Unidentified Speaker: Welcome to a special episode of Work it Out, brought to you by Women’s agenda. Our contributing editor, Georgie Dent, speaks to the Federal Minister for Education Simon Birmingham on the serious issue of child care, the significant reforms and shake ups in the system, increasing costs, lessening supply and what is the Government’s position on universal access for preschool children earlier?
Here’s your host, Georgie Dent.
Georgina Dent: Good afternoon, and thank you for joining us. My name is Georgina Dent, I’m the contributing editor of Women’s Agenda. And I’m joined here today by the Federal Education Minister, Simon Birmingham.
Simon, thank you for being here.
Simon Birmingham: An absolute pleasure, it’s great to be with you.
Georgina Dent: So we have got you in today to talk about the significant child care reforms that have just been passed. Child care is a pretty hot button issue for our readers who are mostly comprised of working women, and obviously access child care and it’s an important part of their lives, but it’s also important beyond working women as I’m sure you’re aware. I wanted to [audio skip] again by asking you how significant do you think these reforms are for Australia?
Simon Birmingham: Well these changes are the biggest shake up to child care subsidies and support assistance that we’ve seen in decades, really. Since sort of the old model was built on top of one another, a whole lot of different pieces that created a child care benefit, a child care rebate, a lot of confusing different arrangements which we’re now going to put to one side in favour of one single new child care subsidy. A child care subsidy that ensures the more hours you work or study or volunteer, the more hours of support you receive for access to child care, and the less a family earns the greater the level of subsidy that people will receive or the greater support they’ll face to pay their child care bills.
Georgina Dent: And I’m interested to know- one of the critical issues with child care as you know is the cost, because the cost has grown exponentially to individual families but also to the Government. The subsidies that it has paid towards child care have increased significantly, and I think for the 2016 and 17 year it’s expected to be in excess of $8 billion so it is a significant expense. And I recognise that it’s incredibly complicated. What would you say about the fact that these reforms don’t address supply of positions, which is one of the factors that goes to the increase in cost?
Simon Birmingham: I think they will help with supply because they’re going to provide a much more certain environment for people to invest to create new child care places, to understand that families aren’t going to face in many instances the same type of cost pressures they have in the past that makes the child care system so hard for them. Some of the changes we’re making will see low income families and medium sized income families receive real increases in their child care benefits that will make a big difference.
Take a family earning just $80,000 per annum with one child in child care for three days a week. Now that family is going to be around $2000 a year better off under the type of reforms we’re now put through to Parliament. Equally the families who might be earning some more but find they hit that $7500 child care rebate cap. It’s at particularly this time of the financial year many families are running up against, and that means you run out of support, fall off a cliff in terms of financial assistance, and it can really impede choices and decisions about the number of hours people work.
Well under the new model for every family earning less than $185,000, that $7500 cap is abolished, gone, no more cap or ceiling whatsoever. And for families earning more than that it’s raised to some $10,000. So giving families greater power to say well I know the number of hours I want to work, the days I want to work, and they can choose to make those decisions in the future without child care costs being the barrier or impediment they sometimes can be now.
Georgina Dent: You would obviously be familiar with one of the criticisms that this reform has faced is around the fact that the access for the children of disadvantaged families, those in the industry have said this bill doesn’t go far enough, this law, because there is effectively a decrease in the hours that those children can access. What is your response to that?
Simon Birmingham: I guess we’re trying to tackle many things in the way child care is structured. We are trying to support, of course, families to participate in the work force, and in that space to make sure that support is targeted and to give the greatest amount of support to people working or studying or volunteering the most and the greatest rate of subsidy, as I said, to families earning the least. But we also of course view the early education benefits of child care as being very important in those early years is critical. My own kids, my own girls are 4 and 6, and so I’ve lived this kind of growing up and those early developmental issues and the opportunities and benefits that high quality child care and early educators provide. Now what we have is a model where every child in Australia is guaranteed preschool access, so that provides a universality of access regardless of whether people are working or not working or the like.
The new child care reforms also provide a lot of safety net elements. Children who are at risk are guaranteed a place in the child care system. Low income families earning less than $65,000 are automatically entitled to ensure 12 hours per week of subsidized care of early high quality education, which equates to two six hour sessions. So there’s two sessions of care that educators and researchers say is essential, will be available to all families who might be on welfare and need that type of assistance. But the activity test we have in place is also incredibly light touch, and you only need to work or study or volunteer for four hours a week to meet the activity test to access the child care subsidy, and that volunteering can be as simple as going along to the child care centre or a preschool or a school and reading with kids, or volunteering in the centre other ways. So we really are trying to make it as easy as possible while still making it really fair to make sure that the child care system targets support to families who really rely on it to make ends meet.
Georgina Dent: In terms of the preschool subject, I know you have spoken before about having sort of broad ambitions to be able to extend universal access to preschool from an earlier age, say three or four. And we’ve seen Ireland and Israel are the two that have made those reforms most recently, but we are seeing in the developed countries that’s the direction we’re heading in because the benefits of that providing quality education at that age, it's incontrovertible. So where are you at in terms of where do you think- when do you think Australian children might have universal access to preschool from the age of three?
Simon Birmingham: We’ll have to really work out firstly how we bed down for the long term, arrangements around four year old preschool access, but I do hope that especially for children in areas of disadvantage that we can have a look at how we can really target increased participation. And we do through the child care model through long day care settings and so on, already see quite significant participation by a lot of three year olds and two year olds in child care and early education opportunities, of course they are largely in families that are working and engaged in different ways. There’s lower rates of participation in some of those families not engaged in the workforce. And the child care model itself doesn’t necessarily encourage them into that, so we need to have a look at other ways to really try to drive that. Preschool models we’ve had to date have helped at least with enrolments, and we need to lift attendance of four year olds and then hopefully see how we can target any extension of that in the future.
Georgina Dent: Which would you describe as the overarching priority when it comes to child care reform, do you think it is in the economic benefits to Australia or is it to the education?
Simon Birmingham: [Laughs] That’s like having to choose between one of your children in a sense. I don’t think you can say either/or because it does play, obviously, a critical role in educational development. Although from an education perspective, we start with that premise of universality of access for four year olds through the preschool system and then of course into schooling. And in child care we’re looking to make sure that where children are in child care that they are receiving high quality educational experiences. But many families choose not to go down that path and there we’re looking at parents, or carers in other circumstances, providing high quality education in the home environment in helping to prepare children for school.
And that’s a choice that families ought to be able to make and that we empower people to make, through the way that we give support through family tax benefit arrangements to stay at home families, support through child care arrangements for people to choose in the workforce. Now as Education Minister, I want to see all children receive the best possible start at school, and I recognise that can come in different ways, although I think at least that minimum level of preschool is essential because it’s not just about the skills that parents can help provide as much as early educators in learning to read and getting accustomed to those factors. There are also behaviour and socialisation elements that preschool provides that really does help set a child up well for starting school. But it’s both, it’s both education and economic participation.
Georgina Dent: So Simon, it would be wholesale change and perhaps its not likely to ever happen, but can you see that we would ever extend our schooling system to those earlier years so that we could effectively treat child care and preschool as an extension of the public education system?
Simon Birmingham: I think there will always at least be a point of difference, now it’s not to say there may not be slightly greater levels of integration – and you already, if you look state by state around Australia you can see significant points of difference that preschool education in states like my home state of South Australia is largely done through Government or community-run preschools with a small share occurring in long day care or child care centres. In WA, it’s almost entirely actually associated with school sites where preschool services are delivered. But in New South Wales and Queensland, it’s delivered more through the child care, long day care models. So different states have developed in different ways, some a lot closer to the school system, but still with points of difference because you are dealing with younger children with more particular additional needs of care that aren’t just centred around their educational and skills development.
Georgina Dent: It’s approximately two-thirds of long day care centres that I understand are run by for-profit operators. What are your views on child care as a for-profit business?
Simon Birmingham: So it has developed, of course, in a very different way to schools or the rest of our education system where in the school space we don’t have for-profit schools. We have lots of non-Government schools in Australia, but they are all not-for-profit entities. In the child care space, it’s a quirk of history I guess, the model has developed this way.
Our reforms don’t just increase payments and support to lower and middle income parents, they’re also trying to take some of the bureaucracy that creates inefficiencies in the child care market out of the system. So currently the laws require centres to open certain hours per day, certain days per week. We’re getting rid of that to create more flexibility which we hope will mean we see more targeted and tailored services, particularly for early education opportunities for parents who don’t need long day care for working days, but are wanting to access early education specifically in those circumstances, or in regional parts of Australia where centres just aren’t viable to have to operate five days a week, but might be viable for two or three days a week.
Georgina Dent: Do you think that there is a conflict of interest in the provision of education to small children being in that business model?
Simon Birmingham: There need not be a conflict of interest as long as they’re well regulated, as long as they’re meeting high quality standards, and as long as there’s real transparency around pricing and so on. Another part of our reforms is to put in place a rate count mechanism that will ensure that subsidies in future are paid against an efficient price, an efficient rate, which we hope will change some of the behaviour around pricing in the sector too.
Georgina Dent: One of the issues that comes up a lot for parents, and indeed anyone who’s got invested interests in this sector, is that despite that fact that cost of care has increased significantly over the past couple of years – I think it’s increased 48 per cent since 2007, so that’s almost 50 per cent over just under a decade – and yet we’re seeing that the educators themselves are struggling with their wages. They’re among the lowest paid workers in Australia. What are your views on how we can address that?
Simon Birmingham: Some of the cost of care growth over recent years have been because of the National Quality Framework reforms where we’ve put in place mandated staff to child ratios to ensure a high quality of care, a high quality of educational experience, but do come at a cost of having higher levels of staff. So it’s not all just down to profit factors, I mean the largest child care operator in the country is Goodstart who are a not-for-profit provider. So we need to be conscious of that. Look I’m very much aware that early educators in our child care sector are hard working and doing a job that kind of boggles the minds for many of us when you walk in and see …
Georgina Dent: I know. As a parent who drops her child off, it’s a miracle that they turn up to work every day.
Simon Birmingham: Rooms full of two and three and four year olds, and the hustle and bustle that goes with it is incredible. I am in awe of what they achieve and what they do.
Now there’s been a long running matter before the Fair Work Commission having a look at effective wage rates and hopefully that will come to a conclusion soon, and hopefully that will give a fair outcome.
Georgina Dent: Simon, I’m interested to ask your views, we’ve recently seen that Kate Ellis, another Federal politician from South Australia although on the other side, has recently announced that she will be retiring from politics. I’m interested to know as a parent of small children, how do you find combining a career in politics with your family?
Simon Birmingham: It’s tough, you know, last sitting week I sat next to Kate on the plane to Canberra, and I had the fun of sitting next to little Sam on the plane to Canberra as well. So whilst that was fun for me, getting to distract myself and play with him for part of the flight, it’s hard work for Kate. And I for six years now have packed up and left home and kissed the kids goodbye, and you know that’s a challenge. And you got to be very disciplined to do it, but politicians aren’t the only people in the country- during the mining boom we learnt about the notion of FIFO workers, fly in fly out. There are many people travelling, working long hours, doing those things that have to juggle work and family. It’s tough, and it is particularly tough I guess on mums in the very early years especially, but also then as you transition, as Kate said, into the school years and how you juggle whether or not your going to be there for the concerts, for the performances, for the pick-up, for the drop-off, for the day to day, but also for the special occasions. You know I will have missed both my kids birthdays this year by being away, and you just have to work really hard to try to create enough quantity of time in the rest of the year, and quality of time when you’re there to try to make up for it.
Georgina Dent: Do you think- are there changes that are feasible remotely to make that juggle a little bit easier, because I think it’s clear we have got limited representation of women in politics. I mean it has improved, but it’s nowhere near the population yet. Are there ways that you think we could make changes to ensure the combination of work and family is more feasible?
Simon Birmingham: We’ve come some way. Sitting hours, particularly in the House of Reps, are a lot friendlier nowadays that does make it more manageable where people are able to bring young children to Canberra, but that’s only feasible in the very early years and then school gets in the way of that type of transit for young kids. And then I think it does become quite challenging. You might be able to cut back a bit on elements of politicians all having to go to Canberra, but you’re not going to be able to cut it out altogether without fundamentally changing the way in which democracy works and the type of debates that we expect people to have, and the type of collective decision making that we hope, despite all the ugliness and battles of politics that happens, you actually hope that when we’re there together making collective decisions you make wiser decisions that doing remotely is probably a bit trickier.
Georgina Dent: Do you see, as a member of Cabinet, that the current composition is significantly better than it has been in recent years? A couple of years ago we only had one woman at the Cabinet table, and now we have got more. Is it something that you ever think about in terms of diversity around that table?
Simon Birmingham: It is, and I’d love to see greater diversity and I hope that we continue to see it over time. I was delighted to be sworn in with so many new incredible women who have come to the Cabinet table, to sit at the Cabinet table next to Kelly O’Dwyer, who in terms of doing the job remotely for the last month or so now has been past the point of pregnancy in which Kelly can travel. But every Cabinet meeting, every expenditure review committee meeting, Kelly’s there on the video screen participating and it’s not long now till baby is due but I know she’ll be back at it soon after. But Kelly is, I’m sure she would say and wouldn’t mind me saying, she’s very fortunate; her husband’s incredibly supportive, he took significant time off after the birth of their first child, and they’ve managed to make it work with lots of help which not every person is unfortunately able to rely upon.
Georgina Dent: Simon, thank you so much for your time, I really appreciate it. And I’m sure that our listeners will have enjoyed the opportunity to hear your insights on this reform.
Simon Birmingham: Thank you, that’s my pleasure. Absolutely.