Interview - ABC Afternoon Briefing

GREG JENNETT: All right. Well, early childhood education has been a key policy pillar for the Albanese Government, and with this 15 per cent pay hike over the next two years, it signals the government still has further plans afoot to build on those pillars. It also follows significant pay rises for low-paid workers in the aged care sector. But there are further details to pin down beyond today's announcement. To do that, we caught up with the Education Minister, Jason Clare, a little earlier.
Jason Clare, it's always good to have you with us on Afternoon Briefing and I will observe that it's not very often that a government announcement is met with broad consensus so early on. But that seems to be the striking impression of the wage subsidy you're announcing today. Now, of course, the intention here will be to make childcare work more attractive. I wonder what forecasting you have behind this announcement about the scale of additional workers likely to be attracted by the 15 per cent pay increase over, well, let's say, the next two years.

JASON CLARE, MINISTER FOR EDUCATION: G'day, mate. This is fantastic news. Our early educators deserve a gold medal, but they also deserve a pay rise, and that's what this 15 per cent pay rise is all about. Over the last two years, we've made childcare cheaper for more than a million Australian families. And this is the next step: recognising and rewarding the people that make that possible. There's about 30,000 more early educators working in our childcare centres today than there were two years ago when we got elected. But the truth is we need more, we need a lot more, particularly if we want to build a truly universal early education system where more kids get access to that important early education that sets them up for school. 
We think that this will help to retain the workforce that we've got, but also encourage more people to want to be an early educator. I dropped my little dude off this morning and told the team at his childcare centre what was happening. And Kerrie, who looks after my little guy, said, "maybe I won't quit then, after all." And I'm hoping that for a lot of people who love this job but feel like they can't afford to keep doing it, it'll make the world of difference.

JENNETT: Yeah, but do you have a number on that? Because growing out the workforce, as I think you said in earlier statements today, is a key step towards whatever might come in the future around universal entitlement. So, you've done 30,000. How many more do you think as a result of this investment?

CLARE: I don't have a specific number. The truth is we need tens of thousands of more people to want to become an early educator. We've got more than 100,000 people in the pipeline, either at TAFE, taking advantage of those fee-free courses, or at university to become an early education teacher. 
It's about two things, retention and expansion. Getting more people in. To round out the answer to your question, you talked about what the Productivity Commission's interim report said. It said, if we're going to build a universal system where it's affordable and available for all kids and all families, then the first step, the very first thing we need to do is build the workforce. And that involves better reward for the work that our early educators do. They said, this is number one, the first thing to do to build a universal system is to increase the pay of early educators. And that's why what we're announcing today is so important.

JENNETT: Yes. So, for those centres or employers, if you like, receiving the subsidy, there is a condition here. They have to limit their fee increases to 4.4 per cent from now until next August. What happens to fees on the 9th of August next year?

CLARE: That'll run through for the full twelve months. The centres will have to sign up to a legally enforceable agreement between my department, the Department of Education, and themselves that they won't increase fees by more than 4.4 per cent. That's important because we want to achieve two things here. We want to pay workers more, but we also want to keep prices down for families. And a lot of people watching know all too well that fees went up by, I think, 49 per cent under the former government, twice as fast as the OECD average. We've managed to cut costs for families with the cheaper childcare policy that we implemented a year ago, but we also want to keep prices down. So, that's why we're doing two things at once. Centres or providers will need an industrial agreement registered with the Fair Work Commission to make sure the money goes to the workers, but they'll also have to sign up to one of these legally enforceable agreements to make sure that they don't increase fees by more than that 4.4 per cent.

JENNETT: And are all bets off after the expiration of the twelve months?

CLARE: No. Its intention to continue that, but we'll do that based on advice from the ABS that'll help to inform what that number should be in twelve months’ time. And we talked a moment ago about the Productivity Commission. Their report to help us set up a universal early education system is on my desk now. We'll release that in due course. But their work, their advice, will help to inform how we do this, not just for the next two years, but over the longer term.

JENNETT: All right, I will come back to universality in just a moment. But after the double step hit on the 15 per cent wage bump up, what's your expectation when you get to 2026? So, that's after the full implementation of the 15 per cent pay rise. Who will pick up the tab from there?

CLARE: It's not the intention to pass that on to employers. Some people ask me, Greg, why is the Government providing a financial support for workers who often work in the for-profit or for the not-for-profit system? The truth is that as a Government, we do that already. That's what the Child Care Subsidy does, by subsidising for parents around about 70 per cent, on average, of the cost. A big part of the cost of running a childcare centre is wages and rent. And so, the Subsidy does that already. This is about recognising that the work that our childcare workers do, that our early educators do, is amongst the most important jobs in the world. And at the moment, there are people who love this job but can't afford to keep doing it.

JENNETT: And so, are you letting a few profitable - I assume there are still in this country a few profitable childcare centres - letting them off the hook, in a sense, by, you know, in one fell swoop picking up the 15 per cent yourself?

CLARE: It's the opposite. They've got to pass that funding through to their workers. It doesn't go into their pocket. And we're saying that as part of this, there's a deal that we're striking here in order to get the 15 per cent extra funding for your workers, you cannot increase your fees by more than 4.4 per cent. If you choose to do that, I suspect the educators who work at your centre will go down the road and work at the other centre that's prepared to sign up to this cap.

JENNETT: Yeah. All right, then let's talk about the Productivity Commission report. Then maybe you can indicate to us, Jason Clare, exactly when we will see the final version of that report. But does it suggest in the timing of the announcement that you've made today that the next steps towards universal access to early childhood education would probably cut in, logically, at about 2026, after this interim pay deal has fully established itself?

CLARE: No, not necessarily. That report, when I release it, you'll see that it talks about financially supporting our workers more, but it also helps to give us a roadmap about how do you build a universal early education system, just like we've got a universal healthcare system in the form of Medicare or universal superannuation system. A universal early education system where every child and every family have access to the system at an affordable level. So, the report talks about more than just paying our workers more, it's about setting the system up for success long-term. And when I say long-term, I mean over the next 10 years, but it doesn't start in 2026. You'll see that in a bit more detail when I release that report. Not too far away.

JENNETT: Ok, yeah, I've seen indications of September? Next month? Does that sound right?

CLARE: Not too far away, mate. I promise to come on the show and take you through it in a bit of detail.

JENNETT: Ok, look, before we go, Jason Clare, I do want to pick up on something. We've had extensive coverage on this program throughout the week of university sector pushback against your laws to cap international students by university and potentially also by courses. The overwhelming view coming from the sector is that foreign student enrolments are falling and falling sharply right now, so, in their view, caps aren't needed. What's the likelihood that once you get these laws passed, and it appears you probably will, that you will not use them, you won't have to, or are you committed to applying them?

CLARE: International education is incredibly important, mate. This is our fourth biggest export. It's the biggest export that we don't dig out of the ground. And this is an export that doesn't just make us money, it makes us friends. I often underline the point here that, yes, it makes our unis money, that helps to fund important research, but it makes money for the economy. People pay rent, but they also buy food, and it helps support our economy. And unlike any other export, this makes us friends around the world because when a student comes here and studies, they fall in love with the best country in the world and they take that love for Australia back home with them when they go home. And in the world we live in, the value of that is incalculable.

What we've seen over the last couple of years is that international education basically got kneecapped by COVID. Students were told to go home. Students have now come back at a greater rate than anyone expected. There's about 10 per cent more international students in our unis today than there were before the pandemic, but there's about 50 per cent more in our vocational education providers than there were pre-pandemic. That's often lost in the debate here. It's about half and half. About half students are at uni, half of them are in vocational education providers.

The intention here is to set caps, but the legislation that's in the Parliament is not just about that. It's about making sure we protect the integrity of the system. Because I've got to tell you, as students have come back, so have some of the crooks that feed off the system that are trying to make money off people. They might be agents who encourage people to switch from a uni degree to a VET course and they never turn up to the VET course. It's used as a backdoor just to work here. So, the legislation's about protecting the integrity of the system and also making sure that we protect the social licence of this system by making sure that growth is sustainable over the long term. And I'll announce what those levels are, provide details to universities about what those intended levels are under the legislation over the course of the next few weeks.

JENNETT: It does sound like you're committed to that. Just one quick response to the number put forward by Universities Australia. Their claim: up to 14,000 jobs could go in the sector. Does that sound realistic?

CLARE: We haven't announced yet what those levels will be. I've seen a bit of reporting suggesting that we're going to create some sort of artificial cap on universities of no more than 40 per cent of their students being international students. That's wrong. I've seen other stories that says that we're going to set caps for the next two years, not one year. That's wrong. I've seen other reports saying that we're setting it at 2019 levels. That's wrong as well. We'll provide all of that detail to unis over the course of the next few weeks.

JENNETT: All right, we'll add that to the list, Jason Clare, of the many topics in your portfolio that we'd love to stay in touch with you on. An open invitation to come back anytime. Thanks so much. 

CLARE: That's brilliant, mate. Looking forward to it.