SUBJECTS: Early childhood education funding; Higher education agenda; Industrial relations reforms.
GREG JENNETT: But $5 billion worth of extra childcare subsidies will start to flow from the middle of next year now that Parliament’s completed passage of the necessary legislation. This is but one plank of a sweeping set of changes being worked up that could one day cover everyone in formal learning from three years of age through to 30, 40 or beyond in their university years, depending how long they persist with that.
Education Minister Jason Clare will oversee all of it, and he joins us in the studio. Welcome, Minister. Why don’t we start with childcare, because you are the Minister for all ages, aren’t you? Now that this legislation has passed and the payments will increase from July next year, this was introduced as a cost-of-living measure, but inflation is a lot worse now than it was when Labor first devised this promise. It’s been eroded in the last six to eight months. Will it deliver the benefits originally envisaged?
JASON CLARE, MINISTER FOR EDUCATION: It does three things. This is a big deal. This is a really big deal. This is one of the biggest and most important commitments we made in the election. Australians voted for it and, you’re right, we delivered it today. It will cut the cost of childcare for more than a million Australian families. That’s the first thing that it does.
Secondly, it’s economic reform, because if you cut the cost of early education and care, then it makes it easier for parents to return to work, in particular mothers. We know in particular, for primary carers, the cost of childcare can mean it doesn’t make sense to work a fourth or a fifth day. And these are more often than not highly skilled workers, and the economy is screaming out for skilled workers, so this is important economic reform.
And the third thing, most importantly, it’s great for our children because the more time you’ve got in early education and care, in particular when you’re three or when you’re four, the better prepared you are for school. So, this is the trifecta – good for children, good for parents and good for the economy.
JENNETT: Well, we’ll talk about the education agenda in a moment, but just one more on childcare. If inflation has eroded some of the financial benefit that came with the original design of this, conversely, since you mention it, because families are hurting, could it be that the extra workers envisaged as joining the economy because of this actually goes up. I think the original estimate was 37,000 – is it possible that more people will take …
CLARE: We’ll have to wait and see. The Treasury modelling is up to the equivalent of 37,000 full‑time workers. That’s not 37,000 individuals; that’s the equivalent of 37,000 full-time workers and all the hours they work. What it will mean in practice is that you’ll have thousands and thousands of people, in particular mothers, working more hours and working more days. And that’s good for businesses who desperately need those workers back in the workforce.
JENNETT: All right. So this is step one on the agenda for child care. Then we’re going to get to schools and universities.
CLARE: I was just going to say, before we move off early education and care, there’s the ACCC inquiry that starts in January and will report to us in June before this legislation comes into effect. That’s important because it’s all about price. And then, secondly, there’s a Productivity Commission inquiry into the way the whole system works and how we make that better. And that will kick off next year.
JENNETT: And that’s your steppingstone towards this goal of universal child care. What does that mean exactly?
CLARE: We’re working on the terms of reference for that at the moment. The bottom line is, though, is that if you’re a child from a poor family, you’re less likely to go to preschool, you’re less likely to be in early education and care. And it’s true that in school as well, if you’re a child from a poor family, you’re less likely to finish high school than children from wealthier families. And when you stretch that right out to universities, what it means is that if you’re a child from a poor family, you’re less likely to have a university degree. I want to fix that.
I don’t want us to be a country, Greg, where your chances in life depend on who your parents are or where you live or the colour of your skin. But we are now. And so the work we do with that Productivity Commission inquiry, as well as a number of other pieces of work we’ll do next year, are designed to target that.
JENNETT: Okay. So in the schools sector, what does that mean? This reform agenda you’re talking about, does it mean revisiting what we used to call Gonski – now it’s called the SES funding model. Is that all up for grabs?
CLARE: We made a commitment in the election that we want all schools to get up to their 100 per cent full and fair funding. We want to work with the States and Territories on that. And as part of that, we’ve got to negotiate the next National School Reform Agreement. And I want to see how we tie funding to fix some of those problems I talked about. How do we make sure that whether you’re a child from a poor family or a wealthy family your chances of finishing school are the same. We had NAPLAN data out a couple of weeks ago, Greg. It shows us one thing which was fantastic, which is that children in primary school today are reading better than children were over 10 years ago. But the gap in reading skills between children from poor families and wealthy families is getting bigger.
JENNETT: But is funding the answer for that?
CLARE: It’s about what you spend it on. It’s about how do you tie that funding to the things that are going to make a difference. And that will be a big part of that piece of work next year.
JENNETT: And in universities? I mean, you’ll refer to a historical fact that poorer kids don’t complete or even enter at the same rate as those – what does that mean? More fee-free places?
CLARE: We’ve already invested in 20,000 extra places. We did that in the Budget, and we’ve directed that to courses where we’ve got skills shortages.
But also I’ve made it very clear to the universities that all of those places are to go to people from poor backgrounds, from the regions, people with a disability and Indigenous Australians because that’s how you change the dial here.
JENNETT: But you’ll drive that further beyond the 20,000?
CLARE: That is just the start. We got some information out two weeks ago that said that about 44 per cent of young Aussies have a uni degree. Only 20 per cent of young Australians from poor backgrounds have a university degree. Same in the bush. Only seven per cent of Indigenous Australians in their 20s and 30s have a university degree. And you rightly point out, part of the problem is not enough going in. The other problem is not enough completing. The completion rate at uni for people from poor backgrounds and bush and Indigenous Australians is lower than average.
So, the big review of higher education called the Universities Accord, that I kicked off last week, will look at that. It’s the first big review of our universities in 15 years, the first since the Bradley Review. Denise Bradley, who we lost two years ago, set us a target to say that, by 2020, 20 per cent of people at our universities should be people from poor backgrounds. We haven’t got there. We’ve failed. The dial’s barely moved. I want to move that dial, and a big part of their work is how do you fix that.
JENNETT: Well, that sounds like a big first-term agenda in education, about which we will speak further, I’m sure.
Can I take you to another news of the day item, which we did just play. It’s around the industrial relations agenda of your Government and Philip Lowe sort of saying, “Don’t go too far with all of this; it will only make my job of slaying inflation all the harder”. He’s got a reasonable point, doesn’t he? And are you both at odds here – Government and the Reserve Bank?
CLARE: I don’t think so. I just saw for the first time what Phil was saying, and he’s saying where wage growth is at the moment, plus a bit more. The fact is, over the last couple of years we’ve seen real wages go backwards. That’s going in the opposite direction. That means that people are hurting. As bills go up and the power of your spending gets less and less, it hurts. And what’s driving inflation at the moment I guess are two things. One, the war in Europe. That’s pushing up energy prices, the price of coal, the price of gas. And you see that through the fact that it’s not just Australia that’s feeling this; it’s the US, it’s Europe and it’s the Poms as well. But it’s also natural disasters driving up the price of food.
We’ve been told over the course of the last few years if you get unemployment as low as possible, wages will go up. Unemployment is now at the point where you think it can’t get any lower but still, you’re not seeing much in the way of wage growth. You’d think it would be roaring now. The industrial relations changes that are in the Parliament now are about how do you get that moving a bit, particularly for Australians on low incomes – lower than you and me.
And I’m thinking about early educators, the sort of people that we were talking about a moment ago, who many of them are not earning much more than the minimum wage.
JENNETT: Yeah, but that’s a deliberate action. But could you in the process be inadvertently conditioning people to what Philip Lowe and others might regard as excessive wage demands? No, we’re not there yet, but could they be excessive if people’s expectations begin to push through 5, 6, 7 per cent?
CLARE: We’ve got to take a responsible approach to this. I think it’s responsible to have argued that people on the minimum wage should get a dollar extra an hour.
I know people lost their mind in the Liberal Party at that idea during the election campaign. I’ve been around long enough; I’ve seen a former Liberal Prime Minister say that wages are like bread – they should both be as cheap as possible. We take a different view. It’s not even worth really having an argument with the Libs here. They want wages to be low. We want people to get a pay rise. You can do it in a responsible way. That’s what this legislation is about.
Let me just give you one example. This multi-employer bargaining debate that we’re having at the moment, we already have it. It’s operating at the moment. Last year we had a multi-employer bargaining negotiation in Victoria. 70 early education or child care centres. The problem with it was once the deal was struck, every centre had to go off and get it signed off by the Commission individually. It’s clunky, you can fix it, make it simpler. But guess what? The people who work in that centre are now the best paid early educators in Victoria. They got a 16 per cent pay rise.
JENNETT: All right, well, let’s see where it goes. There’s a bit more negotiation still to happen in the Senate on all of that. Jason Clare, thanks again for joining us on Afternoon Briefing.
CLARE: Thanks, mate.