Dec 30, 2020






SUBJECTS: Childcare; Labor’s Working Family Childcare Boost.


JOSH SZEPS, HOST: Kate Noble is an education policy fellow at the Mitchell Institute, which is based at Victoria University in Melbourne. G’day, Kate.




SZEPS: Is our child care expensive in Australia?


NOBLE: It is expensive. So, relative to other countries with similar income levels, we do pay pretty high costs even after the childcare rebate. We did some research last year that found that on average, and this is just on average, many families are paying more for one child to be in childcare than they would be to send them to a private primary school. Now, obviously, the difference here is that in school, you’ve got the option of hopefully a high-quality government-funded school, when you’re talking about childcare, parents don’t really have much of an option.


SZEPS: And what sort of price point, just to give people who don’t have kids or grandkids who are of this age at the moment, are we talking about?


NOBLE: Well, it varies hugely depending on how much childcare families use. So, on average, it can be around $6,000-$7,000. And that will go up or down, depending on parents’ level of income, but also, obviously, on whether children are in day care for two days, three days or five days. So, it can be up more towards $10,000 per child, or it can be much lower than that. But that’s around an average.


SZEPS: Yes. That sounds about right in Sydney on average, I would imagine. But it gets up a lot higher. In our neck of the woods, and we don’t live in a fancy area, but just because it’s in the inner west of Sydney, it’s considerably more than that. And I have twin toddlers who are three, who are in day care three days a week. And it’s eye watering, the sums. Donna on the text line says, and her giving us advice about childcare reform, says, ‘Pay conditions get rid of large corporations. Respect from school teachers for the importance of early childhood teachers’. What is the situation with the pay and conditions for people who are working in the sector, Kate?


NOBLE: Those are really good points from one of your listeners. They’re not great. And compared to teachers in primary schools, they’re really a cause for concern. So, early childhood educators are among the lowest paid in the country. Some of them earn around the minimum wage. And they do an incredibly important job. We know that children’s brains develop at an incredible rate in the first five years of life. So, those educators are performing an incredibly important role. There’s huge, huge scope and room for improvement in terms of workers’ pay and working conditions. A lot of them are casuals, so have very little job security. And that was definitely showing up and laid bare during the COVID crisis this year.


SZEPS: What would you do about that? Because obviously, it’s a bit weird if you’re talking about people who are being paid minimum wage, but customers who are paying such high amounts, where’s the money going if it’s not going to staff?


NOBLE: It’s really difficult. And it really does require some kind of long-term thinking and planning and probably major reform. We have a mixed-market model in Australia, which means that centres operate very differently. So, there are for-profit providers, which obviously need to make a profit. And there are community-run providers, which tend to pay their staff above the award. So, it really needs sitting down and working through all of the options to look at how we can address all of these challenges, keep costs manageable for parents, but also recognise the important job that educators are doing.


SZEPS: I wasn’t going to make this a partisan political conversation, Kate, but the Leader of the Opposition has been listening and has just given us a call. Anthony Albanese is on the line. Hello, Albo.


ANTHONY ALBANESE, LEADER OF THE AUSTRALIAN LABOR PARTY: G’day, Josh. How are you going? Merry Christmas and Happy New Year and all that.


SZEPS: I’m terrific. Happy New Year to you as well. How did you want to chime in on this?


ALBANESE: We obviously don’t want to do a heavy political spiel.


SZEPS: It’s the 30th of December, give us a bit of a break, Albo.


ALBANESE: Exactly. But there’s a reason why we had childcare as the centrepiece of my Budget Reply last year, which is, going around my electorate and around the country, one of the things that I get feedback from parents is, ‘Why is it that, thank goodness, our youngest child hit primary school because then all of a sudden they were much better off?’ And we are actually quite unusual compared with many of the more forward-thinking countries in Europe who recognise that early childhood learning is something that benefits the whole society and benefits the whole economy and that a child’s development, in terms of human brain development, 90 per cent of it occurs in the first five years of life. So, it’s certainly good to concentrate in that area. But it’s also good for productivity in the economy. Because at the moment, women who have to work a fourth or fifth day are often working for negative income. And that’s a real disincentive to work. So, all the analysis we did was that if you actually move towards universal provision of affordable provision of childcare, you’ll actually benefit the economy. And it will receive about $2 back for every dollar that’s invested.


SZEPS: It’s quarter past nine. We’re speaking with Kate Noble, who’s a childcare policy expert at the Mitchell Institute at Victoria University about how you would reform childcare. This is off the back of news that the cost of sending a kid to day care is going to increase quite a lot in the next few years from an already high level by international standards. And Anthony Albanese, the Leader of the Opposition, is also on the line. Anthony, how would you reform things? When you talk about universal affordable childcare, does that mean a major nationalisation or overhaul of the sector? What does it look like?


ALBANESE: What it looks like is firstly, lifting the cap, just removing it. And then having lifted the subsidy up to 90 per cent, I think you need some form of price signal in there rather than free provision of childcare. But if you did that as a first step and then taper it off, essentially, you would move towards a second stage of reform after a Productivity Commission review to see the impact of that, of moving towards 90 per cent subsidy across the board. So, a universal provision, just like we provide universal health care through Medicare. We have universal superannuation, in spite of the current Government. We have universality as a really important principle. Anyone can send a kid to the local public school. And there’s no reason why there can’t be a similar principle attached towards early life learning.


SZEPS: Won’t that encouraging inequality? I mean, in the sense that if you’ve currently got a cap, and you’ve currently got a 50 per cent rebate in terms of what people get back from their childcare fees, then that’s bias towards the lower end of town. You’re saying that everybody should get a 90 per cent cap, which will effectively mean that millionaires get more money from the state than they currently do?


ALBANESE: Well, the truth is that millionaires tend not have their kids in childcare, they will have individual nannies and be outside the formal childcare system. Just like when Kerry Packer had a heart attack, he went to Royal Prince Alfred Hospital and got that health care. It is an important principle, I think, that we move towards. And at the moment, the real losers in the system, and what we’re proposing will benefit 97 per cent of families in the reform that we will put in place by one July 2020, the people who miss out are working families, your nurse, and your shop assistant, who have kids in childcare and who there’s now a massive disincentive for, and it particularly ends up impacting working women, for women to work that fourth or fifth day, which can really disrupt their careers as well. It’s a really bad thing for productivity in the economy to have disincentives for people to work full-time. And that’s way the current childcare subsidy system and the way that it relates to the tax system, that interaction, just isn’t working for working families.


SZEPS: Thanks, Albo. Good to talk to you. Happy New Year.


ALBANESE: Thanks very much, Josh.


SZEPS: Thanks for the call. That’s Anthony Albanese, the Leader of the Opposition, who gave us a call while I was speaking with Kate Noble, the childcare policy expert, about what we can do to rein in the cost of childcare and make it more equitable and more available.