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Chapter 1 - Introduction

Terms of reference

1.1 The matter was referred to the Committee on 11 November 1997 for inquiry and report by 30 June 1998. The reporting date was subsequently extended to 20 August 1998, although this was delayed due to the rearranged sitting schedule for the Senate and the intervention of the Federal election. At the commencement of the new Parliament, the Senate agreed to the readoption of the reference with a reporting date of 18 December 1998.

1.2 The complete terms of reference are:

(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 future abolition of operational subsidies for family day care services,

(ii) any reduction of families' access to child care assistance and the child care rebate,

(iii) families only being able to access child care subsidies in the form of child care assistance and the child care rebate if their children are cared for by carers other than the parents,

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

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

(iv) 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 their ability 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 child care assistance and the child care rebate) being available only for families who contract out their child care to others, and not for those who provide child care at home;

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

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

(g) the impact on work-based child care and workers where fringe benefit tax exemption for employer-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 conditions, and associated job losses.

Conduct of the inquiry

1.3 The inquiry was advertised in The Weekend Australian on 15 November 1997, and through the Internet. Submissions were also invited from Federal, State and Territory Governments, community and other groups and individuals involved with the provision or receipt of child care services in Australia. The closing date for submissions was originally 20 March 1998, although the Committee continued to receive submissions throughout the course of the inquiry.

1.4 The inquiry attracted wide interest throughout Australia with the Committee receiving 929 public submissions and two confidential submissions. Submissions came from every State and Territory with many representing regional and remote areas of Australia. Submissions were received from many individuals, primarily parents of children in child care and workers in the industry, as well as from proprietors, directors, management committees, groups of workers and parents involved with individual child care centres. Peak organisations, community groups, State and local government bodies and unions also provided written submissions to the Committee. In addition to written submissions the Committee also received evidence in the form of 395 reproduced letters, often bearing multiple signatures, and petitions. The list of submissions and other written material received by the Committee and for which publication was authorised is at Appendix 1.

1.5 The Committee held eight days of public hearings in Melbourne, Penrith, Gosford, Adelaide, Perth, Brisbane and Canberra (2 days). A balance of government agencies, peak child care organisations representing all sectors of the industry, welfare groups and other interested groups appeared before the Committee. In order to allow as many interested individuals as possible, particularly parents of children in care, to put their view directly to the Committee, a community forum was held at five hearings. During these community forums 65 individuals took the opportunity to comment on child care matters. The Committee also provided an opportunity for representatives of care providers to give evidence. Care providers from 36 services, representing centre-based care, both community and privately operated, family day care services, out of school hours care and vacation care appeared before the Committee. Witnesses who gave evidence at the hearings are listed in Appendix 2.

1.6 In attempting to give as many groups and individuals an opportunity to speak directly to the Committee, the schedule for most hearing days was especially tight. Many witnesses were heard in groups and consequently a few witnesses received only a short time to put their point of view. Conversely, many people who had lodged submissions and wished to appear before the Committee were unable to be accommodated within the hearing schedule. The Committee apologises to people who may have been inconvenienced by these procedures, however the arrangements required to balance available time with maximum opportunity for individual witnesses was an especially complicated exercise with over 1,300 submissions and form letters having been received.

Evidence received

1.7 The Committee completed its program of hearings for the inquiry prior to the Federal election. Written and oral evidence was received from the Department of Health and Family Services (DHFS). In October 1998, following the election, changes were made to the Administrative Arrangements. The Children's Service Program is now administered by the Department of Family and Community Services (DFCS). The Committee has used the name `the Department of Family and Community Services' where appropriate in this report.

1.8 In drawing up its program of hearings, the Committee ensured that all sections of the child care sector were represented. Not only were representatives of all service types invited to give evidence but also community-based not-for-profit and private-for-profit child care providers were represented. On a number of occasions there was vigorous debate between those representing the private child care sector and others representing the community-based child care sector on the merits of these alternative forms of service provision. The Committee considers that both types of service providers have a role in the sector and that they provide families with a choice of care and alternative management structures.

1.9 In submissions and evidence reference was made to surveys which had been conducted during 1997 and the beginning of 1998 by organisations including the National Association of Community Based Children's Services (NACBCS), the New South Wales Council of Social Services (NCOSS), Queensland Child Care Coalition, the South Australian Child Care Coalition, Families at Work and jointly by the Liquor, Hospitality and Miscellaneous Workers Union (LHMU) and NACBCS. Generally, these surveys sought the views of parents, providers and workers on the impact of the Commonwealth's changes to child care on the child care sector and workforce participation. Information provided by these surveys was of interest to the Committee. However, some surveys were conducted on small samples that were not representative of the child care sector as a whole, had relatively low response rates, did not include any analysis of factors such as labour force patterns or geographic location, and relied on anecdotes and assertions in reaching findings. Given the methodological background to these surveys, the Committee has considered the primary value of their information and findings to be anecdotal only.

1.10 Extensive statistical information was also provided to the Committee. The Australian Bureau of Statistics (ABS) conducts a survey of the child care sector every three years. The data from its March 1996 survey of the child care sector was used by the Committee to ascertain a general picture of the sector. However, the Committee notes that the ABS survey is now more than two years old.

1.11 The Department of Family and Community Services administers two data collections: the Child Care System and the Child Care Census. The Child Care System is an administrative system containing information about payments under the Children's Service Program. The Child Care Census provides details of child care users, staff and carers and operational details of child care services. The last published results in September 1997 are those of the Census conducted in 1995. A further Census was conducted in August 1997. While the Department has provided the Committee with a great deal of information and updated statistics where ever possible, the full results of this Census are not expected to be published until late in 1998 and were thus not available for use during this inquiry.

1.12 The Committee would have found the results of the Census particularly beneficial during its deliberations. The sector is undergoing great change and those statistics that the Committee had available to it may not adequately represent the sector during this period of volatility. The availability of data on the child care sector in Australia is discussed further in Chapter 3 of this report.

1.13 The Committee places great value on submissions it receives as primary sources of information. Many of the submissions made to this inquiry, representing a wide range of organisations and individuals, emphasised the same or similar arguments. In preparing this report, it has not been possible to refer to all these submissions in footnotes. Thus, in many instances, footnotes acknowledge submission/s which are representative only of the point or argument being advanced. This in no way downgrades the importance placed on the many other submissions that have reinforced the same or similar point without being specifically identified.

1.14 This report was drafted prior to the Federal election campaign and the announcement by the Coalition Government of a new tax policy proposing changes to the structure and delivery of assistance for families. Of particular relevance to child care issues discussed in this report would be the proposed doubling of the tax free threshold of the Family Tax Initiative and merging the types of assistance for families through the tax and social security systems – including combining the Childcare Cash Rebate and Child Care Assistance into a new Child Care Benefit. In addition, a new Family Assistance Office would be established within the Tax Office to deliver family assistance programs.

Acknowledgments

1.15 The Committee expresses its appreciation to the many individuals and organisations who made submissions to the Committee, provided other written information or gave evidence to the inquiry.

1.16 The Committee would particularly like to thank Greg McIntosh from the Social Policy Group of the Department of the Parliamentary Library for the provision of background material used by the Committee in the preparation of this report and Denise Swift, Judy Raymond and officers from the Family and Children's Services Division of the Department of Family and Community Services who have provided much information in response to requests from the Committee.

1.17 The Committee also thanks Councillor Kevin Dwyer OAM, Mayor of Penrith, the Penrith City Councillors and Council staff for making available the facilities of the Penrith Council Chambers and for their assistance with the organisation of the public hearing held in Penrith.

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