SUBJECTS: Childcare subsidy; Wage increases for childcare workers; multicultural quotas; Voice to Parliament.
PATRICIA KARVELAS: For many the cost of living crisis is biting and any reprieve is welcome, including the major $5 billion childcare subsidy that comes into effect this month. Now, the legislation kicked in over the weekend and from next week’s billing cycle parents will receive the higher government subsidy. But as you’ve heard on the program and across the ABC, some childcare centres are raising their fees at the same time, potentially eating up the payment before it even arrives in your account.
Anne Aly is the Minister for Early Childhood Education and Youth, and she’s my guest this morning. Minister, welcome.
MINISTER ANNE ALY: Thank you, Patricia. Good morning.
KARVELAS: How concerned are you that some centres might drive up their prices even further?
ALY: Well, first of all, it’s pretty standard for centres to raise their costs around this time of year in line with CPI. We know that most centres are raising their fees between 6 and 8 per cent and, in fact, we know that our largest not-for-profit provider, Goodstart, is raising their fees by 7 per cent. And we’ve seen their modelling that with that kind of modest increase of 7 per cent that parents are still receiving a substantial benefit from our increase to the childcare subsidy.
So we’re actually confident that even with modest increases in the fees that centres are charging, as they normally increase their fees around this time of year, the childcare subsidy will make a difference, and more of a difference than if we had not introduced it.
KARVELAS: Yeah. So 6 to 8 per cent, though, is not modest, is it? I mean, it’s a pretty big hike.
ALY: Well, it’s in line with inflation, and it’s pretty average of what the centres are charging around now. But it depends on the centre and it depends on the kind of provider. This is a very complex and mixed market. It includes, you know, not for profits, community run, council run right through to big corporates.
KARVELAS: The ACCC handed in the interim report on its childcare inquiry at the end of last week. What does it say?
ALY: I’ll wait until that report is released publicly, but it is only an interim report and the final report will be delivered later this year. But the purpose of the ACCC inquiry was to look at this very issue about pricing and what pushes pricing in the early childhood education sector.
We know that prices have increasing, have continued to increase over a number of years, and, quite honestly, at an exorbitant amount, to the point that Australia is one of the most expensive countries for early childhood education and care for parents. And it’s the biggest spend that they’ll have, some parents spending more on their children’s first five years in early childhood education and care than they will on their child’s entire high school education.
So, we want to understand and the ACCC has been tasked to give us that information about what drives pricing, what, where does the childcare subsidy go, what part of it goes to wages, what part of it goes to the cost of running a centre et cetera, et cetera.
KARVELAS: Look, as you say, the Productivity Commission is looking into this. This is just the interim report. But really interesting comments today in the Sydney Morning Herald from Canadian economist Professor Gordon Cleveland, who says in Canada Australia is used as an example of what not to do in childcare policy and they’re moving to this – essentially this universal idea of child care. I mean, what do you make of that, the fact that our model is seen as what not to do?
ALY: Yeah, I’m very familiar with the Canadian model; I’ve been looking at models right around the world actually. And the Canadian model is actually a very good model in the way that they’ve moved. The Prime Minister has stated his vision for a universal early childhood education system in Australia. And I think the reports that we’re doing and the reviews that we’re looking at, the Productivity Commission review and the ACCC review, will chart a path for us to achieving that, to achieving the kind of world-class system with high-quality early childhood education and care that is accessible and affordable for every single child in Australia.
KARVELAS: So, I don’t mean to be rude, Minister, so you’re saying you want to do it?
KARVELAS: Why delay? Does there, isn’t there a sense of urgency around this, this transformational piece of work?
ALY: Well, there is. Like, I agree with you, but the sense of urgency, Patricia, is really around the fee relief. And that’s what we did. That’s why the biggest part of the Prime Minister’s election commitments going into the election, it was the centrepiece of his budget-in-reply speech, was that fee relief by raising the childcare subsidy. This is, it’s a very, very complex sector made up of a very mixed market. And so, you know, to get to a place where we are delivering universal early childhood education and care that’s affordable, accessible and flexible for every child is going to be an undertaking. So it’s not something that I can just click my fingers and happen overnight.
KARVELAS: No, but would you like, what is your aim? Do you want it to be like free state education primary school? Because this is the observation many people make: free education, you can send your kid to a state school; it’s free, it’s not means tested. You can send your kid when they’re five and all of a sudden, I mean, I know parents that say all of a sudden they’ve got extra money in their pockets the day their child begins primary school. Do you want to extend that system right from birth?
ALY: Well, you know, as a parent myself I do remember the day that my kids started primary school and the sigh of relief that I breathed because it meant that I didn’t have to pay for early childhood education and care, so I understand that. I do want to see, I want to see a system, and I don’t want to pre-empt what that looks like, but a system that’s universal in the fact that it provides flexibility for parents, it provides every child access and it’s affordable. So, you know, this is why I’m excited. I’m excited because I want, I think that the Productivity Commission review and the ACCC review is going to give us some insight into how we get there.
KARVELAS: Okay, and does that give you a second-term election promise? Is that where you’re moving here?
ALY: I think it’s going to take more than two terms, Patricia. Like, the market is so complex at the moment –
KARVELAS: Why does it need to take longer? Okay, you’ve got the interim report and then you’re going to get the final.
KARVELAS: Why does it need to take more than two terms? You know, I understand this term is just a year or two left, like, really –
KARVELAS: But certainly you could do to it the next term, couldn’t you?
ALY: Well, because you’ve got to understand the market here. So we’ve got, you’ve got big corporate providers that have more than 40 centres, that are defined as having more than 40 centres. You’ve got smaller providers, which is around 80 per cent of the market, that have maybe one or two, up to nine centres, 10 centres. You’ve got your community not for profits, you’ve got large not for profits, you’ve got community-based not for profit, you’ve got parent-run centres and then you’ve got council-run centres. So it is such a mixed market that any change to the market without affecting access, without, you know, by ensuring that centres remain open and that places continue to remain open, because that’s an issue we know of in some areas and a workforce issue where there is a shortage of workers, and we want to encourage more workers into the area, this is long-term reform that we’re talking, Patricia.
KARVELAS: Under the new multi-employer bargaining laws that your government introduced, up to 12,000 childcare workers across 65 employers are negotiating for a 25 per cent wage rise. When childcare costs are already going up, will that wage rise be sustainable for the industry?
ALY: Well, that again, that’s what the ACCC will be looking at. We don’t know how much of the CCS goes to wages. We’ve got some idea, depending, you know, based on what we’ve been told from the providers, but that’s something that the ACCC will look at.
In terms of the bargaining process, I’m very, very proud of the fact that this government made those changes to the Fair Work Act to enable the Fair Work Commission to look at these feminised industries – they’re largely feminised industries –
KARVELAS: Sure, but who pays for it? That’s the issue.
ALY: Well, when, we’ll let this all run out. I’m not going to pre-empt what the outcome is – whether it’s going to be a 25 per cent pay rise or whatever, I’m not going to pre-empt that. But we have said that if and when the government is called to the table as the funder, we will come to the table in good faith. So we’ll wait and see how this process plays out.
KARVELAS: Okay. Minister, before I let you go, just a couple of other issues, not strictly in your portfolio, but certainly things that you’re across. Next month’s Labor National Conference will see a push to start implementing multicultural quotas to encourage candidates from Indigenous and non-English-speaking backgrounds. You already are from one of these diverse backgrounds, of course. But do you support a push like this?
ALY: Look, I support a parliament that reflects the country that we live in. And, you know, when I got elected in 2016, Patricia, I could not have closed my eyes and imagined the government that we have now. We are far more reflective of a multicultural society that Australia is than, you know, 2016 when I got elected. So I support more diversity in the parliament, yes.
KARVELAS: Do you support this mechanism?
ALY: Well, that will be up to national conference.
KARVELAS: Yes, but, what do you think?
ALY: I haven’t looked at in detail. Well, I think we need to have more diversity, and I’ve always been vocal about that and open about that. And I think I’m proud of the government that we have now that is much more reflective of the Australia that I know and love.
KARVELAS: Yesterday over the weekend the Yes 23 Voice campaign held community events across the country. There has been a lot of reporting about a sliding in support for the Yes campaign. How much are people in your community talking about the Voice?
ALY: I’ve held a number of sessions in my community. My community is a very multicultural community, and I think, you know, with multicultural groups from different ethnicities and faith groups there’s strong support for the Voice. And I think that’s because a lot of people get it if they’ve been displaced or, you know, if they come from a culture where they’ve had to struggle for self-determination and identity. They get it.
So, in my community there has been, in fact, the other day I had a meet the member just at a local coffee shop and a lot of the people who came, all of the people who came, actually, were self-described baby boomers who said, “Oh, you know, everyone says the baby boomers are against the Voice, but we’re all for it.” So, yeah, I think there is a lot of support. You know, polls, polls, we can talk to till the cows come home about polling and the intricacies of polling and the different variabilities of reliability of polling, but from what I see, particularly in my community, there is a lot of support.
KARVELAS: Patrick Dodson spoke over the weekend in his first interview since he’s been unwell, and he said that we cannot be able to lecture the world, even China, about human rights if we don’t deliver a yes vote. Do you think that’s true?
ALY: I think that’s been the case for a long time, when we have our First Nations people are the most incarcerated people in the world. They’re the most incarcerated people in the world. They have some of the lowest standards of any First Nations people in the world. So I think we do have to turn the mirror on ourselves, reflect on ourselves and our own history and here’s an opportunity to change that.
KARVELAS: Minister, thanks for your time this morning.
ALY: Thanks so much, Patricia. Have a great day.
KARVELAS: You too. Minister for Early Education Anne Aly, and you’re listening to ABC RN Breakfast, it’s 11 minutes to 8.