Interview with Rafael Epstein, 774 ABC, Productivity Commission’s draft report on childcare

  • Assistant Minister for Education

E&OE TRANSCRIPT 774 ABC Melbourne Drive – Rafael Epstein

SUBJECT/S: Productivity Commission draft report into childcare

RAFAEL EPSTEIN: One of the significant pieces of advice to Tony Abbot's Government came out today; it's the Productivity Commission’s draft report on childcare. It is the bugbear issue, the issue described first I think by the former Prime Minister, John Howard, as a barbeque-stopper. The Productivity Commission has had a lot to say, they want us to talk about their proposals. The most significant proposals from – what would you call them, you’d call them the hard-headed economic viewpoint. They’re independent, the Productivity Commission, but they look at things from a very hard-headed point of view. They want a one, single childcare payment; significantly they want it means-tested.

At the moment, the childcare payment is means-tested, but the rebate you get when you send you child along to a centre is not. The Productivity Commission wants all of those payments consolidated into one, they want it means-tested and they want to propose some other significant changes as well. Someone who’s come down as the booming celebrations from the World AIDS Conference threaten to overwhelm us, is the Assistant Minister for Education in Tony Abbott’s Government, Sussan Ley joins us.

Thank you for coming along to the broadcast.

SUSSAN LEY: Hello Raf and could I also join you in expressing my support for those that have gathered in this very important cause and my sorrow for the loss of people to the scourge of AIDS and also on MH17, and thank you for having me here in Federation Square.

RAFAEL EPSTEIN: Look, it’s a pleasure. I hope everyone can hear us over the – they’ve kicked off their celebrations…

SUSSAN LEY: Well the music’s good.

RAFAEL EPSTEIN: Yeah look, the music is good. I do want to ask you briefly: has the nature of government in your mind changed at all with the disaster of the plane

shooting down… coming down, I know the Budget goes on, things like childcare that I’ll ask you about goes on; does it change your view of what it’s like to be in government though, when you deal with a disaster like that?

SUSSAN LEY: Look I think it does and my colleague, Julie Bishop, has done a fantastic job today in expressing the thoughts of all Australians for the tragedy. It makes us all think about our own humanity and the nature of life itself and the fact that something so unexpected and random can strike in such a meaningless way. So, I think it’s a cause for deep reflection and indeed deep sorrow. And as governments we do bear the responsibility of, look, we’ve got to bring these bodies home. And I know that my colleagues in cabinet and the National Security Council have met continuously during this week, indeed since the incident, to make sure that happens.

RAFAEL EPSTEIN: Let me ask you about childcare and I’d be interested – we can still take your calls here, 1300-222-774 is the phone number – I know childcare affects a lot of people, whether or not it would make a big difference to the economy is a different question, one that was addressed by the Productivity Commission. You can text us as well, 0437-774-774 is the phone number.

I know its – the government’s not going to come up with a policy tomorrow, but the principal of a single payment and means-testing, all of the support that comes form the taxpayer for childcare; that seems very much like a Coalition policy?

SUSSAN LEY: Look, the principal of a single payment is good because it’s incredibly complex; complex to administer and complex for parents. How we structure it is something we’ll wait until the PC reports finally and – you know, I don’t want to talk about who gets what within the system, and actually it’s interesting, because the PC has said: here’s what we think the cost model should look like, now can you out there, stake-holders, can you come back and tell us what you think? So they’ve actually asked for a lot of information and feedback, which I think is good because we are only at the draft stage.

RAFAEL EPSTEIN: Sure, but the principal of a means-test; I mean we could have argy-bargy around the Coalition describing means-testing as middle-class welfare in Opposition, but it’s something clearly that in Government, the Coalition’s interested in embracing. Can you envisage the means-testing, especially of that payment that goes – I think it goes at the moment to the operator and based on their cost, rather than going to the individual and based on their income?

SUSSAN LEY: Well at the moment, some goes to the parents and some goes to the operator and it’s a combination. Look Raf, I don’t want to rule in or out whether we will or won’t means-test and I know a lot of questions today are focusing on that, but say that: across the spectrum, no matter what your income, childcare at the moment is getting pretty unaffordable and what we want to see is workforce participation; we also want to see early education and care and we recognise the value of what happens in childcare settings for that early education and care.

But the fact is that in April, 165,000 people weren’t in work and wanted to be in work; because of childcare they couldn’t work the hours, or even at all.


SUSSAN LEY: And that tells us that the system that we inherited from Labor is pretty much straining at the edges and pretty nearly broken in parts. This is a once-in-a-generation chance to fix the system for a 24/7 economy, not really the nine to five economy where the policy settings for this originated.

RAFAEL EPSTEIN: The way you’re talking about that actually, it makes it sound as though there would be a huge economic uplift if only we got this right. And the Productivity Commission, putting aside whether or not you’d like to adopt their proposal, my reading of that report: they don’t actually see a huge economic benefit. I know there are other issues that are important to address; do you agree or disagree with the Productivity Commission? They don’t see a big economic uplift from an increase in participation from women.

SUSSAN LEY: Look Raf, those of us skilled in economics know that we operate at the margins. You’re never going to see a big bounce. But I did actually question Commissioner Wendy Craik about that increased participation and she and the commission said: look this is a first step, so the first round, if you like, will see this much of an increase, but further on down the track it would be expected to grow. And let’s not forget there’s what I call a pent-up demand within the system, and that is parents working in jobs that they’re not actually trained – well, if you like, lesser trained jobs than they’re qualified to do because they know they can do those inside nine to five. Not shift work, not frontline services and perhaps not as – not the job they’d left to have children, a different job that’s adding less to economic productivity as a whole. And they’re not happy with that and we as an economy, we shouldn’t be happy with that either.

RAFAEL EPSTEIN: Sussan Ley’s with me, she’s the Assistant Minister for Education in Tony Abbott’s Government. Just some of your texts: Wasn’t the Productivity mob asked to check the system against certain criteria? Yes they were, I think we’ve been going through some of those criteria. John simply saying: means-testing has to happen. You can continue sending in your texts, 0437-774-774.

The headline grabber of course, expanding who that money goes to, a nanny, a grandparent who has the right qualifications; certainly looks like the Coalition’s going that way?

SUSSAN LEY: Well we had nannies or in-home care as a term of reference. So we actually asked the PC to look at this. But what I will say is that there will be no taxpayer-funded subsidy for any type of childcare that’s not within a formal, regulated system. And actually the Nannies Association came out today and said: we want to be regulated, we want to come under the existing National Quality Framework, we want to professionalise what we do. And look, that makes sense, because I talked about the shift worker before who doesn’t know what their working hours are week to week, who actually can’t take a job in an area that they want to or that they are trained to do, because they cannot get round-the-clock or on-demand childcare. The system is incredibly inflexible and the PC’s absolutely recognised that and said we need to free it up.

RAFAEL EPSTEIN: Long answer short, that sounds like a yes to me, that we’ll get some sort of subsidy for in-home care that now is only going to childcare centres.

SUSSAN LEY: Well we might, because we must free up the system. Let’s wait and see what happens but we asked the PC to look at forms of in-home childcare and I believe that there’s a strong demand for that and I believe that it’s something that can

suit families in a range of different circumstances. If you’ve got three small children, does it really make sense to pile them all into the car, travel to the centre, do the long commute home at the end of the day then get everyone fed and put to bed and get up and do it all in the morning? No wonder families are tearing their hair out and saying, please give us a better system. It’s about parental choice.

RAFAEL EPSTEIN: The other, I guess – within an accredited system question. There’s some recommendations there from the Productivity Commission, there are childcare centres that aren’t open long enough, don’t quite qualify, it’s the occasional care, it’s the after-hours care. That also looks like a direction the Government’s going in, so spreading some of the taxpayer subsidy to the centres that don’t currently qualify.

SUSSAN LEY: Well certainly occasional care and rural and regional models of care are vital; because they just don’t match one size fits all. So, I represent a third of Western New South Wales and a lot of the communities you can only get to after two and a half jarring hours on a dirt road. It’s not the same there as it is in a metropolitan city. We will always have a system that looks after [audio skip] to parental choice. And yes, allows centres the freedom, for example childcare centres can’t offer places that aren’t occupied if they’re booked, but why not free them up to offer occasional care or respite care to a child on an ad-hoc basis. I mean, that’s a simple idea that to me makes perfect sense.

RAFAEL EPSTEIN: Okay. Look, thank you very much for coming along to Fed Square, I appreciate that.

SUSSAN LEY: Thank you for having me.

RAFAEL EPSTEIN: Sussan Ley is the Assistant Minister for Education, I think you get some indication there perhaps of which way the Coalition Government is going. We were talking there about the Productivity Commission’s draft report into childcare assistance. As I mentioned it’s a draft, they do want some feedback, I wouldn’t expect to see some firm answers from the Coalition probably until next year, but still at this stage you’re getting a pretty clear indication of where they are going.


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