ABC Afternoon Briefing – Labor’s child care transparency policy

Thursday, 24 June 2021

PATRICIA KARVELAS, HOST: But let’s finish in Canberra on another issue, and Labor’s out spruiking a new child care policy, which they claim will increase transparency around fees that parents pay. They want to force providers to report more information about revenues and profits. Amanda Rishworth is the Shadow Minister for Early Childhood Education and my guest, welcome.

AMANDA RISHWORTH, SHADOW MINISTER FOR EARLY CHILDHOOD EDUCATION AND DEVELOPMENT: Great to be with you.

KARVELAS: So let’s do this quickly, because we haven’t got a lot of time, but take me through what additional information Labor would force child care providers to disclose?

RISHWORTH: Well firstly, we want to have much more real time fees on the childfinder website. At the moment, many of the fees are either missing or out of date. So parents need to understand fees, they need to understand the increase in fees that have happened over the last number of years, and they need to understand profit and quality. And those are really important transparency measures so that parents can understand where their fees are going, where the government subsidy is going, and what that means for the type of care that children get. Parents want this information and we want to provide it to them.

KARVELAS: So what mechanism would you put in place to ensure that operators are complying with the disclosure requirements?

RISHWORTH: We will be requiring companies that have more than 25 centres, to be disclosing this information to us as government. And also landlords as well – one of the issues that a lot of providers tell us about is landlords and the profit that they make. So if they have more than 10 centres in which they’re landlords of, we will require them to disclose their profits to government.

KARVELAS: And how would the quality rating system for child care operators work? And how would the assessments be done? Would there be an extra layer of bureaucracy to do that?

RISHWORTH: No, we would use the current rating assessment at the moment. So currently, quality is assessed, but it is unclear how that interacts with wages, how it interacts with profit. Anecdotal evidence suggests that the non for profits have higher quality, and they also put more money into wages. But there is a lot of lack of transparency in some of the company structures, particularly in private equity firms, for example, that own many child care centres. So we need some transparency around this, and we need them to start reporting, considering how much the taxpayer does subsidise these companies.

KARVELAS: Why not simply cap fees instead of hoping mandatory disclosure results in lower prices?

RISHWORTH: Look we are going to look at capping fees and looking at price regulation. We are going to do that. But the truth is we do have a mixed model market, and we do have a market where there are for profit. So it is important, especially for the very big ones, that transparency is there. I think it works hand in hand with exploring the ACCC and the Productivity Commission to actually look at a way we can regulate prices.

KARVELAS: Can the government actually ban for profit providers from offering incentives like cash or iPads to convince parents to sign up?

RISHWORTH: I think you absolutely can. If you are a company that receives a subsidy from the Commonwealth and you registered for subsidy from the Commonwealth, I do not think there’s any role for incentives that sign parents into locking contracts. That is what is happening – iPads, weekends away, these other offerings are being used to lock in parents for a long period of time. With you know, break away fines if they if they leave those contracts. That’s not good enough. We saw that actually happen in the vocational education sector, people signing up for courses because they were getting a free iPad. That is not the appropriate use of taxpayers money, considering just how much we subsidise. So if you’re registered for CCS, and you get that government subsidy, we believe that you should not be offering non educational incentives. I think that’s pretty common sense.

KARVELAS: Thank you so much for joining us, Amanda.

RISHWORTH: Thank you.

ENDS

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