Friday, 09 October 2020
PETER STEFANOVIC, HOST: Joining me live now from Canberra is Amanda Rishworth, Shadow Minister for Early Childhood Education. Good to see you, thanks for joining us this morning. So do you see this as the most important issue for the Labor Party heading into next year’s election, if that indeed turns out to be the case?
AMANDA RISHWORTH, SHADOW MINISTER FOR EARLY CHILDHOOD EDUCATION AND DEVELOPMENT: I think this is an absolutely critical area. When I speak to mums and dads right across the country, the cost of child care is very crippling. It’s not just the benefit for those mums and dads who will get more affordable child care under a Labor Government, but it’s also our economy. What we know is the current system actually acts as a disincentive, particularly for the second wage earner, to go back to work on the fourth or fifth day. For many women, depending on their income bracket, they actually get no pay to go to work on the fifth day if they use child care.
So it’s actually a drag on our economy as well. So our proposal is not only supporting mums and dads with the cost of child care, but it is also about economic reform. Lifting women’s workforce participation, which in turn will grow our economy, and that’s the type of reform we need during this difficult time.
STEFANOVIC: How do you stop the private centres from jacking up the gap fees?
RISHWORTH: Look that’s a really important question and what we’ve said is we will, at the same time as this boost, when it comes to early education and care and the subsidy, we will make sure the ACCC is tasked with the role of working out a price regulation mechanism. We want to make sure that every cent of this flows to families, the benefit flows to families, so that it does bring down the cost of child care.
STEFANOVIC: Why stop at 97 per cent of families?
RISHWORTH: What we’ve proposed in our first three years is to remove the cap, which is a cap on the amount of money you can get in any one year, that is currently a big disincentive for the second wage earner to go into work. We’re also lifting the subsidy. But ultimately what we’ve also said is we would like to task the ACCC to move towards a universal 90 per cent subsidy so that every family could benefit. So we’re starting with a better off for 97 per cent of families, but we would like to look at a pathway to get to universal 90 per cent.
I think it’s important to recognise that child care is an essential service for families that need to go to work, that need to actually get care for their children, and this is how we need to start viewing it.
STEFANOVIC: And that three per cent is for those earning above a combined salary of 500 grand right?
RISHWORTH: That’s right, $530,000. What we see is it’s important to support families, working families, people that are working perhaps in professional jobs, as well as low income families. So we see it as important to support families right across that income, but the three years does cut out at $530,000.
STEFANOVIC: Would the next step be to go all the way?
RISHWORTH: The next step really is to look at how we can get a 90 per cent subsidy for everyone. That’s our plan, that’s what we’re going to task the Productivity Commission to look at is how we transition to that. And I think that’s certainly our ambition to get there.
STEFANOVIC: Is it time we had public child care the same as we do with public schools?
RISHWORTH: There are some public child care services out there, there’s also some private, there’s not-for-profit. There is a really big diversity in the market and that’s good for families to actually have a choice. I think we don’t want to see a sector that doesn’t have choice, so we need to make sure that there is public and there is other services. We don’t intend to change significantly the ability for not-for-profit or for private providers to deliver child care, but what we don’t want to see is price gouging and excessive profits when it comes to early education.
STEFANOVIC: But that would be real reform though wouldn’t it?
RISHWORTH: You know there’s certainly some states and territories that do attach a child care centre to their schools and to their kindies. It’s certainly something that some states have been very interested in, others have not. We don’t run the centres of course, we provide the subsidy and we provide the support. But what we do want to see when you look at this system, is you don’t want excessive profits, and that’s what our ACCC process is all about, looking at price regulation.
STEFANOVIC: Okay, well the government poses the question in response to Anthony Albanese’s budget response – what would have to be cut to make way for this spend? So, what would you say to that?
RISHWORTH: Well what the government’s done is racked up a trillion dollars worth of debt and has not been able to point to any long-term economic reform. They’re spending $9 billion dollars on child care already and haven’t removed these structural barriers for women to go back to work. So we see this as an incredibly important economic reform, and if you grow the economy then that helps with budget repair.
And of course when you look at the return on investment in child care you’re looking at, conservatively with these measures and similar models, between $4 billion to $7 billion growth on GDP. I would like the government to show us which of their measures in their trillion dollars worth of debt would actually have that type of economic return.
STEFANOVIC: Well, it believes it’s doing enough it already subsidises 85 per cent of low to middle income earners, spends some 9 billion dollars a year, and it was free for the majority of the pandemic so far. How far short do you think that is?
RISHWORTH: Well first of all it was only free for three months, and of course what parents realised then was this really helped them actually do more hours, especially if you’re an essential worker. During that time essential workers actually had to do more shifts and having free child care meant that they could do those extra shifts.
But I think what the government has failed to recognise is things like the cap, things like the very steep taper rate for families, act as a disincentive. As I said before, for the second wage earner, particularly women, to go back to work full time they are often having to pay, so they lose money to go back for the fifth day. That is a drag on our economy as well as a bad outcome for that second wage earner if they want to go back full time.
STEFANOVIC: Okay, Amanda Rishworth, appreciate your time this morning. Thanks for joining us here.
RISHWORTH: Thank you.