Interview - Radio National Drive with Andy Park

ANDY PARK: If you have young kids, you'll know that finding childcare at the moment can be a serious challenge and it really affects all part of your family's life, certainly your ability to participate in the workforce for one. About 9 million Australians live in neighbourhoods where there are more than three children per available childcare place. The Federal Government is looking to reform the sector and today it announced it'll fund a 15 per cent pay rise for early childhood educators over two years, the proviso being that childcare centres limit increases to the fees they charge over the next year. Joining me now on Drive is the Education Minister, Jason Clare. Welcome back to Drive, Minister.

JASON CLARE, MINISTER FOR EDUCATION: G'day, Andy. Great to be here.

PARK: I'm not sure if you still have kids in the early childhood age. I think Jack?

CLARE: I do. Jack's out, but Atticus is in.

PARK: Well, you know, it's a real juggle for a lot of families and I think - I mean, I have children in that age group too. No doubt that early childcare, health care educators deserve the work they do. They help us to go to work. But given a key issue here is the shortage of staff, can you guarantee it will actually increase the number of workers in the sector that you and I rely on?

CLARE: It's about two things. First, it's about a bit of wage justice. The people that do this work, our early educators, do some of the most important work in this country, but you wouldn't know it from what they're paid. They deserve a gold medal, but they also deserve to be paid better. And that's what this is about. It means about an extra hundred dollars a week from December this year for an early educator and about $155 a week when it's fully implemented from December of next year.

But it's about two things - retaining the great early educators we've got. And I've got to tell you, some of them are thinking about quitting the job they love because they can't afford to keep doing it. But also, hopefully, encouraging more people to want to work in this crucially important industry. We've got about 30,000 more early educators today than we did two years ago when we won the last election. The truth is we need more. We need tens of thousands of more people to work in this important part of the economy.

PARK: I realise that answer has two parts, but with the 3.6 billion your government's assigned to this, do you have modelling to suggest how many more childcare workers we might get for that?

CLARE: No, there's no particular number on it, but you asked about my little fellow. I dropped him off at his childcare centre this morning and I asked the team there if they'd heard the news. They hadn't, so, I told them what we were announcing today and Kerrie, who is one of the educators that looks after Atticus, her eyes popped, and she said, “well, maybe I won't quit.” And there are a lot of Kerries out there. There are a lot of people who know that they can earn more money at the supermarket than they can in the work that they're doing, even though they love this work.

This is not babysitting; this is early education. The work they do is not about changing nappies or wiping bums, it's about changing lives. Some people, they can't afford to keep doing, and that's what this, at its core, is all about. We think that it will help to keep more people in this part of the economy, but also encourage more people to want to do it. There's about 100,000 or more people studying early education at the moment, either with one of those fee-free courses at TAFE or at university. But we need more. There's more kids going into care at the moment. There's more centres opening, but we need more early educators.

PARK: Independent MP Dai Le says this pay rise will add to inflation. Can you guarantee that it won't?

CLARE: No. I've got a lot of respect for Dai, but she's wrong about this. It's about two things. One, it boosts productivity, because if we've got more workers, if we've got more early educators, then more people can work, more mums and dads can go to work, so it boosts productivity in the economy. But the second part of this is about putting a cap on prices, in other words, putting a lid on inflation. What we're saying here is that we want to give a pay rise to early educators of 15 per cent. But for centres to get the money to pass on to their workers, they have to sign a legally enforceable agreement that they won't increase fees over the next twelve months by more than 4.4 per cent. So, it's good for workers, but it's also good for parents, ultimately good for the economy because it helps to put a lid on inflation.

PARK: Doesn't that mean that we'll have a rash of fee rises in twelve months’ time after this is implemented?

CLARE: No, because it doesn't end in twelve months’ time. We will set a new number based on work that we do with the ABS. The problem over the last decade or so, and the former Liberal government oversaw all of this, is that we saw fees go up by about 49 per cent in the last eight or nine years with the last government, which was double the OECD average. We want to make sure that we pay early educators more and better, but we also want to make sure that we're doing something for parents to control prices of early education. The Cheaper Child Care laws that we promised at the last election that we've implemented have had a massive impact. It means that, for example, a family on a combined income of $120,000 are now paying $2,000 less in childcare fees than they otherwise would have. But there's always more to do here, and that's why we're saying, if we're going to provide the funding to boost the pay of workers, we also want to make sure that the centre can't charge whatever they want. We're going to cap that at 4.4 per cent.

PARK: And you said this is legally enforceable. What does that mean? Will there be penalties for centres that breach it?

CLARE: What it means is it's an agreement between the Department of Education and the centre. And if the centre breaches it, then yes, there will be impacts for the centre. It means that the money no longer goes to the centre. It means that potentially they have trouble keeping their staff because the staff will move to another centre that's desperately looking for workers where they can pay them 15 per cent more.

PARK: If you've just joined me, it's 13 minutes past five. The Education Minister, Jason Clare, is with me on RN drive. I want to give you a question from a listener, Tam in Canberra. She says, "Hi, Andy. I'm praying that you'll ask Jason Clare this question." So, okay, firstly, she says, I don't know if you know, Tam, but here we go. Firstly, she says, "I really believe that early childhood educators deserve much better pay, so I think that's definitely a win". She says, "I can't understand why taxpayers have to foot the pay rise bills for private operators. Most of them are for profit organisations. Why don't we sort of - why don't we hear about the deals curbing those companies’ profits? Why don't we nationalise childcare?" Says Tam. What are your thoughts there, Minister?

CLARE: Good question, Tam. The key point here, which is often missed, is we do that already. Now, that's what the Child Care Subsidy is. It subsidises for most parents, 70, 80, 90 per cent of the childcare costs, most of the cost of running a centre, whether it's a for-profit centre or a not-for-profit centre is rent and wages, and most of the income that comes to those centres, to run the centres, comes in the form of a subsidy that the Commonwealth Government provides. So, the fact is taxpayers, through the Commonwealth Government, are subsidising the cost, paying the wages of early educators right now. And what this is about is topping that up a bit more wage justice, paying them the sort of income that they deserve and that they've missed out on for a long, long time. So, that's just the way the system works at the moment.

Over the course of not too far away, I'll release a Productivity Commission report into how we set up the system for the next ten years, how we reform early education to create what the Prime Minister calls a "universal early education system". We've got a universal health system that we're very proud of called Medicare. We've got a universal retirement system that comes in the form of universal super. But Anthony's made the point. He wants to create a "universal early education system" where all kids and all families can get access to an affordable system. The PC report that I'll release shortly will set out some of the things that we need to do sector wide to make sure that that's possible.

PARK: On another matter, Minister, there's widespread concern in the tertiary education sector about the Government's efforts to reduce international students. Department of Home Affairs data shows the number of higher education visas granted is already down 23 per cent in the past year. Universities Australia told me this week that it's equivalent to about 60,000 students, or about $4.3 billion in a hit to the economy. Do you accept that the economic impact this is already having on the tertiary sector?

CLARE: It's important to make the point, there are more international students here today than there were last year and certainly more than there were before the pandemic. The pandemic basically kneecapped international education. Most students were told to go home, and they did. But it's come back strongly in the last couple of years, stronger than people expected. And there are more students here today than there were last year.

The point I want to make is I understand how important this sector is, not just to universities, not just to our economy, but to us as a country, because apart from it being our fourth biggest export, the biggest export, we don't dig out of the ground. When someone comes to Australia and studies, they fall in love with us, our country. When they go home, they take that love and affection for us back home with them. And the value of that is incalculable.

What's happening at the moment are a couple of things. The number of students in our universities from overseas has jumped by about 10 per cent. It's about 10 per cent higher today than it was before the pandemic. The growth in the number of international students in our vocational education providers is much, much bigger. It's about 50 per cent more today than it was before the pandemic. And as students have come back, so have the crooks, the shonks and the criminals that feed off this system. So, the legislation that's in the Parliament is about protecting the integrity of the system, making sure that people can't rort it, make a buck off it, to entice people to come here to work, not to study. But it's also about setting caps, all levels for not just universities, but these vocational education providers, to make sure that this is a sector that maintains its social licence to operate.

PARK: Those caps, it's been reported that the Government's looking at 40 per cent caps on international students based off 2019 levels. Is that correct?

CLARE: No, that's wrong. And I got asked this question in an interview with Greg Jennett, ABC earlier today. The suggestion that we're setting a limit, that the number of students at a university, for example, should be no more than 40 per cent of the student cohort's wrong. It was also suggested recently that we're going to set it back at pre-pandemic 2019 levels. That's wrong, too. There was also the suggestion we're going to set numbers for two years. That's wrong. None of that -

PARK: So where has this been coming from then Minister? Clearly you've got a pretty active higher education lobby with multiple, I suppose, mouthpieces are making these cases. Does the higher education system need to stick to the facts? Do you feel like there's a bit of conflating here?

CLARE: No. To be fair to the sector, we've got legislation in the Parliament at the moment creating the powers to do this. That legislation will be debated and finalised in the House of Reps next week and then it goes off to the Senate. And in the next couple of weeks, I'll provide universities with an indicative cap or level for the next twelve months, for next year. So, they'll get that information then. But it's not just universities. In this debate, we often think that it's about 40 odd universities and the number of students they can educate from overseas. It's about 1,400 different providers, most of whom are in the vocational sector, and the caps will be provided for them as well.

PARK: How far off is that? 40 per cent?

CLARE: Well, it won't be 40 per cent. Just to take you back to that question you asked, we won't be setting that. We won't be setting a limit for universities of 40 per cent. What I will be doing is providing unis over the next couple of weeks with the indicative cap or level for next year in terms of the number of students that they can enrol and educate next year.

PARK: Because universities say they need lead time for advertising and enrolling people in courses? This is the sort of thing that we're told from the sector.

CLARE: That's a good point. And to be, again, fair to universities, they're out at the moment advertising, encouraging people to enrol. They want to know that number as soon as possible. I've been at pains to make sure that I hear from them over the last few months so that we get the settings right. But they've said, “look, don't give us that number in September, give it to us in August.” And that's my intention.

PARK: Analysis by respected economist Peter - sorry, Richard Holden shows that even a return to 2019 international student numbers without a 40 per cent cap, let's say, would cause an $11.6 billion hit to Australia's economy in 2025 alone, which he says could tip Australia into recession. When you have respected economists saying this, are you not worried about the economic impact it could have?

CLARE: Richard's a very respected economist. I value his contribution, but as I said a moment ago, we're not setting it at 2019 levels.

PARK: Jason Clare is the Education Minister. Nice to talk to you this afternoon.