Title Select Committee on Work and Care
Work and Care Committee
Database Senate Committees
Date 07-10-2022
Source Senate
Parl No. 47
Committee Name Select Committee on Work and Care
Page 1
Questioner O'Neill, Sen Deborah
Bragg, Sen Andrew
White, Sen Linda
Responder Pocock, Sen Barbara (The CHAIR)
Prof. Hill
Prof. Preston
Prof. Cass
Prof. Craig
Prof. Huppatz
Prof. Brennan
Prof. Stewart
Prof. Smith
Dr Withers
Prof. Hamilton
Prof. Cortis
Prof. Boyd
System Id committees/commsen/26140/0001

Select Committee on Work and Care - 07/10/2022 - Work and Care Committee

BOYD, Associate Professor Wendy, Member, Australian Work + Family Policy Roundtable [by video link]

BRENNAN, Emeritus Professor Deborah, Member, Australian Work + Family Policy Roundtable [by video link]

CASS, Emeritus Professor Bettina, AO, Member, Australian Work + Family Policy Roundtable [by video link]

CORTIS, Associate Professor Natasha, Member, Australian Work + Family Policy Roundtable [by video link]

CRAIG, Professor Lyn, Member, Australian Work + Family Policy Roundtable [by video link]

HAMILTON, Associate Professor Myra, Member, Australian Work + Family Policy Roundtable [by video link]

HILL, Associate Professor Elizabeth, Co-convenor, Australian Work + Family Policy Roundtable [by video link]

HUPPATZ, Associate Professor Kate, Member, Australian Work + Family Policy Roundtable [by video link]

PRESTON, Professor Alison, Member, Australian Work + Family Policy Roundtable [by video link]

SMITH, Associate Professor Meg, Member, Australian Work + Family Policy Roundtable [by video link]

STEWART, Professor Miranda, Member, Australian Work + Family Policy Roundtable [by video link]

WITHERS, Dr Matt, Member, Australian Work + Family Policy Roundtable [by video link]

Committee met at 09:07

CHAIR ( Senator Barbara Pocock ): I declare open this public meeting of the Senate Select Committee on Work and Care. This is a public hearing and a Hansard transcript of the proceedings is being made.

I begin by acknowledging the traditional custodians of all the lands on which we meet—and they are many—and I pay my respects to elders past and present. I extend that respect to any Aboriginal and Torres Strait Islander people who may be participating in the hearing today.

Today's the fourth of the committee's public hearings into work and care in Australia. I remind all witnesses that, in giving evidence to the committee, you are protected by parliamentary privilege. It's unlawful for anyone to threaten or disadvantage a witness on account of evidence given to this committee, and such action may be treated by the Senate as a contempt. It's also a contempt to give false or misleading evidence.

The committee generally prefers evidence to be given in public, but, under the Senate's resolutions, witnesses have the right to request to be heard in private session. If a witness objects to answering a question, they should state the ground on which the objection is made. The committee will determine whether it will insist on an answer, having regard to the ground on which the objection is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera.

I now welcome, with real pleasure, members of the Australian Work + Family Policy Roundtable. I understand that information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. Do you have any comment to make on the capacity in which you appear?

Prof. Hill : I'm an associate professor in political economy at the University of Sydney and founder of the Australian Work + Family Policy Roundtable.

Prof. Preston : I am from the University of Western Australia.

Prof. Cass : I am a professor emerita from the University of New South Wales.

Prof. Craig : I'm a professor of sociology and social policy at the University of Melbourne.

Prof. Huppatz : I'm from Western Sydney University.

Prof. Brennan : I'm a professor emerita at the University of New South Wales.

Prof. Stewart : I'm a professor at the law school at the University of Melbourne and honorary professor at the Crawford school of the Australian National University.

Prof. Smith : I'm an associate professor in the School of Business at Western Sydney University.

Dr Withers : I'm a lecturer in sociology at the Australian National University.

Prof. Hamilton : I'm an associate professor from the Centre of Excellence in Population Ageing Research at the University of Sydney.

Prof. Cortis : I'm an associate professor of social policy at the Social Policy Research Centre, University of New South Wales.

Prof. Boyd : I'm an associate professor in early childhood education at Southern Cross University.

CHAIR: Thank you so much to every one of you. I welcome you and the roundtable to this hearing. I'm very conscious of what your lives are like and how busy you all are, and I really appreciate, along with the other senators, the priority you have given to giving your evidence today. I also want you to know that we are delighted to have a collection of our country's foremost researchers on the terrain that this Senate committee is considering. I understand that you all have the information you need around parliamentary privilege. Associate Professor Hill, would you like to begin by making an opening statement on behalf of the roundtable? I understand we will then have three short statements from Professor Miranda Stewart, Associate Professor Myra Hamilton and Dr Matt Withers. Following that, I will lead with some questions and then invite Senator O'Neill to follow me and Senator Bragg to follow after that. So over to you, Associate Professor Hill.

Prof. Hill : Thank you, Chair, and to senators of the committee for extending an invitation to the Australian Work + Family Policy Roundtable to appear at this public hearing. The roundtable really appreciates the opportunity to speak to our submission and engage with the committee in a conversation about how to improve Australia's work-care policy architecture and infrastructure. I'm joining the hearing from the University of Sydney, located on Gadigal land, and wish to acknowledge the Gadigal people of the Eora nation and pay my respects to elders past, present and emerging and to any other First Nations people on this call. With me are 11 members of the Work + Family Policy Roundtable, located at different universities around the country, and this is just a select group who were able to be present today.

The roundtable is a network of, currently, 35 academics from 18 universities and research institutions, with specific expertise on work, care and family policy. The goal of the roundtable is to propose, comment upon, collect and disseminate research to inform good evidence-based public policy in Australia. We held our first meeting in February 2005 and have been actively translating the research evidence into public policy and public debate for the past 17 years. As a group of Australia's leading academics, we research the full range of issues that make up our work-care regime and policy architecture.

You've already heard from roundtable co-convenor and distinguished RMIT professor Sara Charlesworth, at the Melbourne hearing on 20 September, and Professor Marian Baird, at the Sydney hearing on 21 September. You've also heard from the SDA, who addressed the findings of their recent reportChallenges of work, family and care for Australia's retail, online retail, warehousing and fastfood workers, of which roundtable member Associate Professor Natasha Cortis was the lead author. Roundtable members Professor Alison Preston, Dr Fiona Macdonald and, again, Natasha Cortis have also made individual submissions, alongside our collective submission.

Today we speak to our collective submission, which draws together our research expertise on work and care and that of our Australian and international colleagues. Our submission is based primarily upon the research-informed recommendations contained in the three roundtable publications, which we strongly recommend to the committee. They include the 2022 federal election benchmarks for work and care, the 2019 federal election benchmarks for work and care, and our 2020 publication Work + care in a gender inclusive recovery: a bold policy agenda for a new social contract.

These three documents provide an account of the inadequacy of Australia's work-care regime pre-pandemic, the lessons that must be drawn from the pandemic experience for better work and care, and recommendations for an improved work-care policy architecture. Each of these three documents includes detailed recommendations on how to rebuild work-care policy settings, based around a new social contract between citizens, government and employers that recognises and supports the right for everyone to give and receive high-quality care.

The research evidence shows that care is the foundation of a good society and a dynamic and prosperous economy. High-quality care, both paid and unpaid, enables the development of human capabilities, wellbeing and economic productivity, whereas inadequate investment in care infrastructure, including both our services and workforce, weakens our economy, exacerbates inequalities and leaves communities vulnerable. We also strongly argue that care is a collective social responsibility and not the sole domain of women. Everyone has care needs and responsibilities, and these change over the life course. This means that good policy will take a life course approach to design and acknowledge Australians, all Australians, as worker-carers or carer-workers but certainly not just workers and not just carers.

This positioning and framing makes work and care policy a complex domain. At any given point in time, some of us need paid leave from work in order to do unpaid care. Others need access to formal care services for their family so they can be relieved, for some time, of unpaid care and engage in the paid work that will allow them to build economic security. Good jobs—that is, those that are secure, properly paid and with predictable hours, all things that I know Professor Sara Charlesworth spoke to you about—are absolutely fundamental here. Good care and good jobs go together, and now is the time for concrete action. Policy and regulatory settings are not fit for purpose given the make-up of our labour market and the economic challenges Australia faces as we recover from the pandemic.

Changing social norms, high levels of female education, demographic trends and economic conditions mean that Australian women are increasingly engaged in the labour market in a similar pattern to men. Here I want to highlight a particular picture of this phenomenon. This slide is from Professor Alison Preston's research on labour markets, and it shows the pattern of men's and women's participation in paid work over the life course for both 2000 and 2019, so this is pre pandemic. I want you to note that this slide doesn't tell us anything about the type of work that men and women are doing. It doesn't tell us if they're working in full-time or part-time work; it just tells us about their patterns of engagement in paid work over the life course. The point I want to make with this slide is that there is a growing convergence between the shape of men's and women's labour force participation across the life course. You can see here the blue and the red are men's patterns, with not a lot of change here except that older men are maintaining their commitment to the labour market for a little longer. We've got women in 2000 on the green line, and a lot of economists refer to this as 'nappy valley'. We can see that 'nappy valley' is flattening out and increasingly pushing up. There's still a participation gap—there's no doubt about that, and that's one of the important issues that this committee needs to address—but, nevertheless, we are seeing a convergence in the shape of the pattern, particularly with older women. You'll notice here that they are really engaging in paid work for a longer time over their life course.

I want to make the point about the convergence there in the pattern but also to tell you that a range of qualitative and other quantitative research is showing us that young women expect long and fulfilling work lives in much the same way as men. This is the case, importantly, for both professional women and frontline women working in essential jobs. This is not just the domain of the highly educated, professional, knowledge-sector workers. It is for all workers. This is a finding of our qualitative work.

Our research also shows that young Australian men with children have similar understandings to young women about the types of care infrastructure that they will need to have a successful future of work, and that includes things like affordable and accessible early childhood education and care, adequate paid parental leave and decent work with paid leave to care. We're at a point where women are, more than ever, keen to participate in paid work, and men are increasingly signalling they want to participate in unpaid care. But all the data shows that gendered inequalities in paid and unpaid work remain deeply entrenched in Australian labour markets and our households. Professor Lyn Craig can speak to the persistent gendered inequalities in unpaid labour in the home.

These inequalities, we need to recognise, are not a reflection of personal choice; they are the direct consequences of our outdated, inadequate and residual approach to work care policy architecture and the design of care systems that are not fit for purpose, are underfunded and are plagued by workplace crises on account of the systemic low wages paid to our mostly women care workers. So for Australia to reap the productivity benefits embedded in a female population that is amongst the best educated in the world, better educated than any time in history and better educated than our male peers, we urgently need to update, upgrade and upscale Australia's critical care infrastructure so that everyone, no matter where they live and what they do, is able to work and care in a way that they would like to most, unhampered by policy settings that distort the economic incentives for women and fail to provide the high-quality and affordable care infrastructure that is essential for our 21st century economy and labour market. Many other countries do much better than us on many of these issues, and I know the committee has heard evidence on countries that have better designed paid parental leave and better designed early education and care, and long-term aged-care systems.

To remind the committee with regard to young children, recent OECD data shows Australia spends approximately 0.6 per cent of GDP on education and care for children aged nought to five compared to Iceland's 1.8 per cent and an OECD average of about 0.7 per cent. When you consider all the public policy supports for young children in wealthy economies, UNICEF recently ranked Australia 37 out of 41 countries in our total funding commitment. So our policy settings and our care systems need to be urgently recalibrated and resourced to build sustainable work, sustainable care and a sustainable care workforce. This is not an easy task and it will be costly.

The depth of the research expertise on the roundtable shows that a piecemeal approach to work care policy is inadequate and that success in this space will require a holistic and joined-up approach to policy design. Funding this type of robust system will require an investment approach to work and care that is focused on the long-term benefits for individual and community wellbeing, social cohesion, economic productivity and prosperity.

I now invite three of the roundtable members to make short statements on three specific areas of work care policy that we would like to highlight. I first invite Prof. Miranda Stewart.

Prof. Stewart : I would like to acknowledge the traditional owners here on Ngunnawal land. My area of specialisation is tax law and transfer law or policy—transfers meaning cash payments, so you can think of it as cash in and cash out of government—and in particular the interaction of these policy systems on decisions and effective tax rates on work, in particular the gender impact of that when carers of children in particular are making choices to enter the workforce or not and how much to work.

You have had the background of presence in the labour market of women and how that is changing over time. I think it is still important just to add to that background, and we do have a bit more information in our general submission. The statistics on the chart presented by Professor Hill were sort of participation as a whole over all women and men—working age, I am assuming. We do see a more substantial difference in particular for women who are rearing children. You saw in that chart that there was a dip, the 'nappy dip', which is a dip at women's child-bearing age, basically, from early 20s to 40s. But, because that chart doesn't distinguish between women who have children and women who don't, it actually understates the impact on families with children.

Just to emphasise that a little further, I want to draw the committee's attention to an excellent article done by Patricia Apps, just published in the Australian Tax Forum, in 2022. I'm happy to share that article with the committee later. Professor Apps does an illustration of the life cycle phase using ABS data from 2015-16. So it's still a little bit out of date, and the time use data will, hopefully, give us more information—maybe not the first tranche this time but in future. I might just try and share a chart from Patricia Apps's paper. I'm not sure if you can see that well enough. I commend Patricia Apps's work to the committee. Potentially she could also give evidence, but I can certainly share Professor Apps's work with you. She has done this work over a very long period of time, and it's really high quality and targeted to the issues the committee is considering. This chart shows working hours. Professor Hill commented that that was participation in the labour market, which could be anything from one hour a week to full time. This is male and female working hours—'market hours' is how Patricia Apps describes it—over different phases of the life course. Her second phase is when you have young children in the household. Here you can see that men's hours are in grey, and they basically stay as full-time hours and are constant. This is statistical data out of the population. And women's hours, of course, drop dramatically at that time. Women's hours do recover, but not to the extent of men's hours. These are women where there are children in the household. The purpose of sharing that with you is just to illustrate the very particular implications of the interaction of the tax and welfare systems for families with children.

I have a couple more things about that. I'm sure the committee is well aware of some of these issues, but I just want to emphasise them again. There are four elements to this interaction that I think should be of interest to the committee in the context where we're talking about people combining work and care. We're talking about policy that is about families that do both things but where we are increasingly seeing a move towards a dual earner, or both partners wanting to work. The four things that are relevant are, first, the rate structure itself in the income tax. How does that rate structure work? How progressive is that rate structure? Second is the net childcare subsidy, as has been well publicised, and we see continual reform. The net childcare subsidy is a substantial subsidy. The government is paying substantial amounts to support the cost of child care per hour, per child, and that amount is being lifted in the latest government-announced policy, to a cap of 95 per cent. But there are a couple of features of the design of that childcare subsidy which contribute to the effective tax on work. The first is that it is income-tested on joint income, so the income of both the primary earner and what we would call the second earner—the second earner being the person joining the workforce, often with a lower wage and usually female. It tapers, and it tapers not on individual income but on joint income. That childcare subsidy taper sits on top of the personal income tax rate structure and adds an effective tax rate.

So, just to be clear, you've got families that are receiving a substantial subsidy, or it's being paid to the childcare sector—that is, they have higher income support, if you like, at their disposal. It's the withdrawal or tapering of that subsidy on joint income, rather than individual worker income, that has the effect of being a higher effective tax rate.

Two other elements are family tax benefit A and family tax benefit B. We mustn't forget that about 20 per cent of families with children are sole-parent headed, and the majority of those, I think about 90 per cent, are female headed households. The withdrawal of family tax benefit A and B—family tax benefit A tapers at 20 per cent to a threshold and then at 30 per cent. So, over a threshold, you start earning income and you lose the transfer at 20c in the dollar and then at 30c in the dollar—and family tax benefit B at 20c in the dollar over a different threshold. The thresholds are a little complex, so that's something to consider. The payments are per child, so the effect differs depending on the number of children in the household.

Because both of those payments for couple households are tested on joint income—again, we have a quasi joint or family unit in the transfer system—that has the effect of the second earner's income being kind of on top of the first earner's income, and it faces, therefore, the higher rate. The second earner is the more responsive, or we would say 'has more elastic labour supply', to be a bit more jargon oriented, and also, at the same time, faces that higher effective tax rate from the withdrawal of benefits.

I just have a couple of illustrations, and I will share these charts with the committee afterwards. I don't want to take too much time now; they are just illustrative. I have modelled, working with David Plunkett, who has a spreadsheet model of the tax and transfer system, what we would call the 'daily effective tax rate' for cameo families. Going back over the years, to 2016-18 and so on, we've modelled the different iterations of the childcare and family payment system. What we've found in this is that, as the childcare subsidy goes up, of course, effective tax rates do come down. So we are improving the situation for second earners, but we still face rather high effective tax rates on the second earner. I just want to illustrate that for a couple of cameos, and I want to emphasise that these are cameos; these are not real people, using statistical data. These are hypothetical situations or hypothetical examples.

I'm just going to try and very quickly share a couple of these charts. The reason why I want to share these particular charts is that they demonstrate the interaction of the different kinds of family payment or different kinds of childcare subsidy. We can model this in slightly different ways if that would be of interest to the committee.

Let me give you an example here of a median-wage family. So this is a pretty low-wage family. For the median wage of the primary earner, we've used the male median wage, which is $78,000 a year, based on ABS statistics. The female median wage is, of course, lower than that, because we have a gender pay gap. What we have modelled is that the full-time earner is already working full time; the primary earner is in the market working full time. This household has two children under the age of five. They are using long-day child care and paying for that and receiving the childcare subsidy. They are also receiving family tax benefit A and B.

What we modelled is what happens as our second earner—P2—goes to work one day a week, two days a week, three days a week, four days a week and five days a week, as they increase their hours. Rather than thinking per hour and what happens on the next hour, we say, 'Well, more realistically, you work two days a week or you work three days a week or then you go back full time.' The bar chart shows the Y axis as the effective tax rate on that day of work. If there is a primary earner working full time and a second earner coming to work one day a week—with two children under five in this scenario I've given you—we see an effective tax rate on the second earner's day of labour of 50 per cent. That means that the take-home pay is only half the disposable income—after we've adjusted for tax and transfer settings—of the actual earnings for that day.

What is that made up of? The blue on the chart shows family tax benefit A. So the first part—or quite a large chunk of this effective tax rate—is actually the loss of family tax benefit A. That's because of the tapering of that payment over a threshold. Remember, the primary earner is already earning income. The orange shows the loss of family tax benefit B. These are two payments with different thresholds and different tapering. You can see that the two of them actually comprise rather a lot of the effective tax rate on this median earner. The green shows the net childcare cost. The childcare subsidy covers a lot of the childcare cost for this family, but not all of it. These are the settings as they were in May 2022. So, just to be clear, this does not take account of the proposed further changes that we will see.

What you can see is that on day 2 there's a 55 per cent effective tax rate; day 3 has 50 per cent; day 4 has a little over 50 per cent; and day 5 has a 70 per cent effective tax rate. So, for each day of work, essentially we see that you're only taking home the net difference. Income tax doesn't start kicking in until days 2, 3, 4 and 5. On the first day of work, the secondary worker pretty much pays no income tax. That one day a week of salary is not paying much tax. But, of course, by the time you get to day 5, basically the net childcare cost is higher, because they're losing the childcare subsidy and paying income tax.

I might pause there, and I'm not going to go through any other examples. I'm conscious of the time. If there are any questions about the chart, I'm very happy to answer them now or just to submit this later for the committee.

CHAIR: Yes, thank you.

Prof. Hill : Thanks, Miranda. I'm just going to swap the order and invite Dr Matt Withers to present next, because he has to head off for teaching at 10 o'clock.

CHAIR: We may follow Matt's presentation with any immediate questions in relation to immigration or migration. I understand that's what you're going to contribute on.

Dr Withers : Thank you, Senator Pocock and Elizabeth. Good morning, everyone. I would like to begin by acknowledging that I am joining you all from the lands of the Ngunnawal and Ngambri people and paying my respects to elders past and present. Australia is a country of migrants, a large and increasing share of whom work and reside on temporary visas. Existing work and care policies, however, do not adequately address the needs and wellbeing of this diverse and important group of workers.

Whether on permanent or temporary visas, migrant workers face specific challenges in meeting their work and care needs. We know that migrant workers are concentrated in lower-paid occupations for which they are often overqualified; that the conditions attached to specific work visas heighten their vulnerability during employment; and that these same migration settings create significant obstacles to family reunification. As Professor Sara Charlesworth's submission to this inquiry has detailed, migrant workers are over-represented in devalued frontline care occupations. It is grimly ironic that Australia's current migration setting frequently prevents these same workers from being able to receive and give care within their own families.

Nowhere are these limitations on transnational family life more apparent than within the Pacific Australia Labour Mobility scheme. The PALM scheme was designed to address rural and regional Australia's labour needs while promoting sustainable development outcomes in nine Pacific Island countries and Timor-Leste. It offers Pasifika and Timorese workers employer sponsored jobs for periods of up to four years but currently offers no options for family accompaniment.

My research into the implications of transnational family separation within the PALM scheme has involved in-depth interviews with migrant workers, their families and government officials in Fiji, Samoa, Tonga and Vanuatu.

Findings are clear: the economic benefits of the scheme are substantial, but so too are the social costs borne by migrant households and their communities. Interviews with migrant workers and their families revealed that participation within the PALM scheme disrupted the care practices and personal relationships that had hitherto sustained their everyday lives. Parental bonds were frayed by the limitations of distance communication; important forms of unpaid household and community labour were displaced; and spousal relationships frequently broke down amid prolonged separation. These concerns were shared by representatives of Pacific island country governments involved in administering the scheme. In a separate study commissioned by the Department of Foreign Affairs and Trade, stakeholders conveyed significant and widespread concern about the frequency of extramarital affairs and the welfare of children separated from one or both parents. Children were reported to experience harms ranging from dropping out of school through to instances of sexual abuse and abandonment. Consistent with the international literature on transnational family separation, it was clear that these outcomes were not gender neutral. Whether working in Australia or caring in their home countries, women and girls were observed to be more disadvantaged by the reconfigurations of transnational family life.

These findings indicate that the PALM scheme is producing care deficits that erode the prospect of sustainable and gender-equitable development for migrant workers, their families and the communities they originate from. As one Fijian official remarked:

It's not an isolated case, but nearly every deployment there will be a family separation issue.

As the current government looks to expand the PALM scheme as a labour supply fix for Australia's aged-care system, the need for workplace and development policies that better support transnational family life and care practices are all the more urgent. Adopting decent care policies that involve families and predeparture training, facilitate affordable family accompaniment and return travel options, and commit development spending to care infrastructure across the region would allow Australia to establish best practice in the fraught policy space of guest worker migration.

Finally, in addition to this, I want to emphasise that, in administering a four-year temporary migration scheme in which workers have no pathway to permanent residency, are unable to change jobs and cannot be accompanied by family members, Australia has no policy equivalent in Europe and in North America. The closest policy approximations of the PALM scheme are to be found in the countries of the Persian Gulf and in Hong Kong, Singapore and Malaysia, where exploitation is rife and unaccompanied by any pretence of development. The PALM scheme does offer better labour standards than the low bar set in those contexts, but it falls short in care policy. Existing plans to introduce family accompaniment within the scheme are riddled with caveats that will prevent workers from accessing the policy options. They will require permission from their employer for their families to join them; they must cover all the associated costs while on post-tax annual salaries of roughly $35,000 a year; and they will not have subsidised access to public health and education services, the costs of which will vary substantially from state to state. So I want to end by saying that there is a very real risk that the costs of family accompaniment will be so high within the existing model as to make this an unviable option for most participants and their families. Thank you.

CHAIR : Thank you, Dr Withers, for bringing our attention to an issue which has not come to the committee previously. I will ask a couple of questions and then see if the deputy chair, Senator O'Neill, and Senator Bragg have any. I want to ask first how many people are within the PALM scheme. How big is it?

Dr Withers : At the last available figures, the PALM scheme covers roughly 26,000 workers in Australia.

CHAIR: Workers who are here at present?

Dr Withers : At present, yes, and roughly double that number who've been screened for preapproval to participate in the scheme.

CHAIR: Do you have reports or data that you've referred to that you could supply to the committee that spell out comparable arrangements in other countries that you've referred to and the implications and consequences of the failure to provide family reunion? That's essentially what you're pointing to as a recommendation—a more eased form of family reunion and more flexibility for the worker in the labour market to be able to leave their initial job. Are these the recommendations you're pointing to, essentially?

Dr Withers : Yes, that's correct—to have the ability to change employer over the duration of that stint of migration in Australia, but also a range of accompanying decent care policies that enable migrant workers to better access the care resources that they need, whether that means facilitating transnational care practices or directly investing in the care capacity of countries of origin in the Pacific and Timor-Leste.

CHAIR: Thank you, Dr Withers. Senator O'Neill, are there any questions you would like to ask of this witness, who needs to go fairly soon?

Senator O'NEILL: Thank you very much, Dr Withers. Do you have a good schema of exactly where these guest workers, as you've described them, are distributed across the country? That would be helpful, just to get a heat map of where it's really happening. My other question is: What is the comparison in Europe? What conditions are we talking about for European countries that we would normally associate ourselves with in the OECD, for example, with regard to public policy?

Dr Withers : Certainly. I can answer both of those questions. One of the problems with the PALM scheme is that the workers are effectively restricted to employment in rural and regional locations. At the present moment, workers are effectively working in over a hundred different locations across Australia in every state, in often very remote communities. So there is no hotspot, so to speak; it's a very scattered program in terms of where workers are deployed, and workers have very little say in where they find employment as well, from the recruitment side of the program.

Senator O'NEILL: This is actually one of the schemes where we have a much better idea of where the workers are than in other schemes, where we have workers who are completely unknown. We've heard from the Fair Work Ombudsman and Fair Work commissioners that there are many, many workers who are not documented, up to over 100,000 people just moving around in the community who are completely unknown. They would be more vulnerable than the group that you're describing.

Dr Withers : Quite possibly, yes. Although I think one of the distinctions here is that, yes, it's a highly regimented program where we do have a very good idea of where workers are located, although so-called absconsion from the program has increased dramatically in recent months and years. So it's actually feeding into a lot of the kinds of undocumented migration that you're referring to.

Senator O'NEILL: Thank you. The second was the OECD.

Dr Withers : Yes. The point I made in terms of comparison here is that there really is no policy equivalent in a scheme of this kind. Europe actually abandoned most of its guest worker schemes of this nature in the 1970s. There hasn't been an effort in Europe to return to this model, largely because of the contradictions it presents in terms of trying to have workers stay in a sort of permanently temporary capacity without having the same rights and access to family accompaniment. That is why I tried to draw attention to the fact that really the only equivalent policies are to be found in much more regimented authoritarian settings.

Senator O'NEILL: Can I ask one follow-up on that: in terms of the three things that you describe—no job change, no pathway to permanent migration and no family accompaniment—which of those things would be the priority in terms of changing the dynamic to approach what you think might be the best practice?

Dr Withers : From my standpoint, I think family accompaniment is really the biggest issue in the scheme, and, from speaking to workers, that's the issue which is most readily spoken about. Second to that, I think having the ability to change employer is a really important right that workers need to have access to.

Senator O'NEILL: Thank you very much.

Senator BRAGG: I have questions for Professor Stewart.

CHAIR: Let's come back to that after we have heard from Associate Professor Hamilton. Thank you, Dr Withers, for your time this morning. If there's further material you have that relates to what you have put to us, we would welcome receiving it.

Dr Withers : Yes, I would be very happy to submit that. Thank you.

CHAIR: Thank you. Associate Professor Hamilton, we will go to you and then come back and ask questions of all of the other presenters.

Prof. Hamilton : Thank you, Senator Pocock. I would like to acknowledge the Wangal people, on whose land I'm speaking to you from today. I've prepared a short statement on work and care among grandparents.

Grandparents providing regular care for grandchildren are an often invisible part of the work-care equation in Australia, but this care is highly prevalent in Australia. In 2017 about 860,000 children aged nought to 12 received care from a grandparent in a typical week. Recent research by the Australian Institute of Family Studies has found a quarter of grandparents of children aged nought to 13 provide child care at least once a week. Most of this care is provided by grandmothers. Most grandparents report providing this care to support their daughters and daughters-in-law to participate in paid work. The most common reason cited for their adult children's need for help is barriers in the formal early childhood education and care market: it's too expensive; there isn't a place available nearby; it's not flexible enough; or it doesn't meet their needs in some other way.

This certainly supports mothers to participate in paid work. There is now a substantial body of international evidence revealing that the availability of grandparent child care boosts maternal labour supply. But it can create knock-on effects for the work-care reconciliation of grandparents. While regular care of grandchildren can have benefits for grandparents, it can also have negative effects on their labour market participation as they too experience challenges balancing paid work and child care. In our research that surveyed grandparents with regular childcare responsibilities, 70 per cent of grandparents change their shifts, more than half reduce their hours and one in five change their jobs to accommodate their care responsibilities. More than 40 per cent reported it was difficult to balance work and caring for their grandchild. International research drawing on large-scale data also finds a relationship between grandparenthood and grandparent child care and labour market withdrawal.

Regular grandparent child care can also have negative implications for grandparents' financial security as they reduce their incomes and retirement incomes by reducing their paid work and often increase their expenses because of the costs of caring for young children. Our research has suggested a tipping point of 13 hours of child care per week, beyond which grandparents start to report the negative effects of child care on their paid work, their incomes and even their health. Whilst some grandparent child care is generally very positive for all involved, it's these more intensive levels of child care that can be detrimental. According to recent AIFS research, about half of grandparents who provide regular child care provide 10 hours a week or more, and one in five provide 20 hours a week or more—so really getting into those very intensive levels.

Research suggests that policies make a difference in increasing or reducing the levels of intensive grandparent child care that are more likely to lead to negative outcomes. Countries with widely available and affordable ECEC, such as the northern European countries, have much lower rates of intensive grandparent child care and higher rates of mature-age labour market participation among women. Grandparent child care is still prevalent in these countries but is more occasional and doesn't interfere as much with grandparents' paid work.

Longer parental leaves and access to part-time work for mothers also reduced these intensive levels of grandparent care. Countries with longer parental leaves tend to have lower rates of intensive grandparent child care in the early months and years of a grandchild's life, when child care can be very demanding and can interfere heavily with paid work. Countries with poorer access to part-time work for mothers also tend to see high levels of intensive grandparent care, because mothers who work do so full time. In contrast, policies that encourage working longer are likely to lead to a decrease in those intensive levels of grandparent child care, as more grandparents participate in paid work for longer.

Grandparents are still likely to continue providing some child care, particularly where they have access to part-time work. It's likely that more grandparents will be combining work and care into the future. But our recent research suggests that many mature workers don't enjoy the same kind of access to work-care reconciliation policies that parents of young children do.

Grandparents have reported to us that employer flexibility and understanding is essential for them to be able to successfully balance work and care. Some other countries are introducing policies that mitigate the impacts of child care on grandparents' work and incomes, and support them to combine work, child care and their other care responsibilities, such as those for ageing parents. Policies include grandparent leave, longer carer leave, a right to request leave based on grandparent childcare responsibilities, greater access to flexibility and part-time work among mature-age workers, and credits to pension accounts while providing regular child care.

Finally, migrant families are among those most poorly serviced by the formal ECEC system, yet they often have limited access to grandparent child care because the grandparents live abroad. In these families, they're forced to rely on parent visas—one of which has a 30-year-plus waiting period, and the other of which is over $50,000 per parent—or recurring short-term visitor visas, which don't create the continuity of care required for parents to find ongoing, secure, paid work. The recent introduction of the long-stay parent visa was meant to counter this somewhat, but it remains expensive—it's $5,000 to $10,000 per parent—and it creates the conditions of that highly intensive child care by grandparents that comes with negative impacts that I discussed above. The grandparents on the visa have no access to health and social rights, no access to work rights and no pathways to permanency. The visa comes to an abrupt end after five or 10 years, depending on what you apply for, and then the parents must return to their country of origin.

In the area of work and care, I suggest the committee explicitly consider the role of grandparent child care and the importance of supporting work-carer conciliation of mature workers, as well as parents of young children, and use an intergenerational lens in the consideration of policy in order to understand the likely effects across multiple generations, beyond the household or nuclear family.

CHAIR: Thank you, Associate Professor Hamilton. That's important evidence for our committee, and it's an area that we've had limited evidence on, so it's much appreciated. Once again, if you have any further documentation on the issues that you have put before us, we'd like to receive it, and thank you for your explicit pointing to a range of possible recommendations that we can consider.

I'm very conscious our time is short, and I feel that you've put before us a strong argument for a coherent overinvestment across a holistic, joined-up work-care system. That, and a comprehensive approach, is what I very strongly heard from you, Associate Professor Hill. I'm very conscious also that we've got new evidence before us in a range of areas, and I just want to pursue the tax and payments system. Senator Bragg has a few questions for you, Professor Stewart. Over to you, Senator Bragg.

Senator BRAGG: Professor Stewart, I just wanted to try and get a sense from you of what the most immediate policy changes would be that we could make on the payment side to address that issue you identified of the effective marginal tax rate being so high for the secondary earner. I have to admit it's a bit hard to follow it on the phone; I know you had charts there. What are the policy options that we could deploy to address that?

Prof. Stewart : Thanks for the question. Because there are all these elements in play at the same time, there are actually quite a lot of policy levers. The well-known one is the childcare subsidy and changing the adequacy of that and the taper rate—that is, the income testing of that. We are moving gradually towards something that is the end of the spectrum [inaudible] payment. We're moving along that spectrum. The closer we move towards universalism, as long as we solve the other issues that are discussed in the submission, and by other experts, about access, availability, suitable payment of care workers so that we have enough of them, ease of use and appropriateness—so there are a lot of other pieces in that puzzle—then we are improving the situation.

The additional element that I think has not really been in the policy space for quite some time is design of the family tax benefit A and B. These two payments have a long history. Many in the room know what that history is, going back to the nineties—but, of course, child allowances earlier. So what I would be advocating without recommending any one particular solution here—I have an intuitive preference but what I would be recommending actually is a government review of the design of our family and child payment system and considering in that review how that interacts with the tax rate structure and the childcare system that we've already talked about.

The solution that would lower the effective tax rates—the kinds of changes that would have that positive result—include testing the payment on individual wage earnings of the second earner instead of on joint income of the two people in the household. That poses some design challenges because you have to identify that person and identify their wage, but that's one approach. The other possible approach is lowering the taper and raising the threshold at which the taper starts to kick in. In particular, low- to middle-income households are seeing the cut-out happening precisely when that second earner increases her hours from one to two up to four to five. That's where we want the policy impact. We want to increase hours of participation. I'll stop there.

Senator BRAGG: I understand that you want to have a review, but maybe on notice—I'm just conscious there are lots of other people who want to talk so I won't take any more time; I'll send something to you through the secretariat—if you could just give us some options around the FBT issues, without nailing all your colours to the mast. I think that would be helpful because we have lots of reviews and inquiries into these things and sometimes it's better to start with a bit of a concept, even if it's a bit of a woolly concept, just so we can probe into that issue a bit deeper.

Prof. Stewart : That makes sense. I can certainly do that. Just one more comment on that, Senator—sorry, I'm conscious of your time. The policy challenge in the family tax benefit that the government needs to grapple with is about poverty and inequality. The challenge is balancing adequate payments to low-income families, in particular sole-parent headed families, and a more universal child allowance that would also go to most families, I would say. So you've got fiscal cost issues there, but you've also got to make sure that, in a policy reform, you do not reduce the benefits going to the poorest families. That's the challenge.

Senator BRAGG: In terms of what you come back with on the second issue in terms of considering whether you could undertake an individual assessment rather than a family assessment of these matters, could you also consider any integrity measures that may be required if that system were to be considered?

Prof. Stewart : Sure. I'll have a think about that and send in a short note.

Senator BRAGG: Thank you.

CHAIR: Thank you, Senator Bragg, and I'm with you in asking Professor Stewart to come back—as far as you feel confident based on your research evidence and that of Professor Apps as well. We can always recommend an inquiry, further work and so on, but, if there is evidence in favour of change that is more specific that we can consider more immediately, that would be very welcome.

Prof. Hill : Senator Pocock, can I just extend an invitation to Professor Emeritus Cass and Professor Brennan? They may also have some comments on this issue, particularly with that long history of engagement in this space. Bettina or Deb, would either of you like to contribute to this question?

Prof. Cass : The issue that Professor Stewart raised, which I think is quite crucial in terms of the family tax benefit payments, is that they constitute a high proportion of the incomes of low-income families. We should not consider them as add-ons. They are absolutely critical in some instances, particularly for sole-parent families and low-income couple families. Therefore there can be a trade-off, a real dilemma, between ensuring the adequacy of those payments and the relationship between the cut-off points and the tapers. I think that, if the issue for government is ensuring the wellbeing of low-income families, their employment potential, their care potential and the welfare and wellbeing of their children, then I'd be putting my emphasis—I'm not saying that the Work + Family Policy Roundtable might—on adequacy, because it's just so crucial. Very often family payments A and B are crucial add-ons to JobSeeker, particularly for sole parents whose youngest child is over eight, but also for low-income couples whose youngest child is younger than eight. Therefore we should be ensuring that that balance works. I'm sure Professor Stewart could work that out.

Prof. Brennan : I think that Professor Stewart has really taken us to the heart of the complexity of this issue of engaging in paid work, having access to child care—and Professor Cass's comments extend that, of course. I want to make one brief point, which is: there's a very strong focus at the moment on reducing the cost of child care to families, and the roundtable very much welcomes that focus; however—and I think our whole submission drives this point home—the interconnectedness of the policy domains around the care of children, reducing the cost to families, is absolutely vital for women being able to increase their employment. However, we can't take our sights off the necessity of providing decent employment to the educators and teachers in this realm and also providing the high-quality service to children. I know that nothing in the comments of my colleagues has suggested that, but I think it's really important to keep our eyes on the connectedness of the issues in this area.

Senator O'NEILL: I wonder if you have any fiscal management, Professor Stewart, around what your ideal model would look like and where you think costs could be shifted in a way to deliver a more equitable outcome from the current budgetary envelope?

Prof. Stewart : A simple question. I think that's the Expenditure Review Committee, isn't it, in reality? Obviously, if you work within the current fiscal envelope of the current social security system—which includes Newstart, the pension and family payments—you're going to struggle, right? I would urge the committee, in line with the comments of the roundtable as a whole, which are about the interconnectedness of these different policy fields and the impacts, not just on poverty relief—that's one thing and that's part of the job of our human services and social security branch of government, but they have impacts across the economy and across households' consumption and participation.

So I would urge the committee to look beyond the fiscal envelope that we sit in in social security. I do understand the fiscal constraints of government. We are very aware of that, but, in my view, it is misguided economic policy to constrain ourselves with this sort of artificial iron triangle, you could call it. It is worth the investment in spending more on our childcare provision, whether that is allowances in the home for some families as needed, paid parental leave and the subsidy for shared collective care, as part of work and economic participation policy. So any of these policies that Myra would advocate are of course going to expand the immediate fiscal cost of these payments; we have to be clear about that.

On the other side, the tax rate structure as currently proposed under that tax cuts projected to come in 2024-25 does nothing or very little to encourage women's workforce participation, and they are inadequate. They would only make a very minor dent in the effective tax rates paid by families with children. A much better policy would be to reorient the resources dedicated to the tax cuts towards better policies for families with children.

Prof. Hill : I will make a short comment here also in response to Senator O'Neill's question to say that part of the roundtable's evidence and a long conversation over 17 years has not only been to point to the joined-up approach to effective policy but also to recasting any expenditure as an investment, and seeing the links between the changes at the household and individual micro-level in participation and in opportunities for work and care and the way in which they then map onto changes in the macro economy, producing the kind of sustainable base for additional revenue. We certainly can see a lot of colleagues and a lot of research institutes within Australia have been increasingly modelling these changes. We see these come out all the time, both at the global and Australian level. We have had multiple modellings by institutes like the Gratton Institute about the increase to GDP, to productivity, to prosperity of a certain investment in child care, for example. We have seen industry super have also model increased investment in early childhood education and care and the impact that will have on the retirement savings of women in median-income jobs. We have both international and Australian modelling on the employment multiplier effect of investment in care sectors versus other male-dominated sectors that looks at total employment. The proportion of employment is about twice that in the care sectors compared to the non-care sectors of a one per cent increase in GDP according to our colleagues Sue Himmelweit and others.

So there is an increased amount of modelling that really helps us understand the long-term cumulative impact on social and economic multipliers that operate at both the micro level of the household and individual and at the macro economy. I think that is certainly the position of the roundtable—that an investment approach allows us to better understand what the impact of that cost is. It also helps us to ask the question: What is the cost of not acting? What are the impacts on productivity, on labour supply, on wellbeing, on social inclusion, on poverty, on inequality of not investing in quite a determined and robust manner in a joined-up approach to work and care policy? There is also that way of thinking about it.

Senator O'NEILL: Can I indicate my colleague Amanda Rishworth took an incredible package to the Labor Party in the lead up to the last election. The changes that are coming to pass are exactly based on the sort of modelling that you have been talking about. This is a fantastic committee to be part of. I absolutely agree with you about what investment does. I think back to my own life as an educator. Once upon a time there was no public education. We figured out it was a great idea to invest in our people, and we have education in the public sense in the widest possible way because it is an investment that has a long-term benefit. At the same time, there are so many other committees that I'm on just as one senator where an investment approach is also being advocated. The reality is we do have to manage with what we have in the best possible way.

So my question again is to think about not what was in the envelope under the previous government, because that has significantly shifted with policy announcements and fiscal changes to investment in child care. In this new environment, where do you see opportunities to maximise the benefit of that investment of your dollars, my dollars, Australia's dollars, with a sense of the future that would give rise to the best possible outcomes? We can all want more and more, and I am with you in saying, 'We would love to reshape this,' but we are at an historical moment where there are things in train. People are living their lives, and sometimes it's very difficult, managing with family tax benefit A and B and trying to manage with a workforce participant who is not helping them actually advance. There are so many complex stories out there. I'm keen that we get a sense from you, as policy experts, with 35 of the brightest people around the country: what does the best investment look like with the parts that we have? Investment is long term but also government planning needs to be in the medium to longer term, rather than saying, 'Let's just change this tomorrow.' Trading one thing off against the other is a simple answer, but it doesn't answer the complex questions that you're asking.

Could I go to the issue of small business. We've seen a massive rise in the number of people getting an ABN or an ACN and a significant rise in the number of women who are shifting out of paid work where they are a salary earner into often very insecure work as a contractor. Some are establishing their own small businesses and employing women in a very different model of employment that reveals a deeper understanding of care and the benefit of long-term employment in managing all those responsibilities because they have the cultural knowledge to do that. I'm just wondering if there is any evidence about women in small business and how they are managing their care responsibilities and how the workforces that they are generating as new entrepreneurs coming into the workplace are dealing with these issues. The other side of that is larger businesses and larger industries are now under some considerable pressure because of the new government's demands for pay equity et cetera. But small businesses, which operate in quite a different way, need a lot of flexibility. What's your sense of their response to a shift in understanding about the responsibilities of care and managing their workforce when they might be a microbusiness with two employees?

Prof. Hill : Thank you for that question. Lyn, would you like to respond to that?

Prof. Craig : Yes. I'd like to make the point that a lot of women become self-employed in order to be able to manage their own work and care responsibilities and are often sole traders, in fact. This is a risk they are taking often because the institutional supports from organisations are not adequate for them. So they are dealing with a care crisis by multitasking in a way if the children are a certain age and working around the children much more flexibly over the day and maybe employing one other person who is doing a similar thing. But it goes to the difficulty of women working being unable to predict necessarily what work they will be getting in a work environment where shifts are not predictable and pay is not adequate. A lot of the self-employment that is occurring is women taking that risk on themselves and trying to manage. So it's not necessarily that they are able to deal with it any better; it's that they are doing what they can in a very inflexible work environment.

I'd just like to echo what Myra, Associate Professor Hamilton, said earlier about grandparents being so involved. It's largely because, of all of the joined-up systems that we're mentioning, they are one point of flexibility. Workplaces are generally not flexible in favour of the worker, and formal child care is not able to be very flexible as to which days you're going to use for your care and that sort of thing, but grandparents can do that.

So I think—to add to the complexity rather than to answer your question with a solution—the labour market really needs to be attended to. A lot of the problem is long hours and multiple jobs. If families are not making enough money, they're taking on extra work. Getting women into the workforce, their participation, is obviously a good goal and a good investment. But if it comes at the cost of extra hours both in their own unpaid care work and in the labour market—with dual-earner families supplying more labour to the market at greater stress and with an inability to fit care around that—then there's a social cost there as well.

Senator O'NEILL: Thanks very much for that answer, Professor Craig. We certainly took evidence from Natasha Cordis and her colleagues at UNSW with regard to shift allocations and the research she did for the SDA union. If I'm hearing you correctly, the much-celebrated lift in Australian female entrepreneurship in fact might be a bit of a canary about the danger of the workplace to women trying to manage care and work. They're leaving simply because there's no flexibility in either the workplace or the care access that they need to function in full- or part-time work that matches their talents and capacities.

Prof. Craig: That's right. They're taking a risk on themselves—they're being wedged from both sides—and it's not necessarily a good solution. It reflects the lack of collective responsibility for care, in a way. If the reforms to child care make it accessible, flexible and affordable, and if it's available, then I'm not sure that so many people would be taking that risk on themselves.

Senator O'NEILL: Perhaps data on men in corporate structures where there is a higher level of security of work and reasonably high wages, for some of the biggest companies, that revealed the same level of exit to entrepreneurial or small business activity—if male and female data there were similarly matched, then we'd be reflecting a culture that was actually about entrepreneurship rather than 'I'm unable to cope with the demands of a workplace that simply doesn't match the reality of life'.

Prof. Craig : Yes, I think there would be small indicator of that. Men generally are self-employed and employ others. Yes, some men are sole traders, but a high proportion of women are sole traders. Yes, we're not necessarily seeing burgeoning entrepreneurship as much as people finding themselves in an unsustainable situation in the workforce.

S enator O'NEILL: So a desperate flight to work where you have some control?

Prof. Craig : Yes.

CHAIR: Professor Preston, you had your hand up?

Prof. Preston : I think I can add a little bit of information to this discussion we're having right now. This is from a paper I've been working on with a colleague. It's actually under review right now. I hope none of you are reviewing it, or I've just revealed who the authors are! Anyway, it's basically on working from home—using the HILDA data, who's been working from home during COVID. Our focus in the paper is on employees, but there's a chart to look at the difference between employees and those who reported as being self-employed, and it shows the incidence of people who usually spend some of the time working from home. So, if you're self-employed and you're female, around 70 per cent of them have been spending at least some time at home, which I think would go to the point that we've just been discussing, which is that a lot of women who are self-employed are doing it for care related reasons, although there is also a high share of males in that capacity.

This isn't going to talk to the questions that I've just been asked, in terms of the transition out of paid employment and into self-employment, but I thought it might just add to the discussion.

Prof. Hill : Senator O'Neill, I'll also send through some published research by a colleague in the business school, Dr Meraiah Foley, whose PhD is on this very question. It was completed probably five years ago. Nevertheless, she did her project on mumpreneurs, identifying the stresses and inadequacies of wage employment, the way that led to a number of women deciding that the solution was to be self-employed and bear risks themselves, and then the failure in that process and the self-employment not working out. Those are the same drivers that Professor Craig has been talking about, but then she has documented evidence on how that actually worked for them, on the intensification of work and care not being satisfactory and on the negative impacts on wellbeing. So I'll send that to the committee for your consideration.

Senator O'NEILL: I'm sure I won't be seeing the sad stories of that research in a glossy magazine on a Saturday morning, telling me about how I can have it all.

Prof. Hill : No. No, they're the outliers.

CHAIR: In regard to one of your questions, Senator O'Neill, I wondered if it was heading towards asking for a kind of hierarchy of the most important reforms to be given for school constraints that are real. What that made me think about is the way the committee may consider short-term, medium-term and longer-term aspirations, in terms of policy. I wondered if we could ask the committee to give that some thought, if possible, subsequent to this discussion, because some of the things we're talking about are very large reforms.

Just on that front, I wanted to ask a question about child care, before going to you, Senator White, for any questions you may have. I'm conscious that we have some people who've spent many decades studying early childhood education and care, and we have had a range of submission from people on this question. We have a complex system of care. I wondered what your advice might be—whoever wants to take this—on key reforms in that system in the near future. Yesterday, a number of us were at a revenue summit where there was discussion about the privatisation of our care system, for example.

I want to go to the issue of quality care that is more universally available—perhaps looking less at the cost, because I think we've covered that. Is there a good argument for larger public investment in direct childcare provision and planning—Senator Bragg has shown interest in this in previous hearings—where, over the top of an imperfect and very diverse system across our country, we layer an investment in centres in the places where we need them, in the high needs communities, so that we can lift provision of public care outside the profit system? What is your thinking is about that? Is that clear enough? Professor Brennan, it's probably your question.

Prof. Hi ll : Can I suggest Deb and then Wendy, and then, Natasha, you may have a contribution you want to make.

Prof. Brennan : Thanks, Senator Pocock. Yes, I've been sitting here thinking about exactly that issue, especially having regard to Senator O'Neill's question about fiscal constraints, and I would say that serious attention to the nature and the structure of Australia's early education and care system would be one of the most urgent focuses for policy review that I personally would recommend. I think the international evidence now is very compelling. We do know that there is excellent and high-quality education and care in the for-profit and not-for-profit systems, but, looking across the world, I personally could not identify a single system based on for-profit provision that is delivering the types of outcomes that we are now seeking in Australia—that is, equitable, quality provision at rates that are affordable, enabling parents not only to participate in the economy and society but also, critically, to contribute to the development and flourishing of children. I think that that would be one of the best things we could do.

We're seeing in a number of Australian states and territories an effort to build on the public investment in education and public schools and to extend that into the early education care sphere. I think that's a welcome development. It's important not to present or perceive this as any kind of ideological crusade; it's simply an outcome of an exploration of the evidence. We need to spend every single dollar as effectively and efficiently as we can—in all realms of government policy, but I'm speaking about early education and care. My reading of the evidence is that, in order to do that, we need to be looking at investing in supply of non-profit and public provision and not simply looking at supporting parental demand through fee subsidies.

Prof. Boyd : Thank you for this opportunity to speak. I totally endorse what Deb's saying about the need for a public, equitable, quality and affordable early childhood education and care system. Underpinning that, we need to ensure that workers in early childhood education and care, who are mostly female, have good working conditions. At the moment, early childhood educators are turning away from the system, and that was evident in the strike that was held early in September. I think that that comes as part of the parcel of what Deb's talking about. Early childhood educators, teachers in particular, who may well have the same qualification as a primary school teacher, are currently earning around 20 per cent less, in real terms, compared with their primary school counterparts. You're not going to attract people to work in the early childhood system—well, you will because some people are passionate about working with young children; however, we also need to ensure that the early childhood teachers are paid according to what they deserve.

Prof. Cortis : I would endorse all of that as well, and I want to add the importance of considering quality in developing early childhood policy and making decisions about the appropriate roles of public provision and public investment over private providers. I have a recent book chapter that I can provide to the committee on quality and marketised care, which takes advantage of the great quality data that we now have about early childhood education and care. It uses the National Quality Standard and compares performance against those standards of public, private and non-profit family day care providers, and it shows that, as private providers have been able to gain a foothold in the market, standards of quality have fallen. While it is about family day care, which is a much smaller sector of early childhood education and care than long day care, I'd expect similar findings in long day care. I can provide that to the committee if it's of any help.

Prof. Smith : I'd just like to add to that point. We've spoken today about the interconnected nature of policy settings, and, clearly, appropriately paid work for paid carers, whether it's in the early childhood and education sector or in aged care, is reasonably pivotal to that. So the related policy setting here addresses the capacity of minimum-rates awards to properly value the work. There have been impediments to the proper valuation of paid care work in and of itself and, additionally, the problems that have occurred with pay equity matters being addressed by way of the current legislative structure. So I can't stress enough the importance of minimum-wage awards to this sector, in that there is limited bargaining that occurs, so minimum-rates awards operate like paid rates awards for a significant proportion of the sector. The valuation of work is pivotal. Losing skilled workers because of rates of pay detracts from the investment that has been made through their education and their contribution to the sector. Then, of course, comes addressing the disparity in the valuation of work that's been unable to be remedied by pay equity applications to date. I would note the importance of those policy settings to addressing the questions that were raised by Senator O'Neill.

CHAIR: Professor Smith, before we go to Senator White, who may well bring her expertise in on this question as well, have you got any specific recommendations you think would be useful to address the work value questions that are clearly endemic?

Prof. Smith : Yes, I certainly do. I think there needs to be a pay equity principle that is inclusive but also beyond specific equal remuneration claims as currently constituted, which have not been able to be addressed either by way of a specific provision, by way of the expert panel addressing minimum wages or by way of modern award reviews. I note that the capacity for four-yearly reviews is changed now, but there hasn't been the capacity to address the valuation of work until, most recently, the work value proceedings in the Aged Care Award. So there needs to be the capacity to address the valuation by way of an appropriate principle that is inclusive of all industrial instruments as we would currently see them. It would also enable equal remuneration claims. It wouldn't require that comparators be a prerequisite to a claim of this sort, and it would overcome the difficulties that have prevented the Fair Work Commission—and they have commented upon this—from addressing valuation-of-work matters in minimum wage determinations and modern award reviews. That's included towards the conclusion of the roundtable submission, but I would be happy to provide further material as required.

CHAIR: Thank you, Professor Smith. Senator White.

Senator WHITE: Thanks. Having been involved in the comparators, I have to agree it's just an artificial craziness position to do that. I don't know if somebody made that up. I guess, if you look at comparators, you say, 'Well it's just crazy.' Having run a case, I know it took six years to get that equal pay case up. That's a long time, and I agree with you that finding the comparators is extraordinarily difficult. It seems extremely artificial. But, if we look at the comparators, say, in child care, let's look at local government, which provides child care and pays something like 25 per cent more for childcare workers than in the private sector, for the same job. That goes to the point—I'm sorry; I forget who made it—that the intervention of the private sector in some of these vital services has an influence that tends to drive wages down. Anyway, that's not a question; that's a statement of what I'm thinking.

I did have a question about grandparents. In those statistics, Associate Professor Hamilton talked about grandparents. In those studies that you have been looking at, what is the age range of grandparents? I know you talked about other people doing modelling, potentially, about the worth—and the 13-hour barrier that you talked about—but have you got any sense of the age range for grandparents in the research that you're talking about? You could be a grandparent at 40, for instance. So the influence on your earning capacity at different stages varies—not every grandparent is going to be 75. I was just interested in what, if any, statistics you have in relation to that.

Prof. Hamilton : The younger grandparents are more likely to be providing regular child care for their grandchildren. Most of the regular childcare provision is done by people aged 55 to 64. There are some younger grandparents and some older grandparents, but the large bulk of that care is done by those younger grandparents that are still of working age. The older they get, the more likely we see their involvement in grandparent child care to be more occasional and less intensive. The biggest group is right in that part of the more mature-age workforce that we're trying to encourage to participate. When I say 'we', I mean that policy settings are trying to encourage them to participate in the labour market longer, and they're the ones that are also providing most of the regular child care.

Senator WHITE: What seems to be coming out is that there are a lot of levers and lots of different things. Would it be fair to say that, if you had to summarise this in a paragraph, what we have is a system that is still based on women not participating in the workforce? It's generally that at all levels—tax levels, family payments, all those things. It's really not about participation. It's about assistance but not really full-on work participation. Similarly, the other overlay is that the way in which early childhood education is characterised has gone from childminding to a vital part of a child's education. That's what it seems to be. The theme that is coming out is that the system is struggling because it's got this premise of what work is, and we've now got a crisis of participation, which means you've got to relook at absolutely everything, but the fundamentals of how the systems have been designed have got a different premise—or am I missing something?

Prof. Hill : I think your characterisation is clear and correct. We have an approach to work and care that is quite residual, and it centres work. So it centres work for men, and care gets kind of packed around that. As women have entered the labour market, there's been some acknowledgement—but not an adequate acknowledgement—of who then is going to do the unpaid care work. The system is at a real crunch point, because official policy is about increasing women's workforce participation, but the policy settings provide incentives that run diametrically against that. This is where the crunch comes, and it's causing havoc in households. We definitely find in our qualitative research that younger workers—the under 40s—are just gobsmacked. Women have been told to invest in their human capital. They've gone out and they've done it in spades. They're brilliant; they've started careers, and, as soon as they have their first child, they—and often their partners—are like, 'What the heck is going on here?' And that's getting back to Professor Stewart's effective marginal tax rates. There's a lot of worry about how then to patch it together, like turning to grandparents and taking a very piecemeal and patchwork approach that then has to be revisited year on year or six months on six months as children change. There's no security of provision. It's not just about child care; it's also about paid parental leave being a really important piece of that smooth run into an intensive period of work and care and managing that in a way that doesn't disadvantage either party in a family.

Your interpretation of where we're at is correct. Your understanding of the multiple levers is also correct. There is actually a lot we can do. There are a lot of levers that can be pulled to change the incentives and to smooth the process. Those are certainly the findings of all the research expertise around the Work + Family Policy Roundtable. Alison, you were going to make a contribution.

Prof. Preston : I would just like to share another picture, if that's okay with the group. Here we go again—I think I'm getting better at this! It's not too dissimilar to the image that was shared earlier on by Professor Stewart. It really just reinforces the work—I don't know what Patricia Apps has been doing, but obviously we know that she does fantastic work. Again, this is just using Australian Bureau of Statistics data. The part that I really want to point out on this one, that I just find absolutely staggering, is that what we're showing here is all those people who are now in employment. We saw previously that there's been a big shift up in participation in employment by women. There's been a flattening-out [inaudible], partly because women are delaying childbirth and partly because they're having fewer children. But this diagram here is looking at, of all of those who are now in employment, what proportion are working full time. The part that I think is just gobsmacking—maybe that's not the word I should be using; staggering or significant!—is that there's been very little change in the pattern over the 30 years that we're looking at here. The dotted blue line for women is 1990. The yellow line is 2019. There's been very little change in that pattern. We're getting women into the labour market, but we're not changing how they participate in the labour market, and that's all about care. Again, it talks to the points that we've been making right now. But the fact that there's been very little change in that in 30 years I find staggering.

Senator WHITE: With regards to that graph, is there something like that for other countries that shows a differentiation?

Prof. Preston : I'm sure there are. I don't have one to hand, but these wouldn't be difficult graphs to produce, given access to the data.

Senator WHITE: I think it would be really interesting to go, 'Actually, this is not worldwide; other people have done this instead.'

CHAIR: There's a big contrast with the Nordic countries, and we'll ask the Parliamentary Library to produce a comparison. Thanks, Senator White. Who was next?

Prof. Hill : It was Professors Cass, Brennan and Craig. Kate, did you have your hand up? Bettina, would you mind if we go to Kate first?

Prof. Cass : Not at all.

Prof. Huppatz : I just wanted to add that something we haven't talked about yet is the fact that the pandemic [inaudible] and made them really clear to all of us. Looking to evidence, we can find some really recent evidence that shows that the policy inadequacies mean that women are too often the safety net. Women, as Lyn Craig's research showed, did end up intensifying their domestic labour contribution. As research and academia show, women are actually withdrawing their workforce participation, not contributing as they might want to. They also show the significance of flexible work, how flexible work enables us to do things differently, and how universal child care also enables us to do things differently, as well as the pertinence of care workers and how they are indeed essential but undervalued and underpaid.

CHAIR: I think Professor Cass was next.

Prof. Cass : I'd like to add to the conversation—briefly, because I know it's towards the end. The key importance of family and friend care impacts particularly upon women. We have data in our submission which shows that both male and female carers—family and friend carers—of the frail and sick and people with disabilities have considerably lower labour force participation rates than those who don't have caring responsibilities, and this impacts women, particularly, in the area of full-time labour force participation. So we need to ensure that, when we're deeply concerned with maintaining the labour force participation rates through adult life, we don't forget that there are several dips, and that there is particularly another dip in participation when the care of older family members or of a frail, sick spouse and/or continuing care of an offspring with disability keeps on impacting labour force participation. And it's absolutely clear that Australia, compared with the Nordic countries and some of the western European countries, does not have respite care—which is not about maintaining labour force participation; it is what it says: respite care—or forms of alternative care and real investment in plan based, alternative care. And of course there's maintaining the wages and conditions of the paid care workers who are doing that work, which is absolutely vital in maintaining labour force participation rates through working life. If we look only at the dip in the period of family formation, we're missing a large and growing part of the care necessities, of the care infrastructure, as well as the paid care workforce. And I hope your committee will attend to that very carefully.

Prof. Craig : I would just say that Australia is quite an outlier in the amount of reliance on female care and the assumption that unpaid care is going to be available over the life course, as Bettina says—most extreme, or most in evidence, when their children are young, but throughout the life course. We're really much lower on workforce participation than almost any other comparable nation and of a piece with very traditional countries like Italy, or the Asian countries, which are closer, and it really reflects how much the institutional settings, the structures, are disincentivising women and hemming them in from the choices they and their partners and everyone would like to be making. They're being channelled into areas that are not working out for them or really for the nation. So it's just a simple point, to say: yes, Australia is unusual in this regard.

CHAIR: I know your work shows how unchanging—is that fair to say?—the domestic allocations are of unpaid work between men and women. Are there any recommendations that the committee could consider on that really intractable background structural problem of gender roles and unpaid work?

Prof. Craig : I think the gender roles would shift along with attitudes more readily if some of the structural things were changed—if we changed what Professor Stewart was talking about, with making it so expensive to stay longer and use child care for longer. If child care were publicly provided and easily accessible, that would mean that people could choose how to divide their work and care within households with many fewer constraints. I don't think it will solve the problem entirely. I think there would need to be workplace changes too, to do with male work patterns and how those work out, but changing some of the levers that we've discussed today would mean that there would be more choice about people following what they would wish to do, and then we'd be able to attend more closely to the residual problem of within-household divisions of labour, which are intractable, but we're not on a level playing field here. So, yes, doing things within households—it's difficult for policy to intervene there, but there's a lot of public measures that could be taken that could take things out of people's way.

Prof. Hill : Maybe this is what Myra was going to say, but, to add to that, there are examples from Iceland and its paid parental leave system that shows that public policy that provides three months for one parent, three months for the other parent and three months to be shared actually has shifted the gender division of unpaid labour in the household and that that shift then tracks over time, so there are examples of where public policy can actually drive behavioural change within the household. Myra, was that what you were going to say?

Prof. H amilton : It was; that's right. I was going to say in Australia, at the moment with settings as they are, that is the easiest policy lever that we have: the parental leave scheme and the potential to create a considerably longer period that is earmarked for fathers and partners long enough for it to really change behaviour in an ongoing way. As Liz said, in some of the Nordic countries there is evidence that getting fathers involved in child care as the primary provider of child care—not the short periods of secondary carer leave that we tend to focus on here at the moment in Australia—for much longer periods early in the child's life has longstanding impacts on the division of labour.

Prof. Hill : I think this is where the committee needs to consider the aspirations of young Australian men. Our qualitive data shows very clearly that there is an increasing feeling and expectation among young Australian men that they want to participate in the unpaid care of their children, and they are disappointed and shocked by the policy settings that disincentivise that and make it a much more rational response of their household for that work to be done by the female, the birth partner. So we need to make these changes for young Australian men as much as we need to make them for young Australian women.

CHAIR: Thank you for your contribution. I want to thank all of you on behalf of all the senators who are here today for your contributions. I want to acknowledge the incredible practical research findings that you have put before us and your undertakings around providing further material pointing to directions that we need to take, including on paid parental leave. We haven't gone to the overall quantum of leave and of course superannuation but I understand we have views from you on that. I thank you very much, not just for your appearance today and for your submission but also for your body of work that you are providing to the Australian public and the Senate that underpins a number of issues that we will be dealing with.

I remind you that the committee has set a deadline on responses to questions on notice. We would really love to hear anything that you have undertaken to provide to us within two weeks if possible to the secretariat. That is 21 October. But I do want to say to you: you have given us some very up-to-date information and clearly you are collecting stuff that we are very interested in. If there is further material, please don't hesitate to contact the secretariat and supply it to us. We would be very keen to receive it.

Committee adjourned at 11:03