THE HON DR ANNE ALY MP

Minister for Early Childhood Education

Minister for Youth

Topics: Childcare subsidy legislation, benefits of early childhood education, ACCC inquiry into childcare fees.

DANICA DE GIORGIO: Well, the Government is pushing ahead with its plan to make childcare cheaper for more than one million Australian families under a new $5 billion package introduced to Parliament. Under the changes, 96 per cent of Australian families will pay less in childcare from July next year. This is the single biggest investment in the Government’s Budget and is designed to ease cost‑of‑living pressures.

Joining me now live is Early Childhood Education Minister Dr Anne Aly. Thank you very much for joining us. So, you’re saying July next year; why was this not brought forward to, say, January given that families are already doing it tough? Why do they need to wait until July?

ANNE ALY: Well good morning, Danica, and thank you for having me. The reason that we are going to July next year, first of all, it was our election commitment to deliver on this and we are delivering on this, and our election commitment was for July next year and we are delivering on that. There are a number of reasons why it can’t be brought forward, primarily, we’re already dealing with 23 private providers of the IT services for the childcare subsidy, and to give you an idea of what it takes to get them into the position that’s needed in order to deal with the changes to the childcare subsidy, the last time the previous Government made any changes to the childcare subsidy, it took 50 weeks for the IT systems to be prepared to deal with that.

So, as much as we would like to bring it forward, we are delivering on our election commitment. We are delivering relief to families who are concerned about the cost of early childhood education. Where the cost of early childhood education has proven to be a disincentive or a barrier to more hours of work, particularly for the private primary caregiver, we’re delivering on that election commitment and we’re doing it in the fastest way we possibly can and as soon as we possibly can, which is July next year.

DE GIORGIO: So, how big of a difference then will this actually make to the cost of living for families?

ALY: Well, to give you an idea for families earning around $80,000, the subsidy will go up to 90 per cent, and that’s a significant saving for them. It will taper, of course, the more a family earns, so it does make a significant difference. But there are a number of other things that are important as well, Danica, to recognise here, and the first is that we know that children who have good‑quality early childhood education, reap so many benefits from that. If they get good‑quality early childhood education in their formative years, we know that that sets them up for life, for a lifetime of learning, and it prepares them really well for school. So, the benefit to children is immeasurable in terms of their development and their learning, their ability to learn, so that’s one part of it.

The other part of it is delivering that fee relief to parents means that we remove some of those barriers that have existed in the past where you’ve got a family sitting down doing the calculations and they figure that if the mother, in particular, wants to work an extra day or an extra two days, it’s just not worth it because all that money is gobbled up in early childhood education fees. And the third part is that it increases productivity, because it means that more women in particular, or primary caregivers, can get back into the workforce or take on more hours if they want to.

DE GIORGIO: Is the problem, though, that childcare prices are just simply too high? Do you need to bring down the price instead of just changing the subsidy?

ALY: One of the things that we took to the election and that we’re working on is tasking the ACCC with an inquiry into pricing. There is a cap, an hourly cap, on what early childhood education centres and service providers can charge, and that’s at around $10.85. Around 85 per cent of providers actually charge at or below the cap, so the pricing cap might be an issue. I don’t want to pre-empt anything that the ACCC will come up with, but that’s something that we’ve tasked the ACCC with.

DE GIORGIO: The Opposition and the Greens have raised concerns about this bill. How confident are you that it’s going to get through?

ALY: Look, I think that anyone who really cares about Australian children and understands just how important good‑quality education is for children in their formative years can’t argue that this is good for our children. This is good for the most precious asset of our nation, which is our children. I think anyone who cares about women’s workforce participation and the fact that there are so many women out there who can’t take on extra work because it’s just not worth it for them, anyone who cares about women’s workforce participation and equality for women can’t deny this legislation. So, you know, the opposition has said in the past that it’s not necessary, but let’s see what happens when they get to vote on this.

DE GIORGIO: Let’s talk about the cost of it – $5 billion is the price tag. It’s quite a big cost given the current economic circumstances. Is it sustainable?

ALY: You know, we talk about costs, when we look at countries where people invest in early childhood education, like a lot of the Scandinavian countries where they put a lot more investment in early childhood education in those formative years, what you see is a tapering off of the need for investment in later years. This is revolutionary for Australia. This is revolutionary reform, but it’s also about time that we started to recognise that early childhood is just that. It’s education. It’s not childcare. It’s not wiping noses and changing nappies. It’s actually education in the most important years of a child’s life. Is it worth it? Yes, it’s worth it. It’s worth it for our children. It’s worth it because every child born in Australia deserves the best possible future. It’s worth it because any child born into disadvantage should not have to carry that disadvantage through their life, and through early intervention and through early childhood education, we can change a child’s trajectory in life. So, yes, it’s worth it.

DE GIORGIO: Dr Anne Aly, we do have to leave it there. Thank you so much for joining us.

ALY: Thank you.

END