Topics: Dodgy child care operators in Victoria, Labor’s taxes

Rafael Epstein: So we’ve had a number of calls this week from both child care operators and parents who use those small family day care child care operators saying the money’s stopped. The Federal Government is cracking down on smaller child care operators. For the last six weeks, people in Melbourne have not received the subsidy they normally get from the Federal Government.
The Minister in charge of this is part of Malcolm Turnbull’s Cabinet, Education Minister Simon Birmingham. Good morning.

Simon Birmingham: Good morning, Raf. Good to be with you.

Rafael Epstein: Why would some of these small child care operators suddenly not be getting money?

Simon Birmingham: We’ve, over quite a long period of time now, been undertaking a series of rolling reforms in relation to child care, and particularly in relation to compliance in accessing child care subsidies as they currently are – child care rebate and child care benefit payments – because there have been high levels of fraud and malpractice occurring, particularly within parts of the family day care sector.
We’ve made a number of regulatory changes that have tightened access to these benefits in terms of stopping practices that were known as child swapping previously, where people would claim benefits for simply looking after each other’s children, a number of other changes around transportation of children and where rebates can be claimed. But we’ve also upped the compliance regime in terms of the number of checks that when we came to office were only about 500 checks per annum are now close to 4000 checks per annum. So all of that has been a series of actions taken to try to ensure that taxpayers aren’t ripped off.
We estimate that through all of those actions we’re actually now saving around $1 billion in terms of funds that would otherwise have gone out in fraudulent claims, and that gives some indication of the scale of activity. But this is an ongoing effort and there are instances where sometimes payment processes are varied to ensure that they can be better checked.

Rafael Epstein: I understand that, Minister. Cracking down on fraud is fine, but it’s also possible you’re leaving people in limbo who are doing the right thing.

Simon Birmingham: Well Raf, of course what we have to do sometimes is slow down the rate at which money goes out the door so that a more thorough verification process can be put around it. And that’s been a tactic, if you like, a process that’s been deployed particularly more recently in a number of instances where we saw some very large spikes in relation to claims that have been made …

Rafael Epstein: [Interrupts] But is it the case- and again, I think nobody wants fraud to happen, but is it possible that there’s a whole lot of people doing the right thing who, for six, eight, maybe ten weeks are receiving no money? I just wonder if that is fair to the people doing the right thing?

Simon Birmingham: Raf, we only take these steps where we have, we think, reasonable claims for concern or cause for concern in terms of, as I say, spikes around payments that are being made or the like.
So this is not a case where simply providers en masse are seeing payments withheld. It is something that’s undertaken in a targeted manner …

Rafael Epstein: [Interrupts] So how many might there be, Minister? I mean I’ve been told hundreds of staff might be affected. Would that be accurate in Melbourne, do you know?

Simon Birmingham: Well, the number of family day care services is not enormous in terms of those who are affected, but of course some of those services do operate quite a large number of different educators and provider sites. So yes, it’s feasible that you then run into larger numbers of people who could be affected …

Rafael Epstein: [Talks over] So it might be hundreds?

Simon Birmingham: … if they are part of a service that is a service of concern.

Rafael Epstein: So if you’re a parent and the money’s been cut off, should you be sending your child to that place to continue? I mean, it kind of makes you worry about the- or should you be worried about the legitimacy of that place?

Simon Birmingham: Look, this is a genuine concern, genuine question. I’m a dad of two young daughters – four and six – who have both been through different child care services and early education opportunities. And I think the first and most thorough test is indeed the parental test, have your own view about the calibre and quality of your child care provider, the educator there who is looking after your children, and make sure that you are comfortable that the care they’re receiving is absolutely adequate.
Then of course there’s the whole range of regulatory tests that we expect to be met. And I’ve had some concerns in relation to whether the Andrews Government has been entirely thorough in all of their vetting practices of letting people in the door in the first instance, or a number of the services who we have suspended actually were ones who had been assessed by the Government and given a clean bill of health.

Rafael Epstein: [Talks over] So does that mean, though…

Simon Birmingham: Now, that may be that they just were ripping us off in a financial sense, which of course rightly means we’ve shut them down and taken action. But of course people who- the genesis behind your question, I guess, is are people who are doing the wrong thing financially a higher risk of doing the wrong things in other ways [indistinct].

Rafael Epstein: [Interrupts] Well, I’m just wondering about the legal situation. I have no idea. Are there any legal issues that a parent should be concerned about? If they’re not receiving money and you think they’re dodgy, I don’t know, are they still insured? How does that work? Where does a parent get answers like that?

Simon Birmingham: Well, a parent who has concerns should firstly talk to their provider, but they can also absolutely feel free to get in touch with my department. There are details that are published around the assessments of child care services, as well as watch-lists about points of concern. So if they go to education.gov.au, they can follow through the child care links to get some further information there. But if need be, then by all means feel free to get in touch with my office if people have particular concerns that they want to have addressed.

Rafael Epstein: What about back pay, Minister? If someone hasn’t received that subsidy for six, eight, ten weeks, will they then receive it if you say that they are okay?

Simon Birmingham: So, I understand some of the callers you’ve had have been talking about the fact they’re happy to do a more thorough, more manual process of entering some of their data in their claims. That is about applying a greater level of scrutiny to some of the claims they made, as I said, because of concerns about spikes or otherwise. If all of those claims are validated, payments will still flow through.

Rafael Epstein: [Talks over] So they will get back paid if they’re okay?

Simon Birmingham: If the claims are validated, people will still get paid.

Rafael Epstein: 1300 222 774 is the phone number .The Education Minister Simon Birmingham is with us. If you think you’re affected by these changes, it would be good to hear from you. I do want to ask you, Minister Birmingham, as part of the broader Cabinet about the direction your Government’s going in the political rhetoric and your battle against the Labor Party. The Finance Minister, Mathias Cormann, gave a speech last night accusing Bill Shorten of adopting communist polices – or I should say socialist policies. Let’s have a listen.


Mathias Cormann: His rhetoric is the divisive language of haves and have nots. It is socialist revisionism at its worst. I put it to you that Australia under Bill Shorten would be both duller, poorer, and less equal.

[End of excerpt]

Rafael Epstein: Simon Birmingham, your Cabinet colleague did actually essentially say that Bill Shorten’s advocating the sort of policies that brought down the Eastern Bloc countries. Is that going a little too far?

Simon Birmingham: Well, I think we do really want to get Australians to think about both the policies of the Government – and we are seeking to pursue policies of economic growth – but also the policies of the Opposition, because Mr Shorten and the Labor Party have announced around half a dozen different areas where they proposed higher levels of taxes that in aggregate add up to around $150 billion of extra tax taken out of the Australian economy. These are taxes on wages, on small businesses, on houses, on investments, on companies, all of which will have a terrible, stifling impact on entrepreneurialism, on economic activity, on the job prospects in Australia. This is a very, very significant choice that when we get to the next election in 18 months or so time Australians will face.

Rafael Epstein: [Talks over] Is any of that like communist Russia?

Simon Birmingham: Well, I think the extraordinary, extraordinary attack on entrepreneurism, on investment, on success that is behind what the Labor Party is proposing is absolutely reminiscent of socialist-type policies that want to attack those who seek to simply get ahead. But that is also attacking those who, in a country like Australia, create jobs, create opportunity, create exports, underpin all of the things that deliver the high quality of life we enjoy here.

Rafael Epstein: Simon Birmingham, thanks for your time.

Simon Birmingham: Thank you, Raf.

Rafael Epstein: The Education Minister there.