Family Day Care Australia Triennial Conference

Speech
  • Minister for Education and Training

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It is great to join you here at Luna Park for this, my first major address to educators in the sector, since Prime Minister Malcolm Turnbull deliberately placed early childhood policy back into the education portfolio.

The Prime Minister has focussed the portfolio squarely on education policy from child care through to schools, higher education and vocational training.

To remain a prosperous country we have to give parents an incentive to participate in the workforce and we have to establish solid foundations for early learning in our children.

As the Minister for Education and Training, and as a father of two young daughters, I can assure you I bring a passionate interest to the extensive suite of child care reforms underway.

As a husband frequently away, I know how reliant my wife has been on child care to enable her to meet work obligations.

Our reforms will support parents as they balance work and family responsibilities. They will protect those most vulnerable, and they will maintain the high-quality learning experience that is currently being afforded to our children.

Yesterday, I joined with the Treasurer and the Minister for Social Services, Christian Porter to announce reforms into family tax benefit.  As I am sure you will have seen, the Government is reforming and restructuring family tax benefit to give families more money each fortnight, encourage workforce participation and, most importantly, fund the new child care system. In summary, we are ensuring that the system – that is FTB and child care combined – is fit for purpose and gives families what they need, when they need it. 

My clear message is to look at the impacts of these FTB changes, in the context of the child care changes the Government is proposing.  When the budget is in sustained deficit you don't invest an additional $3.5 billion in child care without funding it somehow.

We are delivering the most significant reforms and most significant additional benefits to Australian families in child care support that Australia has seen. These changes ensure that as a nation, families will actually have the support they need when they depend upon it to be engaged in the Australian work force.

Families being afforded greater choice in workforce participation by giving those who need it most great support to engage

And, of course, Family Day Care Australia will continue to play an important role in supporting that choice we are giving families to participate and also facilitating parental choice in the type of care or early learning that is best for their child or children.  FDCA has been an energetic and informed advocate for education and care in the home.

Carla Northam, through her role on the Ministerial Advisory Council for Childcare and Early Learning, has made sure your views were considered by policy makers crafting the reforms.  I’d also like to take this opportunity to note that many of your members have provided input to this child care package by coming along to consultation sessions organised by the Productivity Commission, as well as sessions run by the department around the country in July – so thank you very much for your input.

The reforms underway will make the child care system one that’s simpler, more flexible, more accessible and more affordable.

 

I’m glad your conference theme mirrors what the Australian Government is doing with our Jobs for Families child care package.

Change/Challenge/Innovation is exactly what I believe is facing the entire child care sector in this country.  The Australian Government’s Jobs for Families child care package is a significant change – a once in a generation reform.

Our challenge is to achieve:

  • Child care that’s affordable and accessible for those who need it in order to improve workforce participation; while at the same time
  • Protecting those most vulnerable and continuing to deliver quality early learning.

To achieve this we need to consider all options and be open to innovative approaches. In essence, we need to take the challenge out of child care for families by changing and innovating – and that’s a responsibility we in Government and you in the sector take on every day when we seek to deliver the best services for families.

Australia’s investment in early childhood education and care over the next four years will be almost $40 billion – that is the single largest investment in child care and early learning that this country has ever seen.

It’s an investment that will pay enormous dividends, and not just for children and their families, but for our communities and Australia as a whole.

The reforms are necessary, and the reason for the reforms are well documented in the Productivity Commission report.  Supplementing the important consultation captured in the PC report, is my own experience hearing from parents who tell me they struggle to navigate a complex child care system that does not meet their needs.

 

The policy underpinning the Jobs for Families child care package is the result of careful and sustained consultation and negotiation with the sector. 

My job now is to implement the package in full.

We are committed to a timetable that will see the new Child Care Subsidy replace the Child Care Benefit, the Child Care Rebate and the Jobs, Education and Training Child Care Fee Assistance payments from 1 July 2017.

When the new Child Care Subsidy starts it will be paid directly to service providers to pass on to families as a reduced fee. Our subsidy is based on paying an income dependent proportion of the cost of care up to an hourly fee cap.

The cap for Family Day Care ($10.70) is very generous and most FDC providers charge well below the amount we have set.

It has been set lower than centre-based care ($11.55) because FDC services have lower overheads.

Under the new package service providers will benefit from simplified administration with increased flexibility, smarter technology, and a more straightforward payment system.

The activity test will more closely align taxpayer-subsidised child care with the hours parents work, train, study or engage in other recognised activities.

And for the first time, activities such as unpaid work in a family business, on a family farm or even unpaid work experience, will also meet this activity requirement. 

An important part of the Jobs for Families package is the new Child Care Safety Net which will better support vulnerable families and disadvantaged communities.

We all know the first years of a child’s life are critical.  These early years play a huge role in determining children’s success through their schooling and into their adult lives.

The Child Care Safety Net has three key components:

  • The Additional Child Care Subsidy—this is fee assistance for children at risk, families experiencing temporary financial hardship and families transitioning off income support;
  • The Inclusion Support Programme—this is assistance to child care services to better cater for and include children with additional needs; and
  • The Community Child Care Fund— this is a grants programme to support child care services in locations that need it most.

The Safety Net is our way of making sure that vulnerable families and disadvantaged communities do not miss out on the benefits of child care and early learning.

It is in addition to continued subsidised access for all low income families, without initial application of the activity test, and additional to the universal access we're supporting for the pre-school education of all 4year olds.

 

That brings me to the twin challenge of maintaining quality and improving workforce participation.

It’s a powerful thing when government can offer a child from a vulnerable or disadvantaged family access to early childhood education and care. 

It is equally powerful when the parent or parents in a vulnerable or disadvantaged family take on a job.  Research shows that when a mother returns to the workforce she increases her family’s wealth and the opportunities for her children. [1]

Their contribution in the workforce improves, in a very real way, prosperity for us all but none more so than the child or children who see a role model in their parents, as well as benefit from the opportunities their wages bring to the family. 

When you track the percentage of mothers in the workplace from the 1970s through to today, the participation of mothers has increased dramatically.  As part of its inquiry into Childcare and Early Childhood Learning, the Productivity Commission noted that over the past 30 years or so, the workforce participation rate of Australian women in their prime working years has grown substantially. In September 2014, 76 per cent of women aged 25 to 54 years were in the workforce compared with 50 per cent of women in February 1978[2] (p 186 Vol 1, sourcing ABS 2014g).

Despite the significant taxpayer support for child care in recent years, participation has however plateaued.  Clearly we need to do something new to encourage a new growth in women’s workforce participation.

So while raising workforce participation is an opportunity, it is also a challenge.

Our reforms will make it easier for parents to return to work.

Families using child care in 2017, on family incomes of between $65,000 and $170,000 will be around $30 a week better off.

We anticipate that the new measure will encourage more than 240,000 families to increase their involvement in paid employment, including almost 38,000 jobless families.

I can assure you I am committed to working hard on the reforms so that our child care system remains not only high quality but is one that’s simpler, more flexible, more accessible and more affordable for the 1.2 million Australian children whose parents need child care services.

In terms of early learning, we as a Government will continue to fund the National Quality Framework and the Universal Access agreements.

The National Quality Framework will give parents confidence that their children are attending services that will give them a great start in life and help them make a successful transition to school.

$843 million in funding guarantees Federal support to top up the State and Territory contribution for 15 hours of preschool a week in the year before school, until December 2017. That two year plan gives parents certainty going forward.

Because I doubt it is a surprise to any of you that children who have had the benefit of quality preschool programmes go on to display higher academic achievement and are more likely to graduate, be employed and have higher earnings.

 

In order to meet the challenges ahead, child care – its location, its billing structure, its subsidy arrangements – needed re-examining.

We need innovative solutions to these problems – innovative solutions that remove the challenges families currently face with a complex, confusing system that leave them unable to find a child care place, unable to access the hours they want, or simply unable to afford it.

We want to empower families with choice – real choice that means they decide whether they return to work based on their own interests and needs rather than the availability of child care; real choice about whether they access that child care in their own home, a family day care centre or a long day care centre near their home, near their work or located somewhere in between.

If we’re to empower families with choice, then we need to deliver options and opportunities for them.

I’ve already talked through a number of the changes we believe will help innovate this sector.

One of the ways we have sought to inspire innovation in the sector is to remove the obstacles previously in place around operating hours. The Government will remove restrictions on child care operating days and hours as part of the new Package.  The only requirement on services will be that they operate for a minimum of 48 weeks per year.

This means that services can be more innovative and flexible in the way they operate and therefore more responsive to the needs of families.

It is my hope that the sector welcomes the ability to adapt and change your business model to meet the demands and needs of those who use your services.

One of the most exciting innovations of the child care reforms is the Nanny Pilot Programme.  This is a game changer in terms flexibility for families – particularly those who have been struggling to fit their non-standard work hours into the standard hours of operation child care centres typically run.

The two-year Pilot begins next year and will support these families who struggle to access child care services because they work non-standard hours, or live in regional or remote areas or away from existing child care. Feedback on the Pilot will inform future government policy on home-based care.

From here today I am heading to the North Sydney Police Station where I will hear more about the specific needs of the men and women in our shift working thin blue line for child care.

But the innovation I want to focus in on today is actually your sector. Because, as you are all very well aware, with innovation comes challenge.

Let’s go back to the beginning when Family Day Care was set up to give a parent – and it was usually mothers – a way to earn an income while in the home caring for her own children. [3]    It was an innovative way to boost workforce participation, while at the same time allowing parents a choice on how they participate in the workforce – in their own home, caring for their own children.  It was – and remains – an innovative way of encouraging parents back into the workforce and able to earn an income whilst supporting their choice to look after their own children in their own home.

It was never expected that dodgy operators would pervert this wonderful form of care in the home into a business model that would rip the taxpayer off to the tune of $350 million a year. 

I realise you are all very conscious that the practise of child swapping is harming the reputation of your sector.

The new regulations that came into effect on 12 October aim to eliminate the widespread and costly abuse of payments through ‘child swapping’.

This practise is contrary to the intent of Family Day Care because nobody envisaged that this well-intended policy would result in the family day carer receiving fee assistance for their own children, while being paid to care for other people’s children as a family day care provider.

The new regulations have exemptions for disability, remoteness, work or education.  And family day care educators are still able to claim child care payments when their child is in other types of services - so the change strikes a balance in order to stop exploitation but at the same time safeguard legitimate operators and the families who depend upon them.

The changes give the government more power to clean up the sector and enable it to operate as originally intended.

The coincidence from my perspective is that, when I assumed responsibility for the vocational education sector late last year, I was confronted with the problem of dodgy training providers.

Just as I took carriage of reforms to stop unscrupulous behaviour in the VET sector, I will continue Ministers Ley and Morrison’s work in the child care sector.

I’d like to take this opportunity to thank Family Day Care Australia for publicly supporting our crack down on child swapping.  Thank you for working with us on the policy detail.   Without the new rules, those family day care services – the shonky operators - would be able to continue to exploit loopholes.

Of course, one of the most distressing outcomes of this activity is that, by unfairly draining the child care budget, those who exploit loopholes ultimately limit available funding for the other innovative forms of child care that Australian families need, such as the Nanny Pilot Programme I mentioned earlier and, if left unchecked, unscrupulous activities would ultimately jeopardise ongoing support for your own, innovative sector.

 

You provide flexibility and choice for families. You have demonstrated you are willing to change, and be innovative and I know this will continue as you embrace the challenges we face.

The Government appreciates what you do. You are part of the early childhood education system that has attracted huge government investment and is on the cusp of enjoying the single largest child care and early learning investment in the nation’s history - $40 billion.

We are doing it for just for individual families who need it and will enjoy improved lifestyles with more choice and because our country will be more productive, delivering benefits for all of us.

As the new minister I look forward to working with you to deliver and build upon these important reforms.

Thank you.

 

[1]Childcare and Early Childhood Learning,  Productivity Commission Inquiry Report Volume 1

No. 73, 31 October 2014 (page 13, ‘Overview’ section)

[2] Childcare and Early Childhood Learning,  Productivity Commission Inquiry Report Volume 1

No. 73, 31 October 2014 (p 186 Vol 1, sourcing ABS 2014g).

[3] Australian Institute of Family Studies Family Matters journal No.31 “Family Day Care: a home away from home” https://aifs.gov.au/publications/family-matters/issue-31/family-day-care

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