The childcare policies unveiled by Labor yesterday are eye-poppingly big: $4 billion across the forward estimates on subsidies. Half a billion to increase the pay of childcare workers over the forwards — but rising to $10 billion over the next decade as a long-term commitment to a 20% real increase kicks in. It’s a colossal intervention in the sector, and one that deserves more debate than purely about Labor’s political tactics.
Not that the tactical debate isn’t important. Having done the political hard yards of putting in place a range of unpopular tax measures to generate additional revenue, Labor has been relentlessly focused so far in the campaign on telling voters of all the goodies they’re going to get from them — in particular, in health.
Childcare subsidies continues the theme of telling voters the higher taxes (which fall predominantly on high income earners and wealthy seniors) come with the benefit of more affordable basic services. The Coalition wants to keep voters’ minds focused on the tax part of the equation, not the services, having admitted they can’t keep up with Labor’s spending commitments. And Labor’s pitch is primarily to low income and — partly — middle income earners.
The subsidies package will make childcare free or as near as for households making up to $70,000, then tapering back to 85% for households making up to $100,000, then tapering back to 60% for those making up to $175,000. All recipients of current subsidies will get over $1000 more a year.
The package would, at least for low income households, complete the transformation of childcare into a Medicare-style service. The next battleground will be a childcare version of “out of pocket expenses” driven by the charging of fees above the current hourly fee cap, though Labor promises the ACCC will be charged with pursuing “excessive fee increases and unscrupulous providers”. What constitutes “excessive” when the government pumps $4 billion in extra demand into an industry isn’t clear.
Curiously, it was not the use of taxpayer money to increase demand in the childcare industry that drew the wrath of employers — after all, they’re the beneficiaries of workers who will have more affordable childcare options. It was Labor’s commitment to fund an increase in wages for childcare that drew criticism.
“The wages of childcare workers are paid by their employers, not by the government,” Innes Willox of the Australian Industry Group thundered. Worse, he warned, it would encourage workers elsewhere to demand wage rises. “How would unions or workers in other sectors be stopped making claims against taxpayers and employers for a similar 20% wage increase?”
James Pearson of ACCI echoed the complaint about “longstanding union demands for wage increases in other industries”.
It’s no wonder we have entrenched wage stagnation and our industrial relations debate hasn’t moved at all in a decade that employer groups react with anger to a proposal for government to fund increases in salaries in a targeted sector because unions might “make claims” for wage rises elsewhere. That’d be the unions that in a number of industries have barely been able to prevent their workers from going backwards in real terms for the last six years.
Labor’s 20% wage increase is designed to support the long-term transition of childcare to a more professionalised, if not fully professional, career, driven by a National Quality Framework that has increased staff-child ratios and qualification requirements for childcare workers to deliver higher quality care and integrate care into early childhood education.
The childcare workforce has notably lifted its qualifications but remain poorly paid despite the massive increase in government subsidies to the sector in recent years, with one in five early education workers reported to be considering leaving in 2016. The Centre for Independent Studies argues that the additional regulatory requirements of the National Quality Framework (NQF) should be stripped away to make childcare cheaper. That’s unsurprising for a right-wing think tank, but it also asks an important question:
Governments at all levels must also decide if the primary policy objective of supporting childcare is female workforce participation or the early education of children — as the regulation and funding of childcare currently work at crosspurposes.
Labor tries to address this tension with its wage subsidy — thus illustrating just how expensive it is to reconcile the two objectives. It has fully signed up to the early education agenda — much more so than the Coalition. It already has a $1.75 billion proposal to extend funding of preschool to three-year-olds (the only response from the government so far has been the weird LNP senate candidate who suggested it was some sort of socialist conspiracy).
Labor’s plan would also further enhance a notable tendency of the current government — to pump more money into female-dominated service industries, driving up female employment, female participation and female wages growth via health and care industries like aged care and childcare. As Australia becomes ever more a service economy, its need for some services grows apace.
How much of this “additional revenue” will actually be generated given an obstructive Senate? Am amazed that the Libs haven’t brought this up, maybe they don’t want to admit the possibility of losing. But surely, the jackals of the media have some obligation to raise it with Morrison, ie what would be your attitude in the Senate to these revenue-raising measures?
The media has brought it up several times with Shorten, who sensibly doesn’t engage with hypotheticals like that. There’s genuinely no point. Obviously if things are blocked in the Senate you have to revise your plans – as the current government has had to do on so many, many occasions – but there’s far too many possible permutations to try and express what you’d do if this or that is blocked.
“Mandate” is an overrated argument, but I reckon it would be a brave crossbencher to stand against something like the negative gearing changes which Labor has campaigned on for 6 years and then cop the blame for a reduction in the amount available for funding cancer payments and childcare worker wages. You’d have to be pretty bloody-minded in your ideological opposition in order to do that. You could see some fiddling around the edges and horse trading sure, but a wholesale crossbench block? Nah.
Of course the media don’t bring it up with Morrison. Who could possibly imagine Liberal government policies being blocked in the Senate? It would be as unthinkable as them breaking a raft of “no cuts” policies or knighting Prince Phillip or still having no climate policy after 10 years….
The greater threat to Labor’s spending numbers is that the assumptions in the Treasury forecasts on which both major parties based their figures are so much bullshit and the tax revenue is unlikely to be as strong as forecast.
I would much prefer that Labor take a leaf out of Norway’s book, & seek to cap childcare fees to a certain percentage of average income.
Likewise, I want the government to build publicly owned, not-for-profit Childcare centres that can compete directly with the privately owned & operated ones.
That said, at least Labor is proving to have policies outside of giving tax cuts to the wealthiest Australians.
Yes, typical of Innes Bollocks and his coterie of economic rapists. Raise wages? It’s the end of the earth coming upon us!
He made it very clear, didn’t he, that all those private childcare centre owners (you can include Dutton, master of the conflict of interest, in that) were busily organising the extra subsidies from a Labor government to go straight into their own pockets. Not, for example, to provide more and more affordable places. That wouldn’t be any part of their agenda.
And why should other industries’ unions be stopped from making claims? Any such rises would only serve to restore some salary equity which has been ripped out of the economy by industry employers like Bollocks and his mates. And Pearson’s whining about “long standing union demands” is just absolutely disingenuous, as usual. The demands result from the refusal by ACCI members to honour the proposition that increases in productivity be rewarded by increases in pay.
The policy recognises the fact that the childcare industry is based on the need for families to have two full-time jobs to adequately provide for themselves. This need in part brought about over the last couple of decades by the wage suppression practices of unethical and morally corrupt employers like, for example, members of the ACCI. It also recognises that many child care centres have had their fingers in the government till rather than providing the services for which they are being paid.
Here’s a question; will Dutton be tempted to vote Labor? His missus surely will.
It seems that a government-owned provider (commonwealth/state/local) is needed to compete with private sector providers to drive prices lower. This seems to apply in all sectors of the economy. Perhaps that is why most government-owned businesses have been sold.
AHH- COMMUNITY BASED CHILDCARE- but a memory! We lost this fight in 1989 as the voracious corporates saw the profits to be made in ChildCare.
The irony is that this industry is dominated by wealthy senior members of the LNP.
No wonder they are carping for deregulation and lower wages for workers.
What irritates is that no serious journalists are asking Morrison what his government would offer low paid women workers and how he would make childcare more equitable for all families.
There is some horrible indicative irony about our society that the pay & status of work in arguably the two most important times of life, very early and very late is so low.
Almost as if the people who gouge the profits think that they were never young and will never age.
Labor Childcare policy shows a respect for women so far missing from LNP policy. Not only is the cost of child care prohibitive for young families, the wages in childcare show a total disrespect for women’s rights to just remuneration.
Those of us with daughters know how the cost hangs around their necks, crippling their careers and super in old age. Many only survive because grandparents have stepped in during duty for a few or all days, stepping in when children are sick.
Not every marriage/ partnership weathers the years but most children remain with mothers as primary carers and providers. The lucky ones have loving fathers who continue to support their children but this is not always the case.
Child care is a women’s rights issue as much as an issue for Australian families.
As for the LNP , their idea is “de-regulation”, cutting childcare costs by reducing staffing levels and training, building safety regulations and education in the early childhood sector.
Littleproud spoke of increasing “choice”. What this means is that wealthy parents can pay for better care for their children while the children of low income families can have ” cheaper childcare” in run down buildings with underpaid staff and high child to carer ratios.
Curiously they don’t understanding how repulsive such a proposition is to parents. But therein lies our choice.