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Tuesday 23 January 2018


Why Shorten, Ellis And The Greens Would Flunk Early Learning

Paul Zanetti Monday 21 March 2016

MY kids are smarter than Bill Shorten, Kate Ellis, all the Greens and Senate crossbenchers combined. That’s not saying much about my kids, but says more about our politicians.

Shorten, Ellis and their cohorts could do with some early learning. Thing is, they’d fail the end of year exam.

One plus one, for example does not equal three. They couldn’t quite grasp that when last in government. They still can’t.

The current government is trying to fix the broken early learning and child care subsidy system with legislation designed to benefit the lowest income earners while giving less taxpayer money to the highest income earners.

Labor and the Greens won’t have a bar of it, blocking the reforms in the Senate - and again they blame the government (surprised?).

Here’s the long and the short of it.

Once upon a time, new mums who wanted to work needed someone to look after the kid(s). It was either grandma or a professional child carer.

Child care became a fast growing but unregulated industry, so a few years ago the federal government (in conjunction with State and local governments) introduced a whole cluster of rules - everything from fencing to education curriculums. Child care suddenly became ’early learning’, with rising costs to match. Since 2009 child care costs have outpaced the rise in the CPI.

The National Quality Framework was implemented right across the country making child care and early learning more ‘professional’. Carers now have to be ‘educators’ with at least a Certificate III in Early Learning and moving up to a Diploma in the same.

Qualifications were sorted, but two open sores remain, especially in high density population areas: costs and accessibility (inadequate places particularly for children under two).  

Centres are supply-demand based. Some regional early learning centres with lower occupancy can charge as low as $60 a day per child while Sydney city with higher demand and fewer places charge up to $250 a day per child.

The government currently provides a child care subsidy at a flat 50% across the board.

The Productivity Commission released its report into Early Childhood Education and Care (ECEC) in February 2015. The report recommended more assistance for lower income families, with less assistance for higher income families.

The government accepted the Commission’s recommendation to help poorer mums by increasing the subsidy to 85% for less well off families - with some conditions.

Families with a combined income up to $65k get the full 85% government subsidy (paid directly to the child care provider) up to $110, per kid per day. So a working mum earning $200 a day, sending a child to a centre charging $100/day, pays only $15/day, not the previous $50/day.

Most reasonable thinkers would agree this is very generous.

The subsidy tapers down, so the highest earners don’t get the current 50% subsidy.

Combined family incomes of up to $340k a year get a maximum 20% subsidy. So for a $100 payment per day per child, they pay $80.

The catch is, there will be an ‘activity test’. Currently there is no ‘test’ to for a subsidy.

The newly proposed system means mums on a combined family income up to $65k must, as Mark Latham once famously said, be ‘earning or learning’.

More specifically, to qualify for the subsidy, mums must be working, studying, training or volunteering,  a contrast from the present welfare state where mums are funded by the taxpayer to pop out kids and go to lunch with their besties (yes, we all know a few) or sit around all day watching infommercials and terrible American soaps.

The Productivity Commission says this current system is…well, not very productive for either the mum, the economy or the rest of us. It’s welfare, costing the government $7 billion a year.

The proposed new system says if you choose to not qualify for the activity test, you only receive 12 hours subsidy per week (down from 24 hours per week).

The more you work (or learn, train or volunteer), the more you get.

Overall, this scheme means the average family is $30/week better off. All up, families earning $65k - $170k will be around $1500 a year better off. That’s just the subsidy, not including extra earned income.

Grand parents who are primary carers are exempt from the activity test, helping out nearly 4000 grandparents who care for about 6300 kids.

The new system is designed to help families get into work - and stay in work. Those worse off get back into employment or training and end up better off. You’d think Labor and the Greens would jump for joy.

But no, they’re playing the same old wrecking game.  

Labor and the Greens want to preserve the current welfare system.

The proposed new scheme will cost an additional $3.5 billion with a total of over $40 billion over four years. To pay for it the government needs to offset the current welfare payment, under the Family Tax Benefit scheme once the youngest child turns six (at which time mum should be able to get a job - or learn, or train or volunteer).

The coalition wants to get rid of middle class welfare and replace it with a massive incentive to get mums productive again - a good thing.

I know several mums who put their kids into taxpayer subsidised child care to meet up with their best gal pals at the local tavern, golf club or shopping mall a couple of times a week, paying for long chardy lunches or lazy afternoons at Gloria Jean's while downing mocchacinos and chocolate mudslides with whipped cream. Not so much welfare, but government funded lifestyle choices.  

Price Waterhouse Coopers did some modelling last year and found that government investment to improve the affordability, quality and accessibility of childcare would be revenue neutral inside of a decade and a net positive to the economy within two decades.

This matches up with the experience in Canada where Quebec capped childcare costs at $5 a day, underpinned by generous subsidies. More than 70,000 mums returned to work. Economists estimated that the Government saved $1.50 for every $1 paid out in childcare subsidies.

Labor’s shadow minister for early education, Kate Ellis, said earlier this month, “The Liberals went to the election promising more affordable child care, but the government’s own figures…show a massive increase in the cost of child care for millions of families since the 2013 election.”

An ABC fact check showed this to be true, but the trend started under Labor, years before the coalition came to office - and the Abbott, then Turnbull government has tried to do everything it can to make child care MORE affordable, but blocked in the Senate.

Yesterday we saw the outrageous headlines in the Sunday Telegraph over a story by Samantha Maiden:

Prime Minister’s broken promise means childcare cost will double for more than 100,000 families

I’m no Malcolm Turnbull fan, but even I had to wince at this deliberate lie.

It went on to read,

CHILDCARE costs are set to double for more than 100,000 families next year as a result of a decision to put big promises to deliver cheaper fees on the backburner.

Parents promised childcare relief have been dudded again, with the Turnbull government now conceding Parliament will not pass promised reforms until after the election.

If you continue reading, you’ll find that promises to deliver cheaper fees have been put on the ‘backburner’ for one simple reason - an obstructionist Senate.

How is this Turnbull’s fault?

Personally I find Samantha Maiden’s reporting to be often misleading at best, and blatantly dishonest at its worst. This piece was a glaring example of how journalists have become too accustomed to running an agenda instead of reporting facts.

Is it any wonder readers now turn to online blogs for truth, while traditional mainstream media is viewed as less reliable by a disillusioned and dwindling readership?

Bring on a Double Dissolution, and let’s hope the Canberra press gallery gets caught up in the wash.

Perhaps a fresh Senate will pass the child care and early learning package this country needs.