THE HON DR ANNE ALY MP

Minister for Early Childhood Education

Minister for Youth

SEAN COWAN, HOST: We will have to move on, however, and we're going to talk about child care. Something we've already discussed this week is the child care situation. It's a story that is close to my heart. My daughter moved out of child care in the last 18 months, and I got to tell you, it was verging on unaffordable in her first year in child care, which must have been 2020, 2021, something like that – at $11,000 odd-dollars a year out of my pocket, and that made things very, very tight on a single income family. The changes that have come in the last couple of years through the Albanese government made things a hell of a lot easier. The out of pocket cost was reduced by about $30 a day, which is a significant amount of money. 

So, there has been some improvement on the cost for parents, and the government is now looking at further measures. The Productivity Commission has today released its final report on early childhood education and care, and to talk to me about that this morning on the line is Dr Anne Aly. Good morning, Anne.

MINISTER ANNE ALY: Good morning, Sean, and good morning to all your listeners.

COWAN: Thank you for joining me. I imagine this will be a very costly exercise now for the Federal Government to follow through, given the recommendations of the Productivity Commission, if you want to actually implement those in full. Can you run through the key points of that for us?

ALY: Yeah. So, the Productivity Commission made 56 recommendations, and they go to a number of things. So, when we came into government, we wanted to start a pathway to what we call universal early childhood education, which is basically a system that is affordable, that is accessible, and that is inclusive. So, one of the first things we did was increase the Child Care Subsidy, and you spoke about that in your intro there, Sean. And that has brought down the out of pocket costs by around 11 per cent across Australia. 

The second thing that we did is that we instigated a pay rise for early childhood educators. A lot of people who are listening will know that they are some of the lowest paid people in the workforce out there. And that pay really didn't reflect the level of professionalism that they put into – and the heart that they put into their work in educating children between the ages of zero and five. And that's to ensure that we keep the workforce, because the workforce was – there were people leaving, there were people not taking up work in early childhood education, and we wanted to keep the workforce. 

The next step now is this Productivity Commission review that was released today. Now, as I said, that gives us 56 recommendations, and it goes to things like, you know, do we remove the activity test? And parents who are listening will be familiar with the activity test, as will you. Do we make it, you know – it recommends, for example, that we make it completely free for low-income families earning under $80,000. Basically, what it says, which we kind of knew already, was that the children who most need early childhood education and care aren't getting it, whether they're in the regions, whether they're from low income families, all of those things. But at the end of the day, what we want to do is get to that path, get to that point where early childhood education is affordable – and you spoke about that in your intro, too, about how it's a big decision, it's a huge decision that parents make. You know, do I send my child to early childhood education and care, is it worth the extra hours at work that gets eaten up by it? To make it affordable, make it accessible, because we know that there are some parts of the country where there is no early childhood education and care, and make it inclusive for all children.

COWAN: Minister, it would be naive of me to think you hadn't had early access to this Productivity Commission final report and that you'd seen it for the first time this morning. So, I imagine you would be somewhat ready to go with some announcements, if not today, then in the very near future. Or am I totally wrong there and you're going to have to now sit back and digest all of this?

ALY: I've read it page to page – let me just say, I'm one of those people that reads things. As a former academic and former professor, it's what I do. So, I have read it page to page. Now, obviously, we'll be considering the recommendations in the – that are included in the report and look at which ones we'll be implementing and which ones we won't. But really what we're trying to do is get to that end point. And that end point is a system that's affordable for every parent, accessible for every child, and inclusive of every child, that works for every parent, every child, every community. So, you know, and the report makes a number of recommendations to that. It says that, you know, universality means that every child has access to three days a week of early childhood education and care, regardless of their circumstances. It also talks about establishing an early childhood education and care commission to oversee reform. But importantly, it says that reform needs to be staged. We're not talking about something that's going to happen in the next two years or even three years. This is ten year reform that we're embarking on, and we need to stage it.

COWAN: Now, there are lobby groups, including Minderoo Foundation's Thrive By Five campaign, who are calling for the government to introduce a $10 a day cap on out of pocket fees. As I indicated, I was paying about $70 and that came down to $40 last year under the Albanese government's changed model –

ALY: Good to hear.

COWAN: $10 would be a hell of a lot cheaper again. Now, $10 – I imagine there'd be a lot of parents out there that would be very pleased to pay $10 a day for child care. Is that affordable for government, though? And what would need to change? Because I can't imagine that Federal Government could just stump up the extra coin.

ALY: Well, this is the Canadian model, right. So, in Canada, that's what they did. They did $10 a day flat fee for child care. And look, it's had a lot of bumps along the way, and I've been really following it closely and like, read everything that I can about what Canada did and how they did it. It's one kind of definition of universality being that everyone pays the same, in the same way that we have, you know, a public schooling system that's not based on how much you earn or anything like that. 

It is a big cost for government. I guess what I want to say here is that the Albanese Labor government has made it very clear that we see spending in this aspect as an investment in our children. Right? This is about our children. We've invested already in increasing the Child Care Subsidy. We've invested more in increasing the salary of early childhood educators by 15 per cent. We know that there are huge investments that are required to get to where we want to get to. But as I said, we will consider the pathway to that along with the ACCC review and the recommendations that that made, and the PC review and the recommendations that it made.

COWAN: Minister, have you had a chance yet to cost what it would actually take for you to get it down to $10 a day, or is that work that's going on at the moment?

ALY: That's you know- we're looking at all different options. The Productivity Commission review says that for the recommendations that they make around the 30 hours free and the removal of the activity test and the number of other changes, it would bring the cost up to about $17 billion. Currently we spend around $12 billion in early childhood education and care – I say spend, but I mean invest, because it is an investment in children. And I think you'd agree with that, Sean. So, you know, that's what the Productivity Commission review has said it would cost, what the investment would cost. As I said, we'll look into that, and we'll look at the different models on how we get to universality. 

The point, though, is that we've committed to this. We've committed to a universal system. We've committed to ensuring that every child has access to early childhood education and care. We've committed to ensuring that it is affordable for all parents. We know there's a lot of work to do and we know that the reform has to be staged and that the first step to reform is ensuring that we have the workforce.

COWAN: I'm certainly not against a user pay system, especially if that's, if that's properly means tested, but I also like the idea of getting children into proper care, allowing their parents to be in the workforce, especially when we have various labour shortages. $17 billion might sound like a lot, but I guess when you compare that to the federal Defence budget, for instance, which I think is something like $770 billion over the next decade, or $77 billion a year, that's actually a bit of a drop in the ocean, isn't it?

ALY: Well, I think, you know, governments have a number of responsibilities to keep citizens safe, to education, health, ensuring that our most vulnerable are well looked after. And my role as the Minister for Early Childhood Education and Care is to ensure that we invest in our youngest Australians. It is about workforce participation and ensuring that – you know, early childhood education and care is an essential service for parents who are working. But importantly, and the Productivity Commission review makes this point, is that it benefits children as well.

COWAN: Minister, thank you very much for coming on this morning. I appreciate your time.

ALY: Thank you, Sean. Appreciate your time, too. And thank you to all your listeners.

COWAN: That was Dr Anne Aly, the Minister for Early Childhood Education. She's talking there about the release of the Productivity Commission's report on early childhood education – you might just know of it as daycare or child care – and how we might make that more cheap and accessible for everyone.

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