Topics: QLD Government’s failure to monitor child care standards, child care reforms

Ben Davis: Thanks for your company this afternoon. I’ve been asking you about making child care more affordable and your stories. Even if you don’t have kids or grandkids in child care, we’ve still got skin in the game here because the Government subsidises child care in Australia and I read out what changes are coming and I say coming it’s not until July next year with the change to the rebates – which is a good thing. This is legislation that passed in March and it’s making the subsidy less. It’s changing all these confusing payments coming into it and it is means-tested. Means-tested on household income and how long you work. That’s the big thing for me. Parents who put kids into day care and then they don’t work or don’t study, why? Simple: supply and demand. If you’re putting your child into day care and you’re pushing up demand it pushes up prices. That’s why it’s so expensive.
Now, what’s happening next July, it’s determined by household income and how long you work. No cap on payments. It’s going to be one payment. It’s going to be one thing called the, [coughs] excuse me, the child care subsidy. The cap doesn’t come into play if your household earns $185,000 per year or under. But then between $185,000 to $350,000 a year, it’s capped at $10,000. If you’re bringing over a quarter of a million in as a household each year, should you be getting government rebates or government subsidies or any part of government payment to send your kids to child care? I don’t think so. Too high, too high indeed.
But something else the Federal Government is doing to help bring down the costs of child care is cracking down on dodgy day care providers. Some figures released overnight show that in Queensland there have been a few getting through the cracks. Been given the thumbs up by the State Government but the feds have gone no hang on, they are failing to comply with standards. Now, they’ve seen 15 services suspended or cancelled here in Queensland in the last financial year. And of those, one in five were given the tick of approval by the Palaszczuk Government. Makes you wonder what kind of job the State Government’s actually doing here ensuring child care providers are up to the task. And that comes down to safety as well. Not only is it rorting the system, but it comes down to the safety and due care of your kids. How are they passing state compliance checks but not meeting federal standards? Let’s get a bit of an insight into this from the Federal Education Minister Simon Birmingham. Senator, good afternoon.

Simon Birmingham: Good afternoon Ben, good to be with you.

Ben Davis: Concerning figures.

Simon Birmingham: Well there are concerning figures there. We have been doing a lot over the last couple of years to really clamp down on child care fraud and rorting. And sadly there are those people who seek to capitalise on a system where the Government pays a large amount of subsidy for child care services and shonks and rorters have got into the system. Now, we’ve done I think a very effective job at getting a large number of them out. There are people in jail, people who have faced criminal charges, people who have had services cancelled and suspended. And we estimate thanks to the legal changes we’ve put in place that around $1 billion of funds are now being saved that would otherwise have been rorted and that is a fair indication of the scale of malpractice that was going on.

Ben Davis: Yeah massive. Now, how is the State Government and you guys not on the same page? Are we looking at different hymn books here? Are we looking at the same rules and regulations? Because the Palaszczuk Government’s giving them the tick but you’re saying nah uh they don’t meet the standards.

Simon Birmingham: Well this is a concern. So the way it works for listeners is that Federal Government has responsibility for essentially helping families with the costs of child care. So our responsibility really is around finances and the paying of child care subsidies. But the State Government approves people to become child care providers. They then have the responsibility of assessing whether or not those providers are meeting the National Quality Framework standards that are expected in terms of skills and educators, in terms of the environment in which kids are cared for and the like. And the concern is that a number of services that we have found to be dodgy in terms of their financial operation are services that have been given the tick of approval by the Palaszczuk Government, that they’d been not only let through the gate in the first place, but had then been assessed and given the all clear. And that really is unacceptable and we expect state governments to be doing a lot more to ensure get in as the provider as the first place.

Ben Davis: Simon I’m tipping this as, well I’m hoping this is all computerised. There’s a system that would pick this up. Are the State Government plugged into this IT system to make sure that this doesn’t happen? Because I’m still trying to get my head around how you say no and they’ve given- they’ve said yes.

Simon Birmingham: Indeed Ben. And I mean one of the things we’ve done over the last couple of years as well as changes to the law, as well as a six-fold increase in the number of federal compliance checks that we’re undertaking, another is that we are now doing more around data sharing and data matching with states and territories to ensure that both arms are compliant, ours on the financial side, theirs on the quality side can work hand-in-glove. And so I expect to see a lot more cooperation in future.
The new child care system that we’re bringing in from July next year, which you referenced in your introduction, will have a whole new IT system built for it that will allow us to be much sharper and quicker in terms of identifying problems than perhaps has been in the past. But we have, as I said before, been very effective, I think, in addressing what had been a real failure of compliance and enforcement over previous years. You know, when we came to office there were only around 500 compliance checks happening across Australia annually. That’s now close to 4000 and that’s enabled us to shut down hundreds of services, as I say, to take people to court, to reclaim taxpayer dollars, to send a very clear signal that if you think you can enter this sector just to rip off the taxpayer, think again because you will be caught and you will be punished.

Ben Davis: Simon Birmingham, my guest this afternoon, he’s the Federal Education Minister. The cost of child care is something that we all have skin in the game on, even if we don’t have kids or grandkids in there. But at the coalface, if you are paying for children in child care, how much is it affecting you? Minister, I’ve been getting emails, phone calls, this afternoon with people saying different varying options of how it’s costing them and why the costs are so high. One gentleman said why don’t they subsidise au pairs rather than day care or child care? That way it would take the strain off the system. Is that something that the Government has explored and looked at? I remember it being spoken about but where are we with that?

Simon Birmingham: We are in the midst of a small trial with a nanny pilot program that has allowed for au pairs in certain circumstances, especially for people who are emergency service workers or shift workers where regular child care services just don’t fit their household requirements, or in regional areas where child care just might not be available. So we’ve been trialling that for a little while now. That along with what’s known as in-home care services that particularly catering in special circumstances, families with special needs, including with disabilities, are all under evaluation now for us to see as we implement the new child care subsidy. As you said, a better more targeted child care subsidy that really focusses on helping those who’ve worked the longest hours, earn the least amount of money, the most. We will also be assessing those in-home services and how they might best be supported in the future following this trial.

Ben Davis: I know you had to fight tooth and nail to get this legislation through back in March, but those figures I spoke about are $350,000, I guess, ceiling for families bringing in that amount of money. Is there any way in the future that you can see, is that an easy figure that you might be able to reduce?

Simon Birmingham: Well look, we’ll see as time goes by there, Ben. You’re right that it was remarkable that in putting in place a child care system that in future will pay a higher level of support to the lowest income families who are working the longest hours – remarkably the Labor Party and the Greens voted against that, but we got it through. Currently, the child care rebate – one of the many different payments that are available in the current complex system has no upper income limit.

Ben Davis: Yeah.

Simon Birmingham: So you can be a millionaire and claim up to $7500 of that child care rebate.

Ben Davis: [Talks over] And not work.

Simon Birmingham: And not work potentially as well.

Ben Davis: Ridiculous.

Simon Birmingham: So our new system is much tighter in that sense. It does cut out. It cuts out at a high income. But it’s important as well that we provide a level of support that recognises that the second income earner in a family may not be earning very much, and that there will always be an assessment then done as to is it of net benefit to go back to work in those circumstances. And we do want to empower people to make that choice. Now, at some stage you’ve got to say enough is enough in terms of taxpayer support. The Parliament put that at a very generous level, I think, but it is for listeners, something that will put a cap on income for the first time in terms of eligibility for child care services or child care subsidies from the taxpayer. And will, of course, also ensure that it is much, much better targeted with the greatest level of subsidies going to lowest income families working the longest hours.

Ben Davis: It’s a start. Simon, good to talk to you. Simon Birmingham, Senator in our Federal Parliament. He’s also the Federal Education Minister. It’s all about making child care more affordable. Subsidies though, we know force up prices. If the Government’s got it, then you can increase the price, can’t you? Also, supply and demand.