Stanford Erica; Hipkins ChrisERICA STANFORD (National—East Coast Bays): Thank you Madam Chair. I just want to take issue with what the Minister said in relation to the answer to my question. He gave the example of a centre that hadn't applied for a licence when they'd already opened. I think the point to make quite clearly is that the current licensing arrangements are such that they are checkbox exercises. As long as you meet the criteria you will get a licence. The issue with this new licensing arrangement and why I brought my Supplementary Order Paper (SOP) is because that is not guaranteed any more. It is up to the Minister to decide who gets the pre-licence out of a number of applications depending on his set list which we've had an idea upon about who he will prioritise whether or not he thinks that there is significant demand or enough for another centre in that area. So it is not guaranteed. So that's why it's so very important in the first instance to make sure that these developers and early childhood centres have access to funding more so than they do now because they know very well that as long as they meet the criteria they will get their licence and if they muck up something then they can go and fix it and come back and reapply and get their licence. It is much more of a guarantee than under this new legislation. That is why I brought the SOP because it has been brought to our attention by the banks. I did ask the banks to come to the select committee and they refused because they said they don't normally get involved in this type of thing. But I think it's very telling that the Minister and the officials didn't go to the banks themselves when I raised this with them and said this is going to be a problem.For the Minister to just sit there and say Oh well the banks didn't contact us." isn't really good enough. It is an issue. Early childhood centres and the council have told us it's an issue. The banks have told us it's an issue. We cannot have a clause in the bill that says that the Minister can change his mind at any time that he thinks fit because no one will lend to me on that and my Supplementary Order Paper just makes it clear that if the officials have said that it's to be driven by the applicant then it should be.My second point that I want to ask the Minister about is going back to quality. I asked this question earlier and he didn't answer and then they tried to close the debate down. I think that this is a question that's worthy of answer. We have in some instances issues with the quality of early childhood centres and we need to be doing everything we possibly can about that. This piece of legislation this bill does nothing to make sure that centres are improving their quality of service. In fact it does the opposite. It tells them: if you are in an existing area we will protect you from any competition because we will not allow any competitors in to compete against you to force you to raise your standards because we want to control the sector and make sure that there is the exact right amount of centres in a region. Now the upshot of that is that centres will only be incentivised in these cases to do what is the bare minimum. We all know that competition is the thing that makes sure that people are upping their game improving their services adding additional benefits for parents and that is not going to be guaranteed under this bill. In fact we're going to get the very opposite. So the question that I put to the Minister earlier is really important. If you take the example of an existing centre in a person's local area that is acceptable but it's not great. Parents don't love it but it's just there. This bill means that no one will be able to come in and compete against them if the Minister decides that there isn't sufficient demand for another centre. There is no incentive for that centre to improve their playground to improve the quality offering of their food to improve the resources that the children have access to. The incentive is to do the bare minimum. So I want to ask the Minister: what does he think will happen to the quality of existing early childhood education services when they are not having any competition because he won't allow it? And will this lead to a race to the bottom?So two quite clear questions there: the first one about my SOP and I think his misunderstanding and then secondly it is really important that we get an answer on quality because this whole bill is doing the opposite of incentivising early childhood centres to improve their quality through a lack of competition.Hon CHRIS HIPKINS (Minister of Education): The member's blind faith in the market and in competition delivering better outcomes is somewhat misguided given the concerns that she's raising about the quality of current early childhood education services where there is effectively a free market operating at the moment. In fact international evidence suggests that in education settings particularly in schooling in early childhood education competition and a free market do not lead to better outcomes for children and it does not lead to higher quality services. The network planning provisions are nothing to fear in that regard. They're making sure that Government subsidies are going into high quality services. In fact one of the problems that we've got with the current market model for early childhood education services is that low quality services are able to replicate without any consequence. So even if somebody is operating a poor quality service that's on a provisional licence they can go and establish other services elsewhere with very little consequence. That is one of the problems that we have with the sector at the moment. So the network planning provisions will help us to prevent that from happening and I think that that will be a very good thing.In terms of the member's contention that the planning provisions in this bill will lead to fewer people being willing to enter the market that is simply something that the Government disagrees with. It is a debating point but she hasn't produced any evidence to demonstrate that that's what's actually going to happen."