hurting, and you have given usthe examples of that. I can well believe it. In my own state, Western Australia, we would

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have the same experience. I have spoken to providers that have closed, et cetera. But, to behonest, when we get to the crunch, you say to us the reasons for this are largely about thiscampaign that has been waged about care costs going up.

I do not wish to be rude but you have not won me on that at all. I am just flabbergastedby the argument. It seems to me that you correctly describe major issues that are occurringin the industry but then there is this sort of almost conspiracy theory about this campaign toexplain it all. It just does not seem to ring true with your own evidence. There has got to besomething more fundamental going on here than just this concern about fee rises.

One of the salient points from all the women who spoke this morning as parents was thatmost of them gave you within the cent the increase in costs, the effect on their wages, etcetera. Most people I know who purchase child care, including me, can tell you how muchthey pay each week. They make those calculations; people budget. Even people on goodsalaries like mine budget for those sorts of things. So your claim that there is a myth aboutcosts affecting people does not fit with the reality of those women, or my experience, orother people’s, where people work these things out for themselves. They know where theirmoney goes, et cetera. So, while I accept that there might be some impact from a furoreabout child care costs, et cetera, and publicity, that surely is not an adequate explanation forwhat is going on in your own sector.

Mrs Connolly—Half of the people who spoke this morning said that, yes, their fees hadgone up, and they were people who are from the community based sector. A lot of thosewere out-of-school-hours care people. They are not centre based care. It is a totally differentscenario. Their whole system has changed. Some other people who spoke this morning werewomen from private child care centres who said the fees have not gone up. We have notdone anything different, and the government has not treated us any differently. The onlything we can put it down to is our parents—

Senator CHRIS EVANS—Sorry, that is not right, is it? Put the operational subsidy toone side. There is a range of other budget measures. You complain about the 50-hour rule;there is the fee assistance ceiling. There is a range of measures that directly impact on yourcentres.

Mrs Connolly—We have been able to absorb those through doing more work ourselves,and that has been general across the board. If you speak to any of the private sector centresthat were here today they would all, and did, say the same thing. We are telling you that theparents who come to our centres have walked in the doors in July last year, when there wasa big media campaign, and they are doing it again now, and saying, ‘When are our feesgoing up? How much extra do we have to pay?’ If that is not proof to you that they arebeing convinced through the media that their fees are going up and they need to find outhow much extra they have to pay, then how else can I convince you? I cannot bring themhere.

Senator CHRIS EVANS—You are saying to me, though, that the sole explanation for a30 per cent drop in your clientele is the media—

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Mrs Connolly—No, our clientele is not dropping in as far as people who are with us areleaving.

Senator CHRIS EVANS—Demand.

Mrs Connolly—The people are not coming in.

Senator CHRIS EVANS—All right; that is not so bad. A 30 per cent drop in demand,on your own evidence today, you are saying to me, is solely caused by media speculationabout increases in fees?

Mrs Connolly—And proliferation of child care centres, and we did say that earlier. Isaid that earlier.

Mrs Bardetta—It was in our submission.

Mrs Connolly—I did say that earlier.

Senator CHRIS EVANS—Yes, but you also said to me then that there were no budgetchanges impacting on your industry, which is not true, on your own evidence.

Mrs Connolly—The 50 hours was absolutely minimal—50 hours.

Senator CHRIS EVANS—What about the ceiling? Surely private providers would alsoargue that the freeze on the ceiling impacts on the ability of parents to use their services topay—

Mrs Connolly—It is in our submission that we do not quibble with that. We think thatwas a very retrograde step.

Senator CHRIS EVANS—I know that, so why do you say to me that is not a reasonwhy it has impacted on demand?

Mrs Connolly—As yet we have not had to put our fees up. We have not put our feesup.

Mrs Bardetta—The gap fee has not really caused anyone to move away from us. Whathas happened is we have not had that 30 per cent new intake that we should have. It has notcome. I will just do two very short scenarios. I walked into a gentleman’s hardware shop tobuy some bookshelves, and he said to me, ‘Are you still here? I thought you’d be closed upby now.’ I have been buying equipment from this man for a very long time, and I said,‘Why would you think that?’ ‘Because of all the funding cuts. Hasn’t it affected you? You’restill in business, are you?’ That was one.

I was at a garden nursery. A TAFE lecturer, who lectures in early childhood, said to me,‘How are you managing with the funding cuts?’ My response was, ‘Well, I’m private and Ididn’t receive any of those.’ ‘Oh,’ he said.

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Senator CHRIS EVANS—I take you back to my earlier point. If you are a womanmaking a decision about whether you can afford to stay at work or not, you are not part ofthat general population. You actually do your sums. You work it out on the family budget.All those women who have given their experiences, both here and at meetings, and hearingsin some of the places, including women who have had their children in private centres, dothose sums. They do find out.

Mrs Connolly—And they are still at the private centres. It is the ones that wouldnormally by now have come to us that have not come because they have been led to believein the media that child care is so expensive now. So they do not even ring up. Look, you canscrew your face up all you like, Senator. That is a fact. We live this life every day.

CHAIR —I was not screwing my face up. I am trying to work my way through the rockand a hard place on this issue.

Mrs Connolly—Of course, but we can invite you into our centres to talk to our parents,if you like, and I am not being funny when I say that. It is the only way it appears to methat I can prove to you I am telling you the truth. I have no reason to lie.

CHAIR —I am not doubting that you honestly believe what you are saying to me. I justsuspect something a bit more fundamental is going on here.

Mrs Bardetta—My own experience is from my change in my advertising. I have movedthat drop right up, and I would say within the next month we would be running at 100 percent capacity again. Because I have talked about it at meetings, everybody has asked for acopy of the ad.

Senator NEAL—We have heard before that for babies, under-twos, centres are chargingbetween $250 and $200. How much are you charging for under-twos at your centres?

Mrs Godhard—We have different fees, but for most of our centres the under-threes feeis currently $200 a week. For the threes to fives it is $192.50. When you ask the questionabout fees you also need to ask what is included, because increasingly people separate hotmeals and everything. For us that covers everything. Because we have management agree-ments, say, with government departments, it would vary, but that is our standard.

Senator NEAL—So there is a slight differential between those?

Mrs Godhard—Yes, it does not reflect the difference in cost. We only started doing itlast July and parents requested that we move that way, but not to the full cost of thedifference between the age groups.

Ms Bluett—For our services, every service sets their own fee level appropriate for theirimmediate community. They probably range for under-twos from $38 to about $50 per dayper child, and at the higher end of the range are our services which have never had oper-ational funding through the federal government.

Senator NEAL—So for the under-twos it ranges from $38 to $50 a day?

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Mrs Godhard—Yes, that is correct. We have actually had several centres which werejust for under-twos and we found that we had to modify them to become nought to fivecentres because they were unviable, just looking at that particular age group. That might feedback to an earlier question.

CHAIR —I would like to thank all the representatives who have attended this session. Ithas been most interesting. I would like to call now representatives of ACOSS, the NewSouth Wales Council of Social Services and the Institute of Early Childhood, MacquarieUniversity.

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[3.12 p.m.]

BRENNAN, Dr Deborah Jane, Policy Adviser on Child Care, Australian Council ofSocial Service, Locked Bag 4777, Strawberry Hills, New South Wales 2012

MOORE, Ms Catherine Anne, Policy Officer, Australian Council of Social Service,Locked Bag 4777, Strawberry Hills, New South Wales 2012

FROW, Ms Linda Susan, Policy Officer, New South Wales Council of Social Services,66 Albion Street, Surry Hills, New South Wales 2010

MOORE, Mr Gary Michael, Director, New South Wales Council of Social Services, 66Albion Street, Surry Hills, New South Wales 2010

HAYES, Professor Alan John, Head of Institute of Early Childhood Studies, MacquarieUniversity, Sydney, New South Wales 2109

PRESS, Ms Frances Louise, Lecturer in management, Institute of Early Childhood,Macquarie University, Sydney, New South Wales 2109

CHAIR —I welcome representatives from ACOSS, the New South Wales Council ofSocial Services and the Institute of Early Childhood at Macquarie University. The committeehas before it submissions from your organisations. I now invite you to make a short openingstatement and at the conclusion of your remarks I will invite members of the committee toput questions to you. Who is going to start off today?

Ms Moore—ACOSS is very concerned that low to middle income families are findingchild care increasingly unaffordable. If you read our submission, information from ournetworks around Australia clearly indicates that the changes to funding which were an-nounced in the last two federal budgets are having an immediate and adverse impact onmany children, families and services. Research from around Australia demonstrates that feesin both private and community based long day care centres have increased. At least 40community based centres have closed, families are reducing their use of formal care as theyfind it increasingly unaffordable, and centres are introducing a range of measures, whichimpact on the quality of care they provide, in order to try and minimise fee increases.

Our analysis indicates that the changes to child care funding which were announced inthe last two budgets are a major contributing factor to these issues. Other factors includeincreasing pressure on families, with continuing high rates of unemployment and lesssecurity for those who are employed. So the whole nature of work is changing. Recent workby the Brotherhood of St Laurence and Community Child Care Victoria provides casestudies of nine families, and demonstrates the increasingly complex juggling act theyundertake to balance work and family life.

The rapid unplanned growth of the sector since eligibility for Childcare Assistance wasextended to families using private centres in 1991 may also have contributed to the currentsituation, because some areas are oversupplied with places, which leads to viability problems

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for some centres. So for that reason ACOSS welcomed the government’s introduction of atwo-year cap on the number of places eligible for assistance. However, the affordability ofchild care is decreasing for families in many areas, and not only areas which are wellsupplied with places.

ACOSS does not consider that the government intended these consequences when theyintroduced the changes, but the changes are happening, and they are of great concern. Weurge the government to work with the industry and parents to ensure that quality formalchild care remains accessible and affordable for Australian families. In our submission wehave detailed a series of recommendations that you would have seen. There are two inparticular that we really urge the federal government to implement immediately.

The first is that the federal government set up an independent mechanism to monitor theimpacts of the changes. A review panel which has parents, children’s bodies, independentexperts, and officers from the Department of Health and Family Services should be estab-lished as soon as possible. We believe the changes that we are seeing now are very early,given that the budget changes have not been in place long, so we would urge this panel to beset up soon, and then it can be looking at both immediate and medium-term impacts.

Secondly, we urge the government to lift the Childcare Assistance ceiling immediately byaround $25 to $30 per week to reduce the gap fees. The cost of this measure could befunded from the savings made in Childcare Assistance and cash rebate payments over thepast two years, and those savings that are anticipated from limiting private sector growth forthe next two years.

Mr Moore —Our submission is based upon the child care hotline held by NCOSS inOctober last year, and it also contains information from the New South Wales Children’sServices Forum, some of whose members you have just heard in the previous session, andfrom information directly provided to NCOSS by other community organisations andfamilies.

In terms of the current changing environment for families, we would like to make a fewbrief comments. These changes are both financial and social, and they are linked to highhousing costs, especially when children are young, changing work force patterns, which havealready been alluded to, and an increasing gap between rich and poor. In particular, in theprovision of child care, we would draw your attention to the work Bob Gregory and BoydHunter in terms of neighbourhood locational disadvantage, and unpublished ABS figureswhich look at work force participation for women, particularly in lower income groups,decreasing over the past 12 months, and also a policy emphasis which the Commonwealthgovernment has moved far further on individualism, including responsibility for the family,of the family, for all care, in the youth allowance and the child care area, and market basedapproaches to service provision.

We briefly say that, with these sort of pressures increasing on families, the governmentrole in child care should be to support families in supporting children, encouraging participa-tion of women in the work force, which is the key strategy for poverty alleviation. Ofcourse, affordability of child care is central to this; to support quality in child care to ensure

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positive outcomes for children, to plan services to ensure access and equity, and, importantly,to protect children.

Ms Frow—Just briefly, we would like to run over some of the impacts of the cuts. AsTonia Godhard was noting in the last session—and we believe this is true, too, and it iscertainly what we are hearing—the impact is occurring most on low- to middle-incomeearners. A level playing field for services does not mean a level playing field for families,and we now run the risk of having a two-tiered system of child care, where those who needhigh-quality care most will be the ones who are least able to afford it.

One of the outside-school-hours care services that we have been in contact with is TheFactory in Waterloo. If you just look at the demographics of that area, you are looking at aservice that caters for a population that is 60 to 80 per cent in the Department of Housing.Forty per cent of that population lives above three storeys. There is no such thing as abackyard in Waterloo. This service is used by parents with high levels of drug and alcoholabuse and recovery, mental illness, and incredibly low incomes.

For them, Childcare Assistance will not replace operational subsidy in allowing a serviceto survive, where they have a parent population who do not plan the child care they need,who do not deal well with authority, who cannot deal with the kinds of child care assistanceprocesses that we are being asked to look at, and who have an incredibly variable usage, asdo most outside-school-hours services in any case. They have 72 children enrolled this term.Often they will only get 20 turning up; sometimes 40; it depends. They cannot predict thatservice. But for Waterloo that service is the focus of the community, and they do not knowhow they can survive the kinds of cuts that have come.

Some of the other impacts, as we have already noted, have been on the reliability andstability of services. We are hearing about service closures. We are talking about servicereductions. We are talking about different levels of service provision compared to whatservices were able to offer previously. Now, reliability and stability are the two things thatparents really look for in child care. The rhetoric of choice looks pretty hollow whenservices close or you cannot afford the fees that are now being put up.

We would just like to allude briefly to the hotline report on the issue of fees, because webelieve that fees have increased in both private services and community based services.When we ran the hotline, it was open to all parents, not just parents using community basedservices. Two hundred and thirty five parents rang in from community based services, andon average their costs have increased by $5.50 per day. Sixty parents who were using privateservices rang in. Their costs have increased by $4.40 per day. So there was only $1.10 perday difference between the two.

The other impact that Gary has already alluded to has been on work force participationof women who are already juggling work and home but now are really being forced to makesome hard decisions. We are also hearing back from family support services that they areseeing increased numbers of families coming in suffering from family stress, often partly dueto the financial difficulties caused by the choices that they are having to make. Finally, thebiggest impact of all, we feel, is going to be on the quality of care for children, with servicesleaner, fewer staff, children being moved into informal arrangements of uncertain quality, or

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into a range of arrangements: some time in centre based care, some time in informal care,some time in a preschool—again, a mix of arrangements that may not be best for children—and, in the case of outside-school-hours care, children left home alone.

Mr Moore —In terms of what should be done, we have a range of suggestions in oursubmissions, but I will just highlight three. Firstly, as with ACOSS, we believe affordabilityfor low- to middle-income earners has to be the priority, and so the freeze on ChildcareAssistance must be lifted, and a substantial increase in the maximum rate must be made.Secondly, we do think there is an argument for a proper industry assistance package inchildren’s services, and that covers the whole industry, but as part of that we do think, forthe survival of the service mix, it then means that there must be special support for com-munity based services, and at the end of the day they do set the benchmark for policy, inparticular, in children’s services. Thirdly, we do think, despite some movement, that there isa far greater opportunity for improved planning of places based on shifting social andeconomic needs and utilisation rates.

Prof. Hayes—Our submission focuses attention on the fact that children should be seenas key stakeholders in this issue, and that in a sense it has been trivialised to be one of workforce issues or labour force or economic importance. But the importance of consistency andquality of care, given the realities of families requiring care outside of home, has to be takeninto account.

We also try to focus our discussion in terms of demographic changes that have led to thepresent situation for families in Australia, and the implications of these changes forAustralia’s future. The problem as we see it, to state it briefly, has several elements. Thefirst is that Australia’s birth rate has dropped below replacement level, at the same time asthe population is living increasingly longer. The higher rates of birth among those in themost disadvantaged groups will result in an increase in the proportion of children at risk,given the relationship between disadvantage and risk. The rates of children born withdevelopmental problems, children born with perinatal problems, are differentially muchhigher among those in low social classes. At the moment, the birth rates in lower socialgroups in Australia double those in the upper groups.

The results of these trends will be a progressively shrinking tax base and a loss of socialcapital in the nation. Should these trends continue, Australia faces an unsustainable situation.The solutions that we see require mobilisation of political will to embrace prevention, andparticularly to see a willingness to invest in early preventive services, particularly child careand preschool education. The emphasis in early services has to be on high quality andconsistency, and regard for the developmental needs of Australian children.

In work overseas, such services, along with supports for secondary school completion,have been found by the Rand Corporation to be the most cost-effective crime preventionmeasures, for example, in the long term. In the light of the well-established links betweenpoverty and educational disadvantage, it is timely to reassert also the importance ofeducation in debates about public policy. So we argue that there needs to be a wider frameon issues that are within your terms of reference. It is vital to acknowledge the complexityof the problems and the need for ownership by the community as a whole. This entails

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rejection of simplistic solutions related to familism or the ideology that the problem can besimply solved by merely strengthening families.

The community ownership of some of these problems and the impact on the nation’sfuture needs to be recognised. The evidence is clear that intervention will need to be earlyand focused on children, families, and communities. Family policy is the key to bothaddressing some of the demographic issues that we currently face, and to ameliorating andreducing some of the problems of risk. The extent to which investment in child care andhigh-quality child care needs to be stressed will be an investment in the future that must beregarded by the nation. It must be regarded as an issue beyond partisan political perspectives.

Unless we move to address these issues with the urgency they require, we run the risk ofaccelerating the current trends and jeopardising the social sustainability of Australia. Childcare we see as the solution, not the problem. The cuts have hit the most disadvantaged, andin the long term this does not make economic or social sense. We have a diminished basefor consumption if the trends continue, and we have issues, as I have argued, of diminishedsocial sustainability. We would be happy to amplify any of the points in our submission.

CHAIR —Thank you, Prof. Hayes. Ms Press?

Ms Press—I will take questions.

Senator PAYNE—I just wanted to ask one question in particular to both NCOSS andACOSS. Both your submissions include recommendations in relation to lifting the ChildcareAssistance ceiling—I think in ACOSS’s case to reduce gap fees, and in NCOSS’s case toreflect the real level and impact of child care centres as prescribed. But the government doesnot have any involvement in the setting of the level of child care fees per se. They are set byservice deliverers, by centres. What would your response then be to the fact that perhaps ifthe government were to do that with the ceilings, they should also have a role in setting thelevel of fees?

Dr Brennan—I do not think we as ACOSS would have any major problem withgovernment containment of the actual level of fees, or having a role in setting those fees. Infact, in view of the substantial amount of public funding that goes into children’s services, ithas always been ACOSS’s position that government, and through government the public,have a role in ensuring the highest levels of accountability.

Ms Press—I think the other question that has come up is perhaps it is set without regardto quality, what you need to pay for a good quality service.

Senator PAYNE—I think there is an assumption that the accreditation process andequality issues would continue as they are currently administered.

Ms Press—If accreditation applies to all service types—

Senator PAYNE—Sure, yes.

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Ms Press—and if indeed we see services eventually penalised for non-compliance withaccreditation. I do not think the system has been in place long enough for us to know how itwill work for services in breach of it.

Mr Moore —That would certainly be a case in the first instance of fee monitoring.

Senator PAYNE—Which you think the Commonwealth should do—the fee monitor-ing? Mr Moore —Yes.

Senator PAYNE—Just flowing on from that, even I think when previous governmentshave endeavoured to increase the ceiling for Childcare Assistance to improve the thingswhich are important in both of your submissions—affordability for families in particular—generally services have increased their fees at the same time as the Childcare Assistance hasincreased. I would be interested to know why you think an increase now would be anydifferent.

Dr Brennan—I think that maybe from ACOSS’s point of view an increase at this stagein the fee relief ceiling would be going some way towards making up for the problems thathave been created in the industry already. We think that the organisations that are comingbefore this committee, and others that put submissions forward, are being very transparentabout the operation of their services, what actually happens to their funding, where the gap isactually being created in terms of providing a decent quality service and hoping that it is onethat families can afford. So I really think there is a substantial backlog to make up before thecommunity based services, which we know best, are in a position to in some sense takeadvantage of that increase.

Mr Moore —The gap is awfully significant and growing at this stage compared toprevious times. We also would make the point that, if part of the theory of this has beenabout holding down fees because of improved competition, in fact what has occurred is thatthe clients have gone out of the market, or are going out of the market, rather than simplyfees being held. So your question is a good one in terms of pricing, but we would agree withmonitoring in the first instance, with the possibility of regulation in this regard.

Senator PAYNE—Could I ask, Mr Chairman, one more question of ACOSS. It relatesto a matter on page 3 of your submission which indicates that you support the mixedeconomy model in terms of child care services—that is, both private and community basedcentres in the service mix. But in terms of the removal of the operational subsidy, a subsidywhich the private centres never received, how do you, as the Australian Council of SocialService, address the equity question involved in that? The number of children from low-income families in community based centres is somewhere between 20,000 and 25,000 inAustralia. From low-income families in private centres it is something like 98,000, and theywere never receiving any operational subsidy support. So how do you address the equity ofthat?

Dr Brennan—We are not arguing for any special provision here to be made forcommunity based services. We are in fact saying that we have shifted our position over theyears. We used to have a position of opposition to public funding through ChildcareAssistance being given to the private sector, and we have shifted away from that. We do,

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though, feel that it is a very serious situation that we are looking at when community basedservices, which have traditionally been the benchmark for quality in Australia, are being sodesperately marginalised.

On your other question about the proportion of families from low incomes in the privatesector versus the community based sector, one issue there is that historically the privatesectors have had many more single income families using their services, much more in non-work related care, and almost by definition such families are going to have lower incomesthan poor two-income working families.

Senator PAYNE—Mr Chairman, that is my last question but just for the record I gotthat first figure wrong. It is closer to 30,000 children in community based centres. I justwanted to clarify that.

CHAIR —Thank you, Senator Payne, for that question. I have just got a couple of quickquestions to ACOSS. Ms Moore, in your submission on page 2, paragraph (a), subparagraph(i), you make reference to ‘Private for profit long day centres have had fee increases’. Weheard some fairly trenchant rebuttal of that proposition in the previous panel, where they saidalmost without exception there had been no fee increases in the private sector in New SouthWales in the last two years. Do you have any evidence to give us that supports this commentin light of that later evidence?

Ms Moore—The main evidence that I remember relying on is the hotline report from theCouncil of Social Service. I am sure it would have been included in our submission, whichLinda actually quoted in her address, in terms of the callers that called in. I would also bevery happy to go back through the other reports that I think I summarised because several ofthose other reports were not only focusing on community based centres. Queensland surveys,for example, may well also have contained that.

CHAIR —If you could provide us with any information on that issue it would be quiteuseful because we have had quite strong evidence to the contrary.

Ms Moore—Yes, sure.

CHAIR —My next question is also to ACOSS. In your recommendation 8 on page 11,addressing the Childcare Rebate, you say, ‘The Childcare Rebate should be absorbed as anon-income tested component of Childcare Assistance for users of formal services.’ Is that ashift in the position of your organisation on the Childcare Rebate or is that a different wayor arguing for its retention for current recipients?

Dr Brennan—That is actually not a shift. A recommendation along those lines has beenin our pre-budget submission for the last couple of years. The recommendation probablyneeds to take account of the recent change in policy that limits Childcare Rebate for thoseabove $70,000.

CHAIR —But potentially the position remains the same.

Dr Brennan—It does, yes.

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CHAIR —Because that rebate has also been the subject of quite detailed, vigorous andtrenchant criticism because it is argued that high income earners inappropriately receivesubsidies or rebates whilst low income earners do not. But your organisation’s position hasnot changed?

Dr Brennan—That is right.

CHAIR —Thank you. And now to NCOSS. Ms Frow, you made reference to thesituation at Waterloo. Are you now arguing that the operational subsidy should be targeted toparticular areas based on low income or geographic locality?

Ms Frow—I think there is a real concern about which areas are going to be classified asdisadvantaged areas and will receive some ongoing subsidy. There has been a promise thatcertain services in rural and remote areas, for example, and in so-called disadvantaged areaswill be looked at for special assistance. Our concern is that that includes the kinds of areaslike Waterloo, remote areas in western Sydney and south-western Sydney, where thoseservices are the only services for families to access and are central to the community.

CHAIR —So it is no t the policy position of NCOSS that if the operational subsidy is tobe reinstituted that it should be targeted to low income earners or in particularly poorgeographic areas?

Ms Frow—Well, without outside school hours care, which this service is—it is not along day care centre, it is a before school and after school—I think there is a question,without outside school hours care, as to whether they will survive without an ongoingoperation subsidy. I think it is quite a different situation to long day care.

Senator CHRIS EVANS—Professor Hayes, you might like to comment, or Ms Press.We keep running into this planning issue, and I suppose from experience we should not evenattempt to resolve it, given that we have got federal, state and local governments involved.But it seems to me that that is at the nub of a lot of our problems here. We have got privatecentres setting up against each other, cutting the throats of community based centres, all inthe same area. We have got the federal government initiative now about new places beingrestricted, but it seems to me that none of this tackles the issue about the public policyquestion of how we go about providing assistance for child care in a targeted way thatprovides quality child care where it is needed. Have you got anything you would like to sayto us about directions we ought to be looking at in trying to address those issues?

Prof. Hayes—I think there is a need for coordination of planning of issues that relate toAustralian children. It is one of the key concerns, because I think the fragmentary approachto this is mirrored in the fact that the problems are addressed in a fragmented way. We havealluded in our submission to the fact that there are links between disadvantages and risks ofall types, but we deal with the risks one by one, not seeing that the root causes are in themain a common set of problems. Also, in terms of planning there needs to be bettercoordination between policy for children, and it should not just be absorbed under policy forfamilies. You need both to have equivalent strength and impact in government thinking.

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I think it is the role of the federal government to take the lead on this, particularly giventhat children assume a smaller place in our society, partly because of the demographics ofthe baby boomers moving through into senescence, but also because when you look at it thebase of children to replace our society, to renew our society, is getting smaller. So I thinkyou need a much more coordinated planning base. Specifically in terms of child care,Frances has some thoughts on that.

Ms Press—I think the current situation is a good indication of how competition policydoes not work in certain areas. In fact, competition between child care services has notresulted really in choice for families or good quality for children. It has had a fairly badeffect on both public and private sectors. I think that the two-year cap on Childcare Assist-ance of new places has been a good move, but we really need to evaluate how effectivelythat has worked since it has been implemented. I think the old system of the different levelsof government consulting with each other and with the community with access to statisticswas good in theory but very slow, and I am really not sure where that sort of consultationcould be made to happen more quickly. But I think we certainly need to have a bit morecoordination between the different levels of government in terms of how they determine needin specific areas.

I would also like to bring in Alan’s point that I think maybe we need to start looking athow planning for child care places also takes into account accessing interrelationships withother family support services in specific areas, so that the child care policy is not viewed inisolation.

Prof. Hayes—I am also concerned that child care is not just a good that the marketdelivers for families to purchase but that it is a key benefit to the community as a whole. Ithink Michael Bitman has put it nicely—and to paraphrase, ‘If you leave family policy up tothe market, you can pretty well bet that there won’t be a market before too long.’

Senator CHRIS EVANS—Can someone from ACOSS explain to me the basis of thisargument about a $25 increase in the threshold? Was this done on any particular modellingor was this a best guess? I understand that people put the argument that the squeeze of theincreasing gap payment is putting the pressure on families, but you suggested a figure. I amasking where did you get it from and how do you justify it?

Ms Moore—That figure was actually developed last October-November before our pre-budget submission went into the government. So that was taken out and put into thissubmission. I would need to talk with the person who did that about exactly how they cameup with it and whether it would have changed at all.

Senator CHRIS EVANS—I would appreciate it if you could, because it seems to methis is one of the key arguments for us; whether we accept the argument that in fact price isan important mechanism in people choosing whether or not to enrol their children in childcare. We have evidence of drop-off enrolments in private and community based centres, sosomething is happening. One of the suggested explanations for that is the price, the increasein costs the parent is paying. To me that is a reasonable starting point. That is a propositionone ought to look at seriously. But we have not had any evidence as to whether or not that is

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right, and what the pressures are. You are one of the few groups who have actually chancedyour arm and said, ‘This will make a difference.’

Ms Moore—Sure.

Senator CHRIS EVANS—I think you basically just need to tell us why and how andwhat that is based on because, if we are to consider recommending changes to the threshold,we will have to have some argument as to why we would do that.

Senator NEAL—If it is in your budget submission, just giving us a copy of that wouldbe fine.

Ms Moore—I meant that the figures are in the budget submission. I would need to talkto the person who did the actual workings, because it was not something I modelled myself.

Senator NEAL—Professor Hayes, I was very interested in your views about, I suppose,the social benefits to be gained in a broader way from child care as opposed to direct family.Much of the debate about child care in the last two years has centred around what it coststhe parents and your right to choose to spend that money or not spend that money. Have youquantified what that benefit to the community is or are you aware of any studies that haveattempted to? I know it is obviously a very difficult thing to do.

Prof. Hayes—Yes. For example, the Perry preschool program that David Weikart headsup in the United States produces longitudinal data that shows for each US dollar that youspend on quality child care for disadvantaged families, you get a $7 multiplier in terms ofreductions of children who go towards the juvenile justice system. I cannot produce thefigure off the top of my head at the moment. If you look at it, the differential between whatwe spend in this country on prisons as opposed to what we spend on child care makesanother compelling argument: maybe there is a preventive benefit in this. The recent reportthat has been submitted—it is still not publicly released—the national campaign againstviolence and crime, shows that across the United States and Europe—a bit of research hasbeen done in Australia—one of the most cost-effective interventions early in life is qualitycommunity services like child care, particularly to disadvantaged communities.

The evidence is starting to come in. When a corporation like the Rand Corporation placeschild care as the no. 2 most cost-effective intervention that you can have in terms ofprevention of later criminality, I think the community has to listen to that. I think politiciansneed to listen to that, too. I know that prevention is difficult to sell, but really what we havetried to argue in our submission is that child care is about more than just those narrowissues. As you said, it is also about the building of the fabric of communities. Given therealities of family life now, many communities find that their networks are forged throughtheir child care centre involvements, as they are through education. It is one of the importanthubs for many communities to build links and associations.

If you look at one of the predictors of child abuse in communities, it is the size of thefamily networks. The smaller the family network size, the higher the risk of child abuse.Work by Tony Vinson in the western suburbs of Sydney shows that quite convincingly.Also, you should not lose sight of the fact, though, that it is about the developmental quality

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for young children. The things that have emerged from 25 years of research on attachment,for example, are that it is a matter of consistency of relationships with human beings. Whenyou start to get families putting a patchwork of services together, what you will find is thatthe cost of that also is to the social and emotional development of young children, and theirsocialisation to be the future citizens. I think we have got a formula that has really en-trenched our problems in terms of juvenile crime and criminality—just to take one example.

Senator NEAL—I agree with what you are saying. You say that the report has not beenpublished yet. I know that looking for something in black and white like that is verypredictable and sometimes difficult, but it certainly would assist us if there was anywhereyou could point us to that would give us a bit more in-depth background.

Prof. Hayes—I intend to be talking to the national campaign against violence and crime.The second phase of the project that we have been working in is a semi-longitudinal study ofsome demonstration projects that are geared to looking at early intervention and the role ofearly services in preventing later criminality, and building fabric of community. There aremany examples occurring. To speak briefly to the planning issue, there are examples ofcoordination of services across agencies that are quite stimulating and exciting, and they arehappening in a number of the states. But I think the federal government has a role to look atissues of the coordination of analysis of impact on children and families of major policyshifts.

Senator NEAL—I have been doing a lot of visiting of child care centres and talking toparents. I have found that very much an emerging phenomenon is that people do treat theirchild care centre as their social support. I suppose it is as much an indicator of the fact thatpeople often do not have family close enough to have ongoing contact with them. Oftenleaving the centre has a greater impact than just on the child. It often removes a backup thatthe whole family relies on.

Dr Brennan—Could I just make a small point about that, to back up perhaps somethingthat Professor Hayes said and to extend it. ACOSS, in our submission, has made a point ofdrawing attention to the problem of children who have no access to child care because theirparents are not working and they happen to be in an area that is not oversupplied withchildren’s services. We are very concerned about this. The federal government—appropriately, we think—has put a limit on access to work related child care. That is one setof arguments. The other argument is what about those children, particularly those in areas ofhigh unemployment, perhaps of high rise living, who have no access to any services at all?We really do not want those children to fall through the net of your hearing.

Ms Press—I think that is a reason why we also need to see some government interven-tion in support of non-profit services, as well as the increase in Childcare Assistance. It doesneed to be seen to be part of establishing a support network for families in all sorts ofareas—those that are currently missing out and other disadvantaged areas where services arerunning the risk of closing or have already closed. I do not think we need to have a totallypublic sector by any means. I would support a mixed economy, but we do need to supportthe non-profit sector by some sort of targeted subsidy, I would argue.

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Senator NEAL—One of the points has been made today and yesterday when we hadhearings in Melbourne was that a lot of the centres that are closing are those that are inrelatively disadvantaged areas, both private and public. There is a real concern that you willend up with no child care available in those areas, while the child care centres in the moreaffluent areas will remain. Can you suggest any mechanism to prevent that happening? Is it amatter that you have considered? I assume you have. Anyone can feel free to take a stab atit.

Mr Moore —I guess that raises the thing about an industry assistance package. In thisarea, as in so many others in human services, when significant funding policy changes aremade governments do not tend to think that there should be a transition period about whereyou think you are trying to get to, and most other industries get that. Frances has alreadytalked about some targeted operational subsidy or other assistance. In New South Wales wehave lost somewhere approaching $300 million out of budget over the two years. We wouldargue that a proportion of that should be in an industry assistance package. That could takethe form of some specific purpose grants, some specific purpose business planning and otherassistance, beyond what was touted at the time by the Commonwealth, and beyond what hasbeen provided to out of school hours centres, too.

It could take the form of looking at coordination grants and other assistance along thelines that Professor Hayes has talked about, in tandem with family support services and othercommunity based activities, which are both Commonwealth and state funded. We would behappy to provide views about some components of that back to you, if you would like.

Senator NEAL—Yes, I would.

Mr Moore —That is why we said you should increase assistance to the end users,particularly those who are mostly suffering, but you cannot walk away from the providers.There has to be some form of transitioning arrangements. We do not have it.

Senator NEAL—There are really two possible mechanisms: you could direct thepayment directly to the family in need, direct it through something like Childcare Assistance;alternatively, you could say, ‘This is a centre that exists in an area which has demographicswhere there is social disadvantage,’ and provide funding there. I suppose I am interested inwhat is the most effective. I understand you may not have an instant answer. Can you thinka bit more about that. If you wish to provide us with any further material, we would behappy to receive it.

Ms Press—I think one issue with simply increasing Childcare Assistance is that youactually have to have access to a service before you can access Childcare Assistance. I thinkthere needs to be a shift in policy thinking—I suppose it is looking back—where you seeexpenditure on infrastructure as an investment rather than a cost. I know that is not terriblyeasy to—

Senator NEAL—The minister for finance tends to see everything as costs.

Ms Press—Yes, I think so. I think we are also looking at short-term cost-benefit analysisagainst long-term cost-benefit analysis. That is one of the things that we are up against.

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CHAIR —I thank representatives of ACOSS, NCOSS and the Institute of Early Child-hood for attending this session.

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[3.56 p.m.]

LISTER, Ms Susan Margaret, Spokesperson, Ryde Child Care Taskforce, 170 TennysonRoad, Gladesville, New South Wales 2111

WARING, Mrs Diana Louise, Member, Ryde Child Care Taskforce, 170 TennysonRoad, Gladesville, New South Wales 2111

CHAIR —The committee has before it a submission from your organisation. I now inviteyou to make a short opening statement, and at the conclusion of your remarks I would invitemembers of the committee to put questions to you.

Ms Lister—First of all, on behalf of the members of the Ryde Child Care Taskforce, Iwould like to thank the committee for the opportunity to give evidence at this Senateinquiry. First of all, I will give you a brief background to our group, and then highlight somekey points from our submission. The Ryde Child Care Taskforce is a group of parents thatwas set up in 1992 in Ryde local government area to assist in a review of child care byRyde City Council. In 1994 we became independent of the council, and worked as a childcare lobby group to improve services in our area, but we still work very closely with Rydecouncil.

We are a core group of 15 to 20 members, and we are users of a very wide range ofchild care services, both in the private and community sector, and we include single-incomeand dual-income households. We are very widely networked at the grassroots level, both bythe services we use and with the parents and directors of other services. We have alsoreceived a great deal of interest and contact from parents via our local media. We are anunfunded and voluntary group. We do not receive any funding from anywhere.

In addition to working at local government level we have also worked on state govern-ment committees and have more recently been lobbying against the federal government cutsto child care. For example, we were, along with others, lobbying to get this Senate inquiryinto place, and we are very pleased that it actually succeeded. We are in the electorate ofBennelong, which is John Howard’s electorate, and we have met with Mr Howard on twooccasions. The first was in August 1994 when he was in opposition. The more recentmeeting was in January 1997 when we went to talk to him to express our concerns about thebudget cuts.

In summary, we believe we are a unique group of parents in our range of experience, andwe provide a good cross-section of child care experience and a good local knowledge ofservices in our local government area. I thought I would actually tell members of thecommittee where Ryde was, in case you were not knowledgeable about Sydney. It is an areaof about 100,000 people. It is approximately 14 kilometres west of the city centre, so it ishalfway between Sydney city and Parramatta. It is mixed socioeconomically. About 20 percent of the population are from non-English-speaking background.

To move on to key points from our submission, we have selected five keys issues. Thefirst one, and the most important, is the issue of choice. We have chosen this because choice

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is a term that is used repeatedly by the current government, and is used very frequently inthe press, and our perception, our view, is that choice to work or study—for many women,in particular—has been removed by financial disincentives due to increased fees in childcare. So what I am really saying is that we consider that choice for many families has beenreduced. It concerns us greatly. In fact we first came across the use of the word ‘choice’when we met with Mr Howard first in 1994 and then in 1997. Our view is that his and othermembers of the Liberal Party’s use of the word ‘choice’ means it is related to women whowish to stay at home.

For example, in theSydney Morning Heraldearlier this week there was a quote fromJudi Moylan, who is the Minister for the Status of Women, where she rejected suggestionsthat the government wanted women with children to stay at home, and she said, ‘What weare about is giving women choice.’ She continued, ‘There are some women who would liketo remain at home but can’t because their income won’t allow them to do it.’ As a group, wehave absolutely no problem with women—or men, for that matter—choosing to remain athome, and in fact Diana is in that position. What we do have a problem with is the fact thatwomen who wish to go to work or study are losing their choice because of the increasingcosts of child care.

I thought I would also just quote from a letter from a mother in Ryde that was in ourlocal paper about two weeks ago. She is not actually a member of our group, but there is alot of stuff about child care in our local paper. What she first of all says is, ‘The provisionof adequate and affordable child care services is one of the most important issues in myhousehold at the moment.’ She continues, ‘What John Howard is doing is essentially forcingwomen to stay at home. Mr Howard should realise that women should have the choice to goto work if they so wish. The recent cuts ensure that this choice is taken away from manywomen in this country.’ I think that puts into a nutshell the view of the members of ourgroup. There have been fee increases of about 33 per cent in many services in Ryde, andthat has often just tipped the balance in many low- and middle-income families in particular,including members of our group, about whether they can actually afford to go out to work.

I would like to say as well that it is not as if this is something we should be surprisedabout. In the EPAC interim report, which was a government report on the future of childcare provision in Australia in 1996, there is actually a part that says:

An analysis by Corbett shows a clear link between reduced costs of child care and increased work force participationby women.

It continues in the same vein—that the effect of increasing government child care subsidieswill be increased work force participation by women. What we have basically seen in ourarea, and I think across Australia, is that as child care subsidies have been reduced, of coursethere is a reduced work force participation by women. Women are pulling out, particularly ofthe community based services, which in Ryde are in the lower-income areas. They are theservices that are dropping off in parents using them, and I think that has been said thisafternoon. So I guess what we are really saying is that we should not be surprised that this ishappening. It has been known for quite a while.

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The second issue I would like to raise is something that we feel quite aggrieved aboutreally, which is the lack of consultation with parents on the whole of the policy changes thathave taken place in the two recent budgets. Also there appears to be a complete lack ofevaluation of these cuts. We did raise these issues with Mr Howard when we met with himearlier last year, and he did actually tell us that there would be no evaluation of thesechanges to child care. We are still extremely concerned about that.

Another issue we are concerned about is the reliability of the data that is used in theplanning of child care. In our meeting with Mr Howard last year he produced some figuresthat were national averages in terms of costs of service, and they did not appear to us to bevery relevant to what was happening in Ryde. So we wrote to him after the meeting to askfor regional and state breakdowns of supply, demand, and costs of child care services,because we actually wanted to have a look at what figures were being used in making thesepolicy changes in the last two budgets. That was over a year ago and we still have not had areply. In fact, the lack of consultation with parents has been, as I mentioned, a grievance ofours, I guess. This inquiry has been the first opportunity for parents to have a say in aformalised hearing about how they have been affected by the 1996-97 budget cuts, and forthat we are grateful.

Moving on, the third issue we are concerned about is the privatisation of child care. Weknow that this is being dealt with in other parts of the inquiry but we wanted to give aparents’ perspective of this. In Ryde in the last few years an increasing proportion of childcare services is provided by the private sector. The community based sector essentiallyappears to have stagnated. It is just not growing. What concerns us as parents is that manyparents are happy with the private sector in the sense of quality of service but many alsoprefer community based non-profit services. This is not only because they generally in ourarea are still around about 20 per cent cheaper than the private services.

Why parents prefer community based services is because they can have more involve-ment in the running of the service. There can be more involvement in the management andthe budgeting of the service. In the private sector this is a lot more difficult. I would like tojust give you an example of the services I was actually at and what sort of position we wereput in as parents. In Ryde there is a private operator that runs a number of services and it isa monopoly. She chose to put up the fees in her private services by between 20 to 40 percent in an 11-month period in 1996. She did that across the range of services so parents hadlittle choice. They could not move to another service because she does own quite a lot ofservices in our area.

As parents in a private service it is actually very difficult to network with other parents.When we asked why she was putting the fees up we just did not get much of an answerreally. The point is, as parents we have no choice except to leave that service. In communitybased services generally parents are on the management committee. They have moreinvolvement in all aspects of planning that service, and many parents actually prefer that. Itis of concern to us that the community based sector does appear to be contracting. We doconsider that there needs to be some return of capital funding and possibly some recurrentfunding to keep some growth in the community sector so it keeps a mix of services. Weactually see a mix of services as the best solution.

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Moving on to the fourth out of the five issues, I just want to talk briefly about out ofhours school services, which is the poor relation in child care. It services a very largenumber of children. It has generally been an area of increasing demand in the last few years.It has also been an area that the private sector has not been very involved in. I think most ofus would see it as being quite a difficult private business to run, as these services generallyneed to be school based and they have fluctuating enrolments. So most services are run byparent management committees, and that is certainly the case in Ryde.

Parents have put a great deal of effort into getting these services up and running.Services are now also expected to administer a highly complicated Childcare Assistancesystem. Even in Ryde what we are seeing is that the areas of low income are particularlymore vulnerable, as parents have less time and energy to both set up services and beinvolved in the management of those services. Low income parents are more adverselyaffected by price hikes. In out of hours school care, with the cuts that are about to start nextweek, some of the services, including the ones our children use, have already started puttingthe fees up. They have been going around asking for sponsorship from participating schools,and that has been leading to some division between parents who use the service and parentswho do not.

There is competition for fundraising when these out of hours school services now need todo some more fundraising, but this competes with school fundraising. It has been very hardfor the parent management committees to get sponsorship from local businesses. This isbeing done on top of the fact that many parents are already very stretched with their workand their general life commitments. We also have some concern about child protection. Whatwe are seeing is that there appears to be an increase in the number of children being droppedoff very early at schools when the schools are actually not supervised. We are picking upthat this is because parents are hoping to save some money by avoiding paying for beforeschool care.

I think we will be having to watch the trends as the cuts really do cause the fees to goup from now on. Already there is evidence that there is probably going to be an increase inlatchkey children or children being in unsupervised situations. What we see to help thissector is that we do feel that core funding should be reinstated for these particular types ofservices with the very fluctuating type of enrolments. It is a service type that we see as ripefor expansion really.

We also see that there is a need for extending this service for teenage children aged 13 to16. Many children of that age have both parents in the work force, and in our view they arenot really old enough to be left unsupervised. We think that this type of service, the out ofhours school service, is the one where some injection of funding should go, and that thereshould be some consideration given to extending this service to older children, obviously toa type of service that meets the needs of those older kids.

Finally, and briefly, parent committees: a huge amount of work is done by parents incommunity management committees. As I have mentioned, many enjoy that and like thatinvolvement in the management of the service. However, there has really been quite a lot ofdespair among parents about the extra load and extra pressures that they are now under as aresult of the loss of operational funding. There are going to be some jobs that are going to

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be, in our view, quite hard to fill; for example, treasurers’ jobs. It is of concern to us that inthe low income areas in particular there could be even less willingness for parents to take onthese jobs. That puts the viability of the service under threat.

So to sum up, the issues I have already mentioned today are that the choice to work orstudy in our view has been removed for many families, particularly those on low to middleincomes and those with more than one child. Budget cuts have increased anxiety andpressures on parents at a time of their lives that is already very stressful and where manyfamilies are just surviving. There has been a lack of consultation with parents. There appearsto be a lack of reliable data, and there is a lack of a formal evaluation of what has beenhappening in the last two years in the policy changes in child care.

We consider that the most important thing that should come from this inquiry is acomprehensive and independent evaluation of the 1996 and 1997 budget cuts to child care,and any future policy changes to child care. Thank you.

CHAIR —Thank you, Ms Lister. Mrs Waring?

Mrs Waring —That is on behalf of both of us.

CHAIR —Okay, thank you. Senator Payne?

Senator PAYNE—No, I am happy for somebody else to start questions.

Senator NEAL—You particularly noted that you thought parents got value out ofparticipating in management committees but that they were demanding, in themselves, thatparticipation. Do you think the value of parent management committees is large enough tojustify providing some specific funding to support those committees?

Mrs Waring —I think parent committees need as much support as they can possibly get.I think some sort of funding or programming for parent committees—the nature of thecommittees is that it will probably turn over on a 12-month period so you get fresh people inevery year. I think they really need support because a lot of those roles, such as thetreasurer, now have an increased workload of having to deal with Childcare Assistancefunding details and forms in triplicate, et cetera. I think that parent committees shouldreceive support in whatever way they can.

Senator NEAL—What sort of benefit in terms of quality do you think the parentmanagement committees provide?

Mrs Waring —As far as quality for the centre?

Senator NEAL—Yes.

Mrs Waring —It enables transparency in the running of the centre. There is no hiddenagenda. I think that is what helps parents become more comfortable in the running of theenvironment, in the staffing of the environment, in the setting of fees, and in the programs,so that they know the possibilities, what new equipment needs to be bought, and all that sort

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of thing. It is an involvement in the actual management of the centre, which has an impact inhow the centre is run, therefore impacting on their children. Of course any parent would onlywant the best for their child. That is not to say in a private centre that things are notbought and other things happen, but in a community based centre there is transparency forparents; they can ask questions and get answers if there are any situations or questions thatthey need answers for.

Senator NEAL—So it is a mechanism that ensures that what the centre provides is whatthe families need for child care?

Mrs Waring —Yes, and if there are any staffing problems, any issues that parents needto raise, it can provide a useful forum for that.

Senator NEAL—In terms of the parents’ preparation for being involved in thosecommittees, we received some evidence yesterday from a council in Melbourne. They hadset up a program for training of members of their management committees. Do you thinkthat would be useful if that was provided, say, in your area?

Mrs Waring —I think it could be quite useful, particularly if it was structured so that itwas at the beginning of the year when new parent committees come in. Is there feedbackfrom that group as to how successful that program had been?

Senator NEAL—I think they have only just started doing the training, so I do not thinkit was really at the stage where they could have done that.

Mrs Waring —We are not talking about 10 weeks training. We are talking about maybetwo nights training or whatever, and I think that that could be quite useful for parentcommittees, particularly when the parent committee is just coming in. In that sort of situationthere is normally a reasonable handover; there is contact. If the person taking over a positionis unsure about how to do things, they can always contact the previous treasurer, secretary orwhoever. But I do think some sort of training, particularly in the more complex areas, likethe treasurer, would be very useful to parent committees.

Senator NEAL—I think there was some concern expressed by NATVAC on behalf ofparents involved in management committees that, with a lot of centres closing down—I thinkthey told us that 42 community based centres had closed down—of personal liability forparents when the centre went into liquidation. Have you had any experience with that issue?

Mrs Waring —No, I have not.

Ms Lister—There is a great deal of concern in the out of hours school area about theadditional responsibility of working out, administering the Childcare Assistance scheme. Thatis a lot more complicated. I think there is a great deal of resentment certainly among theparents on the management committees that we have contact with. We have not talkeddirectly about personal liability—

Mrs Waring —It is definitely a question that needs clarification. Parents do not knowhow far they will be held responsible.

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Ms Lister—If they are not calculated at the correct level, who is going to be respon-sible?

Senator NEAL—Just moving on to the outside school hours care centres, there areobviously fairly major changes occurring on 27 April. Are you aware whether the newadministrations are in place for those changes yet?

Ms Lister—I have a lot of personal contact with one centre. I am a user of one centre. Ithas been fairly well organised in that particular centre, which is in Gladesville. It is a bithard to say whether that is the case for all the schools. I think the services I am in touchwith would be some of the better services.

Senator NEAL—It was just that one centre said that their parents had to apply toCentrelink for assessment of the Childcare Assistance eligibility, and only a very smallproportion of their parents had actually been given that assessment. Do you know about that?

Ms Lister—No, I do not know the detail of that.

Senator PAYNE—I want to follow up from an issue which Senator Neal raised withMrs Waring: financial support for parent management committees. What amount do youenvisage would be necessary for that sort of thing? Do you envisage that that would go to allcommunity based centres for their management committees?

Mrs Waring —I could not answer you with an amount. I have not got a figure; I wasresponding to what Senator Neal had said from this group in Melbourne. I do not know whatthe costs involved would be. Whether it went to centres or whether it went to local councilsto run the evenings—I am not sure of the best method for that, but I do believe that thosecommittees should be supported in some way.

Senator PAYNE—From your own experience and your own perspective, do you haveany idea what sorts of resources you would be looking for in your Ryde area, for example,for your committee?

Mrs Waring —For the committee?

Senator PAYNE—Yes, and what you would use the resources for, I guess. We havetalked about training, but—

Mrs Waring —Resources for training are you talking about?

Senator PAYNE—Past that. Would you use financial support for anything else? Wouldyou seek it for anything else?

Mrs Waring —Sorry, I’m a bit unsure about what you are asking.

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Senator PAYNE—We were talking about support for parent management committees. Iwas wondering whether you would seek it for any other roles for the parent managementcommittees.

Mrs Waring —Apart from initial training?

Senator PAYNE—Yes.

Mrs Waring —Maybe establishing clear guidelines, where there are now the child careassistants having to administer that; ensuring that the ground rules are clear for parentbodies. As you would all be very well aware now, child care is such a complex area betweenso many levels of government and there are so many players that it is often very confusingfor parents to try to wind their way through that jungle. Having clearer guidelines would beuseful, but I do think an initial training thing would be quite useful. I do not know howmuch further you would go on from there.

Senator PAYNE—One issue which was raised with us yesterday, particularly inVictoria—and I understand the circumstances in a historical way were slightly differentthere—was the optimal size for a viable community based centre. From the experience of theRyde group, do you have a view about an optimal size for a centre to be viable at communi-ty base?

Ms Lister—I think I have actually heard figures, and possibly they may even be in somesubmissions—I do not know—but I thought about a size of 29 children—

Senator PAYNE—Did you say 29? I did not hear you.

Ms Lister—Yes. I have been involved in discussions on this. Not of noughts to twos,because they are very expensive. I think that the operators would be the best people to askbecause they would know the sorts of costs and so on. I have heard about 29—and generallynot the nought to twos, because they are very expensive. The cost of caring for thosechildren is way beyond the cost of what most parents can pay. I think it is a good questionto ask of the operators.

Senator PAYNE—We have been. I was just interested in the parents’ perspective.

Senator CHRIS EVANS—I just want to ask one question. I am playing the devil’sadvocate here, so don’t get too excited. You have put a pretty good case for parentalinvolvement in child care centres, for that community basis. As I say, I am a parent with achild myself, so I understand the values you are referring to.

Ms Lister—Are you on the committee?

Senator CHRIS EVANS—My partner is on the committee because I am always away atthese sorts of things. The problem we have—this is a public policy question—is that if youput to one side the disadvantaged centres or people with special needs and what have you,why should taxpayers generally fund a smaller group of taxpayers to enjoy the advantages ofa community based centre when the private sector can and will presumably meet the needs

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of that group in the new regime? I have my own views about it, but I am interested in yourresponse. That is the problem we run into as shapers of public policy: how can you justifysupporting parents in that choice when it is a more expensive choice? If they want to havethat choice, why shouldn’t they pay for it themselves?

Mrs Waring —I think one of the things mentioned was how important we feel a mix ofprivate and community based centres is, and in order to maintain community based centresyou need to maintain management committees. We are not saying that there should only becommunity based centres, but that that balance and that mix of private and community basedcentres is important, so that that community based sector should be supported, for variousreasons. We have even heard this afternoon of the social role centres play. I think youmentioned, Senator Neal, from yesterday, what a centre means to families in general—notjust to the child but to the whole social network of the community—and I think it just helpsbalance the system out, balance the level out.

Ms Lister—What you are really saying is—and I gather it has been a bit of a debate inthis inquiry—the sort of level playing field type argument. I will just put that aside, but Iguess we are coming at it from the point of view that many parents actually prefer acommunity based centre because of the increased involvement. That does not mean allparents, but it means quite a lot. It does seem that, particularly from the evidence that iscoming here, that it is the community based centres in the lower-income areas that parentsare actually leaving because they cannot afford those increased fees. That is actuallyhappening in Ryde because the four community based centres in Ryde are in generally thelower socioeconomic areas. It has been worrying that those centres are losing children forthe first time.

I do not know whether you can force well-off parents to use private services. I do nothave an answer to the fact that a few well-off parents may end up using those communitybased services. But certainly in our area the community based centres are in the lowersocioeconomic areas or the areas where the students actually use those services and it seemsthat just having a flat sort of view that they should all be privatised is just not going to workbecause parents are going to leave those centres in the lower-income areas if they cannotafford the fees. That is what is happening already.

I mean, you could turn it around and say, ‘Why aren’t all centres subsidised to someextent?’ In a sense, all centres are, through Childcare Assistance. Of course, what we havenot talked about today, or we have not discussed it today, is that Childcare Assistance hasbeen frozen and has been cut, particularly for families with one or more children. Why hasthat decision been made? We have absolutely no idea why families with two or morechildren are having basically the same level of Childcare Assistance as families with one.What is the rationale behind that, when all the other family payments are increased whenthere are more children? I am sorry to just throw it back to you, but I think it is just not asstraightforward as maybe what you are putting over to me.

Senator CHRIS EVANS—No, I put it as a simple question, but I did not pretend thereis a simple answer. Thanks for that.

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Senator O’BRIEN—Just briefly on the question of private centre fees in Ryde, whatyour submission says is that, particularly for nought to twos, those fees remain around 20 percent above those of the community based services. Is that the present-day situation?

Ms Lister—Yes. I just make the point that we have seen quite high increases in fees inthe private sector, even in the last two years, and obviously the fees in the community sectorhave had to increase. The community centre services are charging around about $40 to $42 aday for nought to twos. About $42 a day is what they have had to increase up to. Theprivate sector is charging anywhere between about $45 to $55. A member of our grouprecently investigated one service, and for two children it was $50 for the three- to five-year-olds and $55 for the nought to twos, so for two children it will cost her $105 a day and sheactually has three children.

Senator O’BRIEN—That is a private centre?

Ms Lister—Yes, that is a private centre.

Senator O’BRIEN—When you say that fees have gone up in the last two years, is itrecently or some time ago that these fees have increased?

Ms Lister—Do you mean for community or private?

Senator O’BRIEN—Private.

Ms Lister—Private, right. I did cite an example of one main operator in Ryde in theprivate sector putting up the fees depending on the range of services she offered. They wentup between 20 per cent and 40 per cent in 1996. So that happened around about the timethat these budget cuts were coming in. But I do not think that was anything to do with thechanges in child care policy at the federal level. Those fees have definitely gone up again.

Senator O’BRIEN—So they are above the community sector now but in 1996 theywould have been significantly above that?

Ms Lister—Yes, that is right.

Senator O’BRIEN—In terms of utilisation of those private centres, have you anyinformation on the effect on utilisation of that rise in fees?

Ms Lister—No, I do not actually have any information. I do not think they have the sortof waiting list that they used to have. There is still in our area quite a shortage of goodquality child care, and one group of centres tends to cover the southern part of Ryde andthere really is not a lot of choice. There are virtually no community based centres in thatarea.

Senator O’BRIEN—And you say the one proprietor controls the market?

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Ms Lister—The one proprietor controls a number of those services. That is one of ourconcerns about privatisation, and we need to look at the monopoly situation because we arecertainly affected by that.

Senator O’BRIEN—In terms of your attempts to obtain the data from the PrimeMinister’s office, you talked about discussions in early 1997. Have you pursued that matterwith the Prime Minister’s office in the electorate of Bennelong recently?

Ms Lister—I think we gave up. We made a number of attempts. We wrote a letter thatwe gather was delivered to him personally that specified what information we were askingfor. We got a very short reply many weeks after we sent the letter, and we were told thatsome information was on the way but we have never received anything.

Senator O’BRIEN—So nothing has happened?

Ms Lister—No, nothing has happened.

Senator O’BRIEN—And subsequent to that you did not follow it up?

Ms Lister—No.

Mrs Waring —No. There has been a lot of discussion in the local media, so there havebeen plenty of opportunities to respond to community pressure for such information.

Senator O’BRIEN—I see. Thanks very much.

CHAIR —No further questions? Thank you, Mrs Waring and Ms Lister, for comingalong this afternoon and sharing your views with us.

Committee adjourned at 4.36 p.m.

COMMUNITY AFFAIRS

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