Interview - Afternoon Briefing

SUBJECTS: Childcare subsidies.

MATTHEW DORAN: Anne Aly, welcome back to Afternoon Briefing. Clearly, the government is very keen to spruik these increases to the childcare subsidy which come into effect from tomorrow and people will start seeing these increased payments in the next couple of weeks or so. But how concerned is the government that some childcare operators may be jacking up their prices and effectively eating in to any benefit households may experience?

MINISTER ANNE ALY: Well, thanks for that, Matt. Look, first of all let me say that this is good policy. It’s the reason that the Prime Minister made a commitment to it in his first budget-in-reply speech. We know that early childhood education and care is expensive for parents in Australia. It’s one of the biggest spends that they’ll have in those first early years, which often makes it prohibitive for a lot of parents to go back to work or take on extra hours of work.

You know, it’s pretty usual for centres to raise their fees around this time of the year, but we’re confident and we’ve seen modelling from one of our largest providers – Goodstart – that the vast majority of parents will benefit from our reforms to the childcare subsidy, which will benefit 1.2 million families across Australia. So we’re confident that the reforms will mean that this is substantial and real cost of living relief for families.

DORAN: If it is, indeed, business as usual to see childcare centres increasing their rates around this time of year, I guess the question is whether or not the increase to the subsidy is going to go far enough to still give any benefit to Australian families?

ALY: Well, the modelling that we’ve seen is that the increase to the subsidy does go far enough and the vast majority of parents will benefit from these changes. But it’s also the reason that we’ve got the ACCC doing their review of pricing so that we can understand the drivers of cost and the drivers of fees in early childhood education and care. And they’ll be giving us the final report at the end of this year with recommendations of any other reforms that are needed to ensure that when we do do things like increasing the childcare subsidy that those reforms do result in parents being better off and that they don’t result in parents being worse off.

DORAN: Are there parameters that get set in an investigation like that? I mean, do you have to, say, okay, an increase by X per cent is acceptable whereas an increase of more than that is not? Where do you set that sort of benchmark or threshold?

ALY: Well, that’s what we’re hoping that the ACCC will be able to tell us through the review that they’re doing. But just to go back to the modelling that one of Australia’s largest not-for-profit providers, Goodstart, has done, they’ve shown with their modelling that their modest increase of 7 per cent still means that the vast majority of parents are much better off with the changes that we’ve introduced that come into play tomorrow and that parents will see the benefit of in about 10 days’ time.

DORAN: Should that investigation or that probe have been launched earlier considering we’re talking about fees going up, subsidies going up, but we still don’t have the findings of that ACCC inquiry?

ALY: Well, the fact is that fees have been going up for a long time now and that this government has recognised that early childhood education and care is expensive and that families need cost of living relief. But there’s another good reason why this is a good policy and why the Prime Minister committed to this policy – and that is because it increases productivity. So it’s also good for the economy because it means that primary caregivers, who are primarily women, can go back to work, they can take on more hours or they can go back to study. So where the fee increases come from and what those pricing mechanisms are will be highlighted by the ACCC review. But we recognise that families need cost of living relief now. This is when they need it. And that’s why it was one of our first acts in government to meet the commitment that we made going into the election to decrease the cost of earlier childhood education and care.

DORAN: Something that you’ve mentioned quite a lot and that the Prime Minister has mentioned quite a lot is really praising the staff who work in this sector for the work that they do now and emphasising that they are more than just child minders. They’re not babysitters; they’re actual educators and should be appreciated as such. Does that mean in your view that staff in this sector should be paid more?

ALY: Well, I absolutely wholeheartedly value the early childhood educators and teachers who do such a wonderful job looking after children and educating children in those foundational first five years. And, in fact, just this morning I visited two centres and spoke with the educators and teachers there. And, you know, whenever I go to one I like to ask them about their passion and why they do this, and every single person that I’ve spoken to who works in early childhood education and care does it because they care for the welfare of children, they care for the development of children and they understand that they are professionals, that this is not just child minding or wiping bottoms and noses.

We changed the law, Minister Burke, Minister Tony Burke, changed the laws, changed the way in which the Fair Work Commission acts so that early childhood educators can bargain for more pay and for what they’re worth. We’ve also seen an increase to the minimum wage. That will also kick in tomorrow. That will also benefit some people working in early childhood education and care.

DORAN: Does that mean, though, that there would need to be a broader think about how this sector is funded or supported by the government? Because if you see pay increases for workers in this area, that is going to put more pressure on their employers, which is then going to be passed on to families. Does there need to be a more wide-ranging investigation there?

ALY: Well, we’re interested in creating a sustainable workforce in early childhood education and care. And the fact is that today there are more children, more services and more educators in the system than when we first took office just over a year ago. So we also have a Productivity Commission review to help us look at how we get to a universal system that benefits every child, where every child has access to good quality education and care. And the ACCC review will tell us about pricing mechanisms and how fees are structured in the system.

So together those two reviews will chart for us a course on how we reform the system to ensure that Australia has one of the best world-class systems for early childhood education and care. And I’m very excited about the future in this sector. I’m very excited for the educators. I’m very excited for the families, and I’m very excited for the children, because at the end of the day, this is about the wellbeing of children in those first foundational years.

DORAN: There are clearly also staffing shortages in this sector, as there are in many sectors across the country. How do you make it a more appealing workplace for prospective staff as well?

ALY: Well, we recognise that there are workforce issues, and I’ve spoken to so many educators and teachers around the country. And so one of the things that we did in the last budget was introduce a $72 million package for professional development and for paid practicums. And this was in direct response to what they told me that they needed right now that would make a difference to them right now, that would help them stay in the profession right now.

One of the other things that we’re doing, of course, is the fee-free TAFE and working with states and territories to look at the workforce issues. And as a result of that yesterday we had news that there has been a 37 per cent increase in the number of people enrolled in early childhood education and care in Western Australia. And along with that a really good number of them are actually being retained in that. So, as I said, we’re interested in creating a long-term, sustainable workforce, and we’re building the foundations for that through fee-free TAFE, through the university places and through bringing in measures such as the workforce package that we brought in at the last budget that will help childhood educators and teachers stay in the job by recognising them as professionals and giving them access to that vital professional development that they said they needed.

DORAN: Well, Anne Aly, for your insights this Friday, thanks for joining us.

ALY: Thank you, Matt.