Subject: Child care access and affordability 


Rafael Epstein: So if they moved child care charges to something based on an hourly rate, instead of a daily rate, what would it mean for you? It’d make it cheaper for the Government. They’re moving resources – the Federal Government, under Malcolm Turnbull – trying to shift them towards working parents. So the Education Minister, Simon Birmingham, wants to give parents flexibility. If you have maybe less than six hours a day you’re likely to do well out of a change like this. If you’ve got more than six hours a day, of child care, the sector says it’s likely to cost you more. There’s no legislation yet – it’s a proposal being floated by the Education Minister for an hourly rate instead of a daily rate. I asked him precisely what the Government is proposing.

Simon Birmingham: Well, all we are seeking to do is make sure that the child care system is both more affordable and more flexible for parents and children and child care providers. And so the affordability is being addressed by providing more than $3 billion in additional funding over the next four years, and increased rates of support for most ordinary working families to be able to access and afford their child care services. 

The flexibility is that we are lifting some of the requirements for child care providers in terms of the days of the week and the hours of the day that they must be open. So those who might want to specialise in providing certain services to young children who may not have parents in the workforce – where it is about providing early learning outcomes for those children – can structure to provide separate four or six hour sessions for those children out of the 12 hour entitlement that we’re still providing to low income families regardless of their workforce participation. 

Rafael Epstein: The sector says those centres who’ve tried this – the costs spiralled too high and they went back to the set daily fee. Do you concede that that’s what’s happened in the past?

Simon Birmingham: Well, look, I recognise that different providers manage to do different things and we do have occasional care providers operating at present. What I’m hoping is that the child care sector will be flexible enough and responsive enough to have a look at how it can cater for the different needs of different families and different children. And we’re just trying to put in place the framework that will allow them to do so if they can. This is not forcing anybody to change their business model, that’s important to be clear here. 

So long day care providers who are specialising in providing child care services and early learning opportunities for children whose parents are juggling work and family obligations and working long days will still be able to do that, will still be providing sessions that run for ten or 11 or 12 hours to cater for the needs of those children and those families.

But where we have families who are not in the workforce we are providing them with an entitlement, as such, of up to 12 hours of care for low income families even though they may not be in the workforce. And in those instances you’re really talking about whether or not those children get the benefits of the socialisation and the learning opportunities provided by child care and early learning services. And what will make most sense for those families is to be able to access two six hour sessions per week. Because after all I’m sure everybody and all of your listeners would accept that you’re not going to have a three year-old sitting around doing 12 hours of centre-based learning or education on one day….

Rafael Epstein: …No, but there’d be a fair few- I guess the question is how do people most often use child care? Most people use child care for when they’re working. If you work an eight hour day, your child’s likely to be in child care for eight and a half, nine hours.

Simon Birmingham: That’s right and for the majority- and for those …

Rafael Epstein: …That’s the majority surely. And won’t the majority then end up paying more if it’s an hourly rate?

Simon Birmingham: No. No, Rafael, they won’t. And in fact the way we’re structuring the system is firstly to ensure that the majority of working families get access to more generous subsidy arrangements, which is why it’s going to cost more than $3 billion more over the next four years to provide the new child care subsidy. So we are seeking to make it more affordable through greater support for working families in particular. And they’ll actually benefit from the fact that we are for the first time putting in place an efficient pricing mechanisms in the system to try to keep the price escalation down in relation to the costs of child care. 

So for families who are working, accessing centres that provide long day care services, that specialise in doing so, there is no expectation that they would necessarily change their business model. They should be able to transition to the new arrangement and those families should frankly see benefits because if they’re earning ordinary incomes they should be seeing probably an increase to the rate of support they get for accessing child care so there’s nothing to fear for those families. 

My appeal is just to providers of child care services to have a look at those families outside of the workforce, those families who are wanting to access child care for early learning support, and see if they can be more flexible in the way they structure their business arrangements. To cater for those families as well, rather than essentially saying we’re going to take your child for five or six hours but we’re going to charge you and the taxpayer 10 or 12 hours to have your child. That’s not an acceptable arrangement if everybody knows at the outset that the child is only going to be present for regular sessions that are much shorter in duration than what they’re being charged for.

Rafael Epstein: 1300 222 774 is the phone number. The Government is keen to move to an hourly rate as opposed to a daily charge. If that would work for you in child care, 1300 222 774. Simon Birmingham, would you say there is no risk of people sending their kids for eight or nine hours, no risk to them of higher charges even if, when this has been tried in the past, charges have gone up?

Simon Birmingham: I am saying that, Rafael, because I want to be clear the Government is not imposing, nor expecting that people will shift to, an hourly rate. What I’m encouraging providers to think about is rather than saying all we offer is a 10.5 or 11 or 12 hour day, and that’s the one session you can choose to access as a family, that perhaps providers should be having a look at whether they can offer a six hour session, perhaps only on certain days of the week just to cater for those families who are wanting to access the early learning opportunities. 

So we have really made sure this is about providing flexibility for child care providers as well as for families. And what I’m urging those child care providers to do is to take a second look at their business model and see whether there are ways that they can do this. They do already vary the number of staff they have on during the course of the day to reflect the different numbers of children who are in the centre at different times of the day. Yes, there may be some cross-subsidisation built into that, but in many cases here we’re talking about children who may not be in the child care system at present. So how about changing your model to appeal to them, and to make sure that they can actually access the early learning benefits of child care by utilising this 12 hour entitlement the Government is providing in a way that gets the best bang for buck for the parent and the taxpayer?

Rafael Epstein: Can I just ask about the activity test? This hourly rate is a new part of the discussion. You’ve proposed previously an activity test. Indigenous groups say that indigenous families now using child care, that half of them would fail that work or study activity test. Do indigenous families need an exemption in some way?

Simon Birmingham: Well, families earning less than $65,000 – and sadly that would be most of the families you were talking about there – still get an exemption from the activity test for up to 12 hours of child care. So that is exactly the type of situation we’re talking about here. There is further additional support provided to families who are identified as being at risk, where the children are in risky circumstances, where unlimited care options can be provided if necessary.

Rafael Epstein: Just a final non-child care question Minister, if I can, on the conflict in Syria and Iraq. Former Prime Minister; former Defence Minister; others in your party room calling for a much tougher military option in Syria. Is that internally disruptive – people backing Tony Abbott’s ideas?

Simon Birmingham: No, Rafael. Look, I’m fairly relaxed about this. I think it’s important that we have sensible discussions out in the public about how we deal with what is a very complex situation in Syria and Iraq. I’m sure that Tony Abbott and Kevin Andrews acknowledge and understand that Australia doesn’t act in isolation, that we work in partnership, and of course that we’re already making the second largest contribution to operations in that part of the world.

Rafael Epstein: Sure. It’s not implicit criticism of the Prime Minister?

Simon Birmingham: No, I think it is airing discussions that are frankly being had right around the world about whether there are any alternative approaches that ought be considered. And no doubt these types of discussions have been had behind closed doors during Malcolm Turnbull’s discussions with world leaders at the G20 and elsewhere over the last couple of weeks.

Rafael Epstein: Education Minister Simon Birmingham. Thanks for your time.

Simon Birmingham: Always a pleasure.