3AW Neil Mitchell: Productivity Commission’s draft report into Child Care

  • Assistant Minister for Education

E&OE TRANSCRIPT 3AW Mornings with Neil Mitchell

SUBJECT: Productivity Commission’s draft report into Child Care

NEIL MITCHELL: This childcare issue. The Productivity Commission report draft out overnight recommends things like a single means tested payment for childcare instead of the current system, subsidies for grandparents and nannies if they’ve done a TAFE certificate. On the line, the Assistant Minister for Education Sussan Ley, good morning.

SUSSAN LEY: Good morning Neil and good morning to your listeners.

NEIL MITCHELL: Well, thanks for talking to us. One thing that jumped at me, you can be earning – a family can be earning $300,000, bringing in 300 grand, but they still get a 30 per cent subsidy for childcare. Why?

SUSSAN LEY: Well, under the current system, the rebate is available to those families up to $7500 a year per child and that’s on the table as is everything else.

NEIL MITCHELL: When you say it’s on the table, it’s on the table for re-assessment is it?

SUSSAN LEY: It’s on the table for the Productivity Commission. This is a draft report, the final one in October will give us some real pointers towards a better policy for the next generation, which is why this is so important Neil, because the system is at breaking point now.

NEIL MITCHELL: But what’s the Government philosophy on this? Is – do people bringing in 300 grand deserve this sort of welfare?

SUSSAN LEY: Look, everyone on every income is struggling with affordability. It may be that not everybody on $300,000 is and that’s why we will look at the system as a whole. But rather than get caught up with the class warfare, which we often see around this subject, I simply want to say to families, where I can, your childcare needs to be more affordable and available. It’s not just about cost; it’s actually about flexibility and working hours as well.

NEIL MITCHELL: Well, yeah, but sorry, before I leave that issue, it’s not just up to $300,000, it’s anything above that isn’t it? I mean Gina Rinehart, were she to have a baby, which is probably unlikely, would be entitled to get a 30 per cent rebate on her childcare.

SUSSAN LEY: Correct. At the moment it isn’t means tested, the rebate and it’s an indicator of where people are having submissions and having their say and there are various views coming forward across the board to the PC and to Government. So it is all in the mix Neil and I appreciate the point of view and, you know, in the next few months people can further submit and have their say and we will see what the draft – what, you know, the final report says in October.

NEIL MITCHELL: So will the Government at some stage be considering means testing for childcare?

SUSSAN LEY: Look, they may or they may not. I don’t want to pre-empt the findings, I really don’t, because this isn’t just about one aspect of the system for people on a certain income, it’s about the whole system for everybody, including might I say, shift workers, who are one of the groups to really step up during the consultations that I’ve been having as minister. I mean we’ve got the policeman, the truck driver, the nurse, all doing out of hours work all unable to find somebody to look after their children, pretty much outside a nine to five working week pattern. And we all live in a 24/7 economy now; times have changed and policies must change with them.

NEIL MITCHELL: Is it wrong to call this welfare?

SUSSAN LEY: Yes it is wrong.


SUSSAN LEY: It’s not welfare, it’s a support. And look, the reason federal government funds childcare, the principal reason is to enable participation in the workforce. That’s why we do it. We also recognise there are important aspects to early learning, to socialising for children, for respite for mothers and families that are time poor for a variety of reasons, but the actual fundamental reason why we fund childcare is to enable people in the workforce. And in April there were 165,000 people who weren’t participating because of childcare.

NEIL MITCHELL: And what does it cost?

SUSSAN LEY: We’re putting $28.5 billion into the system over the next four years. So that’s the funding envelope we’ve got.

NEIL MITCHELL: $7 billion a year.

SUSSAN LEY: Yes and it’s significant. You know, that – we inherited a system from Labor where costs went up 53 per cent, 53 per cent, but you know, workforce participation didn’t really go up very much and that’s one of the key problems we have to solve, which is why we’ve asked the PC, because if people participate, productivity improves and obviously economic output along with it. But not only that, families can cope with what is often is a stressful time, packing the kids in the car, finding a place in day care, rushing to finish work…


SUSSAN LEY: …hoping the boss doesn’t keep you late, you know, it’s – worrying about your mortgage payments and so on.

NEIL MITCHELL: I think, yeah I think everybody’s got sympathy for people in those situations. The argument is whether – we keep hearing about the age of entitlement, we keep hearing about the budget being stretched – whether this is a sensible spending of money. Can you explain to me the proposition on grandparents? I mean grandparents, yes, do a lot of work caring for grandchildren, for their children’s children and the propositions that they could be paid, but they would have to pass some sort of test.

SUSSAN LEY: Well, anyone can employ anyone in a formal or informal arrangement. So we know that this happens already and sometimes there’s, you know, various payment arrangements, even between grandparents and children, between Au Pairs and so on. What I’d say is that if we provide a taxpayer-funded subsidy it has to be within a formal, regulated system. So whether you’re a grandparent or a nanny you would have to meet certain qualifications and criteria. There’s about 10,000 Au Pairs in the country at the moment. They’re all working in, you know, making their own arrangements with families, but what that tells me is that the system is struggling and people are going outside it because they can’t afford what’s on the table now or they can’t find what they need for their family’s circumstances.

NEIL MITCHELL: So what would grandparents need to be tested in before they could do it?

SUSSAN LEY: Well, look, just remember Neil that this is a PC suggestion.

NEIL MITCHELL: Yes of course, yeah.

SUSSAN LEY: We haven’t gone there in policy. But I – well, I believe what they’re saying is that if they meet the qualification requirements, which are a certificate in early education and care, they would have a similar qualification as a person in a childcare centre or as a person operating in an in-home care or nanny setting.

NEIL MITCHELL: Okay. And how does all this affect the paid parental leave scheme? Is this either or, or is it both?

SUSSAN LEY: Two separate policies Neil, completely separate. One is about a workplace entitlement for women so that they don’t lose out over their working lives, and by the way, the country doesn’t lose out on those children that they otherwise might not have. And I also see paid parental leave as vital for the first six to 12 months of a baby’s life to have that nurturing and that bonding with a parent without the parent stressed about having to go back to work to pay the bills or, you know, unable to manage within their current system, so deciding not to have say the third or the second child.

NEIL MITCHELL: I know you need to get away. I really appreciate your time. Thank you very much.

SUSSAN LEY: Thank you.

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