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Address to the Australian Childcare Alliance QLD National Conference, Brisbane



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Address to the Australian Childcare Alliance QLD National Conference, Brisbane

18 July 2015

E&OE

Can I acknowledge the traditional owners and any elders past and present in coming to the address here

today. It is a great thrill to be here. There are so many of you here today. Gwynn thanks very much for the

invitation. It has been a busy week which has taken me from one end of the country to the other and I bumped

into some people in Perth who said they were coming along to this event. It is wonderful to see the industry

coming together in such strong numbers. It demonstrates the vibrancy and passion which I have come to

observe first-hand all around the country when it comes to early childhood education and child care.

I have something in common with you - I love my job. You love your job, I love the job I have to do on behalf of

the Australian people. It is an exciting job. It is quite different to some of the jobs I have had in the past. I

didn’t speak to many conferences in the past which involved young children performing. In previous jobs I

didn’t do the ‘Wombat Wobble’ or read stories or chase chickens around backyards or those sorts of things.

You get to do that every day. I only get to do it once a week!

It is an enormously exciting sector to be in and it is a growing sector to be in. It is a sector that has an

enormous sense of the importance of what it is doing in the lives of young children and frankly in the broader

life of the nation. It is often cliché children are the future but these clichés start from a point of truth often and

that is a truth. That is what brings us all together around the issues we are so focused on from a public policy

point of view but in our day to day dealings.

It has been a busy time of reform for this sector and it has been a long time coming. Child care and early

childhood education has been on the agenda for a very long time. As a young boy myself I went to one of the

first centres in New South Wales which were experimenting in this area in the 70s. We came from a fairly

modest family and we had the opportunity to go along to that centre in New South Wales. Jenny and I made

sure that our kids also had the opportunity to get out and experience early childhood education as well

because we believe it is important that, in our case, it didn’t involve receiving subsidies or anything like that

but nevertheless if you believe in it as a parent then you make it a priority to ensure that your children have

the opportunity to have the best possible start in life. There are responsibilities of parents, of governments

and others working in the sector to try and provide for these opportunities. What we have been working on

for the last couple of years is to achieve a once in a generation reform to the child care and early childhood

learning sector. A once in a generation set of reforms which I have been so pleased to have the strong support

and participation of Gwynn Bridge. Gwynn has been an outstanding leader in coming and representing the

sector’s views very forcibly on occasion privately in my office and you should feel very encouraged by the work

Gwynn does in representing the broad interests of this sector. Working with others in the sector as well our

process has been to be as consultative and participative as we possibly can. It began with the Productivity

Commission report and that was a very good, positive process. It brought together and was able to identify a

series of shared learnings about what had been going on in the sector and what were some of the issues that

really did need to be addressed. My predecessor Sussan Ley who is now doing a great job as Health Minister

really did lead and drive that process to ensure that when I became Minister in December last year we were on

a very strong footing to be able to go forward in developing the response to the Productivity Commission

report which we have done in partnership with the sector, with families, with all of those involved over the last

six months.

We were very pleased to be in a position in this last Budget to announce a $3.5 billion increase in funding for

child care and early childhood learning through a reform system. In addition to that, to be able to continue the

Commonwealth’s commitment to Universal Access to preschool education on top of that which was over $800

million. As you know this is a budget environment where increasing spending on particular things is not an

easy thing to do. In fact it is a very difficult thing to be able to ensure increased investment in areas of public

service at the moment, particularly because of the fiscal situation we find ourselves in. But you should take the

vote of confidence of that increased investment in acknowledgment of the important role of early childhood

education and child care in the life of our country and importantly the life of the children.

The new package - the Jobs for Families package invests some $40 billion over the next four years. It is the

single largest investment in early childhood education and child care this country has ever seen. The single

largest investment. This followed clear indications from the Australian community that the government

needed to prioritise assistance to increase labour force participation - getting people into jobs - and I know

this is something the ACA strongly welcomed.

We know families want accessible, flexible, affordable and I underline quality child care and service providers

want to spend more time educating children, not tied up in red tape. Under our reforms, informed by the

Productivity Commission report but also our direct consultations, it will be more affordable for middle to low

income parents to get the child care and early childhood learning they need to hold down a job and give their

children the best opportunities and best start in life.

One of the things I am very pleased about what we have been able to put together under the Jobs for Families

package is that we are investing considerably more. When the scheme comes in 2017/18 we will be spending

around $10 billion. This is a significant investment in the future of our young people. But we are focusing it in a

way that benefits those who need it most. We are focusing it on low to middle income families. Those on

higher incomes will continue to get the same level of support they have been getting over the years and the

reason we have maintained it at that level is because we don’t want to see a falling away in labour force

participation for those who are getting that support. Where we wanted to change the game, where we wanted

to provide the opportunity for a choice that many low and middle income families don’t have at the moment

that is where we wanted to target the investment. That is the advice that we received from you as well - to

deal with families that struggle with these issues every single day. That is why we have ensured with the

introduction of the new single child care subsidy, the centrepiece of the package, that it will focus on those on

low and middle incomes in terms of the increased assistance provided.

Currently families earning less than $65,000 effectively receive around 74% of child care fees through the Child

Care Benefit and the Child Care Rebate, under the government’s new package this subsidy will increase to

85%. A family on $85,000 which receives approximately 70% currently will receive approximately 78% up to

the value of fee cap while a family on $120,000 receives about 60% currently and will receive around 67% up

to the value of the fee cap.

This is also a simpler system. If there was one thing that was screamed at us from the sector and families alike

it was ‘for goodness sake make this simpler, it is far too complicated’. We are not only going to do that by

collapsing the subsidies into one single subsidy for the mainstream support but we will be looking and

investing in some $200 million or thereabouts in new technologies and new systems that will make the system

more seamless for parents, more seamless for providers and more efficient for government to ensure we can

focus resources that we have in this area on those that need it the most.

The Subsidy is also underpinned by a new activity test. Now I know that has been the topic of some discussion.

We believe that there needs to be, for those on lower incomes under $65,000, two days of early childhood

education a week and that is what we are providing. Two can be in six hour blocks over two days which is the

same amount of time that young children at school receive to get that education and over the next few years

what I am looking forward to happening is the sector working with families and others to ensure that they are

in a position to be able to deliver that support in that way. The sector is changing fast. In the last six months

alone I have been in this portfolio I have seen changes in the sector. With new centres opening, new

technologies they are using and new ways of working with their staff and their training and all of these things -

and you will be talking about these things here over the next two days - this is a sector that can adapt, change

and improve because its passion and capacity is as good as anything anywhere else in the country, if not

better.

There are tiers that are part of the activity test. For eight hours of work a fortnight parents will be able to

access up to 36 hours of subsidised care for their children - that is for those earning over $65,000. The activity

test doesn’t just include work, there will be other activities included such as volunteering and looking for work

I should stress. We are also keen to ensure that the way we assess work understands the difficulties that

parents, particularly on lower incomes have in getting a continuity of work and ensuring there is a way of

assessing this which means that we do not needlessly disrupt or indeed disrupt at all the early childhood

learning of those children. So we are aware of that. One of the virtues of being in the social services portfolio is

the Department of Social Services does have a very good understanding about the inconsistent nature of work

patterns, particularly for those on lower incomes. They deal with it every day in a policy sense as the

Department of Human Services deals with it every day as a matter of their normal practice.

So these are things we understand and that we know. That is why we are not rushing into this new system.

Many have said 'well why can't you bring it forward?’ One of the things I have learnt in my political life and my

more general experience is you never rush to failure. You get it right and then you implement it. Over the next

couple of years we have the opportunity to get this right and to implement it properly. Great ideas are great

ideas, politicians can announce them but frankly the true test of public policy is an idea implemented

otherwise it is just a dream. We want to make sure these reforms actually come into place and we are going to

need your help as we continue to work with you to ensure they get made.

One of the areas I am most proud about in the package is the Child Care Safety Net. As the Minister for Social

Services I know very well the transformational impact that early childhood education can have on

disadvantaged young Australians. It is an absolute circuit breaker. Nicola Forrest has spent a bit of time in my

office educating me on the incredible transformation that happens with young Indigenous children with the

‘Challis model’ that is not only seeing young Indigenous kids going through the programme equal the

performance of other children in primary school but exceed it. If we are going to have a once in a generation

change in Indigenous communities then early childhood education is clearly a part of achieving that change. It

does have the ability to break generational cycles of welfare dependence, generational cycles of aspirations

never coming to be. So it is incredibly important from a social services policy perspective that we utilise early

childhood education in order to break the downward spiral that we too often see with too many families and

they become trapped not just themselves but they pass on that welfare dependency to their children as well.

We recognise that not all parents can work and that is why we have the safety net provisions in place. But in

addition to that it will flow in the following forms - The most disadvantaged and vulnerable families will be

able to receive extra support through the Additional Child Care Subsidy which replaces the Special Child Care

Benefit and the Jobs Education and Training Child Care Fee Assistance programme. But it’s not a one to one

replacement and will support families transitioning from income support to work and also low income families.

In the Child Care Safety Net overall we will be spending around $840 million over the budget and forward

estimates extra. So what was previously there and in budget based funding and special child care benefit and

the JETCCFA subsidy - we are spending all of that and on top of that an extra $847 million or thereabouts in

the additional programmes we are running.

We are introducing a Community Child Care Fund, a competitive grants programme for services to reduce

barriers to access for child care. From July next year there will be $10 million a year programme to integrate

child care, maternal and child health, and family support services in certain disadvantaged Indigenous

communities. This was a recommendation of the Forrest Review into Indigenous Jobs and Training - Creating

Parity. Approved services in other pockets of disadvantage will also be able to apply for the Fund’s grants to

improve access for disadvantaged children. The Fund is not simply a replacement of existing programmes, it

goes above and beyond. It is better targeted, more streamlined, and a more flexible way to achieve our goals,

one which will promote innovative community driven solutions to help our more vulnerable families.

I understand there is concern about competitive grant rounds; I want to assure you that we will be providing

assistance to providers to ensure that services are delivered in areas of need, particularly those areas being

supported by budget based funded services. I want to stress however that we do need accountability in the

use of taxpayer funds and centres need to adopt and maintain viable business models.

This whole sector is like a three-legged stool. The public sector, not for profit sector and private sector,

particularly represented here today. We need all three and all three to be viable. If any one of them fails to

perform or measure up then the system does not work as well as it could. I am always encouraged particularly

by the role of the private sector in this industry which is sometimes derided. But one of the things I know and

read the Productivity Commission report, deep back in the appendices, was a simple little research finding that

said in the most disadvantaged areas of the country those providers with the lowest prices to disadvantaged

families in those sectors were actually privately run child care operators. That said to me that there is no

mortgage on virtue in this sector. It is a virtuous sector all the way across from the private to public sector.

Everybody believes in providing a quality, affordable and accessible service. If you didn’t you would not be in

the service in the first place, or you wouldn’t be working in the policy space which is trying to improve things in

this area. So it is important to recognise the virtuous motive of all of those working to the right ends in this

area.

A new Inclusion Support Programme will start on 1 July 2016, a year ahead of the new child care system, and it

will assist services to develop and improve their capacity and capability to provide inclusive services for

children with additional needs. There is a child care and early childhood centre in my electorate within the

Sylvanvale Foundation. They have for many years been providing mainstream access for children with

disabilities to be learning alongside children without disabilities. I have seen it for many years and when I saw

this many years ago it was one of the things I was keen to be improved in the system right across the country.

To see young people with disability learning alongside those who don’t completely normalises the situation for

those young kids as you know as they grow up. They grew up with a very different understanding of those who

have differences, of those who might struggle with other things they don’t struggle with and the inclusion

support programme I see as pivotal on ensuring a fair go for young people with disability right from the get-go.

Right from the start. That they get the opportunity to go to mainstream centres. Now that doesn’t mean we

don’t still need to maintain our support for some very specialised services for children with disabilities but the

Inclusion Support Programme is exactly about that. That is why we didn’t change the name because I thought

the name was right.

On the rebate I am aware that this has not been increased since indexation was paused in 2011 under the

former government. The former government amended the Family Assistance Law to maintain the limit at

$7,500 per child for three years until 30 June 2014 and this has been extended out to the start of the new

package. We don’t have plans to review the limit before we introduce the new scheme however, under the

new Child Care Subsidy, there will be no annual cap for families earning less than around $185,000 per year.

An annual cap of $10,000 per child will apply for families earning around $185,000 or more. This will support

many more families than the current CCR cap. This was a very deliberate decision to make child care affordable

for more families. I heard from families around the country - ‘I would take the extra few hours, I would take

the extra day if I didn’t hit my head on the cap’. Now you would have heard that from your own families on a

pretty regular basis, as often as I have. So we had to structure the programme to ensure that those not on

exorbitant incomes but on middle and lower incomes would have the opportunity to take on more work and

not have a disadvantage by taking on more work when it came to accessing child care. This is one of the most

important parts of the changes we have introduced. It is a licence to work for families who want to work more.

Because they need to work more in most cases. You probably heard me say on many occasions whether in the

Parliament or elsewhere, I do not consider the support we give to the child care and early childhood learning

sector as welfare. It is not. A welfare payment is a payment I make to a person or a family straight out. A child

care subsidy is being paid to the service provider to reduce the cost of that service so that a family can access

it. You don’t get it unless you are actually acquiring the service. So it is not a welfare payment. It is actually an

enabling payment. It is a payment that is allowing families to work more and more and more families as we

know need to work more through their own choice and have been denied those choices because of the way

the system currently works.

I do want to thank people for their participation in the Regulatory Impact Statement (RIS) consultation that we

are engaged in. Nearly 800 people have attended 18 sessions in person with a further 650 people registered to

attend the remaining 20 sessions that we have. Over 3,000 people have looked at the RIS homepage. I am told

those who attended the sessions have appreciated the opportunity of feedback. A few have provided feedback

to me on twitter who thought it should be a bit better here or there but that is the nature of a consultation

process and there are still sessions to go and I encourage you to get involved in that. The consultations this

month involve meetings, forums and on-line input via email or survey.

We have heard very different views about temporary financial hardship around the country. Many services

agree that allowing people to receive the additional subsidy for 13 weeks in these circumstances is a fair

amount of time but many others consider this might be too restrictive. Farmers in drought affected areas or

families that have a family member with a serious medical condition may need more flexibility for example.

At the same time, you want families and services to provide some evidence before accessing additional

funding but you want us to be flexible about what that evidence might be.

There is also an acknowledgment on the need for simpler administration, particularly around the Subsidy and

the Safety Net. There is a commendable desire to be accountable for the extra funding people receive with

performance reporting to measure outcomes. Support for an alignment of provider approvals with national

quality standards. More flexible operating hours that will suit services in regional and remote areas, making

them more viable and helping them respond to their families and, one that resonates particularly with me is

that you want to spend your time educating and caring for children and not filling in unnecessary paperwork.

Around Inclusion Support, I am really pleased to hear the sector is unanimous in its support for the increase in

the Subsidy. We are hearing that the new programme should be flexible to deal not only with children who

have diagnosed medical conditions, but also children with behavioural issues, and those who have not yet

been diagnosed because there is a shortage of medical professionals - a key issue for regional and remote

Australia.

I think there has been an enormous level of good faith in the discussions I have had with your sector leaders.

There has been a lot of good faith as I have gone around and spoken with the sector directly as I meet with

child care educators and workers around the country, spoken to families and seen the almost universal, I

would go further to say universal appreciation, of the young ones. The smiles on their faces and the love and

care that they are receiving all around the country is something we should all feel very proud about and you

should particularly feel very proud about. We want to maintain that system but have to continue to do it in

partnership. We have to do it in partnership as a government. We are currently providing about two-thirds of

the child care bill in the country today. With the states and the territories there is a federation review process

underway now which I think is going to have to draw them more to the table, particularly in New South Wales

and Queensland. Other states such as South Australia I will note, are putting a very serious investment into

early childhood education as is Western Australia. But in terms of the relativities of investment in preschool

education in New South Wales and Queensland there is a lot of cost shifting going to the federal government

and reliance on the child care subsidy system. There really needs to be a much stronger level of base support

coming out of those states to ensure a broader, more universal access for that level of education.

The responsibility for education of young people in this country does rest with the states and territories. It is

our responsibility as a Commonwealth Government to add value to that, to facilitate that, to ensure the other

objectives and responsibilities we have at a federal level are being met. That is why in many elements of the

package I have focused strongly on the issues of social services policy objectives of supporting young and

disadvantaged families, to support those on lower and middle incomes, to facilitate more of those families into

work. That is why there has been such a strong focus because that is the job I have as the Minister for Social

Services. Early childhood education is an outstanding tool to change the fortunes and outcomes of those

families in this country.

So we do need to continue to work together, we are pleased to have been able to provide the support we

have. We have a long way to go before we get to July 2017. I wish you well for the next few days of your

conference and look forward to seeing some of you at a child care and early childhood education centre

around the country and suppose I will be chasing chickens again and reading stories and dancing or whatever

you have in mind for the visit and I look forward to seeing you and the kids there.

Thank you very much.

(ENDS)