SUBJECTS: Labor’s plans for childcare.

CASSIE MCCULLAGH, PRESENTER: Well Opposition Leader Bill Shorten, followed by Federal Education Minister Dan Tehan there, on Labor's plans for the child care sector. $4 billion over the forward estimates to help parents and $500 million to boost wages of childcare workers. Tanya Plibersek is Shadow Education Minister and Deputy Labor Leader. She's the Member for the Division of Sydney. She's in Perth with Bill Shorten and I caught up with her earlier. Tanya Plibersek, thanks for making some time to talk to us.
TANYA PLIBERSEK, DEPUTY LEADER OF THE OPPOSITION: It's a real pleasure to be with you. 
MCCULLAGH: Now this is a big announcement, both the childcare subsidy and the increase for workers in the sector. It's big in dollar terms, but it's also a big policy direction for Labor. Do you want to just tell us what the thinking is behind it? It's about education, early education, which we know is so important and I'm guessing that it's also about may be women remaining in contact with the workforce during their child-rearing years?
PLIBERSEK: Well Cassie, you've basically hit the nail on the head. There's two really important things that we’re keen to do with these announcements. The first is make a difference to the cost of living for ordinary families. We know that wages have been flatlining for some time. People are really struggling. For many families child care costs are the, after their mortgage and their rent, the next biggest impost on the family budget and a lot of parents say to me "I'm not sure whether it's worth going back to work". A lot of mothers in particular say, "I'm not sure whether I should go back to work, whether I should go from, you know, two days a week to five days a week because the costs of child care are just so exorbitant". So by dealing with the costs we, for the average family, they'll be say, $1200 to $1400 better off. Some families will be up to $2100 better off per child per year. So particularly if you've got a couple of kids in childcare, that's a very big difference to the family budget. But we also know that early childhood education is really important for children's brain development. I mean, 90 per cent of a child's brain development happens before they turn five. We've got a policy already for universal access to preschool for four year olds and three year olds - that's very different to the Government. They've only got preschool for four year olds for one more year and then it's all up in the air. But we're saying, permanently, we will support preschool for three year olds and four year olds. And this investment in the wages of early childhood educators really backs in that view that this is education, it's not just babysitting while parents are at work. We want a highly skilled workforce and we want them to stay as early childhood educators. At the moment you see very high turnover in this industry because the wages are so low. People who work in the sector tell me all the time that they love the work they do with these kids. But you know, at $22 an hour, it's pretty hard to raise a family of your own, to pay your own mortgage or rent. So we think by acknowledging that this work is complex, it's skilled, it's valued by parents. We should better pay early childhood educators and look, the truth is we can't put that cost, additional cost, on to parents because parents are struggling to, so the government does need to come to the party.
MCCULLAGH: It seems like the two parts of the policy work together. Let's look at the subsidy part. So as you say, there's some subsidies in place, but this will increase it for more people - so up to a million people will be receiving something like $1200 a year with this, hence the big number.
PLIBERSEK: Yes so we've rounded it up to a million but the actual number is about 887,000 families will benefit. If you're earning as a family up to just shy of $70,000 - $69,500 - you should have to pay nothing for childcare. You basically have no out-of-pocket expenses if your family income is $69,500. Between $69,500 and $100,000, you'll be about $1,400 a year better off per child. And if you're between $100,000 and $174,000, you'll be about $1,200 better off per child. So they are substantial savings, particularly for families that have got a couple of kids.
MCCULLAGH: Now these are combined income figures you're talking about, of course. There is an activity test for this. How does that work?
PLIBERSEK: Well, the activity test says that you need to be working, studying or volunteering eight hours, about eight hours a fortnight, and that entitles you to 24 hours a fortnight of subsidised care. So the - I mean the concern here has been for some highly disadvantaged families whose kids have dropped out of early childhood education and care, and we will look at the particular circumstances of those families because we are very concerned that we've seen a pretty substantial drop in the number of families who are vulnerable and struggling. We do want to make sure that their children get the opportunity of early childhood education and care and we've already committed to reviewing the circumstances for those families.
MCCULLAGH: Yes, that's a difficult balance to strike because you don't want to just get rid of an activity test and say this is available to anyone because there may not be much incentive for people to re-enter the workforce. But at the same time you don't want to exclude families that are, as you say, the most disadvantaged of society not accessing any childcare and those kids missing out on those learning ladders.
PLIBERSEK: And of course because we've got our preschool and kindy program for three and four year olds, we won't be applying an activity test for those older children because we really do want to focus on this as an early learning opportunity. We want children starting school excited and confident about going to school. This play-based learning that you get in preschool and kindy can really help children become confident learners and all of the high-performing school systems around the world are looking at these types of early investments because we know that the return on that investment is so strong for children. Kids who are you know, being being read to and played with number games and colours and shapes and all of these things, but even learning to sit patiently and take turns and share, these skills are really important when they start formal schooling and kids who have had that preschool exposure often really just fly when they start school.
MCCULLAGH: Mmm and others arrive in kindy and they're already a little bit behind their classmates. There has been the question raised about how do you stop the childcare centres simply raising their fees because if they know that parents are now being helped out by whatever it is per week, I think maybe you know, $25 a week or whatever it is. Why won't they just pop up their fees that much? 
PLIBERSEK: Yeah, and there was a little bit of that when the Government made changes to childcare subsidies recently. We've asked - we've said that we will ask the ACCC to ensure that there is no price gouging, that individual centres that are doing the wrong thing can be reported and investigated and publicly named as doing the wrong thing. But I think more importantly we're asking the ACCC to look systemically at the operation of early childhood education and care to make sure that we are getting value for taxpayers' dollars and just as we've said with private health insurance that we're prepared to put price caps on growth in the cost of private health insurance - we are prepared to act in that way in early childhood should we need to if there is evidence that there is poor behaviour going on. I think more transparency in the system is really important as well, so making sure that the ACCC is able to investigate and publish information about anybody who might be doing the wrong thing is very important.
MCCULLAGH: We're talking with Tanya Plibersek, Shadow Education Minister. Tanya Plibersek, what about the other confusion that sometimes arises out of that activity test. I noticed that the Early Childhood Australia organisation has said that he believes the activity test is too complicated, too confusing, it needs to be simplified to ensure that those people who need the childcare get it so that it's not taking up their time proving what they're doing.

PLIBERSEK: Yeah, I agree. I mean, I think the paperwork we keep getting - reports from childcare providers and peak bodies - like the one you mentioned, that families are just really struggling with the paperwork and the red tape; and the people who are most likely to be dissuaded from putting their kids into child care in these circumstances are often the families that would most benefit from the assistance of having a, you know, a day a week or a couple of days a week where mum and dad could be looking for work or get, you know, improving their skills or something. So, it is very important that we work with early childhood educators to make sure that the activity test requirements reasonable, they're not to onerous - the paperwork's simplified and we're not making the most vulnerable families jumped through all sorts of hoops to get an educational opportunity for their kids that will be so good for their kids.
MCCULLAGH: On to the - the workers’ pay increase. Now, it's a supplement to the award wage. There's a couple of questions around this but just on to the - the kind of, big picture. This is really, as you've said, about creating a more professionalised workforce that is rewarded financially and also, well, we know that the turnover as you said it is enormous. I think one in five workers don't last more than two years and 96 per cent of people who work in this sector of females, but Dan Tehan, the Federal Education Minister, he said that it's a socialist if not communist economy being promoted by this policy. Why would he say that? What do you think he's meaning by that?
PLIBERSEK: I think anybody who's visited a childcare centre; anybody who's dropped off or picked up their own children anytime - anytime within their living memory would see the complexity, the responsibility, the difficulty of the work that is done in early childhood education and care. I don't think there's a parent anywhere who thinks that childcare workers are paid appropriately and I don't think there's anyone that believes, if this wasn't a 96 per cent female workforce, that they wouldn't be better paid. This is a classic example of work that is paid less than it's worth because it's feminised work. We are proud of the fact that we're going to more appropriately recognise the skill and the complexity and the responsibility of this work. We can't ask parents to pay more for child care, centre operators tell us that they can't afford to pay for it out of their, you know, profit margins. There's only one alternative and that's for government to offer more assistance. There's precedent for this, like the social and community sector workers that work in homelessness services and refuges and so on when we were last in government, we recognised that they were underpaid and at the Commonwealth would need to find extra funding to more appropriately recognise the importance of that work. And to be honest, I think down the track when we see the outcome of the Royal Commission into Aged Care, that there'll be other areas where we will have to more appropriately pay highly skilled. highly competent workers that are underpaid - frankly, largely because they're women.
MCCULLAGH: What about the questions around how that increase in pay - now it's 20 per cent over eight years. So it's not 20 per cent, you know, in this financial year or even the next but it would be a big increase over that time. How would you pay them? How would they, how would we ensure that workers got this extra money if we're not paying them directly because it's not part of the award wage, many of them are working in private sectors. How would how would it be delivered?
PLIBERSEK: Well, look we have managed to do that. Like I said with the social and community sector workers and I'm sure that by sitting down with employers, with industry associations, with unions and others we’ll be able to ensure that this money goes to the workforce. It cannot be taken as profits. This must go to keeping these workers and I think most employers understand that it's in their interests when - when this offer's on the table to pass the money through to their workerforce. They don't want to see the high turnover - 37 per cent turnover in the industry was one figure I read recently. Children learn better when they are comfortable and used to the carers at their childcare centre. Making sure that we keep those highly skilled professionals who love kids in the sector benefits the children, it benefits the employers, it reassures parents. It's a win-win-win situation and I'm sure it's not beyond us; and the other thing I want to say about this is: the other question though, beside being accused of socialism, the other criticism that the government has made is that this is unaffordable. Look this Government is actually planning to give $77 billion to the top 3 per cent of taxpayers as a tax cut. Saying that we can't afford to properly pay early childhood educators, but we can afford $77 billion worth of tax cuts for the very top end. It's a matter of priorities. It really is a matter of priorities - what matters more to us is making sure that low-paid workers whose work is so very valuable to our community are properly paid and if we can't afford to give tax cuts to people on $250,000 a year or half a million dollars a year - well, we're just going to have to cop that.
MCCULLAGH: But isn't the argument that follows on from that – why aren't we paying very lowly paid retail workers or people working in food production or other very lowly paid areas? Why aren't we subsidising their wages?
PLIBERSEK: Well, the difference is, of course, that in early childhood education and care that the Commonwealth is already a major funder and in retail and so on we're not providing funding to that industry, but I'll tell you - what for retail workers, for pharmacy, for hospitality workers - we'll restore their penalty rate cuts within the first hundred days of a Shorten Labor Government. We do want to see decent pay increases for private-sector workers on lower incomes because it's not just important for them. We've got the lowest wages growth on record in Australia at the moment. It's not just bad for those family budgets of those people. It's actually bad for our economy. The very low inflation numbers that we've seen recently are because of low wages growth. The demand in the economy is too low, people aren't spending money because they're not confident that they're going to get -  that they've got enough money coming in to make ends meet. They see the price of everything going up, their wages aren't keeping pace with inflation - that puts a dampener on our whole economy; people don't, you know, buy cup of coffee on the way to work, they don't, you know, take the kids out for a meal on a Friday night because they don't have a single dollar to spend - that reduces demand right across our economy and it slows our economy.
MCCULLAGH: Well, this is a big announcement - not just in dollar terms, but also in policy direction for - in childcare the biggest, possibly even across the campaign so far. Thank you for taking some time to explain it to us.
PLIBERSEK: Cassie, It's a real pleasure to talk to you. Thank you.